---

EXPLANATION
  OF THIS AMENDED FILING: THIS FORM 10-K HAS BEEN AMENDED TO STATE THAT THE COMPANY'S
  DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING
  WERE NOT EFFECTIVE AS AT SEPTEMBER 30, 2008 DUE TO THE MATERIAL WEAKNESSES IDENTIFIED
  IN ITEM 9A OF THIS FORM 10-K.

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K /A

(Mark One)

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

For the fiscal year ended September 30, 2008

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

For the transition period from
______________to________________

Commission file number 000-50331

UPSTREAM BIOSCIENCES
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 98-0371433                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Suite 200  1892 West Broadway, Vancouver, British                   |                                     
|Columbia, Canada                                                     | V6J 1Y9                             
|(Address of principal executive offices)                             | (Zip Code)                          

Registrants telephone number, including area code
604.638.1674

Securities registered under Section 12(b) of the Act:

|None                | N/A                                      
|------------------- | -----------------------------------------
|Title of each class | Name of each exchange on which registered

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value(Title of
class)

Indicate by checkmark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]

Indicate by checkmark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act.
Yes [ ] No [X]

Indicate by checkmark whether the registrant has (1) 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.
Yes [X] No [ ]

---

Indicate by checkmark if disclosure of delinquent filers pursuant
  to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
  herein, and will not be contained, to the best of registrants knowledge,
  in definitive proxy or information statements incorporated by reference in Part
  III of this Form 10-K or any amendment to this Form 10-K. []

Indicate by checkmark whether the registrant is a large
  accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
  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 | [ ] | (Do not check if a smaller reporting | Accelerated filer         | [ ]
|----------------------- | --- | ------------------------------------ | ------------------------- | ---
|Non-accelerated filer   | [ ] | company)                             | Smaller reporting company | [X]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). 
Yes [ ] No [X]

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter: $786,019.69 based on a price of $0.0315 per share, being the average bid and asked price of such
common equity as of March 31, 2008.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PAST FIVE YEARS:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ] N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
49,453,006 shares of common stock as of December 19, 2008.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980). Not Applicable

-2-

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PART I

Forward Looking Statements.

This report contains forward-looking statements.
Forward-looking statements are projections in respect of future events or our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, should, intends, 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, including the risks in Item 1A Risk Factors
commencing on page 7 of this report, which may cause our or our industrys
actual results, levels of activity or performance to be materially different
from any future results, levels of activity or performance 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 or performance. 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.

In this report, unless otherwise specified, all dollar amounts
are expressed in United States dollars and all references to common shares
refer to the common shares in our capital stock.

As used in this report and unless otherwise indicated, the
terms we, us and our refer to Upstream Biosciences Inc. and our
wholly-owned subsidiaries.

ITEM 1. BUSINESS

We were incorporated pursuant to the laws of the State of
Nevada on March 20, 2002 under the name Integrated Brand Solutions Inc. and on
February 6, 2006, we changed our name to Upstream Biosciences Inc. We are a
company engaged in the business of developing and commercializing genetic
biomarkers and biotechnology drugs.

We have not generated any revenues from our technologies to
date. We are a development stage company and we anticipate that we will require
significant time and financing before our technologies are developed to a
marketable state. Without adequate funding, it is managements intention to wait
until sufficient financial resources exist prior to spending additional and
significant funds for the commercialization of our genetic biomarker program.
Our companys management and Board of Directors will continue to evaluate and
determine the most effective use of available funds for its future research and
development programs, including those programs related to diagnostic biomarkers,
biomarkers for a drug response assay, as well as our drug development research
and development efforts. Depending on the level of financing and resources
available to us, we may further develop our pharmaceutical business, or
biomarker business, or if possible, both. Once we have developed our
technologies to commercialization, we could generate revenues in one of several
ways. We may elect to sell directly to customers, license our diagnostic
biomarkers and/or our drug candidates to third parties or we may elect to enter
into joint ventures or other collaborations with third parties such as
pharmaceutical, biotechnology and diagnostics companies, with the aim that they
will develop and commercialize our discoveries into therapeutic,
biopharmaceutical or diagnostic products. If such a collaboration is successful,
we will seek to receive payments upon the successful completion of certain
predetermined developmental stages and milestones, and receive royalties from
the sales of the drugs and/or diagnostics kits, which will be based on our
discoveries.

Biotechnology Drugs

On August 24, 2007, we acquired 100% of Pacific Pharma
Technologies Inc. a Canadian early stage biopharmaceutical company that has
developed a proprietary technology platform that combines artificial
intelligence, advanced computational methods and chemical diversity techniques
to discover new drug candidates. As of the closing date, we commenced the
business of developing biotechnology drugs for certain infectious diseases and
cancers. Our business strategy is to generate revenues through either licensing
of our technology or

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sales of our products once commercial or collaborating with
third party companies that develop and/or market biopharmaceuticals and
pharmaceuticals internationally.

Pacific Pharma Technologies was acquired by our company from
its founders, Mr. Gary Morrison and Dr. Artem Cherkasov. The technology,
together with several compounds that were identified by Pacific Pharma
Technologies founders as potential drug candidates for pre-clinical testing,
were developed by Dr. Artem Cherkasov, a faculty member in the Department of
Infectious Diseases in the Faculty of Medicine at the University of British
Columbia, and the current Chairman of our Scientific Advisory Board. Subsequent
to the acquisition of Pacific Pharma Technologies, Dr. Artem Cherkasov entered
into a multi-year consulting agreement with our company. On December 31, 2007,
we entered into an amended consulting agreement whereby Dr. Cherkasov provided
his consulting services through JTAT Consulting, a proprietorship owned by Dr.
Cherkasov and his spouse. This agreement was subsequently amended on March 10,
2008 (effective March 1, 2008).

The technology developed by Pacific Pharma Technologies, and
subsequently acquired by our company, has generated novel compounds that in
preliminary and pre-clinical laboratory studies suggest human and veterinary
potential against certain tropical parasitic diseases. Screening analyses and
diversity generation chemistry are then applied to produce an array of potential
drug candidates. On June 13, 2007, Pacific Pharma Technologies through Dr. Artem
Cherkasov, filed a provisional patent with the United States Patent and
Trademark Office with respect to technology developed by its founders entitled
Anti-Parasitic Compounds and Methods for Selection Thereof and this
provisional patent was re-filed by our company on July 2, 2008. On August 13,
2008, we re-filed our provisional patent entitled Method for combining 3D
quantitative chemical structure activity relationships (QSAR) of compounds with
genetic variation of drug targets and metabolic enzymes to optimize efficacy,
provide predictive toxicology, and address drug resistant microorganisms based
on technology developed post-acquisition of Pacific Pharma Technologies as
Three-Dimensional Genetic-Variant QSAR Methods.

We plan to further develop and improve upon these drug
candidate compounds through additional pre-clinical and clinical studies, in
order to successfully commercialize them.

Genetic Biomarkers

Our company is developing genetic diagnostic biomarkers for use
in determining a patients susceptibility to disease and predicting a patients
response to drugs. Our business strategy is to generate revenues through
licensing our technologies or collaborating with third parties in the disease
susceptibility, biomarkers identification, and drug response areas of cancer,
primarily to companies that develop and/or market developing diagnostic
products.

Our company focuses our research on variations in the
untranslated regions of the human genome. Variations in these regions can be
used as diagnostic markers to predict or aid in the prediction of susceptibility
to disease or to predict a patients response to drugs. On June 27, 2008, we
re-filed a provisional patent application on genetic markers that, following
successful development and testing, may assist in determining the susceptibility
of patients to liver cancer. These markers may also be important for determining
the susceptibility of patients to other types of cancer, such as prostate or
other cancers. On June 27, 2008, we re-filed a provisional patent application on
an assay for identifying genetic markers that may predict a patients response
to a drug entitled In-Vivo Assay, Database and Software Algorithm for using
Liver Enzyme CIS-Regulatory Allelic Binding Affinities to Profile and Predict a
Haplotypes Drug Response. On August 13, 2008, we re-filed the three
provisional patents that related to genetic biomarkers for prostate, ovarian and
thyroid cancer susceptibility.

We incorporate data, ideas and methods from disciplines such as
mathematics, computer science, biochemistry, evolutionary biology, literature
mining, pattern recognition and network analysis and apply such information in a
manner that permits us to understand the genetic basis of human disease and the
role that variations in genes and their related gene regulatory regions play in
the onset of disease, particularly cancer. If successful, we believe that our
research and development will result in predictive models, discovery engines and
related technologies, which will enable us to develop potential diagnostic
markers. The presence, absence, varying quantities, and varying composition of
molecules provide information about the development of a disease or other
physiological condition. A molecule that provides this information is referred
to as a diagnostic marker. In order to develop a diagnostic marker, we must
identify a correlation between the presence of a particular variation of a
molecule and a disease or other physiological condition. Once a correlation is
identified, we must develop a method for identifying the

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correlation. Our goal is to develop our research into
marketable diagnostic markers that are easy to perform, sensitive, consistent,
safe, inexpensive, and cover an attractive market segment.

We are developing platforms and related technologies that we
hope will enable the discovery of marketable diagnostic markers to aid in the
disease susceptibility and drug response areas of cancer. We are developing our
technologies which will enable us to identify and prioritize potential
diagnostic markers. Our goal is to develop our platforms and related
technologies to identify a variety of novel gene regulatory regions with
potential applications in diagnostics. Our business strategy is to understand
the relationship between genetic regulation, proteins and human diseases in
order to develop molecular diagnostic products. Through our research and
development, we intend to identify important disease genes, the proteins they
produce, and the biological pathways in which they are involved to better
understand the underlying molecular basis for the cause of human disease.

COMPETITION

The biotechnology and pharmaceutical industries are highly
competitive. Numerous entities in the United States and elsewhere compete with
our efforts to commercialize our technologies. Our competitors include
pharmaceutical, biomedical, biotechnology and diagnostic companies, academic and
research institutions and governmental and other publicly and privately funded
research agencies. We face, and expect to continue to face, competition from
these entities to the extent that they develop products that have a function
similar or identical to the function of our technologies. We also face, and
expect to continue to face, competition from entities that seek to discover
therapeutic and diagnostic products.

Because many of our competitors have substantially greater
capital resources and more experience in research and development, manufacturing
and marketing than we do, we may not succeed in developing our proposed products
and bringing them to market in a cost-effective and timely manner.

We are a development stage company engaged exclusively in
research and development. We have not yet completed the development of our first
product and have no revenue from operations. As a result, we may have difficulty
competing with larger, established biomedical and pharmaceutical companies and
organizations. Within the global genetic biomarker industry, examples of
publicly traded companies include: Compugen, Ltd., Epigenomics AG, Myriad
Genetics, Inc. and Diagnocure Inc.. Within the global pharmaceutical industry,
examples of publicly traded companies involved in the development of drugs to
treat infectious diseases include: GlaxoSmithKline plc, Johnson & Johnson,
Novartis AG, Pfizer Inc. and Schering-Plough Corporation. These companies and
organizations have much greater financial, technical, research, marketing,
sales, distribution, service and other resources than us. Moreover, they may
offer broader product lines, services and have greater name recognition than we
do, and may offer discounts as a competitive tactic.

The technologies for discovering both drugs and genes that
predispose persons to major diseases and approaches for commercializing those
discoveries are new and rapidly evolving. Rapid technological developments may
result in our potential services, products, or processes becoming obsolete
before we recover a significant portion of our related research and development
costs and any capital expenditures that we may incur. If we do not discover
additional drug candidates or disease-predisposing genes, characterize their
functions, develop predictive medicine products and related information services
based on such discoveries, obtain regulatory and other approvals, launch such
services or products before our competitors, and receive adequate financing to
cover our operating costs, we may be adversely affected. Moreover, any products
and technologies that we may develop may be made obsolete by less expensive or
more effective drugs or tests or methods that may be developed from our
competitors in the future.

INTELLECTUAL PROPERTY

Patent Applications

Our company has filed seven original provisional patent
applications. Our company re-files provisional patents with the US Patent and
Trademark Office on an annual basis, prior to completing an initial patent
filing as part of our overall intellectual property strategy. We have identified
and filed provisional patent applications on genetic markers that, following
successful development and testing, may assist in determining the susceptibility
of patients

-3-

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to liver cancer, prostate cancer, ovarian cancer, thyroid
cancer, as well as, an assay for identifying genetic markers that may predict a
patients response to a drug. On June 13, 2007, Pacific Pharma Technologies
through Dr. Artem Cherkasov, filed a provisional patent with the United States
Patent and Trademark Office with respect to technology developed by its founders
entitled Anti-Parasitic Compounds and Methods for Selection Thereof and this
provisional patent was re-filed by our company on July 2, 2008. On August 13,
2008, we re-filed our provisional patent entitled Method for combining 3D
quantitative chemical structure activity relationships (QSAR) of compounds with
genetic variation of drug targets and metabolic enzymes to optimize efficacy,
provide predictive toxicology, and address drug resistant microorganisms based
on technology developed post-acquisition of Pacific Pharma Technologies as
Three-Dimensional Genetic-Variant QSAR Methods.

The validity and breadth of claims in medical technology
patents involve complex legal and factual questions and, therefore, may be
highly uncertain. 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 or our licensors 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 or our
licensors. Since provisional patent applications in the United States are
maintained in secrecy until patents are issued, we also cannot be certain that
others have not or will not file prior applications for inventions covered by
our, and our licensors pending patent applications, nor can we be certain that
we will not infringe any patents that may be issued to others on such
applications.

Our success will also depend in part on our ability to
commercialize our technology without infringing the proprietary rights of
others. We have not conducted freedom of use patent searches and 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.

Domain Names

We own and operate the following registered internet domain
name: www.upstreambio.com. The information contained on our website does not
form part of this annual report.

General

We also rely on trade secrets and unpatentable know-how that we
seek to protect, in part, by confidentiality agreements. We intend to require
all future employees, consultants, contractors, manufacturers, outside
scientific collaborators and sponsored researchers, directors on our board,
technical review board and other advisors to execute confidentiality agreements
upon the commencement of employment or consulting relationships with us. These
agreements will provide that all confidential information developed or made
known to the individual during the course of the individuals relationship with
us is to be kept confidential and not disclosed to third parties except in
specific limited circumstances. We intend to require signed confidentiality or
material transfer agreements from any company that receives confidential
information from our company. We intend to ensure that, in the case of
employees, consultants and contractors, any agreements that our company enters
into with such persons will

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generally provide that all inventions conceived by the person
while rendering services to us shall be assigned to us as the exclusive property
of our company. We can offer no assurance, however, that all persons who we seek
to sign such agreements will sign, or if they do, that these agreements will not
be breached, that we will have adequate remedies for any breach, or that our
trade secrets or unpatentable know-how will not otherwise become known or be
independently developed by competitors.

GOVERNMENTAL REGULATION

Our research and development activities and the manufacturing
and marketing of our technology are subject to the laws and regulations of
governmental authorities in the United States and any other countries in which
our technology is ultimately marketed. In the United States, the Food and Drug
Administration, or FDA, among other activities, regulates new product approvals
to establish safety and efficacy guidelines of the types of products and
technologies our company is currently developing. Governments in other countries
have similar requirements for testing and marketing.

Regulation by governmental authorities in the United States and
foreign countries is a significant factor in the development, manufacture and
marketing of our proposed technologies and in our ongoing research and
development activities.

The products and technologies that we are currently researching
and developing will require regulatory approval by governmental agencies prior
to commercialization. Various federal statutes and regulations also govern or
influence the testing, manufacturing, safety, labeling, storage, record keeping,
and marketing of therapeutic products. The process of obtaining these approvals
and the subsequent compliance with applicable statutes and regulations require
the expenditure of substantial time and financial resources. Any failure by us
or our collaborators, licensors or licensees to obtain, or any delay in
obtaining regulatory approval, could have a material adverse effect on our
business.

FDA Approval

In the United States of America, the U.S. Food and Drug Agency
(the FDA) sets out guidelines for clinical trials which are conducted in order
to obtain approval. Other countries have separate regulatory agencies that carry
out similar functions to approve devices and drugs for medical use within their
respective territories. Clinical trials are required to find effective
treatments to improve health. All clinical trials are based on a protocol which
is a study plan that describes the type of people who may participate in the
trial, the schedule of tests and procedures, and the length of the study.

Most clinical trials in the United States must be approved and
monitored by an Institutional Review Board, or IRB, to make sure the risks of
the trial are as low as possible and are worth any potential benefits. All
institutions that conduct or support biomedical research are required by federal
regulation to have an IRB that initially approves and periodically reviews the
research.

Upon successful completion of a clinical trial validation
study, an application based on the results of the clinical trial is submitted
for FDA approval. Upon receipt of FDA approval, the diagnostic screening test or
drug is ready for commercialization.

In the United States, clearance or approval to commercially
distribute new medical devices or products is received from the FDA through
clearance of a 510(k) pre-market notification, or 510(k), or approval of a
premarket approval application, or PMA. It may take from three to nine months
from submission to obtain 510(k) clearance, but may take longer or clearance may
not be obtained at all. The FDA may determine that additional information is
needed before approval to distribute the product is given.

For any products that are cleared through the 510(k) pre-market
notification process, modifications or enhancements that may significantly
affect safety or constitute a major change in the intended use of the product
will require new 510(k) submissions.

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A PMA application must be filed if a proposed product is not
substantially equivalent to a medical product first marketed prior to May 1976,
or if otherwise required by the FDA. The PMA approval process can be expensive,
uncertain and lengthy, and a number of products for which other companies have
sought FDA approval of a PMA application have never been approved for marketing.
It generally takes from six to eighteen months from submission to obtain PMA
approval, but it may take longer or the submission may not be approved at all.

In order to obtain FDA approval of a new medical product,
sponsors must generally submit proof of safety and efficacy. In some cases, such
proof entails extensive pre-clinical and clinical laboratory tests. The testing
and preparation of necessary applications and processing of those applications
by the FDA is expensive and may take several years to complete. There can be no
assurance that the FDA will act favorably or in a timely manner in reviewing
submitted applications, and we may encounter significant difficulties or costs
in our efforts to obtain FDA approval. Such circumstances may delay or preclude
us from marketing any products we may develop. The FDA may also require
post-marketing testing and surveillance of approved products, or place other
conditions on the approvals. These requirements may create difficulties for our
company to sell the products and may increase the costs of such products which
may restrict the commercial applications of such products. Product approvals may
be withdrawn if compliance with regulatory standards is not maintained or if
problems occur following initial marketing. For patented technologies, delays
imposed by the governmental approval process may materially reduce the period
during which we will have the exclusive right to exploit such technologies.

If human clinical trials of a proposed medical product are
required, the manufacturer or distributor of the product will have to file an
Investigational Device Exemption or Investigational New Drug submission with the
FDA prior to commencing human clinical trials. The submission must be supported
by data, typically including the results of pre-clinical and laboratory testing.
Following submission of the Investigational Device Exemption or Investigational
New Drug, the FDA has 30 days to review the application and raise safety and
other clinical trial issues. If we are not notified of objections within that
period, clinical trials may be initiated, and human clinical trials may commence
at a specified number of investigational sites with the number of patients
approved by the FDA.

RESEARCH AND DEVELOPMENT

Our research and development costs primarily consist of
research programs related to the development of drug candidates for the
treatment of certain infectious diseases and cancers. We estimate that our
research and development cash expenditures, for the next twelve months will be
approximately $350,000 as follows: $150,000 allocation of management salaries,
$50,000 for contract research and development services from Dr. Artem Cherkasov
and $150,000 for third party lab and testing services. These amounts exclude the
contingent payments of company common equity that may be required if specific
milestone discoveries are achieved.

Our company incurred a total of $882,433 in research and
development costs for the year ended September 30, 2008, consisting of $353,320
in cash expenses and $529,113 in stock expenses, including the Malaria milestone
achievement of 1,000,000 shares valued at $362,400. This was an increase from
the year ended September 30, 2007 where we incurred a total of $160,107 in
research and development costs, consisting of $155,265 in cash expenses and
$4,842 in stock expenses.

Employees

We currently have two employees consisting of Joel Bellenson as
our Chief Executive Officer and Dexster Smith as our President, Secretary and
Treasurer. Tim Fernback acts as our Chief Financial Officer pursuant to the
terms of a management contract between our company and TCF Ventures Corp., a
company wholly-owned by Mr. Fernback. We have also entered into a consulting
services agreement with a company owned by Dr. Artem Cherkasov to pay $49,250
(C$50,000) per year plus an equity component of $193,000 (C$200,000) in
restricted common shares until the agreement expires July 31, 2010. We will hire
additional employees when circumstances warrant.

Customers

As we are in the development stage of our business, we do not
currently have any customers of our technologies.

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Suppliers

Our company is not reliant upon any suppliers for the research
and development of our technologies.

ITEM 1A. RISK FACTORS

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:

- pay our existing and accrued liabilities;
- 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;
- establish additional collaborative relationships; and
- market and develop our technologies.

In light of the current financial crises, financing for
companies such as ours is very difficult to obtain. Even if financing is
available, it may not be available on terms that are favorable 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. Without additional funds, we may not be able to pay our employees
or contracts to provide services, and these same employees or service providers
may have to either accept accruals or common shares, or a combination of both,
for compensation. 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
continue operations 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 inception through the fiscal year ended September 30,
2008, we have incurred aggregate net losses of $5,874,300. 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 are
engaged in the business of developing and commercializing genetic biomarkers and
biotechnology drugs, which technology is in the development stage and we have
not commenced the regulatory approval process for our technology. 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 risk factors as set forth herein.

-7-

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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. Our
  history of losses and nominal operating results raise substantial doubt about
  our ability to continue as a going concern, as described in the explanatory
  paragraph in our companys independent registered public accounting firms
  audit report dated November 27, 2008 which is included in our annual report
  on Form 10-K.

We have
  identified a number of material weaknesses related to our internal control over
  financial reporting and concluded that our internal control over financial reporting
  and disclosure controls and procedures were ineffective as of September 30,
  2008. These material weaknesses remain unremedied, which could continue to impact
  our ability to report results of operations and financial condition accurately
  and in a timely manner.

We have identified a number
  of material weaknesses in our internal control over financial reporting. Our
  management assessed the effectiveness of our internal control over financial
  reporting and disclosure controls and procedures as at September 30, 2008 pursuant
  to Section 404 of the Sarbanes-Oxley Act of 2002 and the related SEC rules and
  concluded that our internal control over financial reporting and disclosure
  controls and procedures were not effective as at September 30, 2008. Specifically,
  they concluded that four material weaknesses existed as at September 30, 2008
  which are set out in Item 9A under the heading “Management’s Report
  on Internal Control Over Financial Reporting”. Although we intend to remediate
  such material weaknesses as set out in Item 9A, we have not yet been able to
  address these material weaknesses and they may continue to remain unremedied
  for some time, which could adversely impact the accuracy and timeliness of future
  reports and filings we make to the SEC and could have a material adverse effect
  on our business, results of operations, financial condition and liquidity.

We currently hold no patents on our proprietary technology
and if we are not able to protect our proprietary technology, our company will
suffer a material adverse effect.

We currently have provisional patent applications filed on our
technologies. We currently rely on the provisional patent applications and trade
secrets to protect our proprietary intellectual property.

The departure of any of our management or any significant
technical personnel or consultants we may hire in the future, the breach of
their confidentiality and non-disclosure obligations, or the failure to achieve
our intellectual property objectives may have a material adverse effect on our
business, financial condition and results of operations. We believe our success
depends upon the knowledge and experience of our management and our ability to
market our existing technology and to develop new technologies.

While we believe that we have adequately protected our
proprietary technology, and we intend to take all appropriate and reasonable
legal measures to protect it in the future, the use of our technology by a
competitor could have a material adverse effect on our business, financial
condition and results of operations. Our ability to compete successfully and
achieve future revenue growth will depend, in part, on our ability to protect
our proprietary technology and operate without infringing upon the rights of
others. We may not be able to successfully protect our proprietary technology,
and our proprietary technology may otherwise become known or similar technology
may be independently developed by competitors. Competitors may discover novel
uses, develop similar or more marketable technologies or offer services similar
to our company at lower prices. We cannot predict whether our technologies and
services will compete successfully with the technologies and services of
existing or emerging competitors.

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

Commercialization of our core technologies will require
significant additional research and development as well as substantial clinical
trials. For our biomarker technologies, we believe that the United States will
be the principal market for our technology, although we may elect to expand into
Japan and Western Europe. With regards to our drug technologies for certain
infectious diseases and cancers, we believe that Africa, the Middle East and
Asia will be the principal market for our technology, although we may elect to
expand into Central and South America, Europe and North America. 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 operations 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
provisional patent applications, technology licenses 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

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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.

If our provisional patent applications and proprietary
rights do not provide substantial protection, then our business and competitive
position will suffer.

Our success depends in large part on our ability to develop,
commercialize and protect our proprietary technology. However, patents may not
be granted on any of our provisional or future patent applications. Also, the
scope of any future patent may not be sufficiently broad to offer meaningful
protection. In addition, any patents granted to us in the future may be
successfully challenged, invalidated or circumvented so that such patent rights
may not create an effective competitive barrier.

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 that 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 effects. 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.

We have not generated any revenues from operations and if we
are unable to develop market share and generate significant revenues from the
commercialization or licensing of our technology, then our business may fail.

We operate in a highly competitive industry and our failure to
compete effectively and generate income through the commercialization or
licensing of our technology may adversely affect our ability to generate
revenue. The business of developing genetic biomarkers and biotechnology drug
development are both highly competitive and subject to frequent technological
innovation with improved price and/or performance characteristics. There can be
no assurance that our new or existing technologies will gain market acceptance.
Management is aware of similar technologies that our technology, when developed
to a stage of commercialization, will compete directly against. Many of our
competitors have greater financial, technical, sales and marketing resources,
better name recognition and a larger customer base than ours. In addition, many
of our large competitors may offer customers a broader or superior range of
services and technologies. Some of our competitors may conduct more extensive
promotional activities and offer lower commercialization and licensing costs to
customers than we do, which could allow them to gain greater market share or
prevent us from establishing and increasing our market share. Increased
competition in the genetic biomarker industry and the drug development industry
may result in significant price competition, reduced profit margins or loss of
market share, any of which may have a material adverse effect on our ability to
generate revenues and successfully operate our business. Our competitors may
develop technologies superior to those that our company is currently developing.
In the future, we may need to decrease our prices if our competitors lower their
prices. Our competitors may be able to respond more quickly to new or changing
opportunities,

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technologies and customer requirements. Such competition will
potentially affect our chances of achieving profitability, and ultimately affect
our ability to continue as a going concern.

Rapid technological changes in our industry may render our
technology non-competitive or obsolete and consequently affect our ability to
generate future revenues.

The genetic biomarker and biotechnology drug development
industries are characterized by rapidly changing technology, evolving industry
standards and varying customer demand. We believe that our success will depend
on our ability to generate income through the commercialization and licensing of
our technology and that it will require us to continuously develop and enhance
our technology that is currently being developed and introduce new and more
technologically advanced technologies promptly into the market. We can make no
assurance that our technology will not become obsolete due to the introduction
of alternative technologies. If we are unable to continue to develop and
introduce new genetic biomarkers, new biotechnology drugs and drug candidates to
meet technological changes and changes in market demands, our business and
operating results, including our ability to generate revenues, may be adversely
affected.

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 market our services, manage operations, handle sales
and marketing 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 United States Food and Drug Administration (FDA)
before we commence commercialization of our technology in the United States, the
principal market for our biomarker technology and internationally. Furthermore
we believe that it is important for the success of our business to obtain the
approval of the FDA or similar international drug regulatory bodies, before we
can commence the commercialization of our biotechnology drug candidates in their
respective international markets. 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
technology, lack of commercial acceptance may impair our business.

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Our product development efforts are primarily directed toward
obtaining regulatory approval to market genetic diagnostic markers and
biotechnology drugs. Diagnostic markers for cancer, as well as, biotechnology
drugs for certain infectious diseases and cancers, have been widely available
for a number of years, and our technology may not be accepted by the marketplace
as readily as these or other competing products, processes and methodologies.
Additionally, our technology may not be employed in all potential applications
being investigated, and any reduction in applications may limit the market
acceptance of our technology and our potential revenues. As a result, even if
our technology is developed into a marketable technology and we obtain all
required regulatory approvals, we cannot be certain that our technology 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 diagnostic products
as well as treatments for certain diseases. 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.

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
Joel Bellenson and Dexster Smith because of their experience developing genetic
diagnostic markers and bioinformatics software as it relates to drug
development. The loss of the services of one or more of these individuals may
impair managements ability to operate our company. We have not purchased key
man insurance on any of these individuals, which 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.

We will depend upon the establishment of relationships with
third parties to test our technologies and any relationship may require our
company to share revenues and technology.

Management anticipates that it will be crucial to identify the
degree of elevated or reduced risk of a particular disease or medication based
on a particular variation or combination of variations. To do so will require
access to samples of patients who have had the diseases in question as well as
normal populations. And for each of these collections of samples, it will be
important to note the demographic and epidemiological ranges covered by the
collection. This would entail establishing relationships with clinics,
hospitals, universities and companies that have repositories of biological
samples with carefully curated patient disease and demographic information.
These relationships have various confidentiality provisions that require
negotiations that can span several months. In addition, some of these
institutions have national or provincial mandates for providing access to these
samples that may require us to make our test results publicly available for
these jurisdictions or institutions at a reduced rate and could also require us
to provide a flow back of intellectual property licensing for their further
research process. Any such requirement may reduce our revenues.

Our company will be dependent on various outsourcing
activities for testing our technology and failure to outsource certain
activities will have a material adverse effect on our company.

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We intend to establish relationships with various vendors of
biological laboratory services. Such laboratory services may include DNA SNP
profiling, gene expression profiling, cell culturing, recombinant techniques for
inserting reporter genes into artificial constructs for testing purposes,
profiling of transcription factors active in different disease states,
manufacturing and testing of potential drug candidates, pre-clinical and
clinical drug trials, and other laboratory and analytical services depending
upon the outcome of the results at various stages. Our ability to secure and
maintain these future relationships will be critical to the success of our
business objectives, and conversely the inability to secure these future
relationships on reasonable commercial terms represents a risk and could have a
material adverse effect on our operations or financial condition.

Most of our assets and a majority 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 Vancouver,
British Columbia, 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, three of our four directors and all of our
executive officers reside outside the United States, and nearly all of the
assets of these non-U.S. 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, Canada 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.

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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 750,000,000 shares of common stock with a $0.001 par value and 100,000,000
preferred shares with a par value of $0.001, of which 49,453,006 common shares
were issued and outstanding as of September 30, 2008. Our board of directors may
fix and determine the designations, rights, preferences or other variations of
each class or series within each class. 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
company.

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.

FINRAs sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission (see above for a discussion of penny stock
rules), FINRA rules 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.

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

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Our common stock is currently quoted 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.

ITEM 2. PROPERTIES.

Executive Offices

Our principal office is located at Suite 200  1892 West
Broadway, Vancouver British Columbia Canada. The 400 square feet office space
serves as the base of operations for our corporate, managerial, accounting,
financial, administrative, sales and marketing functions. Our company has leased
the office premises on a monthly basis for CDN$1000 ($953) per month, pursuant
to an agreement commencing March 1, 2008. This monthly amount includes phone,
fax and internet access, as well as the shared use of a receptionist and a
boardroom facility.

ITEM 3. LEGAL PROCEEDINGS.

We know of no material, active, or pending legal proceeding
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation where such claim or action involves damages for
more than 10% of our current assets as of December 19, 2008. Additionally, there
were no proceedings in which any of our companys directors, officers, or
affiliates, or any registered or beneficial shareholders holding more than 5% of
our voting securities, is an adverse party or has a material interest adverse to
our companys interest as of December 19, 2008.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.

None.

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PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Securities

Our stock is listed for quotation on the OTC Bulletin Board
under the trading symbol UPBS. Our common shares initially began trading on
the OTC Bulletin Board on September 1, 2004 under the trading symbol IBSO.OB.
The following table sets forth, for the periods indicated, the high and low
closing prices for each quarter within the last two fiscal years ended September
30, 2008 as reported by the quotation service operated by the OTC Bulletin
Board. All quotations for the OTC Bulletin Board reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.

|Quarter Ended      | High  | Low  
|------------------ | ----- | -----
|September 30, 2008 | $0.23 | $0.11
|June 30, 2008      | $0.31 | $0.16
|March 31, 2008     | $0.46 | $0.12
|December 31, 2007  | $0.39 | $0.11
|September 30, 2007 | $1.02 | $0.35
|June 30, 2007      | $1.29 | $0.80
|March 31, 2007     | $1.37 | $0.72
|December 31, 2006  | $1.17 | $0.38

On December 18, 2008, the closing price for the common stock as
reported by the quotation service operated by the OTC Bulletin Board was $0.055.

Nevada Agency and Trust Company is the registrar and transfer
agent for our common shares. Their address is 50 West Liberty, Suite 800 Reno,
Nevada, 89501 Telephone: 775.322.0626, Facsimile: 775.322.5623.

Holders of our Common Stock

As of December 18, 2008, there were 9 registered registered holders
of record of our common stock. As of such date, 49,453,006 common shares were
issued and outstanding.

Dividend Policy

We have not declared or paid any cash dividends since
inception. Although there are no restrictions that limit our ability to pay
dividends on our common shares, we intend to retain future earnings, if any, for
use in the operation and expansion of our business and do not intend to pay any
cash dividends in the foreseeable future.

Equity Compensation Plan Information

On March 16, 2007, our board of directors approved the 2007
Stock Option Plan. Under the terms of the 2007 Stock Option Plan, options to
purchase up to 5,000,000 shares of our common stock may be granted to our
officers, directors, employees and permitted consultants of our company.

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The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
of the most recently completed fiscal year.

Equity Compensation Plan Information As At September 30,
2008

|Plan Category                                              | Number of securities to
      be issued upon exercise of outstanding options,
      warrants and rights | Weighted-average
      exercise price of outstanding options,
      warrants and rights | Number of securities remaining
      available for issuance under equity compensation
      plans (excluding securities reflected in the
      first column)
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|Equity Compensation Plans approved by security holders     | Nil                                                                                                     | N/A                                                                                     | N/A                                                                                                                                                         
|Equity Compensation Plans not approved by security holders | 2,000,000                                                                                               | $0.95                                                                                   | 3,000,000(1)                                                                                                                                                
|Total                                                      | 2,000,000                                                                                               | $0.95                                                                                   | 3,000,000(1)                                                                                                                                                

(1)In addition, our company has agreed to issue
1,500,000 stock options to two directors and three new scientific advisory board
members under the 2007 Stock Option Plan, on terms to be determined.

Recent Sales of Unregistered Securities

The following sets forth certain information concerning
securities which were sold or issued by us during the last fiscal year ended
September 30, 2008 without the registration of these securities under the
Securities Act of 1933 in reliance on exemptions from such registration
requirements.

On August 31, 2008, pursuant to the terms of an Amended and
Restated Consulting Agreement, we issued 213,725 common shares to Dr. Artem
Cherkasov. The common shares were issued to Dr. Artem Cherkasov as a non-U.S.
person (as that term is defined in Regulation S of the Securities Act of 1933,
as amended), in an offshore transaction relying on Regulation S and/or section
4(2) of the Securities Act of 1933, as amended.

On March 7, 2008, pursuant to the terms of a Consulting
Services Agreement dated March 7, 2008, we issued 403,388 common shares to Dr.
Artem Cherkasov. The common shares were issued to Dr. Artem Cherkasov as a
non-U.S. person (as that term is defined in Regulation S of the Securities Act
of 1933, as amended), in an offshore transaction relying on Regulation S and/or
section 4(2) of the Securities Act of 1933, as amended.

On February 28, 2008, pursuant to the terms of the Share
Exchange Agreement dated August 17, 2007, among our company, Pacific Pharma
Technologies Inc., and the selling shareholders of Pacific Pharma Technologies
Inc. we issued 462,500 common shares to Dr. Artem Cherkasov and 462,500 to Mr.
Gary Morrison. The common shares were issued to Dr. Artem Cherkasov and Mr. Gary
Morrison as a non-U.S. person (as that term is defined in Regulation S of the
Securities Act of 1933, as amended), in an offshore transaction relying on
Regulation S and/or section 4(2) of the Securities Act of 1933, as amended. At
the same time, 37,500 shares were released to both Dr Artem Cherkasov and Mr
Gary Morrison from the escrow pool of 225,000 performance-based shares which had
been set aside for this purpose, leaving a balance of 150,000 shares for future
milestones as of September 30, 2008.

-16-

---

On January 31, 2008, pursuant to the terms of a Consulting
Services Agreement dated December 31, 2007, we issued 83,183 common shares to
Dr. Artem Cherkasov. The common shares were issued Dr. Artem Cherkasov as a
non-U.S. person (as that term is defined in Regulation S of the Securities Act
of 1933, as amended), in an offshore transaction relying on Regulation S and/or
section 4(2) of the Securities Act of 1933, as amended.

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our
audited consolidated financial statements and the related notes that appear
elsewhere in this annual 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 those discussed below and elsewhere in this annual report.

Our audited consolidated financial statements are stated in
United States dollars and are prepared in accordance with United States
generally accepted accounting principles.

Plan of Operations and Cash Requirements over the Next 12
Months

Without adequate funding, it is managements intention to halt
current research and development efforts associated with our biomarker program
and wait until sufficient financial resources exist before spending additional
and significant funds for the commercialization of our biomarker program, and
concentrate our research and development efforts on our drug development
programs. However, we will continue to evaluate and determine the most cost
effective use of available funds for all future research and development
programs, including diagnostic biomarkers, biomarkers for a drug response assay
and drug development efforts. Depending on the level of financing and resources
available, we may further develop our pharmaceutical business, or biomarker
business, or both, if possible.

There is no assurance that our research and development
programs will produce commercially viable products or treatments, and a great
deal of additional R&D will be required before a final evaluation of the
economic feasibility of our technologies can be determined. Even if we complete
our proposed R&D and we are successful in identifying commercially viable
products and/or treatments, we will have to spend substantial funds on further
studies before we will know our products and/or treatments are commercially
viable or not.

Anticipated Cash Requirements

Over the next 12 months, we have estimated our minimum cash
requirements to be as follows:

|Estimated Expenses for the Next Twelve Month Period |  
|--------------------------------------------------- | -
|Cash Operating Expenses                             |  
|Employee
      and consultant compensation          | $
|Professional fees                                   | $
|General
      and administrative expenses           | $
|Corporate communications                            | $
|Research
      and development                      | $
|                                                    |  
|Total                                               | $

For the 12 months ended September 30, 2008, we recorded a net
operating loss of $2,209,502 and have an accumulated deficit of $5,915,950 since
inception. As at September 30, 2008, we had cash on hand of $612,306 and for the
next 12 months, management estimates minimum cash requirements of $800,000 to
fund on-going operations and planned research and development programs.
Accordingly, we do not have sufficient funds to meet our plan of operation over
the next 12 months and will need to obtain further financing through issuance of
shares, debentures or convertible debentures. We will also endeavor to access
available funding from research and development grants

-17-

---

or loans from various public and private research granting
agencies. Moreover, all cash operating expenses will be carefully monitored to
ensure we can meet our obligations as they come due.

Due to the current financial crisis, there can be no assurance
that additional financing will be available when needed or, if available, on
commercially reasonable terms. If we are not able to obtain additional financing
on a timely basis, we may not be able to meet our obligations as they come due
and may be forced to scale down or perhaps even cease business operations.

Liquidity and Capital Resources

Our financial position as at September 30, 2008 and September
30, 2007 and the changes for the years then ended are as follows:

Working Capital

|                    |   | As
      at   |   |   | As
      at   |  
|------------------- | - | ------------- | - | - | ------------- | -
|                    |   | September 30, |   |   | September 30, |  
|                    |   | 2008          |   |   | 2007          |  
|Current Assets      | $ | 652,922       |   | $ | 1,708,440     |  
|Current Liabilities |   | (462,513      | ) |   | (318,821      | )
|Working Capital     | $ | 190,409       |   | $ | 1,389,619     |  

Working capital has decreased from $1,389,619 at September 30,
2007 to $190, 409 at September 30, 2008 due to significantly lower cash balances
and higher amounts payable to related parties on account of retiring
allowances.

Cash Flows

|                                            |   | Year Ended    |   |   | Year Ended    |  
|------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                            |   | September 30, |   |   | September 30, |  
|                                            |   | 2008          |   |   | 2007          |  
|Net cash used in Operating Activities       | $ | (991,768      | ) | $ | (807,721      | )
|Net cash used in Investing Activities       |   | (6,997        | ) |   | (76,113       | )
|Net cash provided by Financing Activities   |   | -             |   |   | 1,995,000     |  
|Effect of exchange rate changes             |   | (7,657        | ) |   | 36,035        |  
|Increase (Decrease) in Cash during the Year | $ | 1,006,422     |   | $ | 1,147,201     |  
|Cash, Beginning of Year                     |   | 1,618,728     |   |   | 471,527       |  
|Cash, End of Year                           | $ | 612,306       |   | $ | 1,618,728     |  

During the years ended September 30, 2008 and 2007:

| | (i)   | Our net cash used in operating activities of $991,768 in
      2008 and $807,721 in 2007 is substantially lower than the net losses
      incurred in both years primarily due to the significant amount of expenses
      not requiring a cash outlay including amortization of IPR and stock
      options granted and shares issued for service.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (ii)  | Our net cash used in investing activities of $6,997 in
      2008 related to the purchase of R&D software, The $76,113 invested in
      2007 arose from the purchase of PPT and of money market investments to
      secure company credit cards.                                                                                                 
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (iii) | Our net cash from financing activities was $nil in 2008
      and $1,995,000 in 2007. These funds were raised last year pursuant to
      private placement agreements with two
shareholders.                                                                                                                                                      

Results of Operations for year ending September 30,
2008

The following summary should be read in conjunction with our
audited financial statements for the years ended September 30, 2008 and 2007
included herein.

-18-

---

|                                                   |   | **Year Ended** |   |   | **Year Ended** |  
|-------------------------------------------------- | - | -------------- | - | - | -------------- | -
|                                                   |   | September 30,  |   |   | September 30,  |  
|                                                   |   | 2008           |   |   | 2007           |  
|                                                   |   |                |   |   |                |  
|Revenue                                            | $ | Nil            |   | $ | Nil            |  
|Expenses                                           |   |                |   |   |                |  
|Management and consulting fees                     | $ | 487,863        |   | $ | 394,830        |  
|Professional fees                                  |   | 119,348        |   |   | 161,762        |  
|General and administration                         |   | 203,923        |   |   | 144,344        |  
|Corporate communications, transfer agent and media |   | 145,619        |   |   | 68,911         |  
|Research and development                           |   | 882,433        |   |   | 160,107        |  
|Interest (income) expense  net                    |   | (42,329        | ) |   | 226,468        |  
|Stock-based compensation                           |   | 424,128        |   |   | 771,809        |  
|Total expenses                                     | $ | 2,220,985      |   | $ | 1,928,231      |  
|Deferred income tax benefit                        |   | (11,483        | ) |   | -              |  
|Net Loss                                           | $ | (2,209,502     | ) | $ | (1,928,231     | )

Revenue

We are a development stage company and have not generated any
revenues from our technologies since inception. We anticipate significant
additional time and financing will be required before our technologies are
developed to a marketable state.

Expenses

Our operating expenses for the year ended August 31, 2008 were
$2,220,985 compared to $1,928,231 in 2007. This net increase of $292,754 was
primarily due to the following:

- $93,033 increase in management and consulting fees due to increased salary
  and accrued retiring allowance for one company officer to bring his
  compensation into line with the other two company officers.
- $42,414 decrease in professional fees since the legal fees for purchase of
  Pacific Pharma Technologies Inc. and completing the S8/ SB2 registration
  statements were not required in fiscal 2008.
- $59,579 increase in general and administration due to commencement of
  Intellectual Property Rights amortization and higher Directors & Officers
  insurance, both partially offset by gain on foreign exchange.
- $76,708 increase in corporate communication expenses primarily due to
  unsuccessful contracts with fund raising firms which have since been
  cancelled.
- $722,326 increase in research and development expenses of which $198,055
  was cash and $554,271 equity. The increase in cash spend was due to start-up
  implementation of the newly acquired technologies including contracts with Dr.
  Artem Cherkasov, universities in Kampala, Moscow and Montreal along with
  various suppliers for technical materials and testing. The increase in stock
  issuances resulted from achieving the Malaria milestone and paying out the
  equity portion of Dr. Artem Cherkasovs consulting services contract.
- $268,797 decrease in interest (income) expense primarily due to eliminating
  interest expense on the 5% convertible debentures after they were converted in
  March 2007. There was a modest $6,691 increase in interest income from short
  term deposits during 2008 compared to 2007.
- $347,681 decrease in stock-based compensation following resumption of
  normal stock option amortization in fiscal 2008 after recording a major
  catch-up on 2.2 million stock options last year when the new plan was adopted
  in March 2007.

Going Concern

-19-

---

The audited financial statements accompanying this report have
been prepared on a going concern basis, which implies that our company will
continue to realize its assets and discharge its liabilities and commitments in
the normal course of business. Our company has not generated revenues since
inception, has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
our company as a going concern is dependent upon: (i) the continued financial
support from our shareholders; (ii) the ability of our company to continue
raising necessary equity financing to achieve its operating objectives; (iii)
the continuing achievement of positive results from our Research and Development
activities and (iv) the eventual attainment of profitable operations.

Our independent auditors included an explanatory paragraph in
their annual report on our financial statements for the year ended September 30,
2008 regarding concerns about our ability to continue as a going concern. In
addition, our financial statements contain further note disclosures in this
regard. The continuation of our business plan is dependent upon our ability to
continue raising sufficient new capital from equity or debt markets in order to
fund our on-going operating losses and oil and gas acquisition and exploration
activities. The issuance of additional equity securities could result in a
significant dilution in the equity interests of our current stockholders.

Application of Critical Accounting Policies

The preparation of financial statements in conformity with
United States generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying disclosures of our company. Although these estimates
are based on managements knowledge of current events and actions that our
company may undertake in the future, actual results may differ from such
estimates.

Basis of presentation

Our consolidated financial statements and related notes are
presented in accordance with generally accepted accounting principles in the
United States of America (US) and are expressed in US dollars. We are a
development stage company as defined by Statement of Financial Accounting
Standard (SFAS) No. 7,Accounting and Reporting by Development Stage
Enterprises and has not realized any revenues from its planned operations to
date. These financial statements include the accounts of the Company and its
wholly-owned subsidiaries, Upstream Canada and PPT, which were acquired pursuant
to share exchange agreements on February 24, 2006 and August 24, 2007
respectively. All inter-company transactions and account balances have been
eliminated on consolidation. The fiscal year end of our Company and subsidiaries
is September 30.

Intellectual property rights

We have adopted the provisions of the Statement of Financial
Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible
Assets. Intangible assets with a definite life are amortized over that expected
life and tested for impairment at least annually or whenever events or
circumstances indicate a revision to the remaining period of amortization is
warranted.

The fair market value of Intellectual Property Rights (IPR)
acquired on August 24, 2007 during the acquisition of Pacific Pharma
Technologies Inc. is being amortized on a straight line basis over 5 years. The
determination of any impairment of Intellectual Property Rights includes a
comparison of net carrying value with estimated future operating cash flows
anticipated during the remaining life; and is dependent on our ability to
continue operating as a going concern.

During the annual impairment review, we determined the carrying
value of our IPR at September 30, 2008 was not impaired.

Translation of foreign currencies

Our functional and reporting currency is the United States
dollar and our Canadian subsidiaries is the Canadian dollar. The financial
statements of the Canadian subsidiaries are translated into United States
dollars in accordance with SFAS No. 52 Foreign Currency Translation using
period-end rates of exchange for assets and liabilities, and period-average
rates of exchange for revenues and expenses. Gains or losses resulting from
foreign currency transactions are included in the consolidated statements of
operations; whereas, adjustments arising from the translation of financial
statements of our subsidiaries during the consolidation process are included as
a separate

-20-

---

component of shareholders equity called other comprehensive
income (loss). We have not, to the date of these financials statements, entered
into derivative instruments to offset the impact of foreign currency
fluctuations.

Research and development

These costs are charged to expense when incurred and consist
primarily of direct material and personnel costs, contract services and indirect
costs. We have received government assistance in the past and may receive same
in the future regarding our research and development activities. When the work
is performed that qualifies for such grants, the related assistance amount is
credited to research and development expense.

Stock-based compensation

Effective January 1, 2006, we adopted the fair value
recognition provisions of SFAS No. 123R, Share Based Payments, using the
modified prospective transition method. Under this transition method,
compensation cost is recognized for all share-based payments granted prior to
January 1, 2006, based on the grant date fair value estimated in accordance with
the original provisions of SFAS 123; and the compensation cost of all
share-based payments granted subsequent to January 1, 2006, based on the grant
date fair value estimated in accordance with the provisions of SFAS 123R.

All transactions in which goods and services are the
consideration received for the issuance of equity instruments are accounted for
based on fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. Equity
instruments issued to employees and the cost of the services received as
consideration are measured and recognized based on the fair value of the equity
instruments issued.

Recent accounting pronouncements

We do not believe that any recently issued, but not yet
effective accounting standards if currently adopted, will have a material effect
on our financial statements.

In December 2007, the FASB issued Statement of Financial
Accounting Standards No. 141 (revised 2007), Business Combinations (SFAS
141R). SFAS 141R changes the accounting for and reporting of business
combinations including, among other things, expanding the definition of a
business and a business combination; requiring all assets and liabilities of the
acquired business, including goodwill, contingent assets and liabilities, and
contingent consideration to be recorded at fair value on the acquisition date;
requiring acquisition-related transaction and restructuring costs to be
expensed, rather than accounted for as acquisition costs; and requiring
reversals of valuation allowances related to acquired deferred tax assets and
changes to acquired income tax uncertainties to be recognized in earnings. SFAS
141R applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. Earlier application of SFAS 141R is prohibited.
We have reached the conclusion that this will have no impact on our consolidated
financial statements.

In December 2007, the FASB issued Statement of Accounting
Standards No. 160, Non-controlling Interests in Consolidated Financial
Statements, an Amendment of ARB No. 51 (SFAS 160). SFAS 160 changes the
accounting and reporting for non-controlling interests (previously referred to
as minority interests) such that non-controlling interests will be reported as a
component of equity; losses will be allocated to the non-controlling interest;
changes in ownership interests that do not result in a change in control will be
accounted for as equity transactions and, upon a loss of control, any gain or
loss on the interest sold will be recognized in earnings and any ownership
retained will be re-measured at fair value. SFAS 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. Earlier application of SFAS 160 is prohibited. SFAS 160
applies prospectively as of the beginning of the fiscal year in which it is
initially applied, except for the presentation and disclosure requirements which
apply retrospectively for all periods presented. We have reached the conclusion
that this will have no impact on our consolidated financial statements.

In March 2008, the FASB issued Statement of Financial
Accounting Standards No. 161, Disclosures about Derivative Instruments and
Hedging Activities, an Amendment of FASB Statement No. 133 (SFAS 161). SFAS
161 amends and expands the disclosure requirements of FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities  as amended
(SFAS 133), to provide enhanced disclosures about how and why an entity uses
derivative instruments; how derivative instruments and related hedged items are
accounted for under SFAS 133; and how derivative instruments and related hedged
items affect an entitys financial position,

-21-

---

financial performance, and cash flows. SFAS 161 is effective
for financial statements issued for fiscal years and interim periods beginning
after November 15, 2008, with early application encouraged. We have reached the
conclusion that this will have no impact on our consolidated financial
statements.

In May 2008, the FASB issued Statement of Financial Accounting
Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles
(SFAS 162). SFAS 162 identifies a consistent framework, or hierarchy, for
selecting accounting principles to be used in preparing financial statements
that are presented in conformity with U.S. generally accepted accounting
principles for nongovernmental entities. SFAS 162 is effective 60 days following
the SECs approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. We have reached the conclusion that this will
have no impact on our consolidated financial statements.

In June 2008, the FASB issued FASB Staff Position No. EITF
03-6-1, Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities (FSP EITF 03-6-1). FSP EITF 03-6-1
establishes that unvested share-based payment awards that contain nonforfeitable
rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities as defined in Emerging Issues Task Force (EITF) Issue
No. 03-6, Participating Securities and the Two-Class Method under FASB
Statement No. 128, and should be included in the computation of earnings per
share pursuant to the two-class method as described in Statement of Financial
Accounting Standards No. 128, Earnings per Share. FSP EITF 03-6-1 is effective
for financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those years. All prior-period earnings per
share data presented shall be adjusted retrospectively to conform to the
provisions of FSP EITF 03-6-1. Early application is not permitted. We are
currently evaluating the impact that the adoption of FSP EITF 03-6-1 will have
on our consolidated financial statements.

In September 2008, the FASB issued two separate but related
exposure drafts: (1) Proposed Statement of Financial Accounting Standards,
Accounting for Transfers of Financial Assets  an amendment of FASB Statement
No. 140, and (2) Proposed Statement of Financial Accounting Standards,
Amendments to FASB Interpretation No. 46(R) (together, the proposed
Statements). The proposed Statements would remove the concept of a qualifying
special-purpose entity (QSPE) from SFAS 140 and the exceptions from applying
FIN 46R to QSPEs. The proposed Statements would be effective as of the beginning
of a reporting entitys fiscal year that begins after November 15, 2009. We have
reached the conclusion that this will have no impact on our consolidated
financial statements.

In November 2008, the Financial Accounting Standards Board (the
FASB) voted on the effective date and other amendments of proposed FASB Staff
Position FAS 140-e and FIN 46(R)-e, Disclosures about Transfers of Financial
Assets and Interests in Variable Interest Entities (FSP FAS 140-e and FIN
46R-e). FSP FAS 140-e and FIN 46R-e would amend SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities 
as amended (SFAS 140) and FASB Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities (FIN 46R) to require enhanced
disclosures by public entities about transfers of financial assets and interests
in variable interest entities, and provide users of the financial statements
with greater transparency about a transferors continuing involvement with
transferred financial assets and an enterprises involvement with variable
interest entities. The disclosures required by FSP FAS 140-e and FIN 46R-e will
be effective for reporting periods (interim and annual) ending after December
15, 2008. We have reached the conclusion that this will have no impact on our
consolidated financial statements.

Off-Balance Sheet Arrangements

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

-22-

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Upstream Biosciences,
  Inc.

We have audited the accompanying consolidated balance sheets
  of Upstream Biosciences, Inc. (a development stage company) as of September
  30, 2008 and 2007 and the related consolidated statements of operations, stockholders
  equity and cash flows for the years ended September 30, 2008 and 2007 and the
  period from June 14, 2004 (inception) through September 30, 2008. These financial
  statements are the responsibility of the Company's management. Our responsibility
  is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform an audit to obtain reasonable assurance whether the
  financial statements are free of material misstatement. The Company is not required
  to have, nor were we engaged to perform, an audit of its internal control over
  financial reporting. Our audits included consideration of internal control over
  financial reporting as a basis for designing audit procedures that are appropriate
  in the circumstances, but not for the purpose of expressing an opinion on the
  effectiveness of the Companys internal control over financial reporting.
  Accordingly, we express no such opinion. An audit also includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation. We believe that our audits provide a reasonable
  basis for our opinion.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of Upstream Biosciences,
  Inc. as at September 30, 2008 and 2007 and the results of its operations and
  its cash flows for the years ended September 30, 2008 and 2007 and the period
  from June 14, 2004 (inception) through September 30, 2008 in conformity with
  accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming that the Company will continue as a going concern. As discussed
  in Note 1 to the financial statements, the Company has not generated revenues
  since inception, has incurred losses in developing its business, and further
  losses are anticipated. The Company requires additional funds to meet its obligations
  and the costs of its operations. These factors raise substantial doubt about
  the Companys ability to continue as a going concern. Managements
  plans in this regard are described in Note 1. The financial statements do not
  include any adjustments that might result from the outcome of this uncertainty.

|/S/
      DALE MATHESON CARR-HILTON LABONTE LLP
|-----------------------------------------------
|CHARTERED ACCOUNTANTS                          
|Vancouver, Canada                              
|November 27, 2008                              



---

|UPSTREAM BIOSCIENCES, INC.   
|-----------------------------
|(A Development Stage Company)
|CONSOLIDATED BALANCE SHEETS  

|                                                                  |   | September 30, |   |   | September 30, |  
|----------------------------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                                                  |   | 2008          |   |   | 2007          |  
|                                                                  |   |               |   |   |               |  
|ASSETS                                                            |  
|                                                                  |   |               |   |   |               |  
|CURRENT ASSETS                                                    |   |               |   |   |               |  
|Cash and cash equivalents                                         | $ | 612,306       |   | $ | 1,618,728     |  
|Other receivables                                                 |   | 6,485         |   |   | 44,793        |  
|Prepaid expenses                                                  |   | 34,131        |   |   | 44,919        |  
|                                                                  |   | 652,922       |   |   | 1,708,440     |  
|                                                                  |   |               |   |   |               |  
|RESTRICTED CASH(Note 2)                                           |   | 33,231        |   |   | 32,643        |  
|EQUIPMENT,net                                                     |   | 12,007        |   |   | 10,789        |  
|INTELLECTUAL PROPERTY RIGHTS,net (Note 3)                         |   | 294,141       |   |   | 353,322       |  
|                                                                  |   |               |   |   |               |  
|                                                                  | $ | 992,301       |   | $ | 2,105,194     |  
|                                                                  |   |               |   |   |               |  
|                                                                  |   |               |   |   |               |  
|LIABILITIES                                                       |  
|                                                                  |   |               |   |   |               |  
|CURRENT LIABILITIES                                               |   |               |   |   |               |  
|Accounts payable and accrued liabilities                          | $ | 98,315        |   | $ | 99,115        |  
|Due to related parties
      (Note 4)                             |   | 364,198       |   |   | 219,706       |  
|                                                                  |   | 462,513       |   |   | 318,821       |  
|DEFFERED INCOME TAXES(Note 5)                                     |   | 45,932        |   |   | 57,415        |  
|                                                                  |   |               |   |   |               |  
|                                                                  |   | 508,445       |   |   | 376,236       |  
|                                                                  |   |               |   |   |               |  
|                                                                  |   |               |   |   |               |  
|STOCKHOLDERS' EQUITY                                              |  
|                                                                  |   |               |   |   |               |  
|CAPITAL STOCK(Note 6)                                             |   |               |   |   |               |  
|Authorized                                                        |   |               |   |   |               |  
|100,000,000 non-voting
      preferred shares at $0.001 par value |   |               |   |   |               |  
|750,000,000
      common shares at $0.001 par value               |   |               |   |   |               |  
|Issued and outstanding                                            |   |               |   |   |               |  
|49,453,006
      common shares (September 30, 2007 - 47,827,710)  |   | 49,453        |   |   | 47,828        |  
|ADDITIONAL PAID-IN CAPITAL                                        |   | 6,395,333     |   |   | 5,464,752     |  
|OBLIGATION TO ISSUE SHARES                                        |   | 14,391        |   |   | 4,842         |  
|DEFERRED COMPENSATION                                             |   | (78,570       | ) |   | (108,872      | )
|ACCUMULATED OTHER COMPREHENSIVE INCOME                            |   | 19,199        |   |   | 26,856        |  
|DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                  |   | (5,915,950    | ) |   | (3,706,448    | )
|                                                                  |   |               |   |   |               |  
|                                                                  |   | 483,856       |   |   | 1,728,958     |  
|                                                                  |   |               |   |   |               |  
|                                                                  | $ | 992,301       |   | $ | 2,105,194     |  
|                                                                  |   |               |   |   |               |  
|COMMITMENTS AND CONTINGENCIES(Note 8)                             |   |               |   |   |               |  

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

---

|UPSTREAM BIOSCIENCES, INC            
|-------------------------------------
|(A Development Stage Company)        
|CONSOLIDATED STATEMENTS OF OPERATIONS

|                                            |  |         |         |   |                           |         |   |                        |           |   | Cumulative Results |  
|------------------------------------------- |  | ------- | ------- | - | ------------------------- | ------- | - | ---------------------- | --------- | - | ------------------ | -
|                                            |  |         |         |   |                           |         |   |                        |           |   | From Inception     |  
|                                            |  |         |         |   | Years Ended September 30, |         |   | **(June 14, 2004) to** |          
|                                            |  |         |         |   | 2008                      |         |   | 2007                   |           |   | September 30, 2008 |  
|                                            |  |         |         |   |                           |         |   |                        |           |   |                    |  
|REVENUE                                     |  |         |         | $ | -                         |         | $ | -                      |           | $ | 67,600             |  
|                                            |  |         |         |   |                           |         |   |                        |           |   |                    |  
|OPERATING EXPENSES                          |  |         |         |   |                           |         |   |                        |           |   |                    |  
|Amortizaion                                 |  |         |         |   | 64,371                    |         |   | 3,273                  |           |   | 68,407             |  
|Consulting fees                             |  |         |         |   | -                         |         |   | 12,598                 |           |   | 12,598             |  
|Interest and finance charges                |  |         |         |   | 719                       |         |   | 262,825                |           |   | 630,046            |  
|Interest income                             |  |         |         |   | (43,048                   | )       |   | (36,357                | )         |   | (79,405            | )
|Investor and corporate
      communications |  |         | 145,619 |   |                           | 68,911  |   |                        | 238,185   |  
|License fees and
      royalties            |  |         |         |   | 14,867                    |         |   | 8,226                  |           |   | 70,316             |  
|Loss (Gain) on foreign
      exchange       |  |         | (6,746  | ) |                           | 12,019  |   |                        | 618       |  
|Management compensation                     |  |         |         |   | 487,863                   |         |   | 382,232                |           |   | 1,195,772          |  
|Office and general administration           |  |         | 131,431 |   |                           | 120,826 |   |                        | 351,593   |  
|Professional fees                           |  |         |         |   | 119,348                   |         |   | 161,762                |           |   | 396,383            |  
|Research and development                    |  | - Cash  |         |   | 353,320                   |         |   | 155,265                |           |   | 632,270            |  
|                                            |  | - Stock |         |   | 529,113                   |         |   | 4,842                  |           |   | 529,113            |  
|Stock based compensation
      (Note 6)     |  |         | 424,128 |   |                           | 771,809 |   |                        | 1,896,087 |  
|LOSS BEFORE INCOME TAX                      |  |         |         |   | 2,220,985                 |         |   | 1,928,231              |           |   | 5,941,983          |  
|                                            |  |         |         |   |                           |         |   |                        |           |   |                    |  
|Deferred income
      tax recovery          |  |         |         |   | 11,483                    |         |   | -                      |           |   | 11,483             |  
|                                            |  |         |         |   |                           |         |   |                        |           |   |                    |  
|NET LOSS                                    |  |         |         | $ | (2,209,502                | )       | $ | (1,928,231             | )         | $ | (5,862,900         | )
|                                            |  |         |         |   |                           |         |   |                        |           |   |                    |  
|BASIC AND DILUTED NET LOSS PER
      SHARE  |  | $       | (0.05   | ) | $                         | (0.04   | ) |                        |           |  
|                                            |  |         |         |   |                           |         |   |                        |           |   |                    |  
|WEIGHTED AVERAGE NUMBER OF COMMON           |  |         |         |   |                           |         |   |                        |           |  
|SHARES OUTSTANDING                          |  |         |         |   | 48,689,094                |         |   | 46,071,666             |           |   |                    |  

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

---

|UPSTREAM BIOSCIENCES INC             
|-------------------------------------
|(A Development Stage Company)        
|CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                            |   |                           |   |   |                        |   |   | Cumulative Results |  
|----------------------------------------------------------- | - | ------------------------- | - | - | ---------------------- | - | - | ------------------ | -
|                                                            |   |                           |   |   |                        |   |   | From Inception     |  
|                                                            |   | Years Ended September 30, |   |   | **(June 14, 2004) to** |  
|                                                            |   | 2008                      |   |   | 2007                   |   |   | September 30, 2008 |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|CASH FLOW FROM OPERATING ACTIVITIES                         |   |                           |   |   |                        |   |   |                    |  
|Net loss                                                    | $ | (2,209,502                | ) | $ | (1,928,231             | ) | $ | (5,862,900         | )
|Adjustments to reconcile net loss to net
      cash used in |   |                           |   |   |                        |   |   |                    |  
|operating activities:                                       |   |                           |   |   |                        |   |   |                    |  
|Amortization of intellectual
      property                 |   |                           |   |   |                        |   |   |                    |  
|rights and equipment                                        |   | 64,371                    |   |   | 3,273                  |   |   | 68,407             |  
|Shares issued for
      services                            |   | 547,930                   |   |   | 64,031                 |   |   | 1,342,784          |  
|Amortization
      of fair value of stock options granted   |   | 424,128                   |   |   | 771,809                |   |   | 1,464,045          |  
|Deferred income tax
      recovery                          |   | (11,483                   | ) |   | -                      |   |   | (11,483            | )
|Accretion
      of convertible debenture                    |   | -                         |   |   | 232,621                |   |   | 302,808            |  
|Changes in operating assets and liabilities:                |   |                           |   |   |                        |   |   |                    |  
|Other
      receivables                                     |   | 38,308                    |   |   | (28,718                | ) |   | (6,484             | )
|Prepaid expenses                                            |   | 10,788                    |   |   | (39,270                | ) |   | (36,912            | )
|Accounts
      payable and accrued liabilities              |   | (800                      | ) |   | 24,189                 |   |   | 137,604            |  
|Due to related parties                                      |   | 144,492                   |   |   | 92,575                 |   |   | 227,378            |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|Net cash used in operating activities                       |   | (991,768                  | ) |   | (807,721               | ) |   | (2,374,753         | )
|                                                            |   |                           |   |   |                        |   |   |                    |  
|CASH FLOW FROM INVESTING ACTIVITIES                         |   |                           |   |   |                        |   |   |                    |  
|Increase in restricted
      cash                           |   | (588                      | ) |   | (22,188                | ) |   | (33,231            | )
|Cash paid for acquisition of PPT shares                     |   | -                         |   |   | (51,507                | ) |   | (51,507            | )
|Purchase of equipment                                       |   | (6,409                    | ) |   | (2,418                 | ) |   | (21,234            | )
|                                                            |   |                           |   |   |                        |   |   |                    |  
|Net cash used in investing
      activities                 |   | (6,997                    | ) |   | (76,113                | ) |   | (105,972           | )
|                                                            |   |                           |   |   |                        |   |   |                    |  
|CASH FLOW FROM FINANCING ACTIVITIES                         |   |                           |   |   |                        |   |   |                    |  
|Proceeds from issuance of convertible debentures            |   | -                         |   |   | -                      |   |   | 1,000,000          |  
|Proceeds from issuance
      of common shares, net          |   | -                         |   |   | 1,995,000              |   |   | 1,995,345          |  
|Loan from related party                                     |   | -                         |   |   | -                      |   |   | 78,487             |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|Net cash provided by financing activities                   |   | -                         |   |   | 1,995,000              |   |   | 3,073,832          |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|EFFECT OF EXCHANGE RATE CHANGES                             |   | (7,657                    | ) |   | 36,035                 |   |   | 19,199             |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|INCREASE (DECREASE) IN CASH                                 |   |                           |   |   |                        |   |   |                    |  
|AND CASH EQUIVALENTS                                        |   | (1,006,422                | ) |   | 1,147,201              |   |   | 612,306            |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|CASH AND CASH EQUIVALENTS, BEGINNING                        |   | 1,618,728                 |   |   | 471,527                |   |   | -                  |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|CASH AND CASH EQUIVALENTS, ENDING                           | $ | 612,306                   |   | $ | 1,618,728              |   | $ | 612,306            |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|SUPPLEMENTARY INFORMATION                                   |   |                           |   |   |                        |   |   |                    |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|Cash paid for:                                              |   |                           |   |   |                        |   |   |                    |  
|Interest                                                    | $ | -                         |   | $ | -                      |   | $ | -                  |  
|Income
      taxes                                          | $ | -                         |   | $ | -                      |   | $ | -                  |  
|                                                            |   |                           |   |   |                        |   |   |                    |  
|Non-cash investing and
      financing activities (Note 7)  |   |                           |   |   |                        |   |   |                    |  

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

---

|UPSTREAM BIOSCIENCES, INC                               
|--------------------------------------------------------
|(A Development Stage Company)                           
|CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY          
|FOR THE PERIOD FROM MARCH 20, 2002 TO SEPTEMBER 30, 2008

|                                                                   |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   | Deficit     |   |   |               |  
|------------------------------------------------------------------ |  | ------------ |  | - | ---------- | - | - | ---------- | - | - | -------- | - | - | ------------ | - | - | ------------- | - | - | ----------- | - | - | ------------- | -
|                                                                   |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   | Accumulated   |   |   | Accumulated |   |   |               |  
|                                                                   |  | Common Stock |  |   | Additional |   |   | Obligation |   |   |          |   |   | Other        |   |   | During the    |   |   | Total       |  
|                                                                   |  | Number of    |  |   |            |   |   | Paid-in    |   |   | to Issue |   |   | Deferred     |   |   | Comprehensive |   |   | Development |   |   | Stockholders' |  
|                                                                   |  | Shares       |  |   | Amount     |   |   | Capital    |   |   | Shares   |   |   | Compensation |   |   | Income (Loss) |   |   | Stage       |   |   | Equity        |  
|Balance - March 20, 2002                                           |  |              |  | $ | -          |   | $ | -          |   | $ | -        |   | $ | -            |   | $ | -             |   | $ | -           |   | $ | -             |  
|Activity from inception through March 31, 2004                     |  | 59,300,000   |  |   | 59,300     |   |   | (10,300    | ) |   | -        |   |   | -            |   |   | -             |   |   | (77,105     | ) |   | (28,105       | )
|Balance - March 31, 2004                                           |  | 59,300,000   |  |   | 59,300     |   |   | (10,300    | ) |   | -        |   |   | -            |   |   | -             |   |   | (77,105     | ) |   | (28,105       | )
|                                                                   |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Forward stock split on a 1.5:1 basis                               |  | 29,650,000   |  |   | 29,650     |   |   | (29,650    | ) |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Comprehensive income (loss)                                        |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Foreign exchange translation
      adjustment                      |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   | (3,472        | ) |   |             |   |   | (3,472        | )
|Net loss                                                           |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   | (50,205     | ) |   | (50,205       | )
|Balance - December 31, 2005                                        |  | 88,950,000   |  |   | 88,950     |   |   | (39,950    | ) |   | -        |   |   | -            |   |   | (3,472        | ) |   | (127,310    | ) |   | (81,782       | )
|Share exchange and recapitalization                                |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Shares issued to former
      shareholders of Upstream Canada      |  | 24,000,000   |  |   | 24,000     |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 24,000        |  
|Shares cancelled on acquisition                                    |  | -68,650,000  |  |   | (68,650    | ) |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   | (68,650       | )
|Recapitalization adjustment                                        |  |              |  |   |            |   |   | (4,005     | ) |   |          |   |   |              |   |   |               |   |   | (49,045     | ) |   | (53,050       | )
|Fair value compensation to consultant                              |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Issuance of stock at $1.20
      per share                         |  | 500,000      |  |   | 500        |   |   | 599,500    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 600,000       |  
|Amortization of fair value of stock options
      granted          |  |              |  |   |            |   |   | 100,150    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 100,150       |  
|Issuance of convertible debenture                                  |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Fair value of detachable warrants                                  |  |              |  |   |            |   |   | 360,964    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 360,964       |  
|Embedded beneficial conversion
      feature                       |  |              |  |   |            |   |   | 268,108    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 268,108       |  
|Issuance of stock for services                                     |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Prepaid for six months
      ended October 31, 2006                |  | 17,500       |  |   | 18         |   |   | 17,750     |   |   |          |   |   | (17,768      | ) |   |               |   |   |             |   |   | -             |  
|Less: amount expensed to September 30,
      2006                  |  |              |  |   |            |   |   |            |   |   |          |   |   | 14,986       |   |   |               |   |   |             |   |   | 14,986        |  
|Issuance of stock for BCCA license fee                             |  | 29,577       |  |   | 30         |   |   | 17,717     |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 17,747        |  
|Partial forfeiture of convertible debenture                        |  |              |  |   |            |   |   | 141,844    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 141,844       |  
|Comprehensive loss                                                 |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Foreign exchange translation adjustment                            |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   | (5,707        | ) |   |             |   |   | (5,707        | )
|Net loss                                                           |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   | (1,601,862  | ) |   | (1,601,862    | )
|                                                                   |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Balance - September 30, 2006                                       |  | 44,847,077   |  |   | 44,848     |   |   | 1,462,078  |   |   | -        |   |   | (2,782       | ) |   | (9,179        | ) |   | (1,778,217  | ) |   | (283,252      | )
|Amortization of fair value of stock options granted                |  |              |  |   |            |   |   | 771,809    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 771,809       |  
|Amortization of stock issued for operating
      expenses          |  |              |  |   |            |   |   |            |   |   |          |   |   | 2,782        |   |   |               |   |   |             |   |   | 2,782         |  
|Issuance of stock for services                                     |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Prepaid for twelve months
      ended October 31, 2007             |  | 48,326       |  |   | 48         |   |   | 34,674     |   |   |          |   |   | (34,722      | ) |   |               |   |   |             |   |   | -             |  
|Less: amount expensed to September 30,
      2007                  |  |              |  |   |            |   |   |            |   |   |          |   |   | 31,600       |   |   |               |   |   |             |   |   | 31,600        |  
|Issuance of stock for cash @ 1.50 per share                        |  | 1,333,334    |  |   | 1,333      |   |   | 1,998,667  |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 2,000,000     |  
|Cash payment for unsuccessful due diligence                        |  |              |  |   |            |   |   | (5,000     | ) |   |          |   |   |              |   |   |               |   |   |             |   |   | (5,000        | )
|Issuance of stock for convertible debenture                        |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Principal                                                          |  | 800,000      |  |   | 800        |   |   | 799,200    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 800,000       |  
|Interest payable                                                   |  | 53,973       |  |   | 54         |   |   | 53,919     |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 53,973        |  
|Issuance of stock for acquisition of PPT                           |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|For 100% of PPT's shares                                           |  | 520,000      |  |   | 520        |   |   | 243,880    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 244,400       |  
|For performance-based escrow shares as
      deferred compensation |  | 225,000      |  |   | 225        |   |   | 105,525    |   |   |          |   |   | (105,750     | ) |   |               |   |   |             |   |   | -             |  
|Obligation to issue shares under contract                          |  |              |  |   |            |   |   |            |   |   | 4,842    |   |   |              |   |   |               |   |   |             |   |   | 4,842         |  
|Comprehensive income (loss)                                        |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Foreign exchange translation
      adjustment                      |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   | 36,035        |   |   |             |   |   | 36,035        |  
|Net loss                                                           |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   | (1,928,231  | ) |   | (1,928,231    | )
|                                                                   |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Balance - September 30, 2007                                       |  | 47,827,710   |  |   | 47,828     |   |   | 5,464,752  |   |   | 4,842    |   |   | (108,872     | ) |   | 26,856        |   |   | (3,706,448  | ) |   | 1,728,958     |  
|Amortization of fair value of stock options
      granted          |  |              |  |   |            |   |   | 424,128    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 424,128       |  
|Amortization of stock issued for operating expenses                |  |              |  |   |            |   |   |            |   |   |          |   |   | 3,122        |   |   |               |   |   |             |   |   | 3,122         |  
|Issuance of stock for consulting services contract                 |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|For six months ended January 31,
      2008 @ $0.30 per share      |  | 83,183       |  |   | 83         |   |   | 24,872     |   |   | (4,842   | ) |   |              |   |   |               |   |   |             |   |   | 20,113        |  
|For amendede and restated
      contract @ $0.25 per share         |  | 403,388      |  |   | 403        |   |   | 100,445    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 100,848       |  
|For six months ended August 31,
      2008 @ $0.30 per share       |  | 213,725      |  |   | 214        |   |   | 46,841     |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 47,055        |  
|Issuance of stock for achieving Malaria milestone                  |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|New stock issued @ $0.3624 / sh                                    |  | 925,000      |  |   | 925        |   |   | 334,295    |   |   |          |   |   |              |   |   |               |   |   |             |   |   | 335,220       |  
|Release of 75,000 performance-based
      shares from escrow       |  |              |  |   |            |   |   |            |   |   |          |   |   | 27,180       |   |   |               |   |   |             |   |   | 27,180        |  
|Obligation to issue shares under contract                          |  |              |  |   |            |   |   |            |   |   | 14,391   |   |   |              |   |   |               |   |   |             |   |   | 14,391        |  
|Comprehensive income (loss)                                        |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   |             |   |   |               |  
|Foreign exchange translation adjustment                            |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   | (7,657        | ) |   |             |   |   | (7,657        | )
|Net loss                                                           |  |              |  |   |            |   |   |            |   |   |          |   |   |              |   |   |               |   |   | (2,209,502  | ) |   | (2,209,502    | )
|Balance - September 30, 2008                                       |  | 49,453,006   |  | $ | 49,453     |   | $ | 6,395,333  |   | $ | 14,391   |   | $ | (78,570      | ) | $ | 19,199        |   | $ | (5,915,950  | ) | $ | 483,856       |  

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

---

UPSTREAM BIOSCIENCES, INC 
  (A Development Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2008

1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

Upstream Biosciences, Inc. (the Company) was incorporated
  as Integrated Brand Solutions, Inc. on March 20, 2002 under the laws of the
  State of Nevada and on February 6, 2006 changed its name to Upstream Biosciences
  Inc. to better reflect the intended future direction and business of the Company.

On February 24, 2006, the Company completed the acquisition of
  100% of the issued and outstanding shares of Upstream Biosciences, Inc. (Upstream
  Canada) pursuant to an amended share exchange agreement entered into with
  the shareholders of Upstream Canada. Upstream Canada was incorporated on June
  14, 2004 under the laws of Canada for the purpose of developing genetic diagnostic
  biomarkers for use in determining a patients susceptibility to disease
  and predicting a patients response to drugs. After the agreement closed,
  the Upstream Canada shareholders held 54.2% of the issued and outstanding common
  shares of the Company. Accordingly, the transaction was accounted for as a recapitalization
  of Upstream Canada, which is similar to a reverse acquisition, whereby Upstream
  Canada is treated as the accounting parent (legal subsidiary) and the Company
  is treated as the accounting subsidiary (legal parent). This means Upstream
  Canada, the acquired entity, was regarded as the predecessor and continuing
  entity as of February 24, 2006.

On August 24, 2007, the Company completed the acquisition of
  100% of the issued and outstanding shares of Pacific Pharma Technologies, Inc
  (PPT) pursuant to a share exchange agreement entered into with the
  shareholders of PPT. PPT was an early stage biopharmaceutical company incorporated
  under the laws of British Columbia, Canada that had developed a proprietary
  technology platform combining artificial intelligence, advanced computational
  methods and chemical diversity techniques to discover new drug candidates.

After the acquisition, the Company has been able to pursue business
  development strategies in two separate areas:

i) its original strategy of developing technologies in order
  to generate revenues from licensing and/or collaborating with third parties
  in the disease susceptibility, biomarkers identification, and drug response
  areas of cancer, primarily to companies that develop and/or market developing
  diagnostic products.

ii) an expanded strategy of developing biotechnology drugs for
  certain infectious diseases and cancers in order to generate revenues through
  either licensing the technology or selling the drug products following commercialization
  and collaboration with third party companies.

Significant time and financing are required before the Companys
  technologies are developed to a marketable state. Depending on the level of
  financing and the resources available, the Company will continue to evaluate
  and determine the most cost effective way of implementing its on-going research
  and development programs in all areas of its expertise including diagnostic
  biomarkers, biomarkers for a drug response assay, and biotechnology drugs for
  infectious diseases and cancers.

Going concern

These consolidated financial statements have been prepared in
  accordance with generally accepted accounting principles in the United States
  of America on a going concern basis, which contemplates the realization of assets
  and the satisfaction of liabilities and commitments in the normal course of
  business. As at September 30, 2008, the Company has working capital of $190,409
  and has incurred losses since

1

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inception of $5,915,950. Further losses are anticipated in the
  development of its business and there can be no assurance that the Company will
  be able to achieve or maintain profitability. The continuing operations of the
  Company and the recoverability of the carrying value of assets is dependent
  upon the ability of the Company to obtain necessary financing to fund its on-going
  working capital requirements and research and development activities, and upon
  future profitable operations. The accompanying financial statements do not include
  any adjustments relative to the recoverability and classification of asset carrying
  amounts or the amount and classification of liabilities that might result from
  the outcome of this uncertainty. There is no assurance that equity or debt capital
  will be available as necessary to meet the Companys requirements or, if
  the capital is available, that it will be on terms acceptable to the Company.
  The issuances of additional equity securities by the Company may result in dilution
  in the equity interests of its current shareholders. Obtaining commercial loans,
  assuming those loans would be available, will increase the Company's liabilities
  and future cash commitments. If the Company is unable to obtain financing in
  the amounts and on terms deemed acceptable, the business and future success
  may be adversely affected.

Management plans to continue raising sufficient capital from
  equity or debt markets, as a supplement to its existing cash reserves of $612,306,
  in order to fund its on-going research and development program and operating
  losses.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation

These consolidated financial statements and related notes are
  presented in accordance with generally accepted accounting principles in the
  United States of America and are expressed in US dollars. The Company is a development
  stage company as defined by Statement of Financial Accounting Standard (SFAS)
  No. 7,Accounting and Reporting by Development Stage Enterprises
  and has not realized any revenues from its planned operations to date. These
  financial statements include the accounts of the Company and its wholly-owned
  subsidiaries, Upstream Canada and PPT. All inter-company transactions and account
  balances have been eliminated on consolidation. The fiscal year end of the Company
  and its subsidiaries is September 30.

(b) Use of estimates

The preparation of financial statements in conformity with US
  generally accepted accounting principles requires management to make estimates
  and assumptions that affect the reported amounts of assets and liabilities and
  disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenue and expenses during the reporting
  period. The Company bases its estimates and assumptions on current facts, historical
  experience and various other factors that it believes to be reasonable under
  the circumstances, the results of which form the basis for making judgments
  about the carrying values of assets and liabilities and the accrual of costs
  and expenses that are readily apparent from other sources. The actual results
  experienced by the Company may differ materially from the Companys estimates.
  To the extent there are material differences, future results may be affected.
  Estimates used in preparing these financial statements include the carrying
  value of intellectual property rights, fair value of stock-based compensation,
  retiring allowances, deferred income tax rates and deferred compensation.

(c) Cash and cash equivalents

Cash and cash equivalents consist of bank deposits and short-term
  investments in financial instruments with maturities less than 90 days held
  for the purpose of meeting short-term cash commitments rather than for investing
  or other purposes. Restricted cash consists of security deposits for Company
  credit cards.

(d) Financial instruments

The Companys financial instruments consist of cash and
  cash equivalents, other receivables, restricted cash, accounts payable, and
  amounts due to related parties. It is managements opinion that the Company
  is not

2

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exposed to significant interest, currency or credit risks arising
  from these financial instruments. The fair value of these financial instruments
  approximates their carrying values due to the relatively short maturity of these
  instruments.

(e) Equipment

Equipment is valued at cost less accumulated amortization. Amortization
  is recorded using the straight-line method over four years and maintenance and
  repairs are expensed as incurred.

(f) Intellectual property rights

The Company has adopted the provisions of the SFAS No. 142, Goodwill
  and Other Intangible Assets. Intangible assets with a definite life are
  amortized over that expected life and tested for impairment at least annually
  or whenever events or circumstances indicate a revision to the remaining period
  of amortization is warranted.

The fair market value of Intellectual Property Rights (IPR)
  acquired on August 24, 2007 during the acquisition of PPT is being amortized
  on a straight line basis over 5 years. The determination of any impairment of
  IPR includes a comparison of net carrying value with estimated future operating
  cash flows anticipated during the remaining life.

(g) Translation of foreign currencies

The functional and reporting currency of the Company is the United
  States dollar and of the Companys Canadian subsidiaries is the Canadian
  dollar. The financial statements of the Canadian subsidiaries are translated
  into United States dollars in accordance with SFAS No. 52 Foreign Currency
  Translation using period-end rates of exchange for assets and liabilities,
  and period-average rates of exchange for revenues and expenses. Gains or losses
  resulting from foreign currency transactions are included in the consolidated
  statements of operations; whereas, adjustments arising from the translation
  of financial statements of the Companys subsidiaries during the consolidation
  process are included as a separate component of shareholders equity called
  other comprehensive income (loss). The Company has not, to the date of these
  financials statements, entered into derivative instruments to offset the impact
  of foreign currency fluctuations.

(h) Research and development

These costs are expensed when incurred and consist primarily
  of direct material and personnel costs, contract services and indirect costs.
  The Company has received government assistance in the past and may receive the
  same in the future regarding its research and development activities. When the
  work is performed that qualifies for such grants, the related assistance amount
  is credited to research and development expense.

(i) Stock-based compensation

The Company has adopted the fair value recognition provisions
  of SFAS No. 123R, Share Based Payments, whereby compensation expense
  is recognized for all share-based payments based on the fair value in accordance
  with the provisions of SFAS 123R.

All transactions in which goods and services are the consideration
  received for the issuance of equity instruments are accounted for based on fair
  value of the consideration received or the fair value of the equity instrument
  issued, whichever is more reliably measurable.

(j) Convertible debenture

In accordance with EITF 00-27 Application of Issue No.
  98-5 to Certain Convertible Instruments, the proceeds received on issuance
  of convertible debentures are allocated between the convertible debt and the
  detachable warrants based on their relative fair values. At the date of issuance,
  the fair value of the detachable warrants represents the difference between
  the stated value and the carrying value of the

3

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convertible debenture and is recorded as additional paid-in capital.
  The carrying value of the debenture is accreted to its face value at maturity
  through charges to interest and finance charges over its term. As of September
  30, 2008, no convertible debentures were outstanding.

(k) Deferred income taxes

Income taxes are provided for in accordance with Statement of
  Financial Accounting Standards No. 109, Accounting for Income Taxes
  (SFAS 109), as interpreted by FASB Interpretation No. 48, Accounting
  for Uncertainty in Income Taxes  an interpretation of FASB Statement No.
  109 (FIN 48). Deferred tax assets and liabilities are recorded
  for temporary differences between the tax basis of assets and liabilities, computed
  pursuant to FIN 48 and the reported amounts in the consolidated financial statements
  using the statutory tax rates in effect for the year when the reported amount
  of the asset or liability is recovered or settled, respectively. The effect
  on deferred tax assets and liabilities of a change in tax rates is recognized
  in the results of operations in the period that includes the enactment date.
  A valuation allowance is recorded to reduce the carrying amounts of deferred
  tax assets to the amount that is more likely than not to be realized. For each
  tax position taken or expected to be taken in a tax return, the Company determines
  whether it is more likely than not that the position will be sustained upon
  examination based on the technical merits of the position, including resolution
  of any related appeals or litigation. A tax position that meets the more likely
  than not recognition threshold is measured to determine the amount of benefit
  to recognize. The tax position is measured at the largest amount of benefit
  that is greater than 50% likely of being realized upon settlement.

(l) Loss per share

The Company computes net loss per share in accordance with SFAS
  No. 128, Earnings per Share, which requires presentation of both
  basic and diluted loss per share (LPS) on the face of the statement
  of operations. Basic LPS is computed by dividing the net loss available to common
  shareholders by the weighted average number of outstanding common shares during
  the period. Diluted LPS gives effect to all potentially dilutive common shares
  outstanding during the period, including convertible debt, stock options and
  share purchase warrants, using the treasury stock method. The computation of
  diluted LPS does not assume conversion, exercise or contingent exercise of securities
  that would have an anti-dilutive effect on LPS.

(m) Long-Lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment
  or Disposal of Long-Lived Assets, the carrying value of intangible assets
  and other long-lived assets is reviewed on a regular basis for the existence
  of facts or circumstances that may suggest impairment. The Company recognizes
  impairment when the sum of the expected undiscounted future cash flows is less
  than the carrying amount of the asset. Impairment losses, if any, are measured
  as the excess of the carrying amount of the asset over its estimated fair value.

(n) Comparative figures

Certain comparative figures have been reclassified to conform
  to the current years presentation.

(o) Recent accounting pronouncements

In November 2008, the FASB voted on the effective date and other
  amendments of proposed FASB Staff Position FAS 140-e and FIN 46(R)-e, Disclosures
  about Transfers of Financial Assets and Interests in Variable Interest Entities
  (FSP FAS 140-e and FIN 46R-e). FSP FAS 140-e and FIN 46R-e would
  amend SFAS No. 140, Accounting for Transfers and Servicing of Financial
  Assets and Extinguishments of Liabilities  as amended (SFAS
  140) and FASB Interpretation No. 46 (revised December 2003), Consolidation
  of Variable Interest Entities (FIN 46R) to require enhanced
  disclosures by public entities about transfers of financial assets and interests
  in variable interest entities, and provide users of the financial statements
  with greater transparency about a transferors continuing involvement with
  transferred financial

4

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assets and an enterprises involvement with variable interest
  entities. The disclosures required by FSP FAS 140-e and FIN 46R-e will be effective
  for reporting periods (interim and annual) ending after December 15, 2008. The
  Company has reached the conclusion that this will have no impact on its consolidated
  financial statements.

In September 2008, the FASB issued two separate but related exposure
  drafts: (1) Proposed Statement of Financial Accounting Standards, Accounting
  for Transfers of Financial Assets  an amendment of FASB Statement No.
  140, and (2) Proposed Statement of Financial Accounting Standards, Amendments
  to FASB Interpretation No. 46(R) (together, the proposed Statements).
  The proposed Statements would remove the concept of a qualifying special-purpose
  entity (QSPE) from SFAS 140 and the exceptions from applying FIN
  46R to QSPEs. The proposed Statements would be effective as of the beginning
  of a reporting entitys fiscal year that begins after November 15, 2009.
  The Company has reached the conclusion that this will have no impact on its
  consolidated financial statements.

In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1,
  Determining Whether Instruments Granted in Share-Based Payment Transactions
  Are Participating Securities (FSP EITF 03-6-1). FSP EITF 03-6-1
  establishes that unvested share-based payment awards that contain nonforfeitable
  rights to dividends or dividend equivalents (whether paid or unpaid) are participating
  securities as defined in Emerging Issues Task Force (EITF) Issue
  No. 03-6, Participating Securities and the Two-Class Method under FASB
  Statement No. 128, and should be included in the computation of earnings
  per share pursuant to the two-class method as described in Statement of Financial
  Accounting Standards No. 128, Earnings per Share. FSP EITF 03-6-1
  is effective for financial statements issued for fiscal years beginning after
  December 15, 2008, and interim periods within those years. All prior-period
  earnings per share data presented shall be adjusted retrospectively to conform
  to the provisions of FSP EITF 03-6-1. Early application is not permitted. The
  Company is currently evaluating the impact that the adoption of FSP EITF 03-6-1
  will have on its consolidated financial statements.

In May 2008, the FASB issued Statement of Financial Accounting
  Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles
  (SFAS 162). SFAS 162 identifies a consistent framework, or hierarchy,
  for selecting accounting principles to be used in preparing financial statements
  that are presented in conformity with U.S. generally accepted accounting principles
  for nongovernmental entities. SFAS 162 is effective 60 days following the SECs
  approval of the Public Company Accounting Oversight Board amendments to AU Section
  411, The Meaning of Present Fairly in Conformity With Generally Accepted
  Accounting Principles. The Company has reached the conclusion that this
  will have no impact on its consolidated financial statements.

In March 2008, the FASB issued Statement of Financial Accounting
  Standards No. 161, Disclosures about Derivative Instruments and Hedging
  Activities, an Amendment of FASB Statement No. 133 (SFAS 161).
  SFAS 161 amends and expands the disclosure requirements of FASB Statement No.
  133, Accounting for Derivative Instruments and Hedging Activities 
  as amended (SFAS 133), to provide enhanced disclosures about
  how and why an entity uses derivative instruments; how derivative instruments
  and related hedged items are accounted for under SFAS 133; and how derivative
  instruments and related hedged items affect an entitys financial position,
  financial performance, and cash flows. SFAS 161 is effective for financial statements
  issued for fiscal years and interim periods beginning after November 15, 2008,
  with early application encouraged. The Company has reached the conclusion that
  this will have no impact on its consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting
  Standards No. 141 (revised 2007), Business Combinations (SFAS
  141R). SFAS 141R changes the accounting for and reporting of business
  combinations including, among other things, expanding the definition of a business
  and a business combination; requiring all assets and liabilities of the acquired
  business, including goodwill, contingent

5

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assets and liabilities, and contingent consideration to be recorded
  at fair value on the acquisition date; requiring acquisition-related transaction
  and restructuring costs to be expensed, rather than accounted for as acquisition
  costs; and requiring reversals of valuation allowances related to acquired deferred
  tax assets and changes to acquired income tax uncertainties to be recognized
  in earnings. SFAS 141R applies prospectively to business combinations for which
  the acquisition date is on or after the beginning of the first annual reporting
  period beginning on or after December 15, 2008. Earlier application of SFAS
  141R is prohibited. The Company has reached the conclusion that this will have
  no impact on its consolidated financial statements.

In December 2007, the FASB issued Statement of Accounting Standards
  No. 160, Non-controlling Interests in Consolidated Financial Statements,
  an Amendment of ARB No. 51 (SFAS 160). SFAS 160 changes the
  accounting and reporting for non-controlling interests (previously referred
  to as minority interests) such that non-controlling interests will be reported
  as a component of equity; losses will be allocated to the non-controlling interest;
  changes in ownership interests that do not result in a change in control will
  be accounted for as equity transactions and, upon a loss of control, any gain
  or loss on the interest sold will be recognized in earnings and any ownership
  retained will be re-measured at fair value. SFAS 160 is effective for fiscal
  years, and interim periods within those fiscal years, beginning on or after
  December 15, 2008. Earlier application of SFAS 160 is prohibited. SFAS 160 applies
  prospectively as of the beginning of the fiscal year in which it is initially
  applied, except for the presentation and disclosure requirements which apply
  retrospectively for all periods presented. The Company has reached the conclusion
  that this will have no impact on its consolidated financial statements.

3. INTELLECTUAL PROPERTY RIGHTS

| |                              |   | Year ended    |   |   | Year ended    | 
| | ---------------------------- | - | ------------- | - | - | ------------- | 
| |                              |   | September 30, |   |   | September 30, | 
| |                              |   | 2008          |   |   | 2007          | 
| |                              |   |               |   |   |               | 
| | Cost                         | $ | 295,907       |   | $ | 295,907       | 
| | Deferred income tax          |   | 57,415        |   |   | 57,415        | 
| | Total cost                   |   | 353,322       |   |   | 353,322       | 
| |                              |   |               |   |   |               | 
| | Deferred income tax recovery |   | (11,486       | ) |   | -             | 
| | Amortization                 |   | (47,695       | ) |   | -             | 
| |                              |   |               |   |   |               | 
| | Balance at year end          | $ | 294,141       |   | $ | 353,322       | 

4. RELATED PARTY TRANSACTIONS

At September 30, 2008, the Company owed $364,198 (2007 - $219,706)
  in connection with retirement allowances accrued for three Company officers.
  These amounts are unsecured and non-interest bearing.

The compensation paid or accrued for the benefit of the three
  Company officers was as follows:

| |                              |   | Year ended    |  |   | Year ended    | 
| | ---------------------------- | - | ------------- |  | - | ------------- | 
| |                              |   | September 30, |  |   | September 30, | 
| |                              |   | 2008          |  |   | 2007          | 
| |                              |   |               |  |   |               | 
| | Management fees and benefits | $ | 470,866       |  | $ | 403,322       | 

| | Amortization of retirement allowances                     |   | 175,000 |  |   | 131,250   | 
| | --------------------------------------------------------- | - | ------- |  | - | --------- | 
| | Amortization of fair value of stock options
      granted |   | 248,269 |  |   | 476,550   | 
| |                                                           |   |         |  |   |           | 
| | Total compensation to Company officers                    | $ | 894,135 |  | $ | 1,011,122 | 

6

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Of the management fees and benefits expensed during the year,
  $158,003 was recorded as research and development (2007 - $152,340).

All related party transactions are conducted in the ordinary
  course of business and measured at the exchange amount, which is the consideration
  established and agreed to by the related parties.

5. DEFERRED INCOME TAXES

The parent Company is subject to income taxes in the US and its
  wholly-owned subsidiaries are subject to income taxes in Canada. As of September
  30, 2008, both the Company and its subsidiaries had accumulated non-capital
  loss carry-forwards of approximately $3,050,000, which are available to reduce
  taxable income in future taxation years. These losses begin to expire in 2025
  after carry-forward periods of 20 years. The Company is required to compute
  the deferred income tax benefits from non-capital loss carry-forwards. However,
  due to the uncertainty of realization of these loss carry-forwards, a full valuation
  allowance has been provided for this deferred income tax asset.

In addition, the Company has a deferred income tax liability
  of $45,932 (2007: $57,415) arising from the tax gross-up required
  by US GAAP during the acquisition of PPT. At the time of acquisition, it represented
  the deferred income tax on the difference between fair value of the IPR acquired
  for accounting purposes and the related tax base.

At September 30, 2008 and 2007, the components of the deferred
  income tax accounts are shown below including non-capital tax loss carry forwards,
  statutory tax rate, deferred income tax asset and elected amount of valuation
  allowance:

| |                                     |   | September 30, |   |   | September 30 |  
| | ----------------------------------- | - | ------------- | - | - | ------------ | -
| |                                     |   | 2008          |   |   | 2007         |  
| |                                     |   |               |   |   |              |  
| | Non-capital tax loss carry forwards | $ | 3,050,000     |   | $ | 1,700,000    |  
| | Statutory tax rate                  |   | 35%           |   |   | 35%          |  
| | Deferred income tax asset           |   | 1,067,500     |   |   | 595,000      |  
| | Less: valuation allowance           |   | (1,067,500    | ) |   | (595,000     | )
| | Net deferred income tax asset       | $ | -             |   | $ | -            |  
| |                                     |   |               |   |   |              |  
| | Net deferred income tax liability   | $ | 45,932        |   | $ | 57,415       |  

6. CAPITAL STOCK

a) Authorized

The authorized capital stock of the Company is comprised of 100,000,000
  non-voting preferred shares and 750,000,000 voting common shares, both with
  a par value of $0.001 per share.

b) Issued and outstanding

No preferred shares have been issued to date.

7

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During the year ended September 30, 2007, the changes in common
  stock were as follows:

| | (i)   | On January 1 and June 5, 2007, a total of 48,326 common
        shares were issued pursuant to an office lease agreement with a fair value
        of $34,722.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii)  | On February 28 and May 8, 2007, 1,333,334 units were
        issued at a subscription price of $1.50 per unit pursuant to private placements
        for $2,000,000. Each unit consists of one common share of the Company,
        one non-transferable Series A warrant and one non-transferable Series
        B warrant both entitling the holders to purchase one additional common
        share at an exercise price of $1.75 and $1.85 respectively for a two year
        period expiring February 28 and May 8, 2009. No value was attributed to
        the warrants issued as part of these unit placements.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iii) | On March 15, 2007, 853,973 common shares were issued
        pursuant to the terms of a three year, 5% convertible debenture due February
        1, 2009 whereby the Company, at its option, was entitled to convert the
        outstanding principal of $800,000 and related interest payable of $53,973
        into common shares at $1.00 per share at any time.                                                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iv)  | On August 24, 2007, 520,000 common shares were issued
        into escrow at fair value of $244,400 pursuant to a share exchange agreement
        entered into with the shareholders of PPT. On the same date, 225,000 performance-based
        escrow shares were issued at fair value of $105,750 to be released in
        the future when certain agreed research milestones are achieved.                                                                                                                                                                                                                        

During the year ended September 30, 2008, the changes in common
  stock were as follows:

| | (i)  | 700,296 shares were issued with
        a fair market value of $172,858 pursuant to a consulting services agreement
        for the development and commercialization of proprietary drugs with one
        of the former shareholders of PPT. All amounts under this agreement are
        recorded as research and development expense in the statement of operations
        as follows:                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii) | On February 28, 2008, 925,000
        shares were issued pursuant to the terms of an agreement dated August
        24, 2007 regarding the purchase of PPT whereby the Company was obligated
        to issue 1,000,000 shares to the two former shareholders of PPT in consideration
        for each milestone achieved. The fair value of the common shares issued
        was $335,220 which was recorded as research and development expense in
        the statement of operations for the year ended September 30, 2008. At
        the same time, 75,000 shares were released from the escrow pool of 225,000
        performance-based shares which had been set aside for this purpose, leaving
        a balance of 150,000 shares for future milestones as of September 30,
        2008.

c) Stock Options

During the year ended September 30, 2007, the changes in stock
  options were as follows:

8

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| | (i)  | In March 2007, the Company approved and adopted
        a stock option plan (the Plan) authorizing the issuance of
        up to 5,000,000 shares of common stock upon exercise of the options granted
        pursuant to the Plan. Under the Plan, the Companys employees, directors,
        officers, consultants and advisors (collectively the Optionee Group)
        are eligible to receive a grant of the Companys shares, provided
        however that bona fide services are rendered by consultants or advisors
        and such services are not in connection with the offer or sale of securities
        in a capital-raising transaction.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ii) | In March and May 2007, the Company granted
        1,800,000 additional stock options pursuant to the Plan at the market
        price prevailing at the date of grant to certain members of the Optionee
        Group under the following terms and conditions:                                                                                                                                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

The fair value of stock options granted during the year ended
  September 30, 2007 was estimated to be $1,449,100 using the Black-Scholes option
  pricing model using the following assumptions: expected stock price volatility
  of 132%, risk-free interest rate of 3.5%, expected option life of 3 years and
  expected dividend yield of 0%. Due to the subjective nature of these assumptions,
  the fair value estimate can vary significantly with changed assumptions.

During the year ended September 30, 2008, no stock options were
  granted but 200,000 were cancelled following the resignations of two former
  directors.

In connection with all options granted to date, the Company recorded
  $424,128 as stock-based compensation expense for the year ended September 30,
  2008 (2007  $771,809). The unamortized balance of $221,321 will continue
  to be charged to operations on a straight-line basis over the remaining vesting
  periods.

The following table provides continuity of the outstanding stock
  options during the year ended September 30, 2008:

|               |  |                |  |   |            |  |  | # of Options   |  |  |           |   |  | # of Options   | 
|-------------- |  | -------------- |  | - | ---------- |  |  | -------------- |  |  | --------- | - |  | -------------- | 
|               |  |                |  |   |            |  |  | Outstanding at |  |  |           |   |  | Outstanding at | 
|               |  |                |  |   | Exercise   |  |  | September 30,  |  |  |           |   |  | September 30,  | 
|Grant Date     |  | Expiry Date    |  |   | Price      |  |  | 2007           |  |  | Cancelled |   |  | 2008           | 
|               |  |                |  |   |            |  |  |                |  |  |           |   |  |                | 
|May 1, 2006    |  | March 1, 2016  |  | $ | 0.80       |  |  | 400,000        |  |  |           |   |  | 400,000        | 
|March 16, 2007 |  | March 16, 2017 |  | $ | 0.96       |  |  | 800,000        |  |  |           |   |  | 800,000        | 
|March 16, 2007 |  | March 16, 2012 |  | $ | 0.96-$1.00 |  |  | 700,000        |  |  |           |   |  | 700,000        | 
|March 27, 2007 |  | March 27, 2012 |  | $ | 1.02       |  |  | 100,000        |  |  | (100,000  | ) |  | -              | 
|May 3, 2007    |  | May 3, 2012    |  | $ | 1.41       |  |  | 200,000        |  |  | (100,000  | ) |  | 100,000        | 
|               |  |                |  |   |            |  |  |                |  |  |           |   |  |                | 
|               |  | Totals         |  |   |            |  |  | 2,200,000      |  |  | 200,000   |   |  | 2,000,000      | 

9

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As of September 30, 2008, 1,533,333 stock options were exercisable
  with a weighted average exercise price and remaining life of $0.95 and 6.3 years,
  respectively.

d) Share Purchase Warrants

The following table provides continuity of the outstanding stock
  purchase warrants during the year ended September 30, 2008:

|             |  |              |  |   |          |  |  | # of Shares   |  |  |         |  |  | # of Shares   | 
|------------ |  | ------------ |  | - | -------- |  |  | ------------- |  |  | ------- |  |  | ------------- | 
|             |  |              |  |   | Exercise |  |  | Issuable at   |  |  |         |  |  | Issuable at   | 
|Issue Date   |  | Expiry Date  |  |   | Price    |  |  | September 30, |  |  | Expired |  |  | September 30, | 
|             |  |              |  |   |          |  |  | 2007          |  |  |         |  |  | 2008          | 
|Feb 28, 2007 |  | Feb 28, 2009 |  | $ | 1.75     |  |  | 666,667       |  |  |         |  |  | 666,667       | 
|Feb 28, 2007 |  | Feb 28, 2009 |  | $ | 1.85     |  |  | 666,667       |  |  |         |  |  | 666,667       | 
|May 8, 2007  |  | May 8, 2009  |  | $ | 1.75     |  |  | 666,667       |  |  |         |  |  | 666,667       | 
|May 8, 2007  |  | May 8, 2009  |  | $ | 1.85     |  |  | 666,667       |  |  |         |  |  | 666,667       | 
|             |  |              |  |   |          |  |  |               |  |  |         |  |  |               | 
|             |  | Totals       |  |   |          |  |  | 2,666,668     |  |  | 0       |  |  | 2,666,668     | 

The weighted average exercise price and remaining life of the
  stock purchase warrants as of September 30, 2008 was $1.80 and 0.51 years, respectively.

7. NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES

During the year ended September 30, 2008, the Company issued
  1,625,296 shares (year ended September 30, 2007 - 1,647,299) for non-cash consideration
  as follows:

|(a) | 700,296 shares were issued with a fair market
        value of $172,858 pursuant to a consulting services agreement for the
        development and commercialization of proprietary drugs with one of the
        former shareholders of PPT. All amounts under this agreement are recorded
        as research and development expense in the statement of operations as
        follows:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                            
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                            
|    | (ii)                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                            
|    | (iii)                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                            
|(b) | On February 28, 2008, 925,000 shares were
        issued pursuant to the terms of an agreement dated August 24, 2007 regarding
        the purchase of PPT whereby the Company was obligated to issue 1,000,000
        shares to the two former shareholders of PPT in consideration for each
        milestone                                                                           

10

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achieved. The fair value of the common shares issued was $362,400
  which was recorded as research and development expense in the statement of operations
  for the year ended September 30, 2008.

8. COMMITMENTS AND CONTINGENCIES

(a) Employment contracts with three Company officers

The Company has entered into employment contracts with three
  Company officers for renewable periods of two to three years. The total annual
  cash compensation commitment for the three officers is $450,000, excluding a
  40% bonus commitment for two of the three officers when certain performance
  milestones, yet to be determined, are achieved in the future.

In the event of contract termination by either party and subject
  to 30 to 90-day termination clauses, retirement allowances of $450,000 ($150,000
  each) will become immediately payable to the three officers. In this connection,
  $175,000 has been charged to operations for the year ended September 30, 2008
  (for the year ended September 30, 2007 - $131,250). The remaining unamortized
  balance of $85,417 is current and will be expensed over the remaining 7 months
  of the initial term of the contracts.

(b) On-going commitments pertaining to PPT acquisition

| | (i)   | A three year consulting services agreement commenced
        immediately after the acquisition with one of the former shareholders
        of PPT in connection with the development and commercialization of proprietary
        drugs using PPTs intellectual property rights. Initially, the annual
        consulting fee consisted of $49,250 in cash payable monthly and $49,250
        in shares payable semi-annually based on the closing share price at the
        end of each month. Effective March 1, 2008, the original agreement was
        amended and restated. The equity component was increased to $193,000 (C$200,000)
        of which $100,848 was paid immediately with 403,368 common shares and
        $47,055 ($50,000) was paid effective August 31, 2008 with 213,725 shares.
        The equity component balance of $48,427 (C$50,000) is due on February
        28, 2009. Thereafter, the annual equity component of $196,330 (C$200,000)
        will be payable semi-annually until the agreement expires on July 31,
        2010 along with the annual cash component which was not changed.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (ii)  | The Company is committed to issuing up to 2,000,000
        additional common shares for the future achievement of two agreed research
        milestones depending on the degree of success. These shares will be reduced
        by the release of 150,000 performance-based shares remaining from the
        225,000 originally put into escrow and recorded in stockholders
        equity as deferred compensation during the acquisition of PPT.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (iii) | The Company must spend a minimum $150,000 on third-party
        testing of the PPT intellectual property during each of the four years
        ending December 31, 2011 or else the maximum contingent shares payment
        for milestone achievements described above becomes due and payable. This
        commitment was met for the year ended September 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

(c) Contingent payment for successful fund raising

On May 27, 2008, the Company signed a non-exclusive agreement
  with a Toronto-based investment firm for five months at $7,500 per month, extendable
  on a month-to-month basis by mutual agreement, which remains in effect to the
  date of this report. Upon successful completion of a financing agreement, the
  Company will pay this firm 2% of the funds raised or $247,800, whichever is
  greater.

11

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(d) License Agreement with British Columbia Cancer Agency
  Branch (BCCA)

The Company entered into a license agreement with BCCA on March
  10, 2005 for a seven year term expiring March 2012 regarding bioinformatics
  technology developed at the University of British Columbia (UBC).
  Under terms of the agreement, the Company paid the initial license fee to BCCA
  during year ended September 30, 2006 by issuing 29,477 Company shares having
  a fair value of $17,747 at the time of issuance.

In addition, the Company is obligated to pay annual royalties
  starting September 14, 2007 equal to 10% of the gross revenue from licensed
  product sales or $9,632, whichever is greater. At September 30, 2008, royalties
  of $10,033 have been accrued but unpaid.

(e) License Agreement with University of British Columbia
  (UBC)

Upstream Canada entered into a License Agreement with UBC on
  March 23, 2005 for a ten year term expiring March 2015 regarding bioinformatics
  technology developed at UBC. Under terms of the agreement, Upstream Canada agreed
  to pay the initial license fee consisting of $7,554 cash plus an equity component
  which is subject to on-going negotiations. The former has been paid and the
  latter accrued at an estimated amount of $12,040 (CDN$12,500) but unpaid as
  of September 30, 2008.

In addition to the license fee and commencing March 2005, Upstream
  Canada has agreed to pay the greater of (a) annual royalties equal to 15% of
  the gross revenue from licensed product sales or (b) the minimum annual sliding
  scale amounts as follows: $7,554 from April 1, 2005 to March 31, 2007 (2 years);
  $14,448 from April 1, 2007 to March 31, 2012 (5 years); and $19,264 from April
  1, 2012 to March 31, 2015 (3 years). To September 30, 2008, royalties of $21,672
  (CDN$22,500) have been accrued but unpaid.

(f) Minimum annual commitments

The aggregate minimum annual commitments regarding the above
  commitments for the next five years ending September 30 are as follows:

|2009                          | $ | 111,372 | 
|----------------------------- | - | ------- | 
|2010                          |   | 25,955  | 
|2011                          |   | 25,955  | 
|2012                          |   | 25,955  | 
|2013                          |   | 31,146  | 
|Thereafter to 2015, inclusive |   | 51,909  | 
|                              |   |         | 
|                              | $ | 272,292 | 

12

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required
  by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our principal
  executive officer and principal financial officer evaluated our company’s
  disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
  of the Exchange Act) as of the end of the period covered by this annual report
  on Form 10-K. Based on this evaluation, these officers concluded that as of
  the end of the period covered by this Annual Report on Form 10-K,
  these disclosure controls and procedures were not effective to ensure
  that the information required to be disclosed by our company in reports
  it files or submits under the Exchange Act is recorded, processed,
  summarized and reported within the time periods specified in the rules and forms
  of the Securities Exchange Commission and include controls and
  procedures  designed to ensure that such information is accumulated and communicated
  to our company’s management, including our company’s principal executive
  officer and principal financial officer, to allow timely decisions regarding
  required disclosure. The conclusion that our disclosure controls and procedures
  were not effective was due to the presence of material weaknesses in internal
  control over financial reporting as identified below under the heading “Management’s
  Report on Internal Control Over Financial Reporting.” Management anticipates
  that such disclosure controls and procedures will not be effective until the
  material weaknesses are remediated. Our company intends to remediate the material
  weaknesses as set out below.

Because of the inherent limitations in all control systems, no
  evaluation of controls can provide absolute assurance that all control issues,
  if any, within our company have been detected. These inherent limitations include
  the realities that judgments in decision-making can be faulty and that breakdowns
  can occur because of simple error or mistake.

Managements Report on Internal Control Over Financial
Reporting

Our companys management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our
companys internal control over financial reporting is designed to provide
reasonable assurance, not absolute assurance, regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles in the
United States of America. Internal control over financial reporting includes
those policies and procedures that: (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of our companys assets; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles in the
United States of America, and that our companys receipts and expenditures are
being made only in accordance with authorizations of our management and
directors; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. In addition,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions
and that the degree of compliance with the policies or procedures may
deteriorate.

-23-

---

Our Management,
  including our principal executive officer and principal financial officer, conducted
  an evaluation of the design and operation of our internal control over financial
  reporting as of September 30, 2008 based on the criteria set forth in Internal
  Control – Integrated Framework issued by the Committee of Sponsoring Organizations
  of the Treadway Commission. This evaluation included review of the documentation
  of controls, evaluation of the design effectiveness of controls, testing of
  the operating effectiveness of controls and a conclusion on this evaluation.
  Based on this evaluation, our management concluded our internal control over
  financial reporting was not effective as at September 30, 2008 due to the following
  material weaknesses which are indicative of many small companies with small
  staff: (i) inadequate segregation of duties and effective risk assessment; (ii)
  insufficient written policies and procedures for accounting and financial reporting
  with respect to the requirements and application of both US GAAP and SEC guidelines;
  (iii) inadequate security and restricted access to computer systems including
  insufficient disaster recovery plans; and (iv) no written whistle-blower policy.

Our company plans to take
  steps to enhance and improve the design of our internal controls over financial
  reporting. During the period covered by this annual report on Form 10-K, we
  have not been able to remediate the material weaknesses identified above. To
  remediate such weaknesses, we plan to implement the following changes during
  our fiscal year ending September 30, 2009: (i) appoint additional qualified
  personnel to address inadequate segregation of duties and ineffective risk management;
  (ii) adopt sufficient written policies and procedures for accounting and financial
  reporting and a whistle-blower policy; and (iii) implement sufficient security
  and restricted access measures regarding our computer systems and implement
  a disaster recovery plan. The remediation efforts set out in (i) and (iii) are
  largely dependent upon our company securing additional financing to cover the
  costs of implementing the changes required. If we are unsuccessful in securing
  such funds, remediation efforts may be adversely effected in a material manner.

This annual report does
  not include an attestation report of our independent registered public accounting
  firm regarding internal control over financial reporting. Our internal control
  over financial reporting was not subject to attestation by our independent registered
  public accounting firm pursuant to temporary rules of the Securities and Exchange
  Commission that permit us to provide only management’s report in this
  annual report.

Because of the inherent
  limitations in all control systems, no evaluation of controls can provide absolute
  assurance that all control issues, if any, within our company have been detected.
  These inherent limitations include the realities that judgments in decision-making
  can be faulty and that breakdowns can occur because of simple error or mistake.

Changes in Internal Control Over Financial
Reporting.

There were no changes in our companys internal control over
financial reporting during the quarter ended September 30, 2008 that have
materially affected, or are reasonably likely to materially affect, our
companys internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

-24-

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Directors and Executive Officers

As at December 19, 2008, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

|Name                        | Position Held with theCompany        | Age | Date First Electedor Appointed
|--------------------------- | ------------------------------------ | --- | ------------------------------
|Joel Bellenson              | Chief Executive Officer and Director | 44  | March 1, 2006                 
|Dexster Smith               | President and Director               | 41  | March 1, 2006                 
|Dr. Geert Cauwenbergh(1)(2) | Director                             | 54  | March 25, 2008                
|Jeffrey Bacha(1)(2)         | Director                             | 40  | April 3, 2008                 
|Tim Fernback                | Chief Financial Officer              | 41  | April 12, 2006                

|(1) | Members of the Compensation Committee
|--- | -------------------------------------
|    |                                      
|(2) | Members of the Audit Committee       

Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Joel Lloyd Bellenson

Joel Bellenson was appointed as a director and the Chief
Executive Officer of our company on March 1, 2006 and was appointed as a
director and Chief Executive Officer of Upstream Canada in August, 2004. From
1998 to present, Mr. Bellenson has been a partner in Libra Digital, LLC, a
consulting limited liability company that develops new technologies and provides
marketing assistance in the fields of biotechnology and alternative energy. Mr.
Bellenson was also a co-founder of DigiScents Inc. and its Chief Executive
Officer from 1999 to 2001. DigiScents developed hardware and software multimedia
platforms for adding scent to movies, interactive games, advertising and
e-commerce. Mr. Bellenson was also a co-founder of DoubleTwist Inc., its Chief
Executive Officer and Chief Strategist from 1991 to 1999 and a director from
1991 to 2001. DoubleTwist was a bioinformatics company that designed informatics
systems in the fields of biology, chemistry and healthcare for customers in the
life sciences industries. Mr. Bellenson obtained a Bachelor of Science (Biology)
from Stanford University in 1988.

Dexster L. Smith

Dexster Smith was appointed as a director and the President of
our company on March 1, 2006 and was appointed as a director and the President
of Upstream Canada in August, 2004. From 1998 to present, Mr. Smith has been a
partner in Libra Digital, LLC, a consulting limited liability company that
develops new technologies and provides marketing assistance in the fields of
biotechnology and alternative energy. Mr. Smith was also a co-founder of
DigiScents Inc. and its President from 1999 to 2001. DigiScents developed
hardware and software multimedia platforms for adding scent to movies,
interactive games, advertising and e-commerce. Mr. Smith was also a co-founder
of DoubleTwist Inc., its President from 1991 to 1999 and a director from 1991 to
2001. DoubleTwist was a

-25-

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bioinformatics company that designed informatics systems in the
fields of biology, chemistry and healthcare for customers in the life sciences
industries. Mr. Smith obtained a Bachelor of Science (Industrial Engineering)
from Stanford University in 1989.

Dr. Geert Cauwenbergh

Dr. Cauwenbergh was appointed as a director of our company on
March 25, 2008. In 2001, Dr. Cauwenbergh founded Barrier Therapeutics, Inc., a
pharmaceutical company developing and commercializing products in the field of
dermatology, and he subsequently led Barrier Therapeutics successful initial
public offering. Barrier Therapeutics merged with Stiefel Laboratories in August
of 2008. Prior to Barrier Therapeutics, Dr. Cauwenbergh was Vice President of
Technology of the Johnson & Johnson Consumer and Personal Care Products
Companies, leveraging intellectual property owned by Johnson & Johnson to
launch new companies and businesses. Previously, Dr. Cauwenbergh served as Vice
President of Research & Development of the Johnson & Johnson Consumer
Companies Worldwide, Vice President of Product Development and a member of the
Management Board of the U.S. Johnson & Johnson Consumer Company and Director
of the Corporate Skin Care Council of Johnson & Johnson. He also was a
member of the Johnson & Johnson Business Development Council.

Earlier in his career, at Janssen Pharmaceutica in Belgium, Dr.
Cauwenbergh was the International Director of Clinical R&D, Dermatology and
Infectious Diseases at the Janssen Research Foundation. Dr. Cauwenbergh also
serves on the Board of Directors of Ablynx nv and Euroscreen SA in Belgium, as
well as DARA Biosciences Inc. and ECI Biotech in the USA. On August 25, 2008,
Dr. Cauwenbergh joined RHEI Pharmaceuticals Inc., a private development company
in China, as its Chairman and CEO. Dr Cauwenbergh has authored over 100
publications and co-authored several books. Dr. Cauwenbergh received a Ph.D. in
medical sciences from the Catholic University of Leuven, Faculty of Medicine,
where he also completed his Masters and undergraduate work.

Jeffrey Bacha

Mr. Bacha was appointed as a director of our company on April
3, 2008. Jeffrey Bacha has over fifteen years of experience working within the
life sciences industry, specifically in the areas of operations, strategy and
finance. During his career, he has assisted biotechnology, pharmaceutical and
medical device companies to develop and implement a wide range of business and
financing strategies.

Mr. Bacha currently oversees the drug development and financial
activities of Clera Inc. in his current role as Executive Vice President,
Corporate Affairs and Chief Operating Officer and acts in an advisory capacity
to a number of other companies.

In 2002, Mr. Bacha launched Inimex Pharmaceuticals as President
and Founding Chief Executive Officer with University of British Columbia
Professors Bob Hancock and Brett Finlay. Prior to leaving Inimex in 2005, Mr.
Bacha led the company through its start-up phase to pre-clinical lead selection.
He recruited the management and scientific research teams, completed key
strategic partnerships and venture capital financing. Based on Mr. Bachas
leadership, Inimex is positioned to advance new medicines that are anticipated
to overcome the serious issues of drug resistance in the treatment of bacterial
infections and other diseases into human clinical trials.

From 1998 until joining Inimex, Mr. Bacha served as Vice
President, Corporate Development of Inflazyme Pharmaceuticals Ltd. where he was
responsible for overall corporate strategy, partnering and licensing activities,
corporate communications and investor relations.

In a consulting capacity, Mr. Bacha has served as a founding
member of the Board of Directors of Urigen Holdings Inc., a clinical stage
specialty pharmaceutical company focused on the development and
commercialization of new products to treat and diagnose major urological
disorders. During his tenure as a Director, he assisted the company in the
development of its business plan, its relocation to Vancouver, Canada, the
completion of a Series A financing and led the companys successful effort to
in-license a second clinical-stage urology platform in order to expand its
product development portfolio. Urigen recently announced a reverse take-over of
a NASDAQ listed company. Additionally, Mr. Bacha served as founding Chief
Financial Officer and Vice President, Corporate Development of XBiotech Inc., a
start-up antibody platform company. Mr. Bacha assisted the company in
establishing its business

-26-

---

including development of its business plan, raising initial
seed capital and location of the companys laboratories to co-founder and Nobel
laureate Rolf Zinkernagels laboratories in Europe.

Prior 1998, Mr. Bacha spent a number of years in KPMGs U.S.
Health Ventures and Life Sciences Corporate Finance Group where he was most
recently Senior Manager and Director in the Firms San Francisco practice. Mr.
Bacha has also served as the Founding Director of Marketing for the Forensic
Research Consulting Group, of San Diego, California, and as Production, New
Product Development and Regulatory Compliance Manager for MarDx Diagnostics,
Inc. of Carlsbad, California.

Mr. Bacha is originally from California, USA. He holds a B.Sc.
in Biophysics from the University of California and an M.B.A. from the Goizueta
Business School at Emory University.

Both Inimex and Inflazyme were named one of the Top 10 Life
Sciences Investment Opportunities in Canada during every year of his tenure at
those organizations. Mr. Bacha has been recognized by Business in Vancouver
Magazine as one of the Top 40 Under 40 business persons in British Columbia
and in 2004 he was nominated for the Ernst & Young Entrepreneur of the Year
Award.

In addition to his biotechnology industry endeavors, Mr. Bacha
serves on the Board of Directors of Covenant House Vancouver, a not-for-profit
agency focused on assistance to street youth; and as the former Chair of the
Greater Vancouver Economic Council.

Tim Fernback

Tim Fernback has been the Chief Financial Officer of our
company since April 12, 2006. Mr. Fernback has over a decade of experience
financing both private and public companies in Canada. Mr. Fernback was the head
of the technology consulting practice for Discovery Capital Corporation, a
prominent British Columbia venture capital firm specializing in financing and
consulting to technology based start-up ventures, and later oversaw the
Investment Banking and Corporate Finance Departments for Western Canadian-based
brokerage firm, Wolverton Securities Ltd.

In 2004, Mr. Fernback left Wolverton Securities and was the
founder of a boutique technology consulting practice. Since 2002, Mr. Fernback
has been an active director of the Okanagan Capital Fund, a Canadian-based
technology venture fund. Mr. Fernback holds an Honors B.Sc. in Biology from
McMaster University (1991) with a concentration in molecular biology, and also a
graduate of the University of British Columbia (1993), where he completed his
MBA with a concentration in Finance.

Significant Employees

We have no significant employees other than the officers of our
company.

Family Relationships

There are no family relationships among our directors or
officers.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not
been involved in any of the following events during the past five years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                    
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offenses);                                                     
| |    |                                                                                                                                                                                                                    
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of
any                                                                                                     

-27-

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| |    | court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or                                                                                                  
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                   
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.

Audit Committee

Our board of directors struck an audit committee on December 3,
2008. As of this date, Jeffrey Bacha and Geert Cauwenbergh were appointed as
sole members of the audit committee with Jeffrey Bacha acting as Chairman of the
committee, both are independent directors of our company. Jeffrey Bacha and
Geert Cauwenbergh of our compensation committee are independent as defined by
Rule 4200(a)(15) of the Nasdaq Marketplace Rules. Our audit committee undertakes
an independent review of our companys financial statements, and meets with
management to determine the adequacy of internal controls and other financial
reporting matters.

Prior to striking the audit committee, our entire board of
directors acted as the audit committee, which included Joel Bellenson, Dexster
Smith, Dr. Geert Cauwenbergh and Jeffrey Bacha. Our board of directors
determined that Dr. Geert Cauwenbergh and Jeffrey Bacha were the only members of
our board of directors that were independent as the term is defined by Rule
4200(a)(15) of the Nasdaq Marketplace Rules.

Audit Committee Financial Expert

Our board of directors has determined that it does not have an
audit committee member that qualifies as an audit committee financial expert
as defined in Item 407(d)(5)(ii) of Regulation S-K. We believe that the audit
committee members are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development and the fact that we have not generated revenues
to date.

Nomination Procedures For Appointment of Directors

As of December 19, 2008, we did not effect any material changes
to the procedures by which our stockholders may recommend nominees to our board
of directors.

Code of Ethics

Effective January 29, 2004, our companys board of directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, members of our board of directors, our companys officers, contractors,
consultants and advisors. As adopted, our Code of Business Conduct and Ethics
sets forth written standards that are designed to deter wrongdoing and to
promote:

| | (1) | honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest between personal and
      professional relationships;                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                              
| | (2) | full, fair, accurate, timely, and understandable
      disclosure in reports and documents that we file with, or submit to, the
      Securities and Exchange Commission and in other public communications made
      by us;
| |     |                                                                                                                                                                                                                              
| | (3) | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                                                   
| |     |                                                                                                                                                                                                                              
| | (4) | the prompt internal reporting of violations of the Code
      of Business Conduct and Ethics to an appropriate person or persons
      identified in the Code of Business Conduct and Ethics; and                            
| |     |                                                                                                                                                                                                                              
| | (5) | accountability for adherence to the Code of Business
      Conduct and Ethics.                                                                                                                                               

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Our Code of Business Conduct and Ethics requires, among other
things, that all of our companys personnel shall be accorded full access to our
president with respect to any matter which may arise relating to the Code of
Business Conduct and Ethics. Further, all of our companys personnel are to be
accorded full access to our companys board of directors if any such matter
involves an alleged breach of the Code of Business Conduct and Ethics by our
company officers.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our companys President. If
the incident involves an alleged breach of the Code of Business Conduct and
Ethics by the President, the incident must be reported to any member of our
board of directors. Any failure to report such inappropriate or irregular
conduct of others is to be treated as a severe disciplinary matter. It is
against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our companys Code of
Business Conduct and Ethics by another.

We will provide a copy of the Code of Business Conduct and
Ethics to any person without charge, upon request. Requests can be sent to our
company at the address on the cover of this annual report.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during the fiscal year ended September 30, 2008, all filing
requirements applicable to our officers, directors and greater than 10% percent
beneficial owners were complied with, with the exception of the following:

|Name                  | Number of Late Reports | Number of Transactions Not Reported on a Timely Basis | Failure to File Requested
      Forms
|--------------------- | ---------------------- | ----------------------------------------------------- | -------------------------------------
|Dr. Geert Cauwenbergh | 1(1)                   | Nil                                                   | Nil                                  

|(1) | The named director filed a late Form 3  Initial
      Statement of Beneficial Ownership of Securities which has subsequently
      been filed.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth all compensation received during
the two years ended September 30, 2008 by our Chief Executive Officer, Chief
Financial Officer and each of the other most highly compensated executive
officers whose total compensation exceeded $100,000 in such fiscal year. These
officers are referred to as the Named Executive Officers in this Report.

Summary Compensation

The following table provides a summary of the compensation
received by the persons set out therein for each of our last two fiscal
years:

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|SUMMARY COMPENSATION TABLE                                    
|--------------------------------------------------------------
|Name and
      PrincipalPosition                              
|Joel L. Bellenson(1)Chief
      Executive Officer and Director
|Dexster L. Smith(2)President and
      Director               
|Tim Fernback(3)Chief Financial
      Officer                  

|(1) | Joel Bellenson was appointed director and officer of our
      company on March 1, 2006.                                                                                                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                    
|(2) | Dexster Smith was appointed director and officer of our
      company on March 1, 2006.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                    
|(3) | Tim Fernback was appointed Chief Financial Officer on
      April 12, 2006.                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                    
|(4) | The determination of value of option awards is based upon
      the Black-Scholes Option pricing model, details and assumptions of which
      are set out in our financial statements included in this annual report.
      The amounts represent annual amortization of fair value of stock options
      granted to the named executive officer.

Compensation Discussion and Analysis

All of our current research and development is carried out by
Mr. Bellenson and Mr. Smith, with some consulting services carried out by Dr.
Artem Cherkasov. Mr. Bellenson and Mr. Smith have entered into employment
agreements, while Dr. Artem Cherkasov has entered into a consulting agreement
with our company. Pursuant to the terms of the employment agreements, our
company agreed to pay Mr. Bellenson and Mr. Smith a base salary of $150,000
annually adjusted for any foreign exchange difference that may arise. Pursuant
to the terms of the amended consulting contract, our company agreed to pay Mr.
Cherkasov an annual consulting services fee of $49,250 (C$50,000) plus equity
component of $193,000 (C$200,000) in restricted common shares based upon the
closing price of our common stock at the end of each calendar month until the
agreement expires July 31, 2010.

If the employment agreements between our company and Joel
Bellenson or Dexster Smith are terminated for any reason, our company is
required to pay the respective officer a $150,000 retiring allowance within 30
days of receiving notification of the termination. If either Mr. Bellenson or
Mr. Smith terminate the employment agreement for any reason with 14 days notice,
our company is required to pay all accrued salary, bonuses and benefits to the
respective officer. Our company may terminate either agreement for cause on
receipt of written notice to the officer, and without cause on 90 days written
notice to the officer. Under such circumstances, our company is required to pay
all accrued salary, bonuses and benefits to the terminated officer.

-30-

---

Our company also retained TCF Ventures Corp., a company
beneficially owned by Mr. Tim Fernback, as a consultant to provide financial
advisory services to our company pursuant to the terms of a Consultant
Engagement Agreement dated May 1, 2007, our company agreed to pay the consultant
$150,000 annually plus applicable taxes subject to adjustment as set out in the
consulting agreement, as well as 400,000 stock options. The options are
exercisable until March 1, 2016 at the exercise price of $0.80 per share. On
April 12, 2006, Mr. Fernback became our companys Chief Financial Officer. If
the consulting agreement between our company and TCF Ventures Corp. is
terminated for any reason, our company is required to pay the respective officer
a $150,000 retiring allowance within 30 days of receiving notification of the
termination. If TCF Ventures Corp. terminates the consulting agreement for any
reason with 14 days notice, our company is required to pay all accrued fees,
bonuses and benefits. Our company may terminate either agreement for cause on
receipt of written notice to the officer, and without cause on 90 days written
notice to the officer. Under such circumstances, our company is required to pay
all accrued fees, bonuses and benefits.

Our compensation program for our executive officers is
administered and reviewed by our board of directors and the Compensation
Committee. Historically, executive compensation consists of a combination of
base salary and bonuses. Individual compensation levels are designed to reflect
individual responsibilities, performance and experience, as well as the
performance of our company. The determination of discretionary bonuses is based
on various factors, including implementation of our business plan, acquisition
of assets, development of corporate opportunities and completion of financing.
The objectives of our compensation program are to retain and offer an incentive
to current management, and to carry out our compensation related policies as per
our Compensation Committee Charter.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer
certain information concerning the outstanding equity awards as of September 30,
2008.

|OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END          
|------------------------------------------------------
|OPTION AWARDS                                         
|Name                                                  
|Joel L. Bellenson Chief Executive Officer and Director
|Dexster L. Smith President and Director               
|Tim Fernback Chief Financial Officer                  

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---

|(1) | Represents options granted to the named executive officer
      that have vested.        
|--- | -----------------------------------------------------------------------------------------
|    |                                                                                          
|(2) | Represents options granted to the named executive officer
      that have not yet vested.

No options were granted during the year ended September 30,
2008 and 200,000 options were cancelled following the resignations of two former
directors. At September 30, 2008, there were 2,000,000 stock options issued and
outstanding. In addition to the stock options set out in the table above, our
company has agreed to issue 1,500,000 stock options to Dr. Geert Cauwenbergh,
Jeffrey Bacha and three new scientific and business advisory board members under
the 2007 Stock Option Plan, on terms yet to be determined.

In March 2007, our company approved and adopted a stock option
plan authorizing the issuance of up to 5,000,000 shares of common stock upon
exercise of the options granted pursuant to the plan. Under the plan, our
employees, directors, officers, consultants and advisors are eligible to receive
a grant of our shares, provided however that bona fide services are rendered by
consultants or advisors and such services are not in connection with the offer
or sale of securities in a capital-raising transaction.

In connection with previously granted options, we recorded
$424,128 as stock-based compensation expense for the year ended September 30,
2008 (year ended September 30, 2007  $771,809). The unamortized balance of
$221,321 will be charged to operations in the future on a straight-line basis
over the remaining vesting periods.

A summary of our outstanding stock options as of September 30,
2008 is presented below:

|               |  |                |  |   |                |  |  | Options            | 
|-------------- |  | -------------- |  | - | -------------- |  |  | ------------------ | 
|               |  |                |  |   |                |  |  | Outstanding at     | 
|Grant Date     |  | Expiry Date    |  |   | Exercise Price |  |  | September 30, 2008 | 
|               |  |                |  |   |                |  |  |                    | 
|May 1, 2006    |  | March 1, 2016  |  | $ | 0.80           |  |  | 400,000            | 
|March 16, 2007 |  | March 16, 2017 |  | $ | 0.96           |  |  | 800,000            | 
|March 16, 2007 |  | March 16, 2012 |  | $ | 0.96-$1.00     |  |  | 700,000            | 
|May 3, 2007    |  | May 3, 2012    |  | $ | 1.41           |  |  | 100,000            | 
|               |  |                |  |   |                |  |  |                    | 
|               |  | Totals         |  |   |                |  |  | 2,000,000          | 

The weighted average exercise price and remaining life of the
stock options was $0.95 and 6.3 years, respectively.

Aggregated Option Exercises

There were no options exercised by any officer or director of
our company during our twelve month period ended September 30, 2008.

Long-Term Incentive Plan

Currently, our company does not have a long-term incentive plan
in favor of any director, officer, consultant or employee of our company.

Directors Compensation

The particulars of compensation paid to our directors for our
year ended September 30, 2008, is set out in the following director compensation
table:

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|Name                     | Fees Earned
      or **Paid** in **Cash**
      ($) | Stock Awards
      ($) | Option Awards
      ($) | Non-Equity Incentive Plan Compensation
    ($) | Change **in**Pension Value **and**Nonqualified Deferred
      Compensation Earnings | All Other
      **Compensation**($) | Total ($)
|------------------------ | --------------------------------------------------- | ---------------------- | ----------------------- | ---------------------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------- | ---------
|(a)                      | (b)                                                 | (c)                    | (d)(1)                  | (e)                                            | (f)                                                                                 | (g)                                 | (h)      
|Joel Bellenson(2)        | Nil                                                 | Nil                    | Nil                     | Nil                                            | Nil                                                                                 | Nil                                 | Nil      
|Dexster Smith(3)         | Nil                                                 | Nil                    | Nil                     | Nil                                            | Nil                                                                                 | Nil                                 | Nil      
|Dr. Geert Cauwenbergh(4) | Nil                                                 | Nil                    | Nil                     | Nil                                            | Nil                                                                                 | Nil                                 | Nil      
|Jeffrey Bacha(5)         | Nil                                                 | Nil                    | Nil                     | Nil                                            | Nil                                                                                 | Nil                                 | Nil      
|Dr. Dale Pfost(6)        | Nil                                                 | Nil                    | Nil                     | Nil                                            | Nil                                                                                 | Nil                                 | Nil      
|Phil Rice(7)             | Nil                                                 | Nil                    | Nil                     | Nil                                            | Nil                                                                                 | Nil                                 | Nil      

|(1) | Joel Bellenson was appointed as a director of our company
      on March 1, 2006                                                                                                                                                                                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                           
|(2) | Dexster Smith was appointed as a director of our company
      on March 1, 2006                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                           
|(3) | Dr. Geert Cauwenbergh was appointed a director of our
      company on March 25, 2008. Our company has agreed to issue 400,000 stock
      options to Dr. Geert Cauwenbergh under the 2007 Stock Option Plan in
      consideration for services provided as a director, which terms have not
      been agreed upon as at the date of this annual report.
|    |                                                                                                                                                                                                                                                                                                                                                           
|(4) | Jeffrey Bacha was appointed a director of our company on
      April 3, 2008. Our company has agreed to issue 400,000 stock options to
      Mr. Bacha under the 2007 Stock Option Plan in consideration for services
      provided as a director, which terms have not been agreed upon as at the
      date of this annual report.                     
|    |                                                                                                                                                                                                                                                                                                                                                           
|(5) | Dr. Dale Pfost resigned as a director of our company on
      March 25, 2008.                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                           
|(6) | Phil Rice resigned as a director of our company on March
      25, 2008.                                                                                                                                                                                                                                                                                  

Independent directors may be paid their expenses for attending
each board of directors meeting and may be paid a fixed sum for attendance at
each meeting of the directors or a stated salary as director. No payment
precludes any director from serving our company in any other capacity and being
compensated for the service. Members of special or standing committees may be
allowed like reimbursement and compensation for attending committee
meetings.

Pension and Retirement Plans

Currently, we do not offer any annuity, pension or retirement
benefits to be paid to any of our officers, directors or employees, in the event
of retirement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

As of December 19, 2008, there were 49,453,006 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock.

-33-

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|Name and Address of 
      Beneficial
      Owner                                 | Position                             | Amount and Nature of 
      Beneficial Ownership | Percentage of Class(1)
|--------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------------------ | ----------------------
|Joel L. Bellenson c/o Suite 200 1892 West Broadway
      Vancouver, BC V6J 1Y9    | Chief Executive Officer and Director | 12,300,000(2)                                    | 25.3%                 
|Dexster L. Smith c/o Suite 200 1892 West Broadway
      Vancouver, BC V6J 1Y9     | President and Director               | 12,300,000(3)                                    | 25.3%                 
|Timothy Fernback c/o Suite 200 1892 West Broadway
      Vancouver, BC V6J 1Y9     | Chief Financial Officer              | 800,000(4)                                       | 1.6%                  
|Dr. Geert Cauwenbergh Suite 3200, 600 College Road
      East Princeton, NJ 08540 | Director                             | Nil                                              | Nil                   
|Jeffrey Bacha Suite 3, 1545 West 14th Avenue
      Vancouver, BC V6J 2J1          | Director                             | Nil                                              | Nil                   
|Directors and Executive Officers as a Group(5)                                    |                                      | 25,400,000                                       | 52.2%                 

|(1) | Based on 49,453,006 shares of common stock issued and
      outstanding as of December 19, 2008. Beneficial ownership is determined in
      accordance with the rules of the Securities and Exchange Commission and
      generally includes voting or investment power with respect to securities.
      Except as otherwise indicated, we believe that the beneficial owners of
      the common stock listed above, based on information furnished by such
      owners, have sole investment and voting power with respect to such shares,
      subject to community property laws where applicable.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | We granted 400,000 stock options to Mr. Bellenson under
      the 2007 Stock Option Plan at an exercise price of $0.96 per share, of
      which 300,000 options had vested and may be exercisable as of, or within
      60 days after December 19, 2008.                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | We granted 400,000 stock options to Mr. Smith under the
      2007 Stock Option Plan at an exercise price of $0.96 per share, of which
      300,000 options had vested and may be exercisable as of, or within 60 days
      after December 19, 2008.                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4) | Consists of 500,000 common shares and 300,000 options
      held by TCF Ventures Corp., a wholly- owned company of Mr. Fernback. We
      granted TCF Ventures 400,000 options at an exercise price of $0.80, of
      which 300,000 have vested and may be exercisable as of, or within 60 days
      after December 19, 2008.                                                                                                                                                                                                                                                                           

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.

Except as described below, no director, executive officer,
principal shareholder holding at least 5% of our common shares, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction, since the beginning of our year ended
September 30, 2008, or in any currently proposed transaction, in which the
amount involved in the transaction exceeded or exceeds the lesser of $120,000 or
one percent of the average of our total assets at the year end for the last two
completed fiscal years.

At September 30, 2008, we owed $364,584 (September 30,
2007 - $131,250) for accrued retiring allowances to three of our
officers, two of whom are also directors.

Of the management compensation incurred during the year ended
September 30, 2008, $158,003 was expensed as research and development (year
ended September 30, 2007 - $152,340).

All related party transactions are conducted in the ordinary
course of business and measured at the exchange amount, which is the
consideration established and agreed to by the related parties.

Corporate Governance

We currently have four directors, consisting of Joel Bellenson,
Dexster Smith, Dr. Geert Cauwenbergh and Jeffrey Bacha.

We have determined that Dr. Geert Cauwenbergh and Jeffrey Bacha
are independent directors, as that term is used in Rule 4200(a)(15) of the
Nasdaq Marketplace Rules and National Instrument 52-110.

Audit Committee

Our board of directors struck an audit committee on December 3,
2008. As of this date, Jeffrey Bacha and Dr. Geert Cauwenbergh were appointed as
sole members of the audit committee, both of whom are independent. Jeffrey Bacha
and Dr. Geert Cauwenbergh of our compensation committee are independent as
defined by Rule 4200(a)(15) of the Nasdaq Marketplace Rules. Our audit committee
undertakes an independent review of our companys financial statements, and
meets with management to determine the adequacy of internal controls and other
financial reporting matters.

Prior to striking the audit committee, our entire board of
directors acted as the audit committee, which included Joel Bellenson, Dexster
Smith, Dr. Geert Cauwenbergh and Jeffrey Bacha. Our board of directors
determined that Dr. Geert Cauwenbergh and Jeffrey Bacha were the only members of
our board of directors that were independent as the term is defined by Rule
4200(a)(15) of the Nasdaq Marketplace Rules.

Our board of directors has determined that it does not have an
audit committee member that qualifies as an audit committee financial expert
as defined in Item 407(d)(5)(ii) of Regulation S-K. We believe that the audit
committee members are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development and the fact that we have not generated revenues
to date.

The audit committee acts in accordance with our Audit Committee
Charter which is filed as an exhibit to this annual report.

Compensation Committee  Compensation Committee Interlocks
and Insider Participation

-35-

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Our board of directors struck a compensation committee on
September 11, 2008. As of this date, Dr. Geert Cauwenbergh and Jeffrey Bacha
were appointed as sole members of the committee, each of whom are non-employee
directors of our company. All of the members of our compensation committee are
independent as defined by Rule 4200(a)(15) of the Nasdaq Marketplace Rules. The
purpose of our compensation committee is to oversee our companys compensation
and benefit plans, including our compensation and equity-based plans. Our
compensation committee also monitors and evaluates matters relating to the
compensation and benefits structure of our company and takes other such actions
within the scope of the compensation committee charter as our board of directors
may assign to the compensation committee from time to time.

Prior to striking a compensation committee, our board of
directors acted as the compensation committee, which included Joel Bellenson and
Dexster Smith, each of whom is not independent. Joel Bellenson is the Chief
Executive Officer of our company and Dexster Smith is the President of our
company. Mr. Bellenson and Mr. Smith entered into related party transactions
during the year ended September 30, 2008 as disclosed under the heading Certain
Relationships and Related Transactions, and Director Independence.

The compensation committee acts in accordance with our
Compensation Committee Charter which is filed as an exhibit to this annual
report.

Compensation Committee Report

The compensation committee has reviewed and discussed the
Compensation Discussion and Analysis with management, and based on the review
and discussion, the compensation committee recommended to the board of directors
that the Compensation Discussion and Analysis be included in our companys
annual report.

Dr. Geert Cauwenbergh Jeffrey
Bacha

Transactions with Independent Directors

None of our independent directors entered into any transaction,
relationship or arrangement during the year ended September 30, 2008 that was
considered by our board of directors in determining whether the director
maintained his independence in accordance with Rule 4200(a)(15) of the Nasdaq
Marketplace Rules.

National Instrument 52-110

We are a reporting issuer in the Province of British Columbia.
National Instrument 52-110 of the Canadian Securities Administrators requires
our company, as a venture issuer, to disclose annually in our annual report
certain information concerning the constitution of our audit committee and our
relationship with our independent auditor. As defined in National Instrument
52-110, Jeffrey Bacha and Dr. Geert Cauwenbergh are independent. For a
description of the education and experience of each audit committee member that
is relevant to the performance of his responsibilities as an audit committee
member, please see the disclosure under the heading Item 10. Directors,
Executive Officers and Corporate Governance  Business Experience.

All of the audit committee members are financially literate,
as defined in National Instrument 52-110, as all have the industry experience
necessary to understand and analyze financial statements of our company, as well
as the understanding of internal controls and procedures necessary for financial
reporting.

The audit committee is responsible for review of both interim
and annual financial statements for our company. For the purposes of performing
their duties, the members of the audit committee have the right at all times, to
inspect all the books and financial records of our company and any subsidiaries
and to discuss with management and the external auditors of our company any
accounts, records and matters relating to the financial statements of our
company. The audit committee members meet periodically with management and
annually with the external auditors.

-36-

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Since the commencement of our companys most recently completed
financial year, our companys board of directors has not failed to adopt a
recommendation of the audit committee to nominate or compensate an external
auditor.

Since the commencement of our companys most recently completed
financial year, our company has not relied on the exemptions contained in
sections 2.4 or 8 of National Instrument 52-110. Section 2.4 (De Minimis
Non-audit Services)provides an exemption from the requirement that the
audit committee must pre-approve all non-audit services to be provided by the
auditor, where the total amount of fees related to the non-audit services are
not expected to exceed 5% of the total fees payable to the auditor in the fiscal
year in which the non-audit services were provided. Section 8 (Exemptions)permits a company to apply to a securities regulatory authority for an
exemption from the requirements of National Instrument 52-110 in whole or in
part.

The audit committee has adopted specific policies and
procedures for the engagement of non-audit services as set out in the Audit
Committee Charter of our company. A copy of our companys Audit Committee
Charter is filed as an exhibit to this annual report.

National Instrument 58-110

We are a reporting issuer in the Province of British Columbia.
National Instrument 58-101 of the Canadian Securities Administrators requires
our company, as a venture issuer, to disclose annually in our annual report
certain information concerning corporate governance disclosure.

Board of Directors

Our board of directors currently acts with four members
consisting of Joel Bellenson, Dexster Smith, Dr. Geert Cauwenbergh and Jeffrey
Bacha. We have determined that Dr. Geert Cauwenbergh and Jeffrey Bacha are
independent as that term is defined in National Instrument 52-110 and Joel
Bellenson and Dexster Smith are not independent due to the fact that they are
executive officers of our company.

Our board of directors facilitates its exercise of independent
supervision over management by endorsing the guidelines for responsibilities of
the board as set out by regulatory authorities on corporate governance in Canada
and the United States. Our boards primary responsibilities are to supervise the
management of our company, to establish an appropriate corporate governance
system, and to set a tone of high professional and ethical standards. The board
is also responsible for:

- selecting and assessing members of the Board;
- choosing, assessing and compensating the Chief Executive Officer of our
  company, approving the compensation of all executive officers and ensuring
  that an orderly management succession plan exists;
- reviewing and approving the Companys strategic plan, operating plan,
  capital budget and financial goals, and reviewing its performance against
  those plans;
- adopting a code of conduct and a disclosure policy for the Company, and
  monitoring performance against those policies;
- ensuring the integrity of the Company's internal control and management
  information systems;
- approving any major changes to the Companys capital structure, including
  significant investments or financing arrangements; and
- reviewing and approving any other issues which, in the view of the Board
  or management, may require Board scrutiny.

Directorships

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The following directors are also directors of other reporting
issuers (or the equivalent in a foreign jurisdiction), as identified next to
their name:

|Director              | Reporting Issuers or Equivalent in a Foreign
      Jurisdiction
|--------------------- | ---------------------------------------------------------------
|Joel Bellenson        | None                                                           
|Dexster Smith         | None                                                           
|Dr. Geert Cauwenbergh | Ablynx nv and Dara Biosciences Inc.,                           
|Jeffrey Bacha         | Sernova Corp.                                                  

Orientation and Continuing Education

We have an informal process to orient and educate new recruits
to the board regarding their role of the board, our committees and our
directors, as well as the nature and operations of our business. This process
provides for an orientation with key members of the management staff, and
further provides access to materials necessary to inform them of the information
required to carry out their responsibilities as a board member. This information
includes the most recent board approved budget, the most recent annual report,
the audited financial statements and copies of the interim quarterly financial
statements.

The board does not provide continuing education for its
directors. Each director is responsible to maintain the skills and knowledge
necessary to meet his or her obligations as directors.

Nomination of Directors

The board is responsible for identifying new director nominees.
In identifying candidates for membership on the board, the board takes into
account all factors it considers appropriate, which may include strength of
character, mature judgment, career specialization, relevant technical skills,
diversity and the extent to which the candidate would fill a present need on the
board. As part of the process, the board, together with management, is
responsible for conducting background searches, and is empowered to retain
search firms to assist in the nominations process. Once candidates have gone
through a screening process and met with a number of the existing directors,
they are formally put forward as nominees for approval by the board.

Assessments

The board intends that individual director assessments be
conducted by other directors, taking into account each directors contributions
at board meetings, service on committees, experience base, and their general
ability to contribute to one or more of our companys major needs. However, due
to our stage of development and our need to deal with other urgent priorities,
the board has not yet implemented such a process of assessment.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit fees

The aggregate fees billed for the two most recently completed
fiscal periods ended September 30, 2008 and September 30, 2007 for professional
services rendered by Dale Matheson Carr-Hilton Labonte LLP, Chartered
Accountants for the audit of our annual consolidated financial statements,
quarterly reviews of our interim consolidated financial statements and services
normally provided by the independent accountant in connection with statutory and
regulatory filings or engagements for these fiscal periods were as follows:

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|                                  | Year EndedSeptember 30, 2008 | Year EndedSeptember 30, 2007
|--------------------------------- | ---------------------------- | ----------------------------
|Audit Fees and Audit Related Fees | $32,362                      | $30,263                     
|Tax Fees                          | $Nil                         | $7,505                      
|All Other Fees                    | Nil                          | Nil                         
|Total                             | $ 32,362(1)                  | $37,768                     

|(1) | Audit fees for year ended September 30, 2008 have not
      been billed to us yet
|--- | ---------------------------------------------------------------------------------

In the above table, audit fees are fees billed by our
companys external auditor for services provided in auditing our companys
annual financial statements for the subject year. Audit-related fees are fees
not included in audit fees that are billed by the auditor for assurance and
related services that are reasonably related to the performance of the audit
review of our companys financial statements. Tax fees are fees billed by the
auditor for professional services rendered for tax compliance, tax advice and
tax planning. All other fees are fees billed by the auditor for products and
services not included in the foregoing categories.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
fees billed by Dale Matheson Carr-Hilton Labonte LLP and believes that the
provision of services for activities unrelated to the audit is compatible with
maintaining Dale Matheson Carr-Hilton Labonte LLP.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

|Exhibit | Description                                                                                                                                                                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                             
|(2)     | Plan of Purchase, Sale, Reorganization, Arrangement,
      Liquidation or Succession                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                             
|2.1     | Share Exchange Agreement dated February 3, 2006, among
      our company, Upstream Canada, the shareholders of Upstream Canada and
      Steve Bajic (incorporated by reference from our Current Report on Form 8-K
      filed on February 6, 2006).                       
|        |                                                                                                                                                                                                                                                                             
|2.2     | Amended and Restated Share Exchange Agreement dated
      February 24, 2006, among our company, Upstream Canada, the shareholders of
      Upstream Canada and Steve Bajic (incorporated by reference from our
      Current Report on Form 8-K filed on February 27, 2006).
|        |                                                                                                                                                                                                                                                                             
|(3)     | Articles of Incorporation and By-laws                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                             
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on July 5, 2002).                                                                                                                                             
|        |                                                                                                                                                                                                                                                                             
|3.2     | Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 Filed on July 5, 2002).                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                             
|3.3     | Certificate of Amendment filed with the Nevada Secretary
      of State on March 8, 2005 (incorporated by reference from our Current
      Report on Form 8-K filed on March 10, 2005).                                                                                     
|        |                                                                                                                                                                                                                                                                             
|3.4     | Certificate of Change filed with the Nevada Secretary of
      State on December 20, 2005 (incorporated by reference from our Current
      Report on Form 8-K filed on December 29, 2005).                                                                                 
|        |                                                                                                                                                                                                                                                                             
|3.5     | Articles of Merger filed with the Nevada Secretary of
      State on February 6, 2006 (incorporated by reference from our Current
      Report on Form 8-K filed on February 9, 2006).                                                                                      
|        |                                                                                                                                                                                                                                                                             
|3.6     | Certificate of Amendment filed with the Nevada Secretary
      of State on November 27, 2006 (incorporated by reference from our Current
      Report on Form 8-K filed on November 30, 2006).                                                                              
|        |                                                                                                                                                                                                                                                                             
|(10)    | Material Contracts                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                             
|10.1    | Consultant Engagement Agreement dated February 7, 2006
      among TCF Ventures Corp., our company and Upstream Canada (incorporated by
      reference from our Current Report on Form 8-K filed on March 7, 2006).                                                        
|        |                                                                                                                                                                                                                                                                             
|10.2    | Stock Option and Subscription Agreement dated February
      13, 2006, between our company and TCF Ventures Corp. (incorporated by
      reference from our Current Report on Form 8-K filed on March 7, 2006).                                                             
|        |                                                                                                                                                                                                                                                                             
|10.3    | Amendment Agreement dated February 13, 2006, among TCF
      Ventures Corp., our company and Upstream Canada (incorporated by reference
      from our Current Report on Form 8-K filed on March 7, 2006).                                                                  
|        |                                                                                                                                                                                                                                                                             
|10.4    | Employment Agreement dated March 1, 2006, between our
      company and Joel Bellenson (incorporated by reference from our Current
      Report on Form 8-K filed on March 7, 2006).                                                                                        

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|10.5  | Employment Agreement
        dated March 1, 2006 between our company and Dexster Smith (incorporated
        by reference from our Current Report on Form 8-K filed on March 7, 2006).                                                                                                        
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                               
|10.6  | Private Placement
        Subscription Agreement dated March 2, 2007, between our company and Ultimate
        Investments Ltd. (incorporated by reference from our Registration Statement
        on Form SB-2 filed on October 1, 2007)                                                     
|      |                                                                                                                                                                                                                                                                                               
|10.7  | 2007 Stock Option
        Plan (incorporated by reference from our Registration Statement on Form
        SB-2 filed on October 1, 2007)                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                               
|10.8  | Stock Option
        and Subscription Agreement dated March 16, 2007, between our company and
        Dexster Smith (incorporated by reference from our Registration Statement
        on Form SB-2 filed on October 1, 2007)                                                                 
|      |                                                                                                                                                                                                                                                                                               
|10.9  | Stock Option
        and Subscription Agreement dated March 16, 2007, between our company and
        Joel Bellenson (incorporated by reference from our Registration Statement
        on Form SB-2 filed on October 1, 2007)                                                                
|      |                                                                                                                                                                                                                                                                                               
|10.10 | Stock Option
        and Subscription Agreement dated March 27, 2007, between our company and
        Philip Rice (incorporated by reference from our Registration Statement
        on Form SB-2 filed on October 1, 2007)                                                                   
|      |                                                                                                                                                                                                                                                                                               
|10.11 | Contract for
        Services Agreement dated May 1, 2007, between our company and TCF Ventures
        Corp. (incorporated by reference from our Registration Statement on Form
        SB-2 filed on October 1, 2007)                                                                       
|      |                                                                                                                                                                                                                                                                                               
|10.12 | Stock Option
        and Subscription Agreement dated May 3, 2007, between our company and
        Dale Pfost (incorporated by reference from our Registration Statement
        on Form SB-2 filed on October 1, 2007)                                                                       
|      |                                                                                                                                                                                                                                                                                               
|10.13 | Private Placement
        Subscription Agreement dated May 3, 2007, between our company and Red
        Tree Ventures SA (incorporated by reference from our Registration Statement
        on Form SB-2 filed on October 1, 2007)                                                            
|      |                                                                                                                                                                                                                                                                                               
|10.14 | Share Exchange
        Agreement dated August 17, 2007, among our company, Pacific Pharma Technologies
        Inc., and the selling shareholders of Pacific Pharma Technologies Inc.
        (incorporated by reference from our Current Report on Form 8-K filed on
        August 23, 2007)
|      |                                                                                                                                                                                                                                                                                               
|10.15 | Art Cherkasov
        Revised Consulting Services Contract dated September 12, 2007 (incorporated
        by reference from our Quarterly Report on Form 10-QSB filed on February
        14, 2008)                                                                                           
|      |                                                                                                                                                                                                                                                                                               
|10.16 | JTAT Consulting
        Services Contract dated December 31, 2007 (incorporated by reference from
        our Quarterly Report on Form 10-QSB filed on February 14, 2008)                                                                                                                     
|      |                                                                                                                                                                                                                                                                                               
|10.17 | JTAT Consulting
        Services Contract dated March 7, 2008 (incorporated by reference from
        our Quarterly Report on Form 10-QSB filed on May 15, 2008)                                                                                                                              
|      |                                                                                                                                                                                                                                                                                               
|10.18 | Compensation Committee Charter (incorporated by reference from our Annual
      Report on Form 10-K filed on December 19, 2008)                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                               
|10.19 | Audit Committee Charter (incorporated by reference from our Annual Report
      on Form 10-K filed on December 19, 2008)                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                               
|(31)  | Section 302
        Certifications                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                               
|31.1* | Certification
      of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                               
|31.2* | Certification
      of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.                                                                                                                                                                     

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|(32)  | Section 906 Certifications                                                                                                                                        
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                   
|32.1* | Certification
      of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|      |                                                                                                                                                                   
|32.2* | Certification
      of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

-42-

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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.

UPSTREAM BIOSCIENCES INC.

|By:                                        | /s/
      Joel Bellenson | 
|------------------------------------------ | ------------------------ | 
|Joel Bellenson                            
|Chief Executive Officer and Director      
|(Principal Executive Officer)             
|Date: February 2, 2009                    
|                                          
|                                          
|By:                                        | /s/
      Tim Fernback   | 
|Tim Fernback                              
|Chief Financial Officer                   
|(Principal Financial Officer and Principal
|Accounting Officer)                       
|Date: February 2, 2009                    

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|By:                                        | /s/
      Joel Bellenson        | 
|------------------------------------------ | ------------------------------- | 
|Joel Bellenson                            
|Chief Executive Officer and Director      
|(Principal Executive Officer)             
|Date: February 2, 2009                    
|                                          
|                                          
|By:                                        | /s/
      Tim Fernback          | 
|Tim Fernback                              
|Chief Financial Officer                   
|(Principal Financial Officer and Principal
|Accounting Officer)                       
|Date: February 2, 2009                    
|                                          
|                                          
|By:                                        | /s/
      Dexster Smith         | 
|Dexster Smith                             
|President and Director                    
|Date: February 2, 2009                    
|                                          
|                                          
|By:                                        | /s/
      Dr. Geert Cauwenbergh | 
|Dr. Geert Cauwenbergh                     
|Director                                  
|Date: February 2, 2009                    

-43-

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|By:                    | /s/ Jeffrey Bacha | 
|---------------------- | ----------------- | 
|Jeffrey Bacha         
|Director              
|Date: February 2, 2009

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