U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2005

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER: 333-43126

                          BIOACCELERATE HOLDINGS, INC.

             (Exact name of registrant as specified in its charter)


             NEVADA                                  87-0650219
   -------------------------------                 --------------
   (State or other jurisdiction of                (I.R.S. Employer
    incorporation or organization)               Identification No.)


                 712 Fifth Avenue, 19th Floor New York, NY 10019
                    (Address of principal executive offices)

                                 (212) 897-6849
              (Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last
report)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such  report(s),  and (2) has been subject to such filing  requirements  for the
past 90 days. YES [X] NO [_]

The number of $.001 par value common  shares  outstanding  at November 14, 2005:
43,414,950


<PAGE>


                           BIOACCELERATE HOLDINGS, INC

                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----


PART 1  -  FINANCIAL INFORMATION

Item 1        Financial Statements (Unaudited)                                 3

Item 2        Management's Discussion and Analysis or Plan of Operations      15

Item 3        Controls and Procedures                                         23


PART II  -  OTHER INFORMATION

Item 1        Legal Proceedings                                               24

Item 2        Sales of Unregistered Equity Securities and Use of Proceeds     24

Item 3        Defaults Upon Senior Securities                                 24

Item 4        Submission of Matters to a Vote of Security Holders             24

Item 5        Other Information                                               24

Item 6        Exhibits                                                        24

              Signatures                                                      25


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                           BIOACCELERATE HOLDINGS, INC
                          (A Development Stage Company)
               Consolidated Balance Sheet as of September 30, 2005
                                   (Unaudited)


ASSETS
CURRENT ASSETS
Cash and cash equivalents                                         $     137,556
Prepaid expenses                                                        730,503
Other accounts receivable                                               530,140
                                                                  -------------
Total Current Assets                                                  1,398,199
                                                                  -------------
Property and equipment, net                                             916,650
                                                                  -------------
OTHER ASSETS
Other assets                                                             11,406
Patents, net                                                            843,559
Other long term investments                                           2,000,000
                                                                  -------------
                                                                      2,854,965
                                                                  -------------
                                                                  $   5,169,814
                                                                  =============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Bank loans and overdrafts                                         $     844,017
Accounts payable                                                      7,161,676
Accrued expenses                                                      2,076,070
Due to related parties                                                  628,039
Loans payable                                                        17,229,867
Current portion of long-term debt                                        57,177
Other current liabilities                                               217,494
Deferred revenue                                                         50,000
                                                                  -------------
Total Current Liabilities                                            28,264,340
                                                                  -------------
Deferred revenue                                                      1,162,500
Long-term debt                                                        6,498,783
                                                                  -------------
                                                                      7,661,283
                                                                  -------------
STOCKHOLDERS' (DEFICIT)
Preferred Stock, par value $.001;  10,000,000 shares authorized;           --
none issued and outstanding
Common Stock, par value $.001; 100,000,000 shares authorized;            43,415
43,414,950 shares issued and outstanding
Additional paid in capital                                          184,294,379
(Deficit) accumulated in the development stage                     (214,831,537)
Other comprehensive Income (Loss)
Currency translation adjustment                                        (262,066)
                                                                  -------------
Total Stockholders' (Deficit)                                       (30,755,809)
                                                                  -------------
                                                                  $   5,169,814
                                                                  =============


   The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>


                           BIOACCELERATE HOLDINGS, INC
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             Quarter          Quarter        From inception,
                                      Nine months        Nine months          ended            ended        November 1, 1999
                                    ended September    ended September    September 30,    September 30,    to September 30,
                                       30, 2005           30, 2004            2005             2004               2005

<S>                                 <C>                <C>                <C>              <C>              <C>
Revenue                             $       481,588                  0                0                0             481,588
                                    ---------------    ---------------    -------------    -------------    ----------------
Operating expenses
Research and development                 10,698,072          1,605,041          453,255        1,146,375          53,376,146
General and administrative                8,889,516          1,523,071        2,018,205          845,037          14,110,991
Non cash stock compensation -
general and administrative               22,831,872                           2,054,107                           87,332,578
                                    ---------------    ---------------    -------------    -------------    ----------------
                                         42,419,460          3,128,112        4,525,567        1,991,412         154,819,715
                                    ---------------    ---------------    -------------    -------------    ----------------
Net operating (loss)                    (41,937,872)        (3,128,112)      (4,525,567)      (1,991,412)       (154,338,127)

Other income (expenses)
Interest and finance charges               (597,768)                           (352,429)                            (597,768)
Interest and finance charges -
Non cash                                (12,800,000)                                                             (49,731,308)
Share of losses in associate                                  (251,466)                         (251,466)           (362,441)
Minority share of losses                                       319,158                           158,580           6,981,408
Profit on disposal of marketable
securities - net of corporation
tax                                         600,269                             600,269                              600,269
Impairment charges                                                                                               (17,383,570)
                                    ---------------    ---------------    -------------    -------------    ----------------
(Loss) attributable to common
stockholders                        $   (54,735,371)        (3,060,420)      (4,277,727)      (2,084,298)       (214,831,537)

Other comprehensive income (loss)
Foreign currency translation
adjustments                                 211,182             41,220            9,812            6,274            (262,066
                                    ---------------    ---------------    -------------    -------------    ----------------
Total comprehensive (loss)              (54,524,189)        (3,019,200)      (4,267,915)      (2,078,024)       (215,093,603)
                                    ===============    ===============    =============    =============    ================
Per share information - Basic and
Diluted Net (loss) per common
share                               $         (1.30)             (0.12)           (0.10)           (0.08)
                                    ===============    ===============    =============    =============
Weighted average number of shares
outstanding                              42,108,967         25,403,038       43,173,053       25,570,370
                                    ===============    ===============    =============    =============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>

2
                           BIOACCELERATE HOLDINGS, INC
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          Nine months ended     Nine months ended      From Inception
                                                          September 30, 2005    September 30, 2004    November 1, 1999
                                                                                                      To September 30,
                                                                                                             2005
<S>                                                       <C>                   <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Net cash (used in) operating activities                $      (15,911,797)   $       (3,596,753)   $    (15,396,368)
                                                          ------------------    ------------------    ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of long term investments                                (500,000)           (2,222,936)         (4,089,472)
   Sale of long term investments                                     803,140                    --             803,140
   Purchase of property and equipment                               (410,961)             (192,247)         (2,117,333)
   Investment in affiliate                                                --                    --          (4,001,815)
   Payment for purchase of subsidiaries - net of cash                     --                    --
   acquired                                                               --                    --         (16,623,688)
                                                          ------------------    ------------------    ----------------
   Net cash (used in) investing activities                          (107,821)           (2,415,183)        (26,029,168)
                                                          ------------------    ------------------    ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of common stock for cash                                      --             2,877,279          15,445,820
   Bank overdraft                                                    807,143                    --             844,017
   Proceeds from loans payable                                    14,395,993             2,839,793          25,535,321
                                                          ------------------    ------------------    ----------------
   Net cash provided by financing activities                      15,203,136             5,717,072          41,825,158
                                                          ------------------    ------------------    ----------------

   Effect of changes in exchange rates                               211,182               200,374            (262,066)
                                                          ------------------    ------------------    ----------------
   Net (decrease)/increase in cash and cash equivalents             (605,300)              (94,490)            137,556

Cash and cash equivalents at beginning of period                     742,856               331,438                  --
                                                          ------------------    ------------------    ----------------
Cash and cash equivalents at end of period                $          137,556    $          236,948    $        137,556
                                                          ==================    ==================    ================

Supplemental cash flow information:
Cash paid for interest                                    $               --    $               --    $             --
                                                          ==================    ==================    ================
Cash paid for income taxes                                $               --    $               --                  --
                                                          ==================    ==================    ================
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       5
<PAGE>


                          BIOACCELERATE HOLDINGS, INC.
                          (A Development Stage Company)
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                               September 30, 2005

NOTE 1 - NATURE OF THE BUSINESS

DESCRIPTION OF COMPANY: Bioaccelerate Holdings, Inc ("Bioaccelerate" or
"Company"), formerly Mobile Design Concepts, Inc. ("Mobile"), acquired
Bioaccelerate, Inc. ("BI") in an exchange of stock on September 23, 2004.
Simultaneously with the exchange of stock, Mobile Design Concepts, Inc. changed
its name to Bioaccelerate Holdings, Inc. Mobile was organized under the laws of
the State of Nevada on March 10, 2000. Mobile was formed to design, manufacture,
and lease mobile kiosks and other structures. The operation was discontinued on
December 31, 2002.

The Company is examining  opportunities in both start-up and emerging  companies
in the biopharmaceutical sector.

The Company has not yet generated any  significant  revenues and is considered a
development  stage  company as  defined in  Statement  of  Financial  Accounting
Standards No.7. At the present time, the Company has not paid any dividends, and
any  dividends  that may be paid in the future will  depend  upon the  financial
performance of its subsidiary, Bioaccelerate, Inc.

BI was organized under the laws of the State of Delaware on December 29, 1995 as
Tallman Supply Corp. On January 14, 1999, the Company changed its name to
Westminster Auto Retailers, Inc. On July 25, 2003, the Company changed its name
to Bioaccelerate, Inc.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

BASIS OF  PRESENTATION:  These  consolidated  financial  statements  include the
accounts of Bioaccelerate  Holdings,  Inc. and its  subsidiaries  (the Company),
with appropriate  eliminations of inter-company  balances and transactions.  The
financial  statements  are  prepared  by the  Company  on the  accrual  basis of
accounting in accordance  with the rules and  regulations  of the Securities and
Exchange  Commission for interim financial  information,  and in accordance with
the instructions for form 10QSB.

Certain information and footnote  disclosures normally included in the Company's
annual  audited  financial  statements,  as  required by  accounting  principles
generally  accepted in the United States,  have been  condensed or omitted.  The
interim condensed financial  statements,  in the opinion of management,  reflect
all adjustments,  consisting entirely of normal recurring adjustments, necessary
for a fair presentation of the Company's  financial position as of September 30,
2005.

The results of operations for the interim periods are not necessarily indicative
of the results of operations  to be expected for the entire  fiscal year.  These
interim  condensed  financial  statements should be read in conjunction with the
audited financial statements for the seven months ended December 31, 2004, which
are  contained  in the  Company's  10KSB/A,  and filed with the  Securities  and
Exchange Commission,

USE OF ESTIMATES:  The  preparation of financial  statements in conformity  with
generally  accepted   accounting   principles  in  the  United  States  requires
management to make estimates and assumptions that affect the reported assets and
liabilities,  disclosure of contingent assets and liabilities at the date of the
financial  statements,  and the reported  amount of revenues and expenses during
the  reporting   period.   Actual  reports  may  differ  from  these  estimates.
Significant  estimates in the financial  statements  include the assumption that
the Company will continue as a going concern.

CERTAIN  RISKS AND  UNCERTAINTIES:  The  Company is  subject to risks  common to
companies  in its  industry,  including,  but not limited to, new  technological
innovations,  dependence on key personnel, protection of proprietary technology,
compliance  with  government  regulations,  uncertainty of market  acceptance of
products, product liability and the need to obtain financing.

PRINCIPLES OF CONSOLIDATION:  The consolidated  financial  statements  presented
herein include the accounts of the Company and its majority  owned  subsidiaries
(collectively, the "Company").

The  consolidated  financial  statements  include the accounts of the  following
companies:

Amilar Pharma Inc
Anvira Inc
Bioaccelerate Holdings, Inc (formerly Mobile Design Concepts, Inc)
Bioaccelerate, Inc
Bioaccelerate Limited
Bioaccelerate BVI Limited
Biocardio Inc
CNS Thera Inc


                                       6
<PAGE>


Cynat Oncology Inc
Enhance Biotech Inc
Evolve Oncology Inc
Genar Oncology Inc
Genaderm, Inc
Inncardio, Inc
Innova Lifestyle, Inc
Innovate Oncology, Inc
Oncbio Inc

The consolidated  financial statements include the assets and liabilities of the
majority  owned  subsidiaries,  adjusted to allow for  minority  interests.  All
significant inter-company transactions have been eliminated.

LOSS PER SHARE

The Company  calculates  net income (loss) per share as required by Statement of
Financial  Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings
(loss) per share is  calculated  by dividing  net income  (loss) by the weighted
average number of common shares  outstanding  for the period.  Diluted  earnings
(loss) per share is  calculated  by dividing  net income  (loss) by the weighted
average  number  of  common  shares  and  dilutive   common  stock   equivalents
outstanding.  During  periods in which the Company  incurs  losses  common stock
equivalents, if any, are not considered, as their effect would be anti dilutive.

NOTE 3 - BASIS OF PRESENTATION

The Company's financial statements are presented on a going concern basis, which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.

The Company has  experienced  a  significant  loss from  operations  aggregating
$54,735,371,  and  $4,277,727,  and  $214,831,537  for the nine months and three
months ended  September 30, 2005, and the period from inception to September 30,
2005. In addition,  the Company has working capital and stockholder  deficits at
September 30, 2005, of $26,866,141  and  $30,755,809.  The Company's  ability to
continue as a going concern is contingent upon its ability to secure  additional
financing,  utilize its credit facilities,  increase ownership equity and attain
profitable operations. In addition, the Company's ability to continue as a going
concern must be considered in light of the problems,  expenses and complications
frequently encountered in established markets and the competitive environment in
which the Company operates. The Company is pursuing financing for its operations
and  seeking  additional  investments.  In  addition,  the Company is seeking to
establish  a  revenue  base.  Failure  to  secure  such  financing  or to  raise
additional  equity  capital and to  establish  a revenue  base may result in the
Company depleting its available funds and not being able pay its obligations.

The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.


NOTE 4 - LOANS PAYABLE

CREDIT FACILITIES

During  February 2004 the Company  entered into a senior secured credit facility
with  Technology  Finance,  Inc.  ("Technology")  under which  Technology  shall
provide the Company one or more loans in the aggregate principal amount of up to
$7,500,000. Notwithstanding this Technology shall have no obligation to fund the
Company,  if one of the following have  occurred:  (i) there shall be a material
change in the business, properties, assets, results of operations,  prospects or
financial condition of the Company since January 1, 2004; (ii) the Company shall
be in breach of, or in default under any material contract, license agreement or
instrument;  or iii) there shall have  occurred a disruption  in the  securities
markets. Technology has the right to convert the outstanding balance into shares
of the Company's common stock at $1.00 per share. The credit facility matures on
the earliest of (i) the date on which a placement in which the Company  receives
at least  $25,000,000  in gross  proceeds  for the  issuance  of debt or  equity
securities, (ii) the date on which an event of default occurs, or (iii) the date
on which a change in control occurs.  The advances bear interest at a rate equal
to the  Applicable  Federal Rate, as defined in Section  1247(d) of the Internal
Revenue Code and are secured by all of the Company's  assets and assets acquired
in the future.  The credit  facility  contain  certain  affirmative and negative
covenants  including the Company  furnishing  Technology with audited  financial
statements within 90 days after its year end and unaudited financial  statements
with 45 days of each quarter excluding the Company's year end. In addition,  the
credit  facility  provides  that  at the  date  of  signing  there  shall  be no
outstanding  options,  warrants or subscription  rights for capital stock of the
Company.  In  addition,  there  has  been a  material  change  in the  financial
condition of the Company since it last filed quarterly financial statements with
the  Securities  and Exchange  Commission.  The Company has not been notified by
Technology  as to whether  the  credit  facility  will be called  because of any
defaults. The entire balance due has been classified as a current liability. The
Company  had a balance of  $7,465,042  drawn  against the balance of this credit
facility at September 30, 2005,  and as of September 30, 2005, the interest rate
was 4%. The loan matures upon one of the events  described  above.  This balance
includes interest of $50,000.  Subsequent to September  31,2005,  the balance of
the loan was converted into Series A Preferred Stock. (See Note 9.)


                                       7
<PAGE>


During  September 2004 the Company entered into a senior secured credit facility
with Lifescience Ventures, Limited ("Lifescience") under which Lifescience shall
provide the Company one or more loans in the aggregate principal amount of up to
$12,500,000.  Notwithstanding  this Lifescience shall have no obligation to fund
the  Company,  if one of the  following  have  occurred:  (i)  there  shall be a
material  change in the business,  properties,  assets,  results of  operations,
prospects or financial  condition of the Company since January 1, 2004; (ii) the
Company  shall be in breach  of, or in  default  under  any  material  contract,
license agreement or instrument;  or iii) there shall have occurred a disruption
in the securities  markets.  As an inducement for extending the credit  facility
Lifescience  received  1,000,000  warrants to purchase  shares of the  Company's
common stock at $14 per share and 1,000,000  warrants to purchase  shares of the
Company's  common  stock for $28 per share and the  credit  facility  contains a
clause  prohibiting  the repricing of any  outstanding  options or warrants to a
price which is less than the prices of the Lifescience warrants.  The fair value
of the  warrants,  determined  using the  Black-Scholes  option  pricing  model,
aggregates  $12,800,000  and will be amortized as  additional  interest over the
term of the credit facility  commencing with the first draw. The credit facility
matures  on the  earliest  of (i) the date on  which a  placement  in which  the
Company receives at least $50,000,000 in gross proceeds for the issuance of debt
or equity  securities,  (ii) the date on which an event of  default  occurs,  or
(iii) the date on which a change in control  occurs.  The advances bear interest
at a rate equal to the Applicable Federal Rate, as defined in Section 1247(d) of
the  Internal  Revenue Code and are secured by all of the  Company's  assets and
assets acquired in the future.  The credit facility contain certain  affirmative
and negative  covenants  including the Company  furnishing  Lifescience  audited
financial  statements within 90 days after its year end and unaudited  financial
statements  with 45 days of each quarter  excluding the  Company's  year end. In
addition,  the credit facility  provides that at the date of signing there shall
be no outstanding, options, warrants or subscription rights for capital stock of
the Company.  In  addition,  there has been a material  change in the  financial
condition of the Company since it last filed quarterly financial statements with
the Securities and Exchange  Commission.  No amounts are outstanding pursuant to
this credit facility at September 30, 2005.

During  September 2004 the Company entered into a senior secured credit facility
with Jano Holdings  Limited  ("Jano") under which Jano shall provide the Company
one or more  loans  in the  aggregate  principal  amount  of up to  $12,500,000.
Notwithstanding  this Jano shall have no obligation to fund the Company,  if one
of the  following  have  occurred:  (i) there shall be a material  change in the
business,  properties,  assets,  results of  operations,  prospects or financial
condition of the Company  since  January 1, 2004;  (ii) the Company  shall be in
breach of or in  default  under any  material  contract,  license  agreement  or
instrument;  or iii) there shall have  occurred a disruption  in the  securities
markets.  As an  inducement  for  extending  the credit  facility  Jano received
1,000,000  warrants to purchase shares of the Company's  common stock at $14 per
share and 1,000,000  warrants to purchase  shares of the Company's  common stock
for $28 and the credit facility contains a clause  prohibiting the re-pricing of
any outstanding  options or warrants to a price which is less than the prices of
the  Jano  warrants.  The fair  value  of the  warrants,  determined  using  the
Black-Scholes  option pricing model  aggregates  $12,800,000  and was charged to
operations as non cash interest upon the initial draw as the credit facility has
no  specific  due date and the Company  was in default on the  arrangement.  The
credit facility  matures on the earliest of (i) the date on which a placement in
which the  Company  receives  at least  $50,000,000  in gross  proceeds  for the
issuance  of debt or  equity  securities,  (ii)  the  date on  which an event of
default  occurs,  or (iii) the date on which a change  in  control  occurs.  The
advances  bear  interest  at a rate equal to the  Applicable  Federal  Rate,  as
defined in Section  1247(d) of the Internal  Revenue Code and are secured by all
of the Company's  assets and assets acquired in the future.  The credit facility
contain  certain  affirmative  and  negative  covenants  including  the  Company
furnishing Jano audited  financial  statements within 90 days after its year end
and unaudited  financial  statements with 45 days of each quarter  excluding the
Company's year end. In addition,  the credit facility  provides that at the date
of signing  there shall be no  outstanding  options,  warrants  or  subscription
rights for capital stock of the Company. As of the date hereof the Company is in
default of the  covenant  to  provide  financial  statements  for the year ended
December 31, 2004, and the quarters ended March 31, 2005 and September 30, 2005.
In addition,  there has been a material change in the financial condition of the
Company since it last filed quarterly  financial  statements with the Securities
and Exchange  Commission.  The Company has not been notified by Technology as to
whether  the credit  facility  will be called  because of the  defaults  and the
entire balance due has been classified as a current liability. The Company had a
balance of  $9,764,825  drawn  against the  balance of this  credit  facility at
September  30, 2005,  and the interest rate was 4%. The loan matures upon one of
the events  described  above.  Subsequent to the end of the quarter an amount of
$6,675,630 has been converted into Series A Preferred Stock.

CONVERTIBLE LOANS

During  December  2004 the Company  borrowed an  aggregate  of  $3,100,000  with
interest  at Libor  (2.35% at December  31,  2004).  Over the nine months  ended
September 30, 2005 a further $1,459,865 was borrowed bring the total outstanding
as of September 30, 2005 to $4,559,865.  These loans are convertible into common
shares  of the  Company  at  equivalent  terms  to  the  Company's  next  equity
financing,  of not less than  $6,000,000.  Should a financing not occur within 1
year,  the loans  shall  accrue  interest at Libor plus 10% and the loan will be
convertible into common shares at a price to be determined  between the parties.
Subsequent to September 31,2005, an amount of $3,629,908 has been converted into
Series A Preferred Stock. (See Note 9.)


                                       8
<PAGE>


In 1999 and 2000, the Company  formed two joint  ventures with Elan  Corporation
("Elan") that were  terminated  in 2002 and 2003. As part of the joint  ventures
Elan loaned the Company  $1,925,028 in convertible  debt financing,  maturing on
April 14, 2006. Interest accrues at 9% per annum, compounded on an annual basis.
Elan has the right to convert  outstanding debt into the number of common shares
that is obtained by dividing  outstanding  principal and interest by $10.29.  At
September 30, 2005, accrued interest totalled $619,109.

NOTES PAYABLE

The  Company's  borrowings  under an equipment  lease  financing  agreement  are
collateralized  by the related  equipment,  furniture and fixtures,  at interest
rates between 12% and 13% with monthly payments of approximately  $9,920. Future
aggregate annual maturities are:

2005   $ 57,177
2006     13,890
         ------
         71,067
         ======

NOTE 5 - INVESTMENT IN AFFILIATES

EVOLVE ONCOLOGY

Through December 2004, the Company acquired  23,857,000  common shares of Evolve
Oncology  Inc.  ("Evolve")  these  shares were  obtained  initially  through the
acquisition  of  Pharma  Manufacturing  Services  Ltd and the  sale of  Antibody
Technologies Inc.

At  September  30,  2005,  the Company  owned a 49.15%  interest in Evolve.  For
accounting purposes, the Company is treating its capital investment in Evolve as
a vehicle for research and development.  Because the Company is solely providing
financial  support to further  the  research  and  development  of Evolve,  such
amounts  are being  charged  to  expense  as  incurred  by Evolve  since  Evolve
presently  has no ability  to fund  these  activities  and is  dependent  on the
Company to fund its operations.  In these circumstances,  Evolve is considered a
variable interest entity and has been  consolidated.  The creditors of Evolve do
not have recourse to the general  credit of the Company.  Through  September 30,
2005, the Company advanced Evolve an aggregate of $3,043,686.

A summary  of  financial  position  and  results of  operations  of Evolve as of
September 30, 2005, and the seven months then ended is as follows:

Current assets           $   669,185
Property and equipment        97,000
                         -----------
                         $   766,185
                         ===========
Current liabilities      $ 3,962,438
Stockholders' equity      (3,196,253)
                         -----------
                         $   766,185
                         ===========
Sales                    $      --
                         ===========
Net (loss)               $(2,041,383)
                         ===========

ENHANCE BIOTECH

At September  30, 2005 the Company  holds a 22.4%  interest in Enhance  Biotech,
Inc. ("Enhance").  For accounting purposes,  the Company is treating its capital
investment in Enhance Biotech as a vehicle for research and development. Because
the Company is solely  providing  financial  support to further the research and
development of Enhance, such amounts are being charged to expense as incurred by
Enhance since Enhance  presently has no ability to fund these  activities and is
dependent on the Company to fund its operations. In these circumstances, Enhance
is  considered  a  variable  interest  entity  and has  been  consolidated.  The
creditors of Enhance do not have recourse to the general  credit of the Company.
Through  September  30,  2005,  the Company  advanced  Enhance an  aggregate  of
$4,960,246.


                                       9
<PAGE>


A summary  of  financial  position  and  results  of  operations  of  Enhance at
September 30, 2005, is as follows:

Current assets                         $    162,534
Amounts due after more than one year        878,894
Fixed assets                              1,214,112
                                       ------------
                                       $  2,255,540
                                       ============
Total liabilities                      $ 11,447,396
Stockholders' equity                     (9,191,856)
                                       ------------
                                       $  2,255,540
                                       ============
Sales                                  $    238,540
                                       ============
Net (loss)                             $ (5,149,977)
                                       ============

NOTE 6 - INVESTMENTS

During September 2004 the Company invested $2,000,000 in Advance Nanotech,  Inc.
("Advance") in exchange for 2,000,000  common shares.  The Company  borrowed the
funds for this  transaction  pursuant  to the credit  facility  from  Technology
Finance, Inc. described in Note 4. The shares received are considered restricted
securities and represent  approximately 6% of the outstanding  shares of Advance
subsequent to a private  placement by Advance at $2.00 per share in February and
March 2005. The shares are carried at the lower of cost of $1.00 or market value
of $5.90 per issued share.

Through  December  2004 the Company  acquired an aggregate  of 3,928,804  common
shares of Neuro  Bioscience,  Inc.  ("Neuro").  The shares  were  obtained as an
inducement to provide future financing and have no cost basis.  These shares are
carried  at the lower of cost or market  value of $1.01 per  issued  share.

During  November  2004 the Company  invested  $1,366,536  in  Australian  Cancer
Technology  ("ACT") in exchange for 4,893,301 common shares.  The carrying value
of the shares was  $202,871.  During the quarter ended  September 30, 2005,  the
company sold its entire holding in ACT for an aggregate of $803,140  realizing a
gain of $600,269.

During  August 2004 the Company  invested  $222,936 in JPS Holdings  ("JPS"),  a
private  Company.  A further $500,000 was invested during March 2005. No trading
information  or  financial  information  is  available  for JPS and the  Company
carries its investment at the lower of cost or market value of $0.

NOTE 7 - STOCKHOLDERS' (DEFICIT)

From January  through  March,  2005 the Company issued an aggregate of 2,880,146
shares of common  stock  valued at their fair market  value of  $18,167,581  for
consulting services and research and development.  The value of these shares was
charged to operations.  In addition,  the Company  charged the fair value of the
options  issued  to Jano  Holdings,  Inc in  connection  with the loan  facility
referred  to in Note 4 to interest  expense.  The fair value was  calculated  as
$12,800,000 and this amount was charged to interest expense.

From April through June,  2005 the Company issued an aggregate of 480,864 shares
of common stock valued at their fair market value of $2,610,184  for  consulting
services. The value of these shares was charged to operations.

From July  through  September  2005 the company  issued an  aggregate of 259,578
shares of common  stock  valued  at their  fair  market  value of  $906,607  for
consulting  services  and research and  development.  In addition,  a subsidiary
company also issued common stock for consulting services valued at a fair market
value of $1,147,500. The value of these shares was charged to operations.

NOTE 8 - RELATED PARTY TRANSACTIONS

At  September  30, 2005 the company had an  aggregate of $628,039 due to related
parties. These advances have no specified due date or interest rate.


                                       10
<PAGE>


NOTE 9 - SUBSEQUENT EVENTS

Common Stock

On October 19, 2005, Innovate Oncology Inc issued 225,000 shares of Common Stock
for services valued at the fair market value of $5.10 per share.

Credit Facilities

During  October,  2005,  the Company  borrowed an additional  $792,057 from Jano
Holdings Limited pursuant to its credit facilities described in Note 4.

Private Placement

In October 2005 the Registrant  has commenced a private  placement (the "Private
Placement") of the Registrant's Series A Convertible  Preferred Stock, par value
$0.001 per share (the "Series A Preferred Stock"), to accredited investors.  The
Registrant reasonably believes that the securities have been and will be sold in
the Private  Placement only to  "accredited  investors," as such term is defined
under Rule 501(e) under Regulation D promulgated  pursuant to the Securities Act
of 1933,  as amended (the "Act").  The  Registrant  will use the proceeds of the
Private  Placement for general  working  capital and other  corporate  purposes,
including, without limitation, the development of various compounds.

Shares of Series A Preferred  Stock are being  offered in the Private  Placement
for  $6.00  per  share of  Series A  Preferred  Stock.  Each  share of  Series A
Preferred Stock may initially  convert into four (4) shares of the  Registrant's
common stock , par value $0.001 per share (the "Common Stock"), which equates to
an initial  conversion  price of $1.50 per share of Common Stock.  The shares of
Common Stock issued upon  conversion  of shares of Series A Preferred  Stock are
hereafter referred to as Conversion Shares.

Also,  each  purchaser in the Private  Placement will receive one (1) warrant (a
"Warrant")  to acquire one (1) share of Common Stock for every two (2) shares of
Common  Stock  initially  underlying  the  shares  of Series A  Preferred  Stock
purchased  in the  Private  Placement.  The shares of Common  Stock which may be
acquired upon exercise of the Warrants are hereafter referred to as the "Warrant
Shares."  The Warrants  are  exercisable  initially at $2.00 per share of Common
Stock,  subject to  adjustment,  and are  exercisable  for three (3) years after
issuance or until the market  price of the Common  Stock has been at least three
hundred percent (300%) of the then applicable  exercise price of the Warrant for
a period of at least  thirty (30) days,  and the average  trading  volume of the
Common  Stock has been at least one hundred  thousand  (100,000)  shares per day
during such thirty (30) day period (subject to adjustment of such trading volume
threshold in the event of stock splits,  reverse stock splits,  stock dividends,
recapitalizations or similar events) and the shares of Common Stock which may be
acquired  upon  exercise of the  Warrants  are  registered  at the time under an
effective registration statement, whichever is earlier.

In  addition,  each  purchaser  in the Private  Placement  will receive four (4)
shares of the common stock of Cynat Oncology, Inc. ("Cynat") and four (4) shares
of the common  stock of Genaderm  Inc.  ("Genaderm"),  being  referred to as the
"Cynat Shares" and the "Genaderm Shares", respectively, for each share of Series
A Preferred Stock acquired by such purchaser in the Private Placement.

On  October  7,  2005,  the  Registrant  sold  3,128,769  shares of its Series A
Preferred Stock for an aggregate  purchase price of  $18,772,580,  and issued to
those investors Warrants to acquire, in the aggregate, 6,257,523 Warrant Shares.
The Registrant also delivered  12,515,056  Cynat Shares and 12,515,056  Genaderm
Shares, in the aggregate, to those investors. In addition, the Registrant issued
162,755 shares of its Series A Preferred  Stock, in the aggregate,  to investors
to whom it had previously  agreed to issue a lesser number of shares of Series A
Preferred  Stock, in order to give those investors the benefit of the same terms
on their investment,  as well as Warrants to acquire, in the aggregate,  325,510
Warrant  Shares and  651,020  Cynat  Shares and  651,020  Genaderm  Shares.  The
aggregate  investment  by  those  investors  was  $976,530.

The  Registrant  has  agreed  to pay to its  placement  agent  and to any  other
participating agent a cash fee equal to ten percent (10%) of the aggregate gross
proceeds  to the  Registrant  from the sale of Series A  Preferred  Stock in the
Private  Placement to investors  introduced to the  Registrant by the applicable
placement agent or participating agent (without duplication of introduction).

In addition,  the Registrant  has agreed to issue to its placement  agent and to
any other  participating  agent a warrant (the  "Placement  Agent  Warrants") to
purchase  that number of shares of Common Stock (the  "Placement  Agent  Warrant
Shares")  equal to ten  percent  (10%) of the  number of shares of Common  Stock
initially  issuable upon  conversion of the Series A Preferred Stock sold in the
Private  Placement to investors  introduced to the  Registrant by the applicable
placement agent or participating agent (without duplication of introduction).


                                       11
<PAGE>


The Placement  Agent Warrants are initially  exercisable at one dollar and fifty
cents ($1.50) per share of Common Stock, subject to adjustment,  commencing upon
the date of issuance and  continuing  for five (5) years after issuance or until
the market  price of the Common  Stock has been at least three  hundred  percent
(300%) of the then applicable  exercise price of the Placement Agent Warrant for
a period of at least  thirty (30) days,  and the average  trading  volume of the
Common  Stock has been at least one hundred  thousand  (100,000)  shares per day
(subject to  adjustment of such trading  volume  threshold in the event of stock
splits,  reverse stock splits,  stock  dividends,  recapitalizations  or similar
events)  during such thirty (30) day period and the shares of Common Stock which
may be acquired upon exercise of the Placement  Agent Warrants are registered at
the time under an effective  registration  statement,  whichever is earlier. The
Placement Agent Warrants contain a cashless  exercise  provision.  The Placement
Agent Warrants are  transferable by the Placement  Agent or other  Participating
Agent  receiving  the same only to its  officers,  directors,  shareholders  and
employees,  as well as by such persons to their immediate  family  affiliates in
connection with estate  planning,  provided that no such transfer or disposition
may be made  other  than in  compliance  with  applicable  securities  laws  and
furnishing satisfactory evidence of such compliance to the Registrant.

The Registrant  also agreed to indemnify the placement  agent and  participating
agents against  certain  liabilities.  The Registrant also agreed to pay its own
costs of the Private  Placement.  The  Registrant  has also agreed to pay to the
placement  agent  a  non-accountable  expense  allowance  (the  "Non-Accountable
Expense Allowance") equal to 3% of the gross proceeds received by the Registrant
from the sale of Series A Preferred  Stock to  investors  (other than  investors
introduced by management or affiliates of the Registrant or management).

In connection with the Private Placement to date, the Registrant has paid to its
placement agent and other participating  agents, in the aggregate,  cash fees of
$196,053,  issued  Placement Agent Warrants to acquire  130,703  Placement Agent
Warrant Shares, and paid to its placement agent the aggregate sum of $58,815 for
the Non-Accountable Expense Allowance.

The Series A Preferred Stock, the Conversion Shares,  the Warrants,  the Warrant
Shares,  the Cynat Shares, the Genaderm Shares, the Placement Agent Warrants and
the Placement Agent Warrant Shares are "restricted  securities" and,  therefore,
may be transferred, to the extent permissible,  only pursuant to registration or
qualification  under  federal  and  state  securities  laws  or  pursuant  to an
exemption from registration or qualification.  In addition, the Warrants are not
transferable  in  blocks  of less  than the  lesser  of (i) one  hundred  twenty
thousand  (120,000)  Warrants  or, if  applicable,  (ii) the number of  Warrants
acquired by the applicable purchaser in the Private Placement.

In  connection  with the Private  Placement,  the  Registrant  entered  into the
Bioaccelerate  Holding Inc. ('BACL').  Registration  Rights Agreement.  The BACL
Registration Rights Agreement imposes certain registration  obligations upon the
Registrant  with respect to the shares of Common Stock  underlying  the Series A
Convertible  Preferred Stock acquired in the Private  Placement by each investor
who executed and delivered to the Registrant the Securities  Purchase Agreement.
The Registration  Rights Agreement also grants  registration  rights in favor of
such  investors with respect to the shares of Common Stock  underlying  Warrants
received by them in the Private  Placement.  Placement agents and  participating
agents  who  execute  and  deliver  the  Registration  Rights  Agreement  to the
Registrant  have  similar  rights  with  respect to the  shares of Common  Stock
underlying  Placement  Agent  Warrants.  The  shares  with  respect to which the
Registration Rights Agreement grants such rights are referred to as "Registrable
Securities",  and shall continue to be Registrable Securities until those shares
have  either  been  effectively  registered  under  the Act and  disposed  of in
accordance  with a registration  statement  covering them, have been sold to the
public  pursuant  to Rule 144 or by  similar  provision  under  the Act,  or are
eligible  for resale  under Rule  144(k) or by similar  provision  under the Act
without  any  limitation  on the  amount of  securities  that may be sold  under
paragraph (e) thereof.

Pursuant to the Registration Rights Agreement, the Registrant is required to use
its reasonable best efforts to accomplish the following:

prepare and file a  registration  statement  covering the Common  Shares and the
Warrant Shares (a "Required  Registration  Statement") with the U.S.  Securities
and Exchange  Commission  (the "SEC") by the date (the  "Required  Filing Date")
which is not more than  sixty  (60) days  after  the  first  date to occur  (the
"Commencement  Date") of the  following  dates:  the Final Closing Date (as such
term is defined in the Securities  Purchase Agreement) or the termination of the
Offering,  if there is no Final Closing Date;  and cause either of the following
(the  "Effectiveness  Actions") to occur by a date (the "Required  Effectiveness
Date") which is not more than ninety (90) days after the Commencement  Date: (A)
cause the SEC to declare the Required Registration  Statement to be effective or
(B) cause the SEC to communicate to the Registrant,  orally or in writing,  that
the Required Registration  Statement will not be reviewed or that the Commission
has no further  comments  thereupon,  whereupon the  Registrant  shall cause the
Required Registration Statement to be effective.

Pursuant to the  Registration  Rights  Agreement,  the failure to file or become
effective   within  the  applicable   time  period  shall  be  deemed  to  be  a
"Non-Registration Event". For each thirty (30) day period during the pendency of
any such  Non-Registration  Event, the Registrant shall deliver to each investor
in the Private Placement,  as liquidated damages, an amount equal to one percent
(1.0%) of the  aggregate  purchase  price  paid by such  investor  for shares of
Series A Preferred Stock in the Offering,  with such payment being pro-rated for
any Non-Registration Event of less than thirty (30) days, subject to the maximum
penalty  of 18.5% of the  gross  proceeds.  Each  such  payment  is  hereinafter
referred to as a "Non-Registration  Event Penalty Payment".  Notwithstanding the
foregoing,  in no event shall the  Registrant  be obligated to pay more than one
Non-Registration Event Penalty Payment to the same


                                       12
<PAGE>


Purchaser  in respect of a  substantively  concurrent  failure to  perform.  The
Registrant, at its sole discretion, shall pay the Non-Registration Event Penalty
Payment to all holders in cash or in shares of its Common Stock.

The Registrant  agreed to use its reasonable  best efforts to keep such Required
Registration  Statement  continuously  effective (the "Effective  Period") for a
period of two years after the  Required  Registration  Statement  first  becomes
effective plus whatever period of time as shall equal any period, if any, during
such two year period in which the  Registrant was not current with its reporting
requirements  under the Exchange Act. To the extent the  Registrable  Securities
are not sold under the Required  Registration  Statement,  the  investors in the
Private Placement shall have the following  registration  rights pursuant to the
Registration Rights Agreement:

If the  Registrant  is  eligible  to use Form S-3 under the Act (or any  similar
successor  form) and shall receive from the holders of the Common Shares and any
permitted  transferees (the "S-3 Initiating Holders") a written request that the
Registrant  effect a  registration  on such Form S-3 pursuant to Rule 415 of the
Act and any related  qualification  or compliance with respect to all or part of
the Registrable  Securities owned by the S-3 Initiating Holders (provided,  that
the  S-3  Initiating  Holders   registering   Registrable   Securities  in  such
registration  (together with all other holders of  Registrable  Securities to be
included in such registration)  propose to sell their Registrable  Securities at
an aggregate  price  (calculated  based upon the Market Price of the Registrable
Securities  on the  date  of  filing  of the  Form  S-3  with  respect  to  such
Registrable  Securities)  to the public of no less than the lesser of $5,000,000
or the remaining  Registrable  Securities),  the Company shall (i) promptly give
written notice of the proposed  registration,  and any related  qualification or
compliance, to all other holders of Registrable Securities;  and (ii) as soon as
practicable,  use reasonable  best efforts to file and effect such  registration
and all such  qualifications and compliances as may be so requested and as would
permit or  facilitate  the sale and  distribution  of all or such portion of the
Registrable  Securities as are  specified in such request,  together with all or
such portion of the  Registrable  Securities of any other holder in the group of
holders  joining in such  request as is  specified  in a written  request  given
within fifteen (15) days after the holder's  receipt of such written notice from
the Registrant.

In  addition,  for so  long  as  the  Registration  Rights  Agreement  shall  be
applicable,  whenever the Registrant  proposes to register any of its securities
under the Securities Act (other than pursuant to any of the registration  rights
described  above,  or a  registration  on Form  S-4 or S-8 or any  successor  or
similar  forms)  and  the  registration  form to be  used  may be  used  for the
registration  of  Registrable  Securities,  whether  or not for sale for its own
account,  the  Registrant  will give prompt written notice (but in no event less
than twenty five (25) days before the anticipated filing date) to all holders of
Registrable Securities, and such notice shall describe the proposed registration
and  distribution  and  offer  to all  holders  of  Registrable  Securities  the
opportunity to register the number of Registrable Securities as each such holder
may request.  The Registrant will include in such  registration  all Registrable
Securities  with respect to which the Registrant has received  written  requests
for inclusion therein within fifteen (15) days after the holders' receipt of the
Registrant's  notice.  The Registrant shall use all reasonable  efforts to cause
the  managing  underwriter  of a proposed  underwritten  offering  to permit the
Registrable  Securities requested to be included in a Piggyback  Registration to
be included on the same terms and  conditions  as any similar  securities of any
other  security  holder  included  therein  and to  permit  the  sale  or  other
disposition  of such  Registrable  Securities  in  accordance  with the intended
method of distribution  thereof. The performance of these registration rights is
subject  to  customary  investor   representations  and  warranties,   customary
indemnifications by investors,  customary  allocations of fees and expenses and,
where applicable, customary cutback and blackout provisions.

In connection with the Private Placement,  the Registrant entered into the Cynat
and Genaderm Registration Rights Agreement.  The Cynat and Genaderm Registration
Rights Agreement  imposes certain  registration  obligations upon the Registrant
with respect to the Cynat Shares and the Genaderm Shares, respectively, acquired
in the Private  Placement by each  investor  who  executed and  delivered to the
Registrant the Securities Purchase Agreement.  The Cynat Shares and the Genaderm
Shares  with  respect to which the  Registration  Rights  Agreement  grants such
rights  are  referred  to  as  "Cynat  Registrable  Shares"  and  the  "Genaderm
Registrable  Shares",  respectively,  and shall continue to be Cyant Registrable
Shares or Genaderm  Registrable  Shares,  as the case may be, until those shares
have  either  been  effectively  registered  under  the Act and  disposed  of in
accordance  with a registration  statement  covering them, have been sold to the
public  pursuant  to Rule 144 or by  similar  provision  under  the Act,  or are
eligible  for resale  under Rule  144(k) or by similar  provision  under the Act
without  any  limitation  on the  amount of  securities  that may be sold  under
paragraph (e) thereof.  Pursuant to the Cynat and Genaderm  Registration  Rights
Agreement,  the  Registrant  is required to use its  reasonable  best efforts to
cause Cynat and Genaderm to accomplish the following:

prepare and file a registration  statement covering the Cynat Registrable Shares
and the  Genaderm  Registrable  Shares  with the SEC by the date (the "Cynat and
Genaderm  Required Filing Date") which is not more than one hundred twenty (120)
days after the first date to occur (the  "Commencement  Date") of the  following
dates:  the  Final  Closing  Date (as such  term is  defined  in the  Securities
Purchase  Agreement) or the  termination  of the Offering,  if there is no Final
Closing Date (it being understood that Cynat shall prepare and file the required
registration  statement  with  respect to Cynat  Registrable  Shares (the "Cynat
Required Registration  Statement),  and that Genaderm shall prepare and file the
required registration statement with respect to Genaderm Registrable Shares (the
"Genaderm Required Registration  Statement");  and cause either of the following
(the  "Effectiveness  Actions")  to occur by a date  (the  "Cynat  and  Genaderm
Required  Effectiveness Date") which is not more than ninety (90) days after the
Commencement Date: (A) cause the SEC to declare the Cynat Required  Registration
Statement and the Genaderm  Required  Registration  Statement to be effective or
(B) cause the SEC to communicate to Cynat or Genaderm,  whichever is applicable,
orally or in writing,  that the Cynat  Required  Registration  Statement and the
Genaderm  Required  Registration  Statement  will  not be  reviewed  or that the
Commission has no further comments thereupon, whereupon the Registrant shall use
its reasonable best efforts to cause Cynat and Genaderm, as applicable, to cause
the Cynat Required  Registration  Statement and Genaderm  Required  Registration
Statement to be effective.


                                       13
<PAGE>


The  Registrant  agreed to use its  reasonable  best  efforts to cause Cynat and
Genaderm  to keep  such  Cynat  Required  Registration  Statement  and  Genaderm
Required Registration  Statement continuously effective (the "Effective Period")
for a period of two years after the Cynat  Required  Registration  Statement and
Genaderm Required  Registration  Statement first becomes effective plus whatever
period of time as shall equal any period, if any, during such two year period in
which Cynat or  Genaderm,  as  applicable,  was not current  with its  reporting
requirements under the Exchange Act.

To the extent the Cynat Registrable  Shares or the Genaderm  Registrable  Shares
are not sold under the Cynat  Required  Registration  Statement  or the Genaderm
Required  Registration  Statement,  the investors in the Private Placement shall
have  registration  rights with  respect to their Cynat  Registrable  Shares and
their  Genaderm   Registrable  Shares,   pursuant  to  the  Cynat  and  Genaderm
Registration   Rights   Agreement,   substantially   similar  to  the  Form  S-3
registration  rights  and the  piggyback  registration  rights of  investors  in
respect of the BACL Registration Rights Agreement.

The terms of the Series A  Preferred  Stock have been set forth in the  Restated
Certificate  of  Designations,  Preferences  and Rights of Series A  Convertible
Preferred Stock of the Registrant (the "Certificate of Designations")  which has
been filed with the Secretary of State of Nevada.

Each share of Series A Preferred  Stock shall carry a  cumulative  dividend at a
rate of six per cent (6%) per  annum,  payable  out of funds  legally  available
therefore,  prior and in preference to the payment of all other dividends on the
Registrant's  Common  Stock or junior  equity  securities,  quarterly in arrears
(with the first payment on December 31, 2005) in cash or shares of the Company's
Common Stock, at the Registrant's  option,  whether or not declared by the Board
of Directors.  The shares of the Registrant's  Common Stock issued in payment of
the dividend  hereunder  shall be valued at the twenty (20) trading day trailing
average  market  price of the Common Stock as of the date five (5) days prior to
the dividend  payment  date. In the event that the shares of Common Stock issued
in payment of dividends  payable  more than one hundred  eighty (180) days after
the issuance of the Series A Preferred Stock to which such dividends  relate are
not then registered under an effective registration statement, the Company shall
only pay such dividends in cash.

In the  event of any  liquidation  or  winding  up of the  Company,  before  any
distribution of assets to the holders of Junior  Securities,  the holder of each
share of Series A  Preferred  Stock  then  outstanding  shall be paid out of the
assets of the Company legally  available for  distribution to its stockholders a
per  share  amount  equal to the  original  issue  price  per  share of Series A
Preferred  Stock  ($6.00 per share),  as adjusted for stock  splits,  dividends,
combinations or other recapitalization of the Series A Preferred Stock) plus any
declared and unpaid dividends thereon (the "Liquidation  Preference").  Upon the
completion of all required  distribution  to any other class or series of Senior
Securities, if assets remain in the Company, the remaining assets of the Company
available  for  distribution  to  stockholders  shall be  distributed  among the
holders of shares of any other  series of  preferred  stock in  accordance  with
their  respective  terms,  then to the holders of Common Stock pro rata based on
the  number of shares  of the  Common  Stock  actually  outstanding  and held by
holders of shares of Common Stock. Notwithstanding the foregoing, if the holders
of the Series A Preferred Stock would receive on an as-converted basis an amount
greater  than the  Liquidation  Preference,  such  holders  shall be entitled to
receive such greater amount.

Each holder of Series A Preferred Stock has the right to convert such shares, at
any time,  into a number of shares of Common Stock equal to the  original  issue
purchase  price ($6.00 per share)  divided by the  conversion  price  (initially
$1.50 per share) (an "Optional Conversion"). Alternatively, a Series A Preferred
Stock will automatically convert into Common Stock calculated in the same manner
as an Optional  Conversion upon the earliest to occur of the following dates (an
"Automatic  Conversion"):  (i)  the  date,  at  any  time  after  the  one  year
anniversary of the issuance date,  upon which both (x) the average of the market
price  for a share  of  Common  Stock  for a  period  of at  least  thirty  (30)
consecutive   trading  days  exceeds  three  hundred   percent   (300%)  of  the
then-applicable  conversion  price and (y) the average of the trading volume for
the Common Stock during such period  exceeds  100,000 shares per day (subject to
adjustment  of such  trading  volume  threshold  in the  event of stock  splits,
reverse stock splits,  stock  dividends,  recapitalizations  or similar  events)
shares per  trading  day;  (ii) upon the  affirmative  vote of the  holders of a
majority of the then  outstanding  shares of Series A Preferred  Stock; or (iii)
immediately  prior to the  closing of an  underwritten  public  offering  of the
Registrant's  Common Stock for aggregate gross proceeds to the Registrant of not
less than one hundred  million  dollars  ($100,000,000)  if the public  offering
price  of  the  Registrant's  Common  Stock  is  at  least  two  (2)  times  the
then-applicable  conversion  price  and the  shares of  Common  Stock  issued in
exchange  for  each  share  of the  Registrant's  Series  A  Preferred  Stock so
converted  are  registered  at the time of such  conversion  under an  effective
registration  statement.  The terms "market price" and "trading day" are defined
in the Certificate of Designations.

The number and kind of securities  issuable upon the  conversion of the Series A
Preferred Stock and the conversion price shall be adjusted  appropriately in the
event of stock splits, reverse stock splits, stock dividends,  recapitalizations
or  similar  events.  In  addition,  the  conversion  price  shall be subject to
appropriate  adjustment,  on a  weighted  average  basis,  in the event that the
Registrant issues, or is deemed to issue under the applicable  provisions of the
Certificate  of  Designations,  additional  shares of Common Stock at a purchase
price  less  than  the  then-effective  conversion  price,  except  for  certain
issuances excluded from any such calculation.

The Series A Preferred Stock will vote together with the Common Stock and not as
a  separate  class  except  as  specifically  provided  in  the  Certificate  of
Designations or as otherwise  required by law. Each holder of outstanding shares
of Series A Preferred Stock shall


                                       14
<PAGE>


have a number of votes equal to the number of whole  shares of Common Stock into
which the Series A Preferred  Stock would  convert as of the  applicable  record
date at each meeting of stockholders of the Registrant.

So long as the Series A Preferred Stock is outstanding,  the Registrant will not
do any of the  following  without the consent of at least a majority in interest
of the Series A Preferred Stock voting as a separate group: (a) authorize, issue
or agree to  authorize  or  issue  any new  class or  series  of  senior  equity
securities  or parity  equity  securities  or  securities  or rights of any kind
convertible  into or  exercisable  or  exchangeable  for any such senior  equity
securities  or parity  equity  securities,  or offer,  sell or issue any  senior
equity  securities  or parity  equity  securities or securities or rights of any
kind  convertible into or exercisable or exchangeable for any such senior equity
securities  or parity  equity  securities;  (b)  purchase,  repurchase or redeem
shares of (i) Common Stock,  (ii)  securities or rights of any kind  convertible
into or exercisable or exchangeable  for Common Stock or (iii) other  securities
of the Company,  (except in the case of a termination  of an employee,  at which
the Company  may  repurchase  or redeem such shares of Common  Stock at cost and
pursuant to any agreement  under which such shares of Common Stock were issued);
(c) increase the authorized number of shares of Series A Preferred Stock, or (d)
amend the Certificate of  Incorporation  or Bylaws of the Registrant or alter or
change the rights,  preferences or privileges of the Series A Preferred Stock or
any parity equity  securities or senior equity  securities in each case so as to
affect adversely the rights, preferences or privileges of the Series A Preferred
Stock.

In  connection  with the  Private  Placement  referred  to above the  Registrant
consummated a second closing on October 24, 2005, at which the  Registrant  sold
170,668 shares of its Series A Preferred  Stock for an aggregate  purchase price
of  $1,024,008  and  issued  to those  investors  Warrants  to  acquire,  in the
aggregate,  341,336 Warrant Shares.  The Registrant also delivered 682,672 Cynat
Shares and 682,672 Genaderm Shares, in the aggregate, to those investors.

To date, the Registrant has sold an aggregate of 3,299,437  shares of its Series
A Preferred  Stock for an aggregate  purchase price of $20,773,118 and issued to
those investors Warrants to acquire, in the aggregate, 6,598,859 Warrant Shares.
The Registrant also delivered  13,197,728  Cynat Shares and 13,197,728  Genaderm
Shares,  in the  aggregate,  to those  investors.  Of the aggregate  $20,773,118
invested  in the  Private  Placement  to date,  $3,002,538  was paid in cash and
$17,770,580  was paid  through  conversion,  on a  dollar-for-dollar  basis,  of
outstanding indebtedness of the Registrant to investors.

In connection with the Private Placement to date, the Registrant has paid to its
placement agent and other participating  agents, in the aggregate,  cash fees of
$298,453,  issued  Placement Agent Warrants to acquire  198,970  Placement Agent
Warrant  Shares and paid to its placement  agent the aggregate sum of $89,536.14
for the Non-Accountable Expense Allowance.

No such fee or placement agent warrants are due with respect to certain
investors or with respect to the conversion of Series A Preferred Stock or the
exercise of warrants.

ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS

FORWARD LOOKING STATEMENTS: NO ASSURANCES INTENDED

This  disclosure  contains  forward-looking   statements.   The  forward-looking
statements  include all statements  that are not statements of historical  fact.
The  forward-looking  statements are often identifiable by the use of words such
as "may," "expect,"  "believe,"  "anticipate,"  "intend,"  "could,"  "estimate,"
"seek,"   "contemplate,"   "hope,"  "suggest,"  "envision,"  or  "continue,"  or
comparable  language,  or the negative or other variation of those or comparable
terms. Our actual results could differ  materially from the anticipated  results
described with forward-looking  statements.  These forward-looking statement are
based  largely  on our  expectation  and are  subject  to a number  of risks and
uncertainties,  including  but not limited to: those risks  associated  with out
ability to  identify  and raise  additional  capital  to  complete  our  product
development  programs;  our  allocation  of  resources  as necessary to continue
operations; our ability to generate cash flow from revenue or other sources; our
ability to use our  capital  stock for  acquisitions,  paying  expenses or other
disbursements,  attracting  personnel or contracts and other business uses. Many
of these factors are beyond our management's control.  These uncertainties could
cause our actual results to differ materially from the expectations reflected in
these forward-looking statements. In light of these risks and uncertainties,  we
cannot be certain that the forward-looking information contained herein will, in
fact, occur.  Interested persons should consider carefully the previously stated
factors as well as the more detailed information contained elsewhere herein.

PLAN OF OPERATIONS.

BUSINESS
Bioaccelerate (or "The Company") acquires and develops pharmaceutical  compounds
that have  substantial  medical and  commercial  value.  The  companies in which
Bioaccelerate  currently has interests focus on five vertical therapeutic areas;
Oncology,   Specialty  Pharma,   Central  Nervous  System,   Cardiovascular  and
Infection.   These   therapeutic  areas  represent  a  current  combined  market
opportunity in excess of $250 billion.

REDUCING RISK, ACCELERATING SPEED TO MARKET
Bioaccelerate uses a virtual  development  network to accelerate the development
of multiple  early stage  compounds to Phase II/III  clinical  development.  The
Company believes that this strategy  creates a lower risk business model,  since
its network  enables the timely and cost  effective  passage from the  discovery
process up to Phase II/III where substantial incremental value is created.


                                       15
<PAGE>


INNOVATION COMPLEMENTED BY A DIVERSE PARTNER NETWORK
Bioaccelerate's innovative approach focuses on the use of latest technologies to
cut  development  costs and  reduce  the  amount  of time that a drug  spends in
development.  Bioaccelerate's  key  objective  is to create  value  through  its
aggressive development of existing companies and compounds, as well as;

     o    Identifying additional compounds for portfolio companies;

     o    Entering into partnering, co-development and marketing agreements with
          large  pharmaceutical  and other biotech  companies,  speeding time to
          market for the compounds being developed;

     o    Using industry  expertise,  business contacts and insights of in-house
          scientific and business  management to develop synergies and establish
          collaborative agreements;

     o    Orchestrating a network of development  resource to ensure  efficiency
          in the development process;

     o    Creating  substantial  shareholder  value through the  development  of
          existing and further portfolio  companies,  via the deep asset base of
          identified  compounds that Bioaccelerate has access to via established
          relationships

A STRATEGIC APPROACH TO CREATING VALUE
Large  pharmaceutical  companies  need  additional  products  to  fill  depleted
pipelines.  Bioaccelerate  believes it has  developed a cost  effective  process
which   provides  a  link  between  early  stage  drug   candidates   and  large
pharmaceutical companies. Currently, funding is increasingly only available from
the capital  markets  for later  stage  companies.  Bioaccelerate  develops  and
consolidates  multiple early stage products in standalone  companies in vertical
therapeutic  areas until critical mass and development  milestones are achieved.
At this  stage the  company  is then ready to access  further  funding  from the
capital markets. This affords  orphan/individual  technologies an opportunity to
be  developed  while  giving  academic  institutions  and  scientists  access to
development capital for early stage compounds.  Bioaccelerate's drug development
strategy includes  in-licensing  compounds from various  academic,  research and
medical  centres  where  the  company  has  developed  extensive  relationships.
Bioaccelerate  is  constantly  reviewing  these  development   opportunities  to
establish  which products  offer the best strategic fit with other  companies in
its portfolio.

A PROVEN DEPTH OF EXPERTISE
Bioaccelerate  has a proven  management  team with a broad base of experience in
pharmaceutical  &  biotechnology  companies  as well  as  capital  markets.  The
management  team  is  responsible  for  company-wide  initiatives,   significant
operating  decisions and  policymaking.  This team works  alongside a scientific
advisory board whose function is to advise the Company on scientific  aspects of
product selection and development.
Bioaccelerate  conducts  its  business  directly  and through its  subsidiaries.
Bioaccelerate   Holdings  Inc.   currently  holds  100%  of  Bioaccelerate  Inc.
,Bioaccelerate  Ltd. and Bioaccelerate Ltd (BVI), and through these subsidiaries
a significant equity interest in the following thirteen biotech companies:

ONCOLOGY - Evolve Oncology,  Inc. (49.1%); Genar Oncology,  Inc. (94%); Innovate
Oncology, Inc. (90%); OncBio, Inc. (90%); Cynat Oncology, Inc. (94%)

SPECIALTY PHARMA - Innova Lifestyle,  Inc. (94%);  Amilar  Pharmaceuticals  Inc,
(94%); Enhance Biotech, Inc. (22.4%); Genaderm, Inc. (94%)

CENTRAL NERVOUS SYSTEM - CNS Thera, Inc. (94%); Neuro Bioscience, Inc (19%)

CARDIOVASCULAR DISEASE - InnCardio, Inc. (94%); BioCardio, Inc. (50 %)

ANTI-INFECTIVE - Anvira, Inc. (94%)

The  Company  also has  investments  in  Advance  Nanotech  Inc  (AVNA.OB),  JPS
Holdings, Inc and Llama Biotech Ltd

Our management  believes that large  pharmaceutical  companies  need  additional
drugs to fill  depleted  drug  development  pipelines,  particularly  since many
existing products of large  pharmaceutical  companies will soon be losing patent
protection.  Increasingly  those companies seek to fill that gap by in-licensing
drugs  at the  middle  to late  stages  of  development  rather  than  acquiring
compounds  at an earlier  stage.  We believe that the large  in-house  basic and
applied  research staffs of those large  pharmaceutical  companies  increase the
overhead of those  companies and may also engender  institutional  resistance to
acquisition or development of in-licensed  drugs,  resulting in costs and delays
in development of new drugs by those companies.  It also appears to us that many
individual  scientists and medical research  institutions may lack the expertise
or resources to develop promising early stage drug candidates.

Bioaccelerate's  business  goal  is to  act as a  cost-effective  pharmaceutical
development organization,  identifying commercially viable early-stage compounds
from  academic,  research and medical  centres  where  Bioaccelerate  has forged
strong relationships,  and utilizing our expedited product development structure
to provide a cost-effective  link between  early-stage drug candidates and large
pharmaceutical   companies.   Bioaccelerate  achieves  its  value  by  providing
management  expertise  and  funding  to develop  the  products  assigned  to its
portfolio  companies  and  achieves  shareholder  value by taking the  portfolio
companies  public  and  benefiting  from  the  upside  in  share  price of those
portfolio  companies as and when  milestones are achieved in the  development of
the compounds.

STRATEGY


                                       16
<PAGE>


Bioaccelerate  and its subsidiaries  select,  in-license and group,  early-stage
compounds which their  respective  managements deem promising in the stand-alone
companies  which  Bioaccelerate  has  organized by vertical  therapeutic  areas.
Bioaccelerate  may utilize its own  resources  for the initial  operations  of a
newly-formed  subsidiary,  including its initial  in-licensing.  However, when a
subsidiary company's product pipeline reaches critical mass and achieves certain
development  milestones,  it is intended that the  subsidiary  company will seek
additional  funding from the capital  markets on its own. Since funding is often
only available for later-stage compounds,  Bioaccelerate's development resources
make it possible for academic  institutions  and scientists to pursue early- and
mid-stage develop of orphaned compounds and technology.


Bioaccelerate  generally  favors  in-licensing  compounds  in the early- to mid-
stages of  development  to  reduce  the  risks  and  costs  associated  with new
molecular entity (NME) and new chemical entity (NCE) development.  Bioaccelerate
will  continue  to  advance  its  clinical   development   strategy,   balancing
in-licensing and reformulations with NME and NCE development when it feels it is
appropriate.

Bioaccelerate enters into development, marketing and partnership agreements with
laboratories,  industry experts and large  pharmaceutical  companies to develop,
test and seek regulatory approval for drug candidates. By relying primarily upon
contracts  with third parties for  research,  clinical  development  and project
management  rather  than  doing  that work  in-house,  Bioaccelerate  is able to
maintain  a  limited   infrastructure,   particularly  as  compared  with  large
pharmaceutical  companies.  Our management  believes that this strategy offers a
lower risk  model for  achieving  incremental  value for  investors  in new drug
products,  allows us to  accelerate  the time it takes for new products to reach
the critical Phase II/III  clinical  trials level,  and creates an efficient and
cost-effective route from discovery to commercializing a product.

RESEARCH AND DEVELOPMENT

The structure of our research and development activity is designed to enable the
best choices to be made as to where and how the projects are run and  resourced.
Each is managed as a discreet  project with its own budget and project  manager.
Where and when possible projects make common use of the resources and contracted
facilities enlisted at each stage. We manage our projects through ongoing review
of  scientific  data,  making  use of our  broadly  experienced  Management  and
Scientific  Advisory Board to assist in this process and by supplementing  these
programs  with  our cost  allocations  as  required  to move  toward  regulatory
approval.   Our  cost   allocations  are  based  primarily  on   pre-established
development  budgets set out in our agreements with research and  co-development
partners.   Costs  attributed  to  Research  and  Preclinical  projects  largely
represent our pipeline generating activities.  See Item 6 "Management Discussion
and  Analysis of  Financial  Condition  and Results of  Operations"  for further
discussion of research and development spending trends.


OUR PRODUCT DEVELOPMENT PORTFOLIO AND PIPELINE

1. ONCOLOGY

Oncology is the  therapeutic  market with the largest  portfolio  of products in
development by  Bioaccelerate  and its  subsidiaries.  Reuters  Business Insight
forecasts the global cancer  treatment market to grow from $34.3 billion in 2002
to $42.8 billion in 2007.  Their  research also  indicates  that the  innovative
cancer  therapy market will triple from $4.3 billion in 2001 to $12.3 billion in
2007.

EVOLVE  ONCOLOGY.  Evolve Oncology seeks to acquire,  develop and  commercialize
drugs to treat  various  types of cancer  and  cancer  pain  management.  Evolve
Oncology's product development portfolio targets lung, breast and other types of
cancer. Evolve Oncology's management believes its focus on innovative treatments
should  benefit  from  the  market   opportunity   created  by  multiple  patent
expirations,  particularly in hormonal and cytostatic therapies facing the large
pharmaceutical  companies.  Bioaccelerate  will also seek to develop niche drugs
passed over by large pharmaceutical companies.

ONCBIO.  OncBio  seeks to  acquire,  develop  and  commercialize  drugs to treat
multiple cancers such as breast, lung and chronic myelogenous leukemia. OncBio's
product  development  pipeline focuses on new,  innovative  compounds as well as
enhanced formulations of existing compounds.

GENAR  ONCOLOGY.  Genar Oncology seeks to acquire,  develop and  commercialize a
broad   platform  of  compounds  to  fight  cancers.   Bioaccelerate's   product
development portfolio targets multiple cancers, such as a single product one for
solid  tumors  prevalent  in  breast,  lung and  colorectal  cancer.  Management
believes  these  multiple-use  products  will  enhance  the drugs'  value in the
marketplace.

INNOVATE ONCOLOGY. Innovate Oncology seeks to acquire, develop and commercialize
compounds targeted at multiple cancers and oncology-related  conditions. Some of
the  oncology  related  conditions  we  seek  to  address  are  reversing  chemo
resistance  and  treating  common  side  effects  such as nausea  and  vomiting.
Innovate Oncology's pre-clinical product development portfolio is all based upon
scientific approaches which our management believes are innovative.


                                       17
<PAGE>


Bioaccelerate  through it's  subsidiaries  is developing a platform of compounds
which have been selected to target multiple cancers, instead of focusing on only
one specific  disease area. This approach  management  believes will enhance the
compounds future values and give the drugs a greater chance of success.

2. SPECIALTY PHARMA

The  specialty  pharma  segment  of the  global  pharmaceutical  marketplace  is
projected to grow from $22.9  billion in 2002 to $29 billion by 2007,  according
to Reuters  Business  Insight.  Bioaccelerate's  management  believes  its three
lifestyle drug subsidiary  companies are poised to take advantage of some of the
most potentially lucrative segments, including sexual dysfunction, skin diseases
and addiction.

ENHANCE BIOTECH. Enhance Biotech acquires,  develops and commercializes drugs to
treat  lifestyle   disorders.   Enhance's  portfolio  of  seven  products  under
development  target male sexual  dysfunction and  dermatology,  two of the seven
major therapeutic segments in the lifestyle drug market.  Enhance's lead product
targets premature  ejaculation,  which is the most widespread indication in male
sexual  dysfunction (MSD). The disorder affects 29% of the adult male population
and  represents a potential  $6 billion  market,  according to Reuters  Business
Insight.

Enhance Biotech recently acquired Ardent  Pharmaceuticals Inc., a privately held
biotechnology  company with an extensive research and development  pipeline that
includes a number of pre- clinical and clinical drug  candidates in the areas of
moderate to severe pain, urinary incontinence, premature ejaculation, depression
and cardio protection. Pursuant to the merger agreement, Ardent became a wholly-
owned subsidiary of Enhance Biotech and the former Ardent stockholders  received
Enhance  Biotech  securities  amounting,  on a fully- diluted  basis,  to 45% of
Enhance Biotech's  outstanding equity securities,  post-merger.  Shareholders of
Enhance Biotech own 55 % of the merged entity.

INNOVA LIFESTYLE.  Innova Lifestyle seeks to acquire,  develop and commercialize
drugs for  lifestyle  disorders  including  acne,  alcohol  addiction and female
sexual  dysfunction.  Awareness has been increasing about the need for effective
and safe female  stimulants  to treat  female  sexual  dysfunction.  Analysts at
Reuters  Business  Insight  say  this  disorder  is  still  poorly  defined  and
understood,  evidenced by their research that indicates that between 19% and 43%
of women in the general population suffer from sexual dysfunction.  Despite that
prevalence,  only  26%  of  women  across  the  major  markets  seek  treatment.
Bioaccelerate  believes  treatment for female sexual  dysfunction may be a major
market  opportunity  following in the footsteps of the strong public response to
male erectile and premature dysfunction treatments coming to market now.

AMILAR  PHARMACEUTICALS.  Amilar  Pharmaceuticals seeks to acquire,  develop and
commercialize drugs to treat lifestyle disorders.  Bioaccelerate's  portfolio of
products under  development  concentrates  on treatments for alcohol  addiction,
osteoarthritis,   interstitial  cystitis,  osteoarthritis  and  irritable  bowel
syndrome. Alcohol addiction affects a patient population of 47 out of every 1000
adults. The current market for this product is estimated to be $300 million.


3. CENTRAL NERVOUS SYSTEM

The worldwide population with CNS disorders is rising steadily. This increase is
being driven by an aging population, improving diagnostic techniques, increasing
physician and patient  awareness and a gradual shift away from the social stigma
traditionally attached to many psychiatric conditions.  As the prevalence of CNS
disorders  rises,  so does the cost. In the U.S., it is estimated that more than
20% of healthcare spending is directed towards CNS-related disorders,  according
to Reuters Business Insight.  Alzheimer's disease alone is estimated to cost the
U.S. economy $100 billion annually,  with a prevalent  population of more than 4
million.  Bioaccelerate  is  seeking  to tap the  potential  in this  market  by
developing  subsidiaries with diversified  products to target the broad range of
CNS diseases.

CNS THERA.  CNS Thera seeks to  acquire,  develop  and  commercialize  compounds
targeted  against  various  central  nervous system  disorders.  Bioaccelerate's
portfolio of products under development focuses on some of the largest potential
markets  such  as  Alzheimer's   disease,   epilepsy,   multiple  sclerosis  and
Parkinson's disease.


4. CARDIOVASCULAR DISEASE

Among  the  cardiovascular  diseases,  a  disorder  of lipid  metabolism  called
dyslipidemics  has had the fastest  growth in global sales.  In 2002, the global
anti-dyslipidemics market generated sales of $21.86 billion and Reuters Business
Insight  forecasts annual sales to rise to $32.6 billion by 2008.  Dyslipidemics
is often used as a blanket term to describe any  imbalance in the level of blood
lipids (fats) and a variety of conditions  characterized  by either  excessively
high or excessively low levels of certain lipids in the  bloodstream,  including
cholesterol    and     triglycerides.     Within     cardiovascular     disease,
hypercholester-olemia  is the most common risk, with an average  prevalence rate
of 43.8% in the seven major markets.

BIOCARDIO.  Biocardio seeks to acquire,  develop and commercialize  therapies to
treat  cardiovascular  and metabolic  diseases.  Bioaccelerate's  products under
development target heart disease, cholesterol imbalances and chronic obstructive
pulmonary disorder


                                       18
<PAGE>


(COPD).  COPD is lung damage caused by smoking and has the third largest  burden
of  disease  in  the  world.   Bioaccelerate  believes  its  novel  therapy,  if
successfully  developed  and  approved,  will  fill a  largely  unmet  need  for
treatment.

INNCARDIO.  Inncardio seeks to acquire,  develop and commercialize  therapies to
treat cardiovascular and metabolic diseases including diabetes, artherosclerosis
and myocardial ischemia.  Approximately 60 million people in seven major markets
suffer from diabetes, 17 million in the U.S. alone.


                                       19
<PAGE>


5. ANTI-INFECTIVES

The global anti-virals market, which is a subset of anti-infective,  is forecast
to grow from $8.7  billion in 2001 to $14 billion in 2007,  according to Reuters
Business  Insight.  Much of that growth  comes from the high  incidence of viral
infections  and  currently  available  drugs that are not  efficacious.  Another
growth  factor for this  therapeutic  area is a strategy  by big  pharmaceutical
companies   that   increasingly   target   patients  in  developing   countries.
Bioaccelerate  believes  this  change  creates an  opportunity  to  develop  its
anti-infective portfolio.

ANVIRA.  Anvira  seeks to acquire,  develop and  commercialize  anti-  infective
products  for  common  diseases  such as ear and  throat  infections  as well as
pneumonia and bronchitis.  Bioaccelerate's  current  portfolio of products under
development consists of reformulations of off- patent anti- infectives.


PRODUCT DEVELOPMENT

A  major  element  of  the  Company's  product  development  strategy  is to use
third-party or contract research organizations ("CROs") to assist in the conduct
of safety and efficacy  testing and clinical  studies,  to assist the Company in
guiding  products  through  the FDA and  EMEA  regulatory  review  and  approval
processes, and to manufacture and distribute any FDA and EMEA approved products.
The Company believes that maintaining a limited infrastructure will enable it to
develop products efficiently and cost effectively.

On  November  1st,  2004  the  Company  entered  into a  contract  with  Faustus
Forschungs  Cie,  Translational  Cancer  Research GMBH for the co development of
nine compounds targeted at various forms of Cancer.

The Company  believes the use of  third-parties  to develop and  manufacture its
products has several  advantages.  This approach generally allows a greater pool
of  resources  to be  concentrated  on a product  than if these  functions  were
preformed  by  internal  personnel  who  were  required  to  support  all of the
Company's product development activities.  Although this approach will allow the
Company  to avoid  the  expense  associated  with  developing  a large  internal
infrastructure to support its product development efforts, it will result in the
Company being  dependent on the ability of outside  parties to perform  critical
functions  for the Company.  Over time,  the Company  expects to build  internal
capabilities to replace certain development  functions now contracted to outside
parties.

This contract  approach to product  development  requires project  management by
professionals with substantial industry experience. The Company will continue to
evaluate   prospective   additions  to  its  in-house  expertise,   as  well  as
opportunities for contract and advisory services in areas of critical importance
to all of its proposed products, including the management of current development
teams.  These areas include  regulatory  affairs,  marketing and sales,  quality
assurance,  manufacturing,  clinical  trials  management,  finance,  information
systems and general management.

The product development process is designed to identify problems associated with
a proposed  product's safety and  effectiveness.  The Company attempts to reduce
the risk that a proposed  product  will not be  accepted in the  marketplace  by
conducting  market  research and defining  commercial  strategy for each product
candidate.  A drug  development  portfolio  cannot be completely  insulated from
potential clinical and market failures. It is likely that some proposed products
selected for development by the Company will not produce the clinical or revenue
results expected.

RESEARCH PRODUCT PIPELINE

The Company will continue to invest in the research and  development of existing
and new products, including those that could extend the applications of existing
technologies. The Company is currently evaluating a number of product candidates
arising from various academic facilities and other biotech companies.

MARKET OVERVIEW

The  pharmaceutical   industry  is  characterized  by  ongoing  convergence  and
consolidation.  Large  pharmaceutical  companies continue to experience depleted
product pipelines and reduced research and development ("R&D") productivity,  as
measured  by  declining  numbers  of  approved  new  chemical  entities  despite
year-on-year increases in R&D spending.

ONCOLOGY
Cancer is not a single disease, but a set of several hundred distinct neoplastic
entities  that  together  represent  the  third  largest  disease  burden of any
therapeutic  area.  According to the 2003 Facts and Figures report issued by the
American Cancer Association, men in the United States have an approximately 1 in
2 chance of developing  cancer during their lifetime.  The increasing age of the
population  and the  continuing  morbidity  and mortality  associated  with this
disease confirm the need for continued  scientific  research and the development
of new therapies.


                                       20
<PAGE>


     o    In 2004 over 10 million  people were  diagnosed  with cancer,  by 2015
          this is  forecast to reach 15  million.  Six  million  people die from
          cancer every year, representing 12% of deaths worldwide.

     o    The National Cancer Institute  estimates the overall cost of cancer in
          the U.S. to be in excess of $100  billion.  Treatment of breast,  lung
          and prostate cancers accounts for over half the direct medical costs.

     o    The global  cancer market was valued at $34.3 billion in 2002, a 16.5%
          increase on previous  year's sales of $29.5 billion.  Cytotoxic  drugs
          were the largest  class,  followed by  hormonal  therapeutics.  A fast
          growing  category was a class that includes  cytokines and  monoclonal
          antibodies.  This class, known as the innovative therapy category, was
          driven by widespread physician uptake which led to growth of over 57%.

     o    Oncology  is   currently   the  most  active  area  of  research   for
          multi-national  pharmaceutical companies. BMS is currently the leading
          player in the oncology  market in revenue  terms,  with total oncology
          sales of $3.71 billion equating to a 10% market share


SPECIALTY PHARMA
Specialty pharma (including `lifestyle' drugs) enhance or improve human function
in  individuals  who believe that their  problems - from sexual  dysfunction  to
diabetes,  incontinence  and  obesity -  negatively  affect  normal  aspects  of
everyday  living.  These  conditions  should be  capable  of being  defined  and
diagnosed with reference to measurable  characteristics,  of known etiology, and
prospective  patients  must be capable of being  targeted  and  convinced of the
value of pharmacotherapy.


     o    The  appeal  of  Specialty  drugs  lies in their  ability  to  improve
          physical  and  mental  well-being  and  as an  alternative  to  making
          lifestyle changes.

     o    The ability to create new disease markets,  as is currently  happening
          in the area of female  sexual  dysfunction,  will  cause  the  overall
          Specialty  pharma  market  to expand  significantly  over the next two
          decades.

     o    When  developing  and  defining  a new  Specialty  condition:  (a) the
          disorder must be capable of being clearly  defined and diagnosed  with
          reference to measurable  characteristics,  (b) the epidemiology of the
          condition must be known, and (c) prospective  patients must be capable
          of being targeted and convinced of the value of pharmacotherapy.

     o    According to definition and included conditions, the global market for
          Specialty/lifestyle  medicines  is  estimated at close to $22 billion.
          Leading  contributors to this total include Sexual function,  ED ($2.5
          billion);  Smoking,  alcohol ($1.5 billion); Oral contraceptives ($4.0
          billion);  Obesity ($1 billion);  Selected  dermatological  conditions
          ($4.0 billion); Inflammatory Bowel Disease ($2.0 billion); and Fatigue
          ($2.0 billion).


CENTRAL NERVOUS SYSTEM
CNS (Central Nervous System) products represent a large and fast-growing  sector
of  the  pharmaceutical  market.  The  segment  is  based  on  neurological  and
psychiatric conditions, which have been estimated to account for over 15% of the
disease  burden  within the  world's  developed  economies.  Conditions  include
Alzheimer's Disease,  Depression,  Epilepsy, Migraine, Multiple Sclerosis, Pain,
Parkinson's Disease and Schizophrenia.


     o    The worldwide  population with CNS disorders is steadily rising.  This
          is  being  driven  by  an  aging  population,   improving   diagnostic
          techniques,  increasing  physician and patient awareness and a gradual
          shift  away from the  social  stigma  traditionally  attached  to many
          psychiatric conditions.

     o    As the prevalence of CNS disorders rises, so does the cost. In the US,
          it is estimated  that over 20% of healthcare  expenditure  is directed
          towards CNS related disorders.  Alzheimer's disease alone is estimated
          to  cost  the US  economy  $100  billion  annually,  with a  prevalent
          population of over 4m.

     o    Neuroscience (CNS) world market value is over $98 billion,  growing at
          11% per annum.

     o    The   global  CNS  market  is   dominated   by  four  major   players,
          GlaxoSmithKline,  Eli Lilly,  Pfizer and Janssen,  who hold a combined
          market share of 38.8%.


CARDIOVASCULAR
The Cardiovascular  market is one of the largest of all pharmaceutical  sectors.
Cardiovascular  disease  includes heart  failure,  atrial  fibrillation,  stable
angina and peripheral  arterial  disease.  Acute  thrombotic  events,  including
unstable angina, myocardial infarction, deep vein thrombosis, pulmonary embolism
and stroke also  contribute  to the burden of disease.  Risk  factors  including
hypercholesterolemia,   hypertension,   diabetes  and  obesity   predispose  the
development of cardiovascular disease in later life.


     o    Cardiac  therapy  holds  enormous  potential for new drugs due to high
          unmet need within substantial patient populations.

     o    Cardiovascular world market value is currently valued at $116 billion.
          Cardiovascular  disease  accounts for 17 million deaths  globally each
          year. The Statin market has a world market value of $26 billion


                                       21
<PAGE>


     o    Antithrombotics  sales  grew to just under $10  billion in 2002,  with
          antiplatelet therapies representing a 58% share of the class.

     o    Pfizer is the dominant player in the global cardiovascular market with
          a 19% market share.


INFECTION
Infectious  diseases  continue to be a leading  cause of morbidity and mortality
across the globe. They are a leading cause of death, accounting for a quarter to
a third of the estimated 54 million deaths worldwide in 1998.  However,  new and
re-emerging infectious diseases may pose a rising global health risk. The spread
of infectious diseases can result as much from changes in human behaviour - from
lifestyles,  land use patterns,  increased trade and travel to inappropriate use
of antibiotic drugs - as from mutations in pathogens.

     o    The three main types of  infections  for which there is a  significant
          market are, in terms of Causitive Micro-organisms;

          -    bacterial

          -    fungal

          -    viral

In  terms  of  the  total   anti-infective   market,  the  contribution  of  the
anti-infective segment increased from 14% in 1996 to 22% in 2001.

     o    The Infection world market in 2004 was valued at $53 billion.

     o    There are  around 30 key drugs in the  Infection  market.  There are a
          number a very large selling broad spectrum antibiotics  dominating the
          Infection  market,  such as  Zithromax  (Pfizer),  Cipro  (Bayer)  and
          Augmentin (GSK) The Intron franchise of Schering-Plough, which is used
          for the treatment of hepatitis C  infections,  dominates the antiviral
          drugs market with a share of around 17%.  Combivir,  GlaxoSmithKline's
          combination  drug for the  treatment  of HIV,  is the  second  leading
          antiviral drug and has a market share of 10%.

     o    The  major  players  in  the  Infection  market  are  GlaxoSmithKline,
          Schering-Plough, Bristol Myers Squibb, Hoffman La Roche, Merck, Abbott
          Laboratories,  Pfizer,  J&J and Bayer.  GlaxoSmithKline  is the market
          leader with a share of 20%. Pfizer is the second largest player with a
          market share of 10%.


GENERAL

Management's  Discussion  and  Analysis  presents  a review of our  consolidated
operating  results and financial  condition  for the period ended  September 30,
2005.  This discussion and analysis is intended to assist in  understanding  the
financial  information of the Company presented  elsewhere herein.  This section
should be read in conjunction with our consolidated financial statements and the
related notes, as well as ITEM 1., Description of Business, of this Form 10-QSB.


CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements,  which have been prepared in accordance
with  accounting  principles  generally  accepted  in  the  United  States.  The
preparation  of these  financial  statements  requires us to make  estimates and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses.  In  consultation  with our  Board of  Directors,  we have  identified
accounting  principles  that  we  believe  are  key to an  understanding  of our
financial  statements.  These important accounting policies require management's
most difficult, subjective judgments.

(1) GOING CONCERN

As shown in the  accompanying  financial  statements,  the Company has  incurred
significant losses and needs additional capital to finance its operations. These
factors create  substantial  doubt about the Company's  ability to continue as a
going  concern.  The financial  statements do not include any  adjustments  that
might be necessary if the Company is unable to continue as a going concern.  The
Company  intends to finance its  operations  through sales of its  securities as
well as entering  into loans and other types of financing  arrangements  such as
convertible debenture. There is no assurance that the company will be successful
in its efforts.

(2) RESEARCH AND DEVELOPMENT

The Company  conducts  its  research  and  development  with  numerous  academic
research  facilities,   other  biotechnology  companies  and  clinical  research
organizations.  Such  expenses are expense as incurred.  Any  disruption  in the
Company's  relationship  with these entities could have a material impact on the
Company's future operations.  Research and Development is expenses as incurred.

(3) FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates  discussed herein are based upon certain market assumptions
and pertinent  information  available to management as of December 31, 2004. The
respective  carrying  value of certain  on-balance-sheet  financial  instruments
approximated  their fair  values.  These  financial  instruments  include  cash,
accounts receivable,  accounts payable, accrued expenses and loans payable. Fair
values  were  assumed  to  approximate   carrying  values  for  these  financial
instruments  because  they are short term in nature and their  carrying  amounts
approximate fair values or they are receivable or payable on demand.

The carrying value of the Company's  long-term debt  approximated its fair value
based on the current market conditions for similar debt instruments.

(4) STOCK BASED COMPENSATION

The Company  accounts for equity  instruments  issued to employees  for services
based on the fair value of the equity instruments issued and accounts for equity
instruments  issued  to other  than  employees  based  on the fair  value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.

The Company  accounts for stock based  compensation in accordance with SFAS 123,
"Accounting  for  Stock-Based  Compensation."  The  provisions of SFAS 123 allow
companies  to either  expense the  estimated  fair value of stock  options or to
continue  to follow the  intrinsic  value  method set forth in APB  Opinion  25,
"Accounting  for Stock Issued to Employees"  (APB 25) but disclose the pro forma
effects on net income  (loss) had the fair value of the options  been  expensed.
The Company has elected to continue to apply APB 25 in accounting  for its stock
option plans.

                                       22
<PAGE>


RESULTS OF OPERATIONS

During the three months ended  September 30, 2005, work continued on the product
development programs as planned and the individual items are detailed below. The
period ended  September  30, 2005,  compared to the period ended  September  30,
2004:

During the period the following events took place:

On August 24, 2005 the company  issued  9,578  shares in relation to  consulting
services at $3.30 per share.  On September 15, 2005 the company  issued  250,000
shares in relation to consulting services at $3.50 per share.

No revenues were generated during the three months ended September 30, 2005.

General and administrative expenses increased from $845,037 in the quarter ended
September 30, 2004,  to  $2,018,205  in quarter to September 30, 2005.  The main
reason  for  the  increase  was the  significant  development  of the  Company's
infrastructure  to support its planned  growth.  Such costs were primarily wages
and consulting fees.

Research & Development  expenses for the quarter ended  September 30, 2005, were
$453,255 as compared with $1,146,375 in the previous year. The majority of these
expenses were in connection with the  development of an increased  number of our
product candidates.

Non cash stock  compensation  was $2,054,107 for the quarter ended September 30,
2005 compared with nil for the same period in the previous  year.  These amounts
were due to payments  made for services by the issue of common  shares at market
prices.

The  Company  has  incurred  substantial  losses to date and has an  accumulated
deficit of $214,831,537 as of September 30, 2005.

LIQUIDITY & CAPITAL RESOURCES

Since our  inception,  we have financed our operation  through the sale of stock
and the  issuance  of  debt.  The  Company  has  $32,500,000  in line of  credit
facilities as of September 30, 2005.  $17,229,867 of the lines are  outstanding.
The facilities  accrues  interest at the Applicable  Federal Rate, as defined in
Section  1247(d) of the Internal  Revenue Code.  As of September  30, 2005,  the
interest  rate was 4.0%.  As at  September  30,  2005 cash and cash  equivalents
totalled  approximately  $137,556.  The  Company  expects  to incur  substantial
additional  research  and  development   expenses  and  general   administrative
expenses,  including  personnel-related  costs,  costs  related  to  preclinical
testing and clinical  trials.  The Company  intends to seek  additional  funding
through  the  sale  of debt  and  equity  securities,  increases  in our  credit
facilities and with suitable  potential  collaborators.  Subsequent to September
30, 2005,  $14,141,672 of these credit  facilities were converted into preferred
stock (see Note 9 to the financial statements).

ITEM 3. CONTROLS AND PROCEDURES.

The issuer's  principal  executive  officer or officers and principal  financial
officer or officers,  or persons performing  similar functions,  are responsible
for establishing and maintaining  disclosure controls and procedures (as defined
in Exchange  Act Rules  13a-15(e)  and  15d-15(e))  and  internal  control  over
financial  reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f))
for the issuer and have:

     o    designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and  procedures  to  be  designed  under  their
          supervision,  to ensure  that  material  information  relating  to the
          issuer, including its consolidated subsidiaries, is made known to them
          by others  within those  entities,  particularly  during the period in
          which the periodic reports are being prepared;

     o    designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          their  supervision,  to provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     o    evaluated the  effectiveness of the issuer's  disclosure  controls and
          procedures  as of the  end  of the  fiscal  quarter  (the  "Evaluation
          Date").


Based on their evaluation as of the Evaluation Date, their conclusions about the
effectiveness  of the  disclosure  controls  and  procedures  were that  nothing
indicated:

     o    any  significant  deficiencies  in the design or operation of internal
          controls which could adversely  affect the issuer's ability to record,
          process, summarize and report financial data;


                                       23
<PAGE>

     o    any fraud, whether or not material,  that involves management or other
          employees  who  have  a  significant  role  in the  issuer's  internal
          controls; or

     o    any material  weaknesses in internal controls that have been or should
          be identified for the issuer's  auditors and disclosed to the issuer's
          auditors and the audit committee of the board of directors (or persons
          fulfilling the equivalent function).

Changes in internal control over financial  reporting.  There was no significant
change in the issuer's  internal control over financial  reporting that occurred
during the most  recent  fiscal  quarter  that has  materially  affected,  or is
reasonably  likely to  materially  affect,  the issuer's  internal  control over
financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any material  pending legal  proceedings.  No such
action is contemplated by the Company nor, to the best of its knowledge, has any
action been threatened against the Company.

ITEM 2. SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS

(a) There were no sales of unregistered securities in the period

(b) During the period covered by this report,  there were no securities that the
issuer sold by registering the securities under the Securities Act.

(c) During the period  covered by this report,  there was no repurchase  made of
equity securities registered pursuant to section 12 of the Exchange Act. None of
the issuer's securities is registered pursuant to section 12 of the Exchange Act


ITEM 3. Defaults upon Senior Securities

None

ITEM 4. Submission of matters to a vote of Security holders

None

ITEM 5. OTHER INFORMATION - CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

As of April 29, 2005,  the  Registrant  has appointed  new auditors.  Registrant
terminated F E Hanson Limited as the company's  auditor.  The decision to change
auditors  was approved by the Board of  Directors.  The former  accountant  only
acted for the Registrant from November 2004. The prior accountant did not render
any report on the financial  statements  for the past two years which  contained
any adverse opinion or disclaimer of opinion, or was qualified or modified as to
uncertainty,  audit scope or accounting principles.  During the Registrant's two
most  recent  fiscal  years and any  subsequent  interim  period  preceding  the
termination there were no disagreements with the former accountant on any matter
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing scope or procedure.

Simultaneously  with  the  termination  of  its  relationship  with  F E  Hanson
Limited.,   Registrant  retained  Stark,  Winter,  Schenkein,  &  Co.,  LLP,  as
registrant's independent auditors.  Stark, Winter, Schenkein, & Co LLP's address
is 7535 East Hampden Avenue, Suite 109, Denver, CO, 80231

ITEM 6. EXHIBITS AND REPORTS FILED ON FORM 8-K.

The  registrant  filed  a Form  8-K on  4th  May,  2005  reporting  that  it had
terminated  FE Hanson  Limited as the company's  auditors and  appointed  Stark,
Winter,  Schenkein & Co, LLP as the company's  auditor.  This form 8-K is hereby
incorporated by reference.

Exhibit Index - Exhibits required by Item 601 of Regulation S-B.

(31) Certifications required by Rules 13a-14(a) or 15d-14(a).

(32) Section 1350 Certifications


                                       24
<PAGE>


SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                   Bioaccelerate Holdings, Inc.

    Date: November14 , 2005        By: /s/ Lee Cole
          -----------------           ---------------------------------------
                                      Lee Cole, CEO, President and Director

    Date: November 14, 2005        By:/s/ Linden Boyne
          ------------------          ---------------------------------------
                                      Linden Boyne , CFO, Secretary-Treasurer
                                      & Director