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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended April 30, 2011

or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to
_______________

Commission File Number 000-52057

COMPASS BIOTECHNOLOGIES
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 47-0930829                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|9650  20 Avenue, Edmonton, Alberta, Canada                          | T6N 1G1                          
|(Address of principal executive offices)                             | (Zip Code)                       

780.990.4539(Registrants telephone number,
including area code)

CYPLASIN BIOMEDICAL LTD.(Former name,
former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (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 reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] YES    
[   ] NO

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).[   ] YES     [   ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

Large accelerated filer [   ]
    
    Accelerated
      filer                 [  
      ]Non-accelerated filer   [   ]
    (Do not check if a smaller
      reporting company)
    Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act [   ]
YES     [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCYPROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.[   ]
YES     [   ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date. 21,655,629
common shares issued and outstanding as of June 24, 2011

1

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited consolidated interim financial statements for the
three month period ended April 30, 2011 form part of this quarterly report. They
are stated in United States Dollars (US$) and are prepared in accordance with
United States generally accepted accounting principles.

2

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Table of Contents

|PART
      I - FINANCIAL INFORMATION                                                                      | 2 
|--------------------------------------------------------------------------------------------------------- | --
|                                                                                                          |   
|Item
      1. Financial Statements                                                                        | 2 
|                                                                                                          |   
|Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations | 5 
|                                                                                                          |   
|Item
      3. Quantitative Disclosures About Market Risks                                                 | 13
|                                                                                                          |   
|Item
      4. Controls and Procedures                                                                     | 13
|                                                                                                          |   
|PART
      II - OTHER INFORMATION                                                                         | 13
|                                                                                                          |   
|Item
      1. Legal Proceedings                                                                           | 13
|                                                                                                          |   
|Item
      1A. Risk Factors                                                                               | 13
|                                                                                                          |   
|Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 19
|                                                                                                          |   
|Item
      3. Defaults Upon Senior Securities                                                             | 19
|                                                                                                          |   
|Item
      4. [Removed and Reserved]                                                                      | 19
|                                                                                                          |   
|Item
      5. Other Information                                                                           | 19
|                                                                                                          |   
|Item
      6. Exhibits                                                                                    | 20
|                                                                                                          |   
|SIGNATURES                                                                                                | 21

3

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Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) April 30, 2011 (Unaudited)



|                                                 | Index
|------------------------------------------------ | -----
|                                                 |      
|Consolidated Balance
      Sheets                | F1  
|                                                 |      
|Consolidated Statements
      of Operations      | F2  
|                                                 |      
|Consolidated Statements
      of Cash Flows      | F3  
|                                                 |      
|Notes to Consolidated
      Financial Statements | F4  

4

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Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) 
  Consolidated Balance Sheets

|                                                                                                                                                                                                                                                   |  | April 30,   |   |  | January 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                                                                                                                                                                                                                   |  | 2011        |   |  | 2011        |  
|ASSETS                                                                                                                                                                                                                                             |  | $           |   |  | $           |  
|                                                                                                                                                                                                                                                   |  |             |   |  | (Restated  |  
|                                                                                                                                                                                                                                                   |  | (Unaudited) |   |  | Note 8)     |  
|                                                                                                                                                                                                                                                   |  |             |   |  |             |  
|Current Assets                                                                                                                                                                                                                                     |  |             |   |  |             |  
|Cash                                                                                                                                                                                                                                               |  | 22,086      |   |  | 34,753      |  
|Receivable                                                                                                                                                                                                                                         |  | 48,097      |   |  | 45,071      |  
|Prepaids                                                                                                                                                                                                                                           |  | 25,660      |   |  | 36,796      |  
|Promissory note receivable (Note 3 and 7)                                                                                                                                                                                                          |  | 5,687       |   |  | 5,373       |  
|Total Current Assets                                                                                                                                                                                                                               |  | 101,530     |   |  | 121,993     |  
|Equipment, net                                                                                                                                                                                                                                     |  | 589         |   |  | 730         |  
|Licenses, net(Note 5)                                                                                                                                                                                                                              |  | 675,743     |   |  | 695,050     |  
|Total Assets                                                                                                                                                                                                                                       |  | 777,862     |   |  | 817,773     |  
|                                                                                                                                                                                                                                                   |  |             |   |  |             |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)                                                                                                                                                                                                  |  |             |   |  |             |  
|Current Liabilities                                                                                                                                                                                                                                |  |             |   |  |             |  
|Accounts payable and accrued
      liabilities (Notes 5 and 7)                                                                                                                                                                                     |  | 917,742     |   |  | 935,682     |  
|Promissory note (Note 3)                                                                                                                                                                                                                           |  | 13,500      |   |  | 13,500      |  
|Total Liabilities                                                                                                                                                                                                                                  |  | 931,242     |   |  | 949,182     |  
|                                                                                                                                                                                                                                                   |  |             |   |  |             |  
|Contingency (Note 1)                                                                                                                                                                                                                               |  |             |   |  |             |  
|Commitments (Note 7)                                                                                                                                                                                                                               |  |             |   |  |             |  
|Stockholders’ Equity (Deficiency)                                                                                                                                                                                                                  |  |             |   |  |             |  
|Common stock (Note 4)                                                                                                                                                                                                                              |  |             |   |  |             |  
|Authorized:
      100,000,000 shares of common stock, par value
      $0.001          and
      100,000,000 shares of preferred stock, par value
      $0.001      Issued and outstanding:
      19,857,624 shares (January 31, 2011  15,729,053) |  | 19,858      |   |  | 15,729      |  
|Additional paid-in capital                                                                                                                                                                                                                         |  | 3,877,912   |   |  | 3,422,506   |  
|Accumulated other
      comprehensive income                                                                                                                                                                                                       |  | 12,966      |   |  | 21,664      |  
|Obligation to issue shares (Note 7)                                                                                                                                                                                                                |  | 243,875     |   |  | 490,875     |  
|Subscriptions receivable                                                                                                                                                                                                                           |  | (10,200     | ) |  | (10,200     | )
|Subscriptions received (Note 4)                                                                                                                                                                                                                    |  | 25,247      |   |  | 115,247     |  
|Deferred compensation (Note 4)                                                                                                                                                                                                                     |  | (80,826     | ) |  | (188,192    | )
|Deficit                                                                                                                                                                                                                                            |  | (54,275     | ) |  | (54,275     | )
|Deficit accumulated during the development
      stage                                                                                                                                                                                             |  | (4,187,937  | ) |  | (3,944,763  | )
|Total Stockholders’ Equity (Deficiency)                                                                                                                                                                                                            |  | (153,380    | ) |  | (131,409    | )
|Total Liabilities and Stockholders Equity                                                                                                                                                                                                         |  | 777,862     |   |  | 817,773     |  

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

F - 1

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Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Consolidated Statements of
Operations 
  (Unaudited)

|                                                        |  | Accumulated From      |   |  |            |   |  |           |  
|------------------------------------------------------- |  | --------------------- | - |  | ---------- | - |  | --------- | -
|                                                        |  | February 15, 2007     |   |  |            |   |  |           |  
|                                                        |  | (Date of reporting as |   |  |            |   |  |           |  
|                                                        |  | a development stage   |   |  | Three      |   |  | Three     |  
|                                                        |  | company)              |   |  | Months     |   |  | Months    |  
|                                                        |  | to                    |   |  | Ended      |   |  | Ended     |  
|                                                        |  | April 30,             |   |  | April 30,  |   |  | April 30, |  
|                                                        |  | 2011                  |   |  | 2011       |   |  | 2010      |  
|                                                        |  | $                     |   |  | $          |   |  | $         |  
|                                                        |  |                       |   |  |            |   |  |           |  
|                                                        |  |                       |   |  |            |   |  |           |  
|Operating Expenses                                      |  |                       |   |  |            |   |  |           |  
|                                                        |  |                       |   |  |            |   |  |           |  
|Amortization                                            |  | 98,855                |   |  | 19,448     |   |  | -         |  
|General and administrative                              |  | 2,667,795             |   |  | 185,747    |   |  | 79,618    |  
|Management fees (Note 5)                                |  | 385,895               |   |  | 20,184     |   |  | 16,421    |  
|Research and development (Note 5)                       |  | 1,015,619             |   |  | 20,184     |   |  | 16,421    |  
|Travel                                                  |  | 17,722                |   |  | 1,383      |   |  | 536       |  
|                                                        |  |                       |   |  |            |   |  |           |  
|Loss Before Other Items                                 |  | (4,185,886            | ) |  | (246,946   | ) |  | (112,996  | )
|                                                        |  |                       |   |  |            |   |  |           |  
|Other Items                                             |  |                       |   |  |            |   |  |           |  
|Gain of sale of patent                                  |  | 70,025                |   |  |           |   |  |          |  
|Gain (loss) on settlement of debt
      (Note 4)        |  | 1,106                 |   |  | 6,000      |   |  |          |  
|Write-off of patent                                     |  | (1                    | ) |  |           |   |  |          |  
|Write-off of accounts receivable                        |  | (73,181               | ) |  | (2,228     | ) |  |          |  
|                                                        |  |                       |   |  |            |   |  |           |  
|Net Loss                                                |  | (4,187,937            | ) |  | (243,174   | ) |  | (112,996  | )
|                                                        |  |                       |   |  |            |   |  |           |  
|Loss Per Share  Basic and Diluted                      |  |                       |   |  | (0.01      | ) |  | (0.02     | )
|                                                        |  |                       |   |  |            |   |  |           |  
|Weighted Average Shares Outstanding  Basic and Diluted |  |                       |   |  | 18,259,551 |   |  | 5,136,030 |  

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

F - 2

---

Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Consolidated Statements of Cash
Flows 
  (Unaudited)

|                                                                                                                              |  | Accumulated From      |   |  |           |   |  |           |  
|----------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | - |  | --------- | - |  | --------- | -
|                                                                                                                              |  | February 15, 2007     |   |  |           |   |  |           |  
|                                                                                                                              |  | (Date of reporting as |   |  | Three     |   |  | Three     |  
|                                                                                                                              |  | a development stage   |   |  | Months    |   |  | Months    |  
|                                                                                                                              |  | company) To           |   |  | Ended     |   |  | Ended     |  
|                                                                                                                              |  | April 30,             |   |  | April 30, |   |  | April 30, |  
|                                                                                                                              |  | 2011                  |   |  | 2011      |   |  | 2010      |  
|                                                                                                                              |  | $                     |   |  | $         |   |  | $         |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Cash Flows From Operating Activities                                                                                          |  |                       |   |  |           |   |  |           |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Net loss                                                                                                                      |  | (4,242,212            | ) |  | (243,174  | ) |  | (112,996  | )
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Adjustments to
      reconcile net income (loss) to net cash
      provided          by
      (used in) operating activities: |  |                       |   |  |           |   |  |           |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Amortization                                                                                                                  |  | 98,855                |   |  | 19,448    |   |  | 212       |  
|Gain on sale of patent                                                                                                        |  | (70,025               | ) |  |          |   |  |          |  
|Deferred
      compensation                                                                                                   |  | 107,366               |   |  | 107,366   |   |  |           |  
|Foreign exchange on gain
      on sale of patent                                                                              |  | 790                   |   |  |          |   |  |          |  
|Gain on
      settlement of debt                                                                                              |  | (1,106                | ) |  | (6,000    | ) |  |          |  
|Accrued interest on loan
      payable                                                                                        |  | 2,816                 |   |  | 494       |   |  | 205       |  
|Shares
      for consulting services                                                                                          |  | 732,308               |   |  |          |   |  | 46,500    |  
|Obligation to issue
      shares for consulting services                                                                      |  | 405,875               |   |  |          |   |  |          |  
|Stock-based compensation                                                                                                      |  | 391,765               |   |  | 14,670    |   |  |          |  
|Write-off of patent                                                                                                           |  | 1                     |   |  |          |   |  |          |  
|Write-off
      of accounts receivable                                                                                        |  | 71,563                |   |  | 2,228     |   |  |          |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Changes in operating assets
      and liabilities:                                                                            |  |                       |   |  |           |   |  |           |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Receivable                                                                                                                    |  | (50,389               | ) |  | (5,318    | ) |  | (3,261    | )
|Prepaids                                                                                                                      |  | (47,768               | ) |  | 11,136    |   |  | (22,532   | )
|Accounts payable and accrued
      liabilities                                                                                |  | 867,995               |   |  | 65,431    |   |  | (3,705    | )
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Net Cash Used in Operating Activities                                                                                         |  | (1,732,166            | ) |  | (33,719   | ) |  | (95,577   | )
|Cash Flows From Investing Activities                                                                                          |  |                       |   |  |           |   |  |           |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Acquisition of equipment                                                                                                      |  | (2,909                | ) |  |          |   |  |          |  
|Acquisition of patent                                                                                                         |  | (100                  | ) |  |          |   |  |          |  
|Acquisition of license                                                                                                        |  | (101,642              | ) |  |          |   |  |          |  
|Loan receivable                                                                                                               |  | (5,373                | ) |  |          |   |  |          |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Net Cash Used in Investing Activities                                                                                         |  | (110,024              | ) |  |          |   |  |          |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Cash Flows From Financing Activities                                                                                          |  |                       |   |  |           |   |  |           |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Proceeds from promissory notes                                                                                                |  | 13,500                |   |  |          |   |  | 10,000    |  
|Issuance of common stock                                                                                                      |  | 1,838,060             |   |  | 30,000    |   |  |          |  
|Subscriptions received                                                                                                        |  |                      |   |  |          |   |  | 83,300    |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Net Cash Provided By Financing Activities                                                                                     |  | 1,851,560             |   |  | 30,000    |   |  | 93,300    |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Effect of Exchange Rate Changes                                                                                               |  | 12,716                |   |  | (8,948    | ) |  | (1,468    | )
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Change in Cash                                                                                                                |  | 22,086                |   |  | (12,667   | ) |  | (3,745    | )
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Cash Beginning                                                                                                               |  |                      |   |  | 34,753    |   |  | 4,918     |  
|                                                                                                                              |  |                       |   |  |           |   |  |           |  
|Cash Ending                                                                                                                  |  | 22,086                |   |  | 22,086    |   |  | 1,173     |  

Supplemental Cash Flow Information (Note 6)

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

F - 3

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Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Notes to Consolidated Financial
Statements 
  April 30, 2011

|1. | Nature of Operations and Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Compass Biotechnologies Inc. (the “Company”) was incorporated in the state of Nevada on November 25, 2004 and is a development stage company in the business of developing its licenses for patents pertaining to the technology utilized in the prevention and treatment of hepatitis C.  Effective March 29, 2011, the Company entered into an agreement and plan of merger with its wholly-owned subsidiary whereby the subsidiary merged with and into the Company and effected a name change to Compass Biotechnologies Inc. The Company’s shares were quoted on the OTC-BB and subsequent to April 30, 2011, the Company’s shares were de-listed from the OTC-BB. The Company has not been in compliance with the filing requirements of the Securities and Exchange Commission (“SEC”). The Company is currently in the process of completing all the required filings with the SEC to enable the Company to reinstate its shares for trading on the OTC-BB.                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Unaudited Interim Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the rules and regulations of the SEC. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended January 31, 2011 included in the Company’s Form 10-K filed with the SEC. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended April 30, 2011 are not necessarily indicative of the results that may be expected for the year ending January 31, 2012.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Licenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective December 29, 2009, the Company entered into an
      Asset Assignment Agreement with C-Virionics Corporation (C- Virionics)
      whereby the Company acquired certain licenses to patents used in the
      development of vaccination for prevention and treatment of hepatitis C. In
      consideration, the Company paid $97,291 in royalty and other costs on
      behalf of C-Virionics and is obligated to issue 3,680,000 shares of common
      stock with a fair value of $625,600 which had been recorded in obligation
      to issue shares at January 31, 2010. During the year ended January 31,
      2011, the Company issued 3,180,000 shares of common stock with fair value
      of $540,600, 500,000 shares of common stock at a fair value of $85,000
      remain in obligation to issue shares.                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The licenses to patents are licensed from the United
      States Public Health Service (PHS), to which the Company is obligated to
      make the following royalty payments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | a) | $5,000 annually commencing January 1, 2010 (paid);
| | -- | --------------------------------------------------
| | b) | 5% on net sales; and                              
| | c) | Benchmark royalties of:                           
| |    | •                                                 
| |    | •                                                 
| |    | •                                                 
| |    | •                                                 
| |    | •                                                 

|   | The Company is also obligated to pay PHS additional
      sublicensing royalties, of 12% - 25%, based on the fair market value of
      any consideration received for granting each sublicense or option to
      sublicense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company paid royalties of $Nil during the three month period ended April 30, 2011 ($Nil – April 30, 2010). To April 30, 2011 the Company has recorded a royalty payable of $27,500 (January 31, 2011 - $27,500) in accounts payable and accrued liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Management has determined that the Companys license to
      patents to be used in the development of vaccination for the prevention
      and treatment of hepatitis C to have a useful life of 10 years. For the
      three months ended April 30, 2011, the Company has recorded amortization
      of $19,307 (2010 - $Nil).                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | Promissory Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On April 5, 2010, the Company entered into an unsecured
      promissory note agreement with a shareholder whereby the Company has
      borrowed $20,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The note is interest bearing at 15% per annum commencing April 5, 2010, and repayable upon the Company completing a financing of at least $100,000.  The note is currently due and payable. If the Company fails to make payment, interest  accrues at a rate of 18% per annum on the outstanding balance plus accrued interest. During the year ended January 31, 2011, the Company completed such financing and repaid $6,500, therefore the loan of $13,500 is interest bearing at 18% per annum. Included in accounts payable and accrued liabilities at April 30, 2011 is $2,816 (January 31, 2011 - $2,332) in accrued interest, which has been recorded in general and administrative expenses.

F - 4

---

Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Notes to Consolidated Financial
Statements 
  April 30, 2011

|3. | Promissory Note (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During the term that the note is outstanding, the shareholder will have the right to convert the outstanding principal balance and accrued and unpaid interest into shares of preferred stock.  The number of preferred shares into which the note may be converted will be equal to the total outstanding amount plus accrued interest on the date of conversion divided by $0.80.  The conversion feature had no intrinsic value and accordingly no beneficial conversion feature was recorded.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On January 1, 2011, the Company entered into an unsecured promissory note agreement with a related company that is controlled by a director. The Company has loaned $5,687 (CAD $5,382) under the agreement.                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The note is interest bearing at 6% per annum commencing January 10, 2011, and repayable upon the related company  completing a financing of at least $100,000.  If the related company controlled by a director of the Company fails to make payment, interest will accrue at a rate of 18% per annum on the outstanding balance plus accrued interest. During the period ended April 30, 2011, the related company controlled by the director did not complete such financing.                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During the term that the note is outstanding the Company will have the right to convert the outstanding principal balance and accrued and unpaid interest into shares of preferred stock of the related company. The number of preferred shares into which the note will be converted may be equal to the total borrowed plus accrued interest on the date of conversion divided by $0.20.                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is authorized to issue common stock of up to
      100,000,000 shares, with a par value of $0.001 and up to 100,000,000
      shares of preferred stock, with a par value of $0.001. The preferred
      shares entitle the holder to payment as a preferred creditor in the case
      of corporate default.                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During the three month period ended April 30, 2011, the
      Company issued the following shares of common stock:                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | At April 30, 2011, the Company has $25,247 (January 31,
      2011 - $115,247) in subscriptions received. These subscriptions are
      comprised of advances towards a private placement of 147,890 (January 31,
      2011 - 1,047,890) shares of common stock ranging from $0.10 to $0.17 per
      share.                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | At April 30, 2011, the Company has recorded $80,826 (January 31, 2011 - $188,192) in deferred compensation, which represents the issuance of shares of common stock for consulting services. At January 31, 2011, the balance had been recorded in prepaids and has been reclassified to conform with the current period’s presentation. During the three month period ended April 30, 2011, the Company reallocated $107,366 from deferred compensation to general and administrative expenses. 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The following are the assumptions used for the
      Black-Scholes option pricing model to record the fair value of the issued stock
  options:                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F - 5

---

Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Notes to Consolidated Financial
Statements 
  April 30, 2011

|4. | Common Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Stock options (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On January 31, 2010, the Company issued 500,000 stock options to the President of the Company, pursuant to the Company’s stock option plan. These options are exercisable at a price of $0.18 for a period of five years. The Company recognizes stock-based compensation costs over the requisite service period of the award, which is the option vesting term.  The options vest at a rate of 20% per year, commencing January 31, 2010. The fair value of these options at the date of grant was estimated to be $68,006 using the Black-Scholes option pricing model with an expected life of 5 years, a risk-free interest rate of 2.34%, a dividend yield of 0%, and expected volatility of 101%. These stock options expire on January 31, 2014. To April 30, 2011, 200,000 of these stock options are exercisable and the Company recognized $3,400 (January 31, 2011 - $13,600) in stock-based compensation expense in relation to these vested stock options, of which $1,700 was allocated to management fees and $1,700 was allocated to research and development costs.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On April 18, 2011, the Company issued 1,000,000 stock
      options to a third party consultant. These options are exercisable at a
      price of $0.07 for a period of 60 days. The Company recognizes stock-based
      compensation costs over the requisite service period of the award, which
      is 60 days. The fair value of these options at the date of grant was
      estimated to be $52,015 using the Black-Scholes option pricing model with
      an expected life of 60 days, a risk-free interest rate of 1%, a dividend
      yield of 0%, and expected volatility of 105.59%. These stock options
      expired on June 20, 2011. To April 30, 2011, 1,000,000 of these stock
      options are exercisable and the Company recognized $11,270 (January 31,
      2011 - $Nil) in stock-based compensation expense in relation to these
      stock options, of which $11,270 was allocated to consulting fees in
      general and administrative expenses.                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Stock option transactions during the three months ended
      April 30, 2011 were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Balance, January 31, 2010 and 2011
    
    504,000Granted
    
    1,000,000Expired
    
    (4,000
    )Balance, April 30, 2011  Outstanding
    
    1,500,000Balance, April 30, 2011  Exercisable
    
    1,200,000


|5. | Related Party Transactions                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | During the three month period ended April 30,
  2011:                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | a)                                                                                                                                                                                                                                                                                                                                              
|   | b)                                                                                                                                                                                                                                                                                                                                              
|   | c)                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | As at April 30, 2011, $347,788 (January 31, 2011 - $321,913) was due to related parties and recorded in accounts payable and accrued liabilities and $5,687 (January 31, 2011 - $5,373) is due from a company controlled by a director of the Company (Note 3).                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                 
|   | All related party transactions are in the normal course
      of operations and are measured at the exchange amount, which is the amount
      of consideration established and agreed to by the related parties. Unless
      otherwise noted related party amounts are unsecured, bear no interest and
      have no fixed terms of repayment.

F - 6

---

Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Notes to Consolidated Financial
Statements 
  April 30, 2011

|6. | Supplemental Cash Flow
Information
|-- | ----------------------------------

| |                                                                                                    |  | Accumulated        |  |  |              |  |  |              | 
| | -------------------------------------------------------------------------------------------------- |  | ------------------ |  |  | ------------ |  |  | ------------ | 
| |                                                                                                    |  | From               |  |  |              |  |  |              | 
| |                                                                                                    |  | February 15,       |  |  |              |  |  |              | 
| |                                                                                                    |  | 2007               |  |  | Three Month  |  |  | Three Month  | 
| |                                                                                                    |  | (Date of reporting |  |  | Period Ended |  |  | Period Ended | 
| |                                                                                                    |  | as a development   |  |  | April 30,    |  |  | April 30,    | 
| |                                                                                                    |  | stage company)     |  |  | 2011         |  |  | 2010         | 
| |                                                                                                    |  | to April 30, 2011  |  |  | $            |  |  | $            | 
| |                                                                                                    |  | $                  |  |  |              |  |  |              | 
| | Cash paid for interest                                                                             |  |                   |  |  |             |  |  |             | 
| | Cash paid for income taxes                                                                         |  |                   |  |  |             |  |  |             | 
| | Obligation to issue shares of common stock
      for acquisition of licenses                       |  | 85,000             |  |  |             |  |  |             | 
| | Issue shares of common stock for acquisition of licenses                                           |  | 540,600            |  |  |             |  |  |             | 
| | Obligation to issue shares of common stock
      for consulting services                           |  | 28,875             |  |  |             |  |  |             | 
| | Royalties recorded in accounts payable and accrued
      liabilities                               |  | 27,500             |  |  |             |  |  |             | 
| | Finders fee shares                                                                                |  | 82,000             |  |  |             |  |  |             | 
| | Finders fees recorded in accounts payable and accrued
      liabilities                           |  | 114,346            |  |  |             |  |  |             | 
| | Reclassification of prepaids to common
      stock                                                 |  |                   |  |  |             |  |  | 22,108       | 
| | Issuance of shares of common stock for consulting services
      recorded in deferred compensation |  | 80,826             |  |  |             |  |  |             | 
| | Subscriptions receivable for shares issued                                                         |  | 10,200             |  |  |             |  |  |             | 
| | Issue share for debt                                                                               |  | 77,865             |  |  | 77,865       |  |  |              | 
| | Reclassification of subscriptions received to common stock                                         |  | 90,000             |  |  | 90,000       |  |  | 153,480      | 

|7. | Commitments
|-- | -----------
|   |            
|   | a)         
|   |            
|   |            
|   |            
|   | b)         
|   |            
|   |            
|   |            
|   | c)         
|   |            
|   | d)         

F - 7

---

Compass Biotechnologies Inc. (formerly Cyplasin BioMedical,
Ltd.)(A Development Stage Company) Notes to Consolidated Financial
Statements 
  April 30, 2011

|7. | Commitments (contd)                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                   
|   | d)                                                                                                                                                                
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   | e)                                                                                                                                                                
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   |                                                                                                                                                                   
|   | f)                                                                                                                                                                
|   |                                                                                                                                                                   
|   | g)                                                                                                                                                                
|   |                                                                                                                                                                   
|   | h)                                                                                                                                                                
|   |                                                                                                                                                                   
|8. | Restatement                                                                                                                                                       
|   |                                                                                                                                                                   
|   | The Company has restated its financial statements for the year ended January 31, 2011, in order to record the following transactions in the correct fiscal period.
|   |                                                                                                                                                                   
|   | a)                                                                                                                                                                
|   | b)                                                                                                                                                                
|   | c)                                                                                                                                                                
|   | d)                                                                                                                                                                

| |                                                                                   |   | As
      reported |  |   |            |  |   | As
      restated | 
| | --------------------------------------------------------------------------------- | - | ----------------- |  | - | ---------- |  | - | ----------------- | 
| |                                                                                   |   |                   |  |   | Adjustment |  |   |                   | 
| |                                                                                   |   |                   |  |   |            |  |   |                   | 
| | Consolidated balance sheets  As at January
      31, 2011                        |   |                   |  |   |            |  |   |                   | 
| | Cash                                                                              | $ | 40,126            |  | $ | 5,373      |  | $ | 34,753            | 
| | Promissory note                                                                   |   | -                 |  |   | 5,373      |  |   | 5,373             | 
| | Accounts payable and accrued liabilities                                          |   | 685,682           |  |   | 250,000    |  |   | 935,682           | 
| | Obligation to
      issue shares                                                  |   | 113,875           |  |   | 377,000    |  |   | 490,875           | 
| |                                                                                   |   |                   |  |   |            |  |   |                   | 
| | Consolidated statements of operations  For the year ended
      January 31, 2011 |   |                   |  |   |            |  |   |                   | 
| | General and administrative expenses                                               |   |                   |  |   |            |  |   |                   | 
| |                                                                                   | $ | 1,128,517         |  | $ | 627,000    |  | $ | 1,755,571         | 

F - 8

---

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
quarterly report.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "US$"
refer to United States dollars and all references to "common shares" refer to
the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our"
and "our company" mean Compass Biotechnologies Inc. and our wholly owned
subsidiary, unless otherwise indicated.

General Overview

We were incorporated pursuant to the laws of the State of
Nevada on May 12, 2004 under the name Glass Wave Enterprises, Inc. Effective
February 16, 2007, we changed our name to Cyplasin Biomedical Ltd. and effected
a six point two (6.2) for one (1) forward stock split of our authorized, issued
and outstanding common stock. Following our incorporation, we commenced the
business, through our wholly-owned subsidiary, Astro Nutrition Inc., as a
reseller of health products and herbal remedies. We targeted the market of
health food supplements and herbal remedies by catering mainly to the European
and Asian markets. We disposed of our former wholly-owned subsidiary, Astro
Nutrition Inc. during our quarter ended July 31, 2007 and abandoned our business
plan to focus on the identification of suitable businesses with which to enter
into a business opportunity or business combination.

On February 1, 2007, we entered into an asset purchase
agreement dated February 1, 2007 with Christian Petzelt. The asset purchase
agreement contemplated our company acquiring certain intellectual property
pertaining to cancer treatments, specifically protein molecules, for potential
applications in treating various cancers in exchange for the issuance by our
company of 21,000,000 shares of our common stock on a post six point two (6.2)
for one (1) forward basis. The closing of the transactions contemplated in the
asset purchase agreement and the acquisition of such intellectual property
occurred on February 15, 2007.

As of the closing date of the asset purchase agreement on
February 15, 2007, our company commenced the business of developing a novel
therapeutic, recombinant protein called Cyplasin. On April 10, 2007, we
entered into an asset purchase agreement with Bioxen Ltd., whereby we acquired a
second Cyplasin patent describing a protein having anti tumor effect. Research
into the Cyplasin protein structure has allowed us to manufacture the protein in
the laboratory and develop procedures for the scale up in large-scale
manufacturing processes as the discovery was to be commercialized. Additional
patents were filed for these various processes and some have been issued in
various jurisdictions.

5

---

Prior to the Cyplasin asset being vended into our company an
aggregate of approximately $1.8 million had been spent on research and
development related activities. These previous expenditures allowed for our
company to anticipate the further development of the protein molecule from
discovery and proof of concept stage to a clinical development stage.

On April 10, 2007, we entered into an asset purchase agreement
with Bioxen Ltd. to acquire certain intellectual property. The closing of the
transactions contemplated in the asset purchase agreement and the acquisition of
the intellectual property occurred on April 10, 2007. In accordance with the
closing of the asset purchase agreement, we paid $100 to Bioxen in exchange for
the acquisition by our company of such intellectual property.

During the last part of 2008 as we completed our preclinical
testing and analysis of Cyplasin-SC, as a therapy for skin cancer and melanoma
treatment it was determined the product would require additional product
formulation work and additional funding would b e required in order to advance
the potential product to human clinical studies. Due to the financial
environment at the time and continuing forward we were not successful in being
able to raise the required funds and subsequently we were unable to proceed with
the Cyplasin product development on our own and started looking for strategic
development partners or a sale of our company via a reverse takeover (RTO)
event.

In order to prepare for such events, on December 23, 2008, we
effected a forty (40) old for one (1) new reverse stock split of our authorized
and issued and outstanding common stock. As a result, our authorized capital
decreased from 465,000,000 shares of common stock with a par value of $0.001 to
11,625,000 shares of common stock with a par value of $0.001and our issued and
outstanding shares decreased from 39,584,000 shares of common stock to 989,600
shares of common stock. The reverse stock split became effective with the
Over-the-Counter Bulletin Board at the opening for trading on February 2, 2009
under the stock symbol CPBM.

Effective November 25, 2009, the Nevada Secretary of State
accepted for filing a Certificate of Amendment, wherein we effected an amendment
to our Articles of Incorporation to increase the authorized number of shares of
our common stock from 11,625,000 shares to 100,000,000 shares, par value of
$0.001 per share; and an amendment to our Articles of Incorporation for the
alteration of our authorized share capital to authorize the issuance of up to
100,000,000 shares of preferred stock, par value of $0.001 per share, for which
our directors may fix and determine the designations, rights, preferences or
other variations of each class or series within each class of the shares of
preferred stock.

On February 7, 2009, we entered into a licensing agreement with
Bioxen for further development of the Cyplasin product. Under terms of the
agreement, Bioxen received an exclusive license to further develop the Cyplasin
product and commercialize the intellectual property and corresponding patents
held by our company.

In consideration of the license granted, Bioxen agreed to pay
our company a 0.5% royalty, calculated on all gross revenue of licensed products
sold by Bioxen. In addition, Bioxen agreed to pay a non-refundable license fee
of 25,000 EUR. This fee to be due within 30 days of the completion of any
corporate financing by Bioxen, in which Bioxen receives a minimum collective
amount of 500,000 EUR. Bioxen also agreed to pay all current outstanding patent
amounts owed by our company and all ongoing, continued, and related patent and
maintenance fees owed.

On June 9, 2009, our company entered into a consulting agreement with a third party whereby the consultant would provide research and development activities and consulting. As consideration, our company would pay a fee of US$12,000 per month.  Effective February 2, 2010, this third party became a director of our company. On April 14, 2011, our company entered into an agreement to issue restricted shares of common stock to settle debt of $268,500 with the director of our company. As at April 30, 2011, the shares of common stock have not been issued and, accordingly, the balance remains in accounts payable and accrued liabilities.  Commencing May 1, 2011, our company will issue the number shares of common stock equal to $12,000 per month until our company is able to pay in cash or the director becomes an employee of our company.

On February 28, 2010, we entered into a letter agreement with
Minapharm Pharmaceuticals SAE, wherein Minapharm has agreed to provide our
company with a loan. Pursuant to the terms of the letter agreement, the loan may
be converted into common stock of our company provided that Minapharm enters
into a promissory note, a debt conversion agreement and a subscription
agreement. Minapharm shall grant to our company a distribution agreement to
market and sell a version of its pegylated interferon-alpha (PEG-IFN) product in
territories where it is legally able to do so. To April 30, 2011 Minapharm has not made a loan to our company.

6

---

On July 1, 2010, we entered into an agreement with Virionics
Corporation. Virionics holds an exclusive worldwide license to intellectual
properties, data and knowhow pertaining to hepatitis C prevention and treatment
technologies and product candidates licensed from the U.S. National Institutes
of Health. Pursuant to the agreement, Virionics has agreed to provide our
company with a sublicense for exclusive worldwide use to make, use and
commercialize hepatitis prevention and therapy products according to the terms
of the license agreed upon by Virionics and the U.S. National Institutes of
Health.

On July 27, 2010, we entered into a securities purchase agreement with Tangiers Investors, LP.  Under the agreement, our company agreed to issue and sell its shares of common stock to Tangiers for an aggregate purchase price of up to $10,000,000.  The funding agreement specifies that Tangiers would purchase our company’s stock in amounts of up to $250,000 per draw down, at our company’s discretion over a period of 2 years.

Our company shall be required to issue Tangiers up to $300,000 worth of restricted shares of common stock as a commitment fee (the “commitment fee shares”). The commitment fee shares shall have piggyback registration rights and shall be issued in tranches as follows:

|a) | $150,000 worth of shares of common stock shall be issued 25 days after the execution of Securities Agreement; and                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                       
|b) | $150,000 worth of shares of common stock 25 days after our company’s S-1 Registration Statement is declared effective by the Securities and Exchange Commission or 90 days after the date of the Securities Agreement.

In the event that Tangiers is unable to obtain at least $250,000 of value through the sale of the commitment fee shares, our company will issue that number of shares to Tangiers that would allow Tangiers to obtain a minimum of $250,000 through the sale of the commitment fees shares. At April 30, 2011, recorded in accounts payable and accrued liabilities is $250,000 (January 31, 2011 - $250,000), which represents our company’s obligation to the securities purchase agreement.

The purchase and sale of common stock is predicated upon our company filing an S-1 Registration with the Securities and Exchange Commission, which at April 30, 2011, was not completed.

On March 1, 2011, our company entered into a subscription agreement with Tangiers. Pursuant to the agreement, Tangiers subscribed for 813,008 shares of common stock at $0.123 per share and 1,250,000 shares of common stock at $0.12 per share for total proceeds of $250,000. In lieu of receiving cash for issuance of shares of common stock, our company has agreed to issue 2,063,008 shares of common stock to Tangiers in tranches at a fair value of $250,000 to settle the minimum commitment fee obligation. Subsequent to April 30, 2011, our company issued 813,008 shares of common stock at a fair value of $100,000 subject to certain escrow conditions.

On October 20, 2010, we entered into a one year consulting agreement with Rathbourne Mercantile Ltd., which was subsequently amended on October 26, 2010, whereby our company would pay Rathbourne an up-front non-refundable retainer of $50,000 (paid) and issue 1,000,000 shares of our company for services completed to October 2010. As at April 30, 2011 our company has recorded an obligation to issue shares at a fair value at $130,000 (January 31, 2011 - $130,000). The payments to Rathbourne were recorded as consulting fees and are part of general and administrative expenses. Subsequent to April 11, 2011, our company issued 1,000,000 shares to Rathbourne.

On December 27, 2010, we entered into an asset assignment agreement with Dr. Joseph Sinkule, wherein Dr. Sinkule agreed to assign to our company certain therapeutic products licensed from the Public Health Services of the National Institute of Health in Bethesda, Maryland. We issued 3,680,000 shares of our common stock with a fair value of $0.17 per share as consideration for the license assignment.

In February 2011 we changed the name of our wholly owned
private Canadian subsidiary from Cyplasin Oncoscience Inc., to C-Pharma Inc.

On March 29, 2011, we changed our name from Cyplasin Biomedical
Ltd. to Compass Biotechnologies Inc., by way of a merger with our wholly-owned
subsidiary Compass Biotechnologies Inc. which was formed solely for the purpose
of the change of name. We changed our name to better reflect a new business
direction for our company.

Other than as set out herein, we have not been involved in any
bankruptcy, receivership or similar proceedings, nor have we been a party to any
material reclassification, merger, consolidation or purchase or sale of a
significant amount of assets not in the ordinary course of our business.

Our Current Business

Until our year ended January 31, 2009, we were a company
focused on developing a novel therapeutic, recombinant protein called
Cyplasin. During the last part of 2008 and early 2009 as we completed our
preclinical testing and analysis of Cyplasin-SC, as a therapy for skin cancer
and melanoma treatment it was determined the product would require additional
product formulation work and additional funding would be required in order to
advance the potential product to human clinical studies. Subsequently it was
determined that the project should not continue and in early 2010 we completed
the transfer of the project back to Bioxen, the original owners of the IP.

7

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In January 2010 we were assigned an exclusive worldwide license
from the National Institutes of Health (NIH) for a technology based on using
virus like particles (VLPs) to produce vaccines. The first license we decided to
develop was to use the VLP technology to develop a vaccine for Hepatitis C. We
also decided to develop generic products using different formulations off the
off patent drugs Ribavirin and alpha interferon. These two drugs are the current
standard of care for Hepatitis C and represent a global US$2 billion a year
market.

In addition to these two generic drugs we became aware of other
similar projects for drug development not related to Hepatitis C. Thus in
February of 2011 we out-licensed the VLP vaccine project and the two Hepatitis C
generic drugs to our wholly owned private Canadian subsidiary Cyplasin
Oncoscience Inc and then renamed the Canadian subsidiary to C-Pharma Inc. to
better reflect the subsidiarys corporate mission. C-Pharma is now charged with
the development of the Hepatitis C products and also to expand the pipeline of
products to develop a Hepatitis franchise.

This left our company to pursue the development of generic, biosimiliar and biobetter drug products. Generic drugs are duplicates of small molecule or chemical compounds and are well established in the pharmaceutical industry. Biosimiliars are protein drugs which are close duplicates of the originally marketed protein drug but are not exact replicas. The European Union and other countries have a regulatory approval process in place to allow these biosimiliar drugs to be marketed. The USA and Canada are expected to have a similar approval process in place shortly. Biobetter drugs use existing protein drugs and through modifications to these protein drugs add value and new intellectual properties. A "biobetter" is a biopharmaceutical product that is a copy of an existing product but is designed to have superior efficacy, safety, or improved drug delivery characteristics compared to the original product. Biobetter drugs are subject to full clinical trials but the cost, time and risk in getting them to market are lower; as the base component of the drug (the protein component) is already well known, characterized and accepted by regulatory agencies like the US Food and Drug Administration (FDA). Markets and their sizes are already established.

We are now focused on the development and commercialization of generic, biosimiliar and biobetter products. Our subsidiary, C-Pharma Inc., will continue to develop the Hepatitis C project our company was previously focused on.

Research and Development

We are a biotechnology development stage company and have not
generated any revenues from our technologies. We believe, however, that there
are opportunities to discover and develop effective and cost-effective
treatments for the VLP technology licensed via the NIH for Hepatitis C. In
addition to developing a vaccine for Hepatitis C, we anticipate to be able to
develop generic Hepatitis C therapeutic drugs which we can market and generate
revenue from. The focus of our company will be to develop protein based
biosimiliar and biobetter drugs

During our quarter ended April 30, 2011 we expended $20,184 on
research and development costs, compared to $16,421 during the quarter ended
April 30, 2010.

Intellectual property

We currently own and operate the registered internet domain http://www.compassbio.net/ We rely on a combination of patents and licenses to establish and protect our proprietary rights. We intend to require our customers to enter into confidentiality and nondisclosure agreements before we disclose any sensitive aspects of our technologies or strategic plans, and it is our policy to enter into proprietary information agreements with employees and consultants. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology. It is difficult to monitor unauthorized use of technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as laws in the United States, Canada and Europe. In addition, our competitors may independently develop technologies similar to ours. Our precautions may not prevent misappropriation or infringement of our intellectual property.

8

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We currently have the rights to the following patents in the US
and in Europe with other territories:

Patent(s) or Patent Application(s):
entitled "Synthesis and Purification of Hepatitis C Virus-Like particles"
(PHS Ref. E-009-1997/0).

Serial Number
    Country
    Filing Date
    Issue Date
    Status
    Patent Number09/296,441
    U.S.A.
    04/21/1999
    05/14/2002
    Issued
    6,387,66223479/97
    Australia
    03/25/1997
    01/03/2002
    Issued
    7385859791652.6
    EPO
    03/25/1997
    --
    Pending
    --10-522521
    Japan
    03/25/1997
    --
    Pending
    --2269097
    Canada
    03/25/1997
    --
    Pending
    --


No assurance can be given that any patents based on pending
patent applications or any future patent applications by us, or any future
licensors, will be issued, that the scope of any patent protection will exclude
competitors or provide competitive advantages to us, that any of the provisional
patent applications that have been or may be issued to us will be held valid if
subsequently challenged or that others will not claim rights in or ownership of
the provisional patent applications and other proprietary rights held or
licensed by us. Furthermore, there can be no assurance that others have not
developed or will not develop similar products, duplicate any of our technology
or design around any patents that may be issued to us.

Our success will also depend in part on our ability to
commercialize our technology without infringing the proprietary rights of
others. While we have conducted freedom of use patent searches no assurance can
be given that patents do not exist or could not be filed which would have an
adverse affect on our ability to market our technology or maintain our
competitive position with respect to our technology. If our technologies or
subject matter are claimed under other existing United States or foreign patents
or are otherwise protected by third party proprietary rights, we may be subject
to infringement actions. In such event, we may challenge the validity of such
patents or other proprietary rights or we may be required to obtain licenses
from such companies in order to develop, manufacture or market our
technology.

There can be no assurances that we will be able to obtain such
licenses or that such licenses, if available, may be obtained on commercially
reasonable terms. Furthermore, the failure to either develop a commercially
viable alternative or obtain such licenses may result in delays in marketing our
proposed technology or the inability to proceed with the development,
manufacture or sale of products requiring such licenses, which may have a
material adverse affect on our business, financial condition and results of
operations. If we are required to defend ourselves against charges of patent
infringement or to protect our proprietary rights against third parties,
substantial costs will be incurred regardless of whether we are successful. Such
proceedings are typically protracted with no certainty of success. An adverse
outcome could subject us to significant liabilities to third parties and force
us to curtail or cease our development and commercialization of our technology.

Results of Operations

As a result of a review of our company’s significant transactions, in preparing for our three month period ended April 30, 2011, we identified certain errors that have a significant impact on our previously issued financial information contained in Forms 10-K for the year ended January 31, 2011.

In performing these reviews our company discovered that certain transactions were not properly accounted for.  We have restated our financial statements for the year ended January 31, 2011, in order to record the following transactions in the correct fiscal period, with the result being a corresponding increase in our loss for the year.

- Promissory note of $5,373;
- Commitment fee of $250,000;
- Obligation to issue shares for services provided in the amount of $130,000; and
- Obligation to issue shares for services provided in the amount of $247,000.

Three month Summary ending April 30, 2011 and 2010

Three Months EndedApril 30,2011
      
      
      2010Revenue
      $
      Nil
      
      $
      NilOperating Expenses
      $
      246,946
      
      $
      112,996Gain (loss) on settlement of debt
      $
      6,000
      
      $
      NilWrite-off of accounts receivable
      $
      (2,228
      )
      $
      NilNet Loss
      $
      (243,174
      )
      $
      (112,996
      )


9

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Expenses

Our operating expenses for the three month periods ended April
30, 2011 and 2010 are outlined in the table below:

Three Months EndedApril 30,2011
      
      
      2010Amortization
      $
      19,448
      
      $
      NilGeneral and administrative
      $
      185,747
      
      $
      79,618Management fees
      $
      20,184
      
      $
      16,421Research and development
      $
      20,184
      
      $
      16,421Travel
      $
      1,383
      
      $
      536


Operating expenses for the three months ended April 30, 2011, increased by 118.54% as compared to the comparative period in 2010 primarily as a result of increased amortization of license to patent, general and administrative expenses due to shares issued for consulting fees, management fees, travel expenses and research and development expenses.

Revenue

We have not earned any revenues since our inception and we do
not anticipate earning revenues in the upcoming quarter.

Equity Compensation

On March 31, 2007 our board of directors approved our 2007
stock option plan. Under the 2007 stock option plan, options may be granted only
to our directors, officers, employees and consultants as determined by our board
of directors. Pursuant to the stock option plan, we reserved for issuance
3,000,000 pre-split shares of our common stock (75,000 post split shares of our
common stock).

Liquidity and Financial Condition

Working CapitalAt April 30,
    
    
    At January 31,
    
    
    Percentage2011
    
    
    2011
    
    
    Increase/DecreaseCurrent Assets
    $
    101,530
    
    $
    121,993
    
    
    (16.77
    )%Current Liabilities
    $
    931,242
    
    $
    949,182
    
    
    (1.89
    )%Working Capital
    $
    (829,712
    )
    $
    (827,189
    )
    
    0.3
    %


Cash FlowsAs at
    
    
    As atApril 30,
    
    
    April 30,2011
    
    
    2010Net Cash Provided by (Used
      in) Operating Activities
    $
    (33,719
    )
    $
    (95,577
    )Net Cash Provided by (Used In) Investing
      Activities
    $
    Nil
    
    $
    NilNet Cash Provided by
      Financing Activities
    $
    30,000
    
    $
    93,300Effect of Exchange Rate Changes
    $
    (8,948
    )
    $
    (1,468
    )Increase (Decrease) In
      Cash During The Period
    $
    (12,667
    )
    $
    (3,745
    )


As of April 30, 2011, our company had working capital deficit of $829,712. In the next twelve months we anticipate spending $360,000 on management fees, $250,000 on general and administrative expenses and $1,180,000 on research and development. Our cash on hand at April 30, 2011 was $22,086. We plan to raise additional capital required to meet immediate short-term needs and to meet the balance of our estimated funding requirements for the twelve months, primarily through the private placement of our securities.

10

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We are not aware of any known trends, demands, commitments,
events or uncertainties that will result in or that are reasonably likely to
result in our liquidity increasing or decreasing in any material way.

Future Financings

We will require additional financing in order to enable us to
proceed with our plan of operations, as discussed above, including approximately
$1,790,000 over the next 12 months to pay for our ongoing operating expenses.
These cash requirements are in excess of our current cash and working capital
resources. Accordingly, we will require additional financing in order to
continue operations and to repay our liabilities. There is no assurance that any
party will advance additional funds to us in order to enable us to sustain our
plan of operations or to repay our liabilities.

We anticipate continuing to rely on equity sales of our common
stock in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned business activities.

Other than as described below, we presently do not have any
arrangements for additional financing and no potential lines of credit or
sources of financing are currently available for the purpose of proceeding with
our plan of operations.

Estimated
        Expenses for the Next Twelve Month PeriodOperating
        ExpensesManagement
        and Consulting
      $
      360,000Research and Development
      
      1,180,000General and
        Administrative
      
      250,000Total
      $
      1,790,000


Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual financial
statements for the year ended January 31, 2011, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

As a result, there will also be substantial doubt about our
ability to continue as a going concern as the continuation of our business will
be dependent upon obtaining further financing and achieving a profitable level
of operations. The issuance of additional equity securities by us could result
in a significant dilution in the equity interests of the stockholders who will
be receiving our shares in the spin off. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We intend to pursue various
financing alternatives to meet our immediate and long-term financial
requirements, which we anticipate will consist of further private placements of
our equity securities or shareholder loans. There can be no assurance that
additional financing will be available to us when needed or, if available, that
it can be obtained on commercially reasonable terms. If we are not able to
obtain the additional financing on a timely basis, we will not be able to meet
our obligations as they become due and we will be forced to further scale down
or perhaps even cease operations.

As noted, we are pursuing various financing alternatives to
meet our immediate and long-term financial requirements, which we anticipate
will consist of further private placements of equity securities, advances from
related parties or shareholder loans. We plan to rely on shareholder loans and
private placements to meet our short term cash requirements. We have not entered
into any definitive agreements with any shareholders or related parties for the
provision of loans or advances. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain the
additional financing on a timely basis, or generate significant material
revenues from operations, we will not be able to meet our other obligations as
they become due and we will be forced to scale down or perhaps even cease our
operations.

11

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Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Going Concern

We anticipate that additional funding will be required in the
form of equity financing from the sale of our common stock. At this time, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock or through a loan from our
directors to meet our obligations over the next twelve months. We do not have
any arrangements in place for any future debt or equity financing.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.

Critical Accounting Policies

The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with the accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.

Basis of Presentation

These consolidated unaudited financial statements and notes are
presented in accordance with accounting principles generally accepted in the
United States (U.S. GAAP) and are expressed in US dollars. Our companys
fiscal year end is January 31.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Our company’s actual results could differ from management’s estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of impairment of intangibles and long lived assets, expected tax rates for future income tax recoveries and determining the fair values of financial instruments.

Recent Accounting Pronouncements

In January 2010, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU “) 2010-06, Improving Disclosures about Fair Value Measurements, which is included in the ASC Topic 820 (Fair Value Measurements and Disclosures). ASU 2010-06 requires new disclosures on the amount and reason for transfers in and out of Level 1 and 2 fair value measurements.  ASU 2010-06 also requires disclosures of activities, including purchases, sales, issuances, and a settlement within Level 3 fair value measurements and clarifies existing disclosure requirements on levels of disaggregation and disclosures about inputs and valuation techniques. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The implementation of the adoption of ASU 2010-06 did not have a material impact on the Company’s consolidated financial statements.

In February 2010, the FASB issued ASU 2010-09, "Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements". The amendment eliminates the requirement for SEC filers to disclose the date through which subsequent events have been evaluated. This standard had no impact on the Company's consolidated financial statements. Certain other recent accounting pronouncements have not been disclosed as they are not applicable to our company.

12

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Item 3. Quantitative Disclosures About Market Risks

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 4. Controls and Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (also
our principal executive officer, principal financial officer and principal
accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
president (also our principal executive officer, principal financial and
accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president (also
our principal executive officer, principal financial and accounting officer)
concluded that our disclosure controls and procedures were not effective in
providing reasonable assurance in the reliability of our reports as of the end
of the period covered by this quarterly report.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended April 30, 2011 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report
includes or is based upon estimates, projections or other "forward looking
statements". Such forward looking statements include any projections or
estimates made by us and our management in connection with our business
operations. While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions
or other future performance suggested herein.

13

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Such estimates, projections or other "forward looking
statements" involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward looking statements".

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

RISKS RELATED TO OUR BUSINESS

We have had negative cash flows from operations since
inception. We will require significant additional financing, the availability of
which cannot be assured, and if our company is unable to obtain such financing,
our business may fail.

To date, we have had negative cash flows from operations and
have depended on sales of our equity securities and debt financing to meet our
cash requirements. Our ability to develop and, if warranted, commercialize our
technologies, will be dependent upon our ability to raise significant additional
financing. If we are unable to obtain such financing, we will not be able to
fully develop our business. Specifically, we will need to raise additional funds
to:

- support our planned growth and carry out our business plan;
- continue scientific progress in our research and development programs;
- address costs and timing of conducting clinical trials and seek regulatory
  approvals and patent prosecutions;
- address competing technological and market developments; and
- establish additional collaborative relationships.

We may not be able to obtain additional equity or debt
financing on acceptable terms as required. Even if financing is available, it
may not be available on terms that are favourable to us or in sufficient amounts
to satisfy our requirements. If we require, but are unable to obtain, additional
financing in the future, we may be unable to implement our business plan and our
growth strategies, respond to changing business or economic conditions,
withstand adverse operating results and compete effectively. More importantly,
if we are unable to raise further financing when required, we may be forced to
scale down our operations and our ability to generate revenues may be negatively
affected.

We have a history of losses and nominal operating results,
which raise substantial doubt about our ability to continue as a going
concern.

Since February 15, 2007 (date of reporting as a development stage company), we have a net loss of $4,187,937. We can offer no assurance that we will operate profitably or that we will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the level of competition and general economic conditions.

Our company's operations will be subject to all the risks
inherent in the establishment of a developing enterprise and the uncertainties
arising from the absence of a significant operating history. No assurance can be
given that we may be able to operate on a profitable basis.

Due to the nature of our business and the early stage of our
development, our securities must be considered highly speculative. We have not
realized a profit from our operations to date and there is little likelihood
that we will realize any profits in the short or medium term. Any profitability
in the future from our business will be dependent upon the successful
commercialization or licensing of our core technology, which itself is subject
to numerous risks.

We expect to continue to incur development costs and operating
costs. Consequently, we expect to incur operating losses and negative cash flows
until our technology gains market acceptance sufficient to generate a
sustainable level of income from the commercialization or licensing of our
technology.

14

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Our inability to complete our product development activities
successfully may severely limit our ability to operate and finance operations.

Commercialization of our core technology will require
significant additional research and development as well as substantial clinical
trials. We believe that the United States will be the principal market for our
technology, as will any country in the world where the need for anti cancer
therapeutics, initially for skin cancer and melanomas, exists. We may not be
able to successfully complete development of our core technology, or
successfully market our technology. We, and any of our potential collaborators,
may encounter problems and delays relating to research and development,
regulatory approval and intellectual property rights of our technology. Our
research and development programs may not be successful. Our core technology may
not prove to be safe and efficacious in clinical trials, and we may not obtain
the intended regulatory approvals for our core technology. Whether or not any of
these events occur, we may not have adequate resources to continue operations
for the period required to resolve the issue delaying commercialization and we
may not be able to raise capital to finance our continued operation during the
period required for resolution of that issue.

We may lose our competitiveness if we are not able to
protect our proprietary technology and intellectual property rights against
infringement, and any related litigation may be time-consuming and costly.

Our success and ability to compete depends to a significant
degree on our proprietary technology. If any of our competitors copy or
otherwise gain access to our proprietary technology or develop similar
technologies independently, we may not be able to compete as effectively. The
measures we have implemented to protect our proprietary technology and other
intellectual property rights are currently based upon a combination of patents
and trade secrets. This, however, may not be adequate to prevent the
unauthorized use of our proprietary technology and our other intellectual
property rights. Further, the laws of foreign countries may provide inadequate
protection of such intellectual property rights. We may need to bring legal
claims to enforce or protect such intellectual property rights. Any litigation,
whether successful or unsuccessful, may result in substantial costs and a
diversion of our company's resources. In addition, notwithstanding our rights to
our intellectual property, other persons may bring claims against us alleging
that we have infringed on their intellectual property rights or claims that our
intellectual property rights are not valid. Any claims against us, with or
without merit, could be time consuming and costly to defend or litigate, divert
our attention and resources, result in the loss of goodwill associated with our
business or require us to make changes to our technology.

Our company may become subject to intellectual property
litigation which may harm our business.

Our success depends in part on our ability to develop
commercially viable products without infringing the proprietary rights of
others. Although we have not been subject to any filed infringement claims,
other patents could exist or could be filed which may prohibit or limit our
ability to market our products or maintain a competitive position. In the event
of an intellectual property dispute, we may be forced to litigate. Intellectual
property litigation may divert management's attention from developing our
technology and may force us to incur substantial costs regardless of whether we
are successful. An adverse outcome could subject us to significant liabilities
to third parties, and force us to curtail or cease the development and
commercialization of our technology.

If our company commercializes or tests our technology, our
company will be subject to potential product liability claims which may affect
our earnings and financial condition.

We face an inherent business risk of exposure to product
liability claims in the event that the use of our core technology during
research and development efforts, including clinical trials, or after
commercialization, results in adverse affects. As a result, we may incur
significant product liability exposure, which may exceed any insurance coverage
that we obtain in the future. Even if we elect to purchase such issuance in the
future, we may not be able to maintain adequate levels of insurance at
reasonable cost and/or reasonable terms. Excessive insurance costs or uninsured
claims may increase our operating loss and affect our financial condition.

15

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If we fail to effectively manage the growth of our company
and the commercialization or licensing of our technology, our future business
results could be harmed and our managerial and operational resources may be
strained.

As we proceed with the development of our technology and the
expansion of our marketing and commercialization efforts, we expect to
experience significant growth in the scope and complexity of our business. We
will need to add staff to manage operations, handle business development efforts
and perform finance and accounting functions. We anticipate that we will be
required to hire a broad range of additional personnel in order to successfully
advance our operations. This growth is likely to place a strain on our
management and operational resources. The failure to develop and implement
effective systems, or to hire and retain sufficient personnel for the
performance of all of the functions necessary to effectively service and manage
our potential business, or the failure to manage growth effectively, could have
a material adverse effect on our business and financial condition.

Failure to obtain and maintain required regulatory approvals
will severely limit our ability to commercialize our technology.

We believe that it is important for the success of our business
to obtain the approval of the Food and Drug Administration in the United States
(FDA) before we commence commercialization of our technology in the United
States, the principal market for our technology. We may also be required to
obtain additional approvals from foreign regulatory authorities to apply for any
sales activities we may carry out in those jurisdictions. If we cannot
demonstrate the safety, reliability and efficacy of our technology, the FDA or
other regulatory authorities could delay or withhold regulatory approval of our
technology.

Even if we obtain regulatory approval of our technology, that
approval may be subject to limitations on the indicated uses for which it may be
marketed. Even after granting regulatory approval, the FDA and other regulatory
agencies and governments in other countries will continue to review and inspect
any future marketed products as well as any manufacturing facilities that we may
establish in the future. Later discovery of previously unknown problems with a
product or facility may result in restrictions on the product, including a
withdrawal of the product from the market. Further, governmental regulatory
agencies may establish additional regulations which could prevent or delay
regulatory approval of our technology.

Even if we obtain regulatory approval to commercialize our
products, lack of commercial acceptance may impair our business.

Our product development efforts are primarily directed toward
obtaining regulatory approval for our Hepatitis C product treatments. Our
products may not be employed in all potential applications being investigated,
and any reduction in applications may limit the market acceptance of our
products and our potential revenues. As a result, even if our products are
developed into marketable products and we obtain all required regulatory
approvals, we cannot be certain that our products will be adopted at a level
that would allow us to operate profitably.

If we do not keep pace with our competitors, technological
advancements and market changes, our technology may become obsolete and our
business may suffer.

The market for our technology is very competitive, is subject
to rapid technological changes and varies for different individual products. We
believe that there are potentially many competitive approaches being pursued
that compete with our technology, including some by private companies for which
information is difficult to obtain.

Many of our competitors have significantly greater resources
and have developed products and processes that directly compete with our
technology. Our competitors may develop, or may in the future develop, new
technologies that directly compete with our technology or even render our
technology obsolete. Our technology is designed to develop a topical treatment
for skin cancer and melanoma. Even if we are able to demonstrate improved or
equivalent results from our technology, researchers and practitioners may not
use our technology and we may suffer a competitive disadvantage. Finally, to the
extent that others develop new technologies that address the targeted
application for our current technology, our business will suffer.

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Our ability to hire and retain key personnel will be an
important factor in the success of our business and a failure to hire and retain
key personnel may result in our inability to manage and implement our business
plan.

We are highly dependent upon our management personnel such as
the loss of the services of one or more of our management may impair
management's ability to operate our company. We have not purchased key man
insurance on any of these individuals, which insurance would provide us with
insurance proceeds in the event of their death. Without key man insurance, we
may not have the financial resources to develop or maintain our business until
we could replace the individual or to replace any business lost by the death of
that person. The competition for qualified personnel in the markets in which we
operate is intense. In addition, in order to manage growth effectively, we must
implement management systems and recruit and train new employees. We may not be
able to attract and retain the necessary qualified personnel. If we are unable
to retain or to hire qualified personnel as required, we may not be able to
adequately manage and implement our business.

Most of our assets and all of our directors and officers are
outside the United States, with the result that it may be difficult for
investors to enforce within the United States any judgments obtained against us
or any of our directors or officers.

Although we are organized under the laws of the State of
Nevada, United States, our principal business office is located in Edmonton,
Alberta, Canada. Outside the United States, it may be difficult for investors to
enforce judgments against us that are obtained in the United States in any
action, including actions predicated upon civil liability provisions of federal
securities laws. In addition, a majority of our directors and officers reside
outside the United States, and nearly all of the assets of these persons and our
assets are located outside of the United States. As a result, it may not be
possible for investors to affect service of process within the United States
upon such persons or to enforce against us or such persons judgments predicated
upon the liability provisions of United States securities laws. There is
substantial doubt as to the enforceability against us or any of our directors
and officers located outside the United States in original actions or in actions
of enforcement of judgments of United States courts or liabilities predicated on
the civil liability provisions of United States federal securities laws. In
addition, as the majority of our assets are located outside of the United
States, it may be difficult to enforce United States bankruptcy proceedings
against us. Under bankruptcy laws in the United States, courts typically have
jurisdiction over a debtor's property, wherever it is located, including
property situated in other countries. Courts outside of the United States may
not recognize the United States bankruptcy court's jurisdiction. Accordingly,
you may have trouble administering a United States bankruptcy case involving a
Nevada company as debtor with most of its property located outside the United
States. Any orders or judgments of a bankruptcy court obtained by you in the
United States may not be enforceable.

Our business is subject to comprehensive government
regulation and any change in such regulation may have a material adverse effect
on our company.

There is no assurance that the laws, regulations, policies or
current administrative practices of any government body, organization or
regulatory agency in the United States or any other jurisdiction, will not be
changed, applied or interpreted in a manner which will fundamentally alter the
ability of our company to carry on our business. The actions, policies or
regulations, or changes thereto, of any government body or regulatory agency, or
other special interest groups, may have a detrimental effect on our company. Any
or all of these situations may have a negative impact on our operations.

RISKS RELATED TO OUR COMMON STOCK

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because a significant portion of our operations
has been and will be financed through the sale of equity securities, a decline
in the price of our common stock could be especially detrimental to our
liquidity and our operations. Such reductions may force us to reallocate funds
from other planned uses and may have a significant negative effect on our
business plans and operations, including our ability to develop new products and
continue our current operations. If our stock price declines, we can offer no
assurance that we will be able to raise additional capital or generate funds
from operations sufficient to meet our obligations. If we are unable to raise
sufficient capital in the future, we may not be able to have the resources to
continue our normal operations.

17

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The market price for our common stock may also be affected by
our ability to meet or exceed expectations of analysts or investors. Any failure
to meet these expectations, even if minor, may have a material adverse effect on
the market price of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our certificate of incorporation authorizes the issuance of up
to 100,000,000 shares of common stock. Our board of directors may choose to
issue some or all of such shares to acquire one or more businesses or to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of our
corporation.

Trading of our stock may be restricted by the Securities
Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations
which generally define "penny stock" to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our common stock currently trades on a limited basis on the OTC
Bulletin Board. Trading of our stock through the OTC Bulletin Board is
frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in the stock, in which case it could be difficult for
shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.

OTHER RISKS

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.

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

On May 18, 2011 we issued 813,008 shares of common stock at $0.123 per share at a fair value of $100,000 with respect to partial settlement of a commitment fee. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On June 5, 2011 we issued 1,000,000 shares of our common stock at a fair value of $130,000 for services. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]Item

5. Other Information

None.

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Item 6. Exhibits

|Exhibit |                                                                                                                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                              
|(3)     | Articles
        of Incorporation and Bylaws                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                              
|3.1     | Articles of
        Incorporation (Incorporated by reference from our Registration Statement
        on Form SB-2/a filed on July 29, 2005)                                                                                                  
|        |                                                                                                                                                                                                                                              
|3.2     | Bylaws (Incorporated
        by reference from our Registration Statement on Form SB-2 filed on May
        5, 2005)                                                                                                                         
|        |                                                                                                                                                                                                                                              
|3.3     | Articles of
        Merger (Incorporated by reference from our Current Report on Form 8-K
        filed on April 4, 2011)                                                                                                                    
|        |                                                                                                                                                                                                                                              
|(10)    | Material
        Contracts                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                              
|10.1    | Asset Purchase
        Agreement dated April 10, 2007 with Bioxen Ltd. (Incorporated by reference
        from our Form 8-K Current Report filed on April 13, 2007).                                                                         
|        |                                                                                                                                                                                                                                              
|10.2    | Consulting Agreement
        dated February 15, 2007 with Garth Likes (Incorporated by reference from
        our Form 10-KSB filed on May 1, 2007).                                                                                         
|        |                                                                                                                                                                                                                                              
|10.3    | Exclusive License
        and Option Agreement between our company and Bioxen Ltd. dated February
        7, 2009. (Incorporated by reference to our Current Report on Form 8-K
        filed on February 8, 2011).                          
|        |                                                                                                                                                                                                                                              
|10.4    | Asset Assignment
        Agreement between our company and Dr. Joseph Sinkule and C-Virionics Corporation,
        dated December 27, 2009. (Incorporated by reference to our Current Report
        on Form 8- K/A filed on April 12, 2011).
|        |                                                                                                                                                                                                                                              
|10.5    | Letter of Agreement
        between our company and Minapharm Pharmaceuticals SAE, dated February
        28, 2010. (Incorporated by reference to our Current Report on Form 8-K
        filed on February 8, 2011).                         
|        |                                                                                                                                                                                                                                              
|10.6    | Exclusive License
        Agreement between our company and Virionics Corporation, dated July 1,
        2010. (Incorporated by reference to our Current Report on Form 8-K filed
        on February 8, 2011).                              
|        |                                                                                                                                                                                                                                              
|10.7    | Securities Purchase
        Agreement between our company and Tangiers Investors, LP, dated July 19,
        2010. (Incorporated by reference to our Current Report on Form 8-K filed
        on February 8, 2011).                          
|        |                                                                                                                                                                                                                                              
|10.8*   | Consulting Agreement between our company and Rathbourne Mercantile Ltd. dated October 20, 2010.                                                                                                                                              
|        |                                                                                                                                                                                                                                              
|10.9*   | Amendment to Consulting Agreement between our company and Rathbourne Mercantile Ltd. dated October 26, 2010.                                                                                                                                 
|        |                                                                                                                                                                                                                                              
|10.10*  | Debt Settlement Subscription Agreement between or company and Tangiers Investors, LP dated March 1, 2011.                                                                                                                                    
|        |                                                                                                                                                                                                                                              
|(21)    | Subsidiaries
    of the Registrant                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                              
|21.1    | C-Pharma Inc.
        (a Canada corporation).                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                              
|(31)    | Section 302
        Certifications                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                              
|31.1*   | Certification
        of Principal Executive Officer and Principal Financial Officer filed pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                
|        |                                                                                                                                                                                                                                              
|(32)    | Section 906
        Certification                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                              
|32.1*   | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.                               

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|                     | COMPASS BIOTECHNOLOGIES INC.                           
|-------------------- | -------------------------------------------------------
|                     | (Registrant)                                           
|                     |                                                        
|                     |                                                        
|Dated: June 24, 2011 | /s/
      Garth Likes                                  
|                     | Garth Likes                                            
|                     | President, Chief Executive Officer and Director        
|                     | (Principal Executive Officer, Principal
      Financial
|                     | Officer and Principal Accounting Officer)              

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