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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-KSB

(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,
2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from
______________to________________

Commission file number 000-30299

UPSTREAM BIOSCIENCES
INC.(Name of small business issuer in its charter)

|Nevada                                                               | 98-0371433                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Suite 100  570 West 7th Avenue, Vancouver, British                  | V5Z 4S6                             
|Columbia, Canada                                                     |                                     
|(Address of principal executive offices)                             | (Zip Code)                          

Issuers telephone number 604.707.5800

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

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

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

Common Stock, $.001 par value(Title of
class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act.[ ]

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act
from their obligations under those Sections.

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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[ ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or

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information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB. Yes[X] No[ ]

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

State issuers revenues for its most recent fiscal year.
$Nil

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 sold, or the average bid and asked price of such common
equity, as of December 18, 2007.

23,327,710 common shares @ $0.113(1)= $2,636,031

(1) average bid and asked price of such common
equity, as of December 18, 2007

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)

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

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. 47,827,710
common shares as of December 18, 2007

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (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 (Securities
Act). The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for fiscal year ended December
24, 1990). N/A

Transitional Small Business Disclosure Format (Check one): Yes[
] No[ ]

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PART I

|ITEM 1. | DESCRIPTION OF BUSINESS.
|------- | ------------------------

Forward Looking Statements

This annual report contains forward-looking statements as that
term is defined in Section 27A of the United States Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as may, should,
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 the
section entitled Risk Factors, 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 annual 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. Our financial
statements are prepared in accordance with United States generally accepted
accounting principles.

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

Corporate History

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 entered
into an amended and restated share exchange agreement dated February 24, 2006,
which amended and restated the terms of a share exchange agreement dated
February 3, 2006. Pursuant to the terms of the amended and restated share
exchange agreement, our company agreed to acquire all of the issued and
outstanding stock of Upstream Canada in exchange for the issuance by our company
of 24,000,000 common shares. The closing of the transactions contemplated in the
amended share exchange agreement and the acquisition of all of the issued and
outstanding shares of Upstream Canada occurred on March 1, 2006. As at the
closing date, the former shareholders of Upstream Canada held 54.2% of the
issued and outstanding common shares of our company. The acquisition of Upstream
Canada was deemed to be a reverse acquisition for accounting purposes. Upstream
Canada, the acquired entity, is regarded as the predecessor entity as of March
1, 2006.

Following our incorporation, we commenced the business as a
start-up integrated marketing services company. We offered integrated marketing
services such as advertising design, advertisement placement strategies,
advertising sales, branding services, website development, marketing plans, and
tools to establish focus groups and media strategies to prospective clients.
Additionally, we offered advertising and integrated marketing and branding
services in hopes of assisting companies in describing their products and
services.

We were not successful in implementing our business plan as a
marketing and branding services business. As management of our company
investigated opportunities and challenges in the business of being a marketing
and branding services company, management realized that the business did not
present the best opportunity for our company to realize value for our
shareholders. Accordingly, we abandoned our

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previous business plan and focused on the identification of suitable businesses with which to enter into a business opportunity or business combination.

Business Subsequent to the Acquisition of Upstream Canada

As of the closing date of the amended and restated share exchange agreement on March 1, 2006, our company commenced the business of 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. We have identified and 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 colorectal cancer. We have also filed a provisional patent application on an assay for identifying genetic markers that may
predict a patients response to a drug. On March 22, 2006, we have identified and filed a provisional patent application on genetic markers that, following successful development and testing, may assist in determining the susceptibility of
patients to prostate cancer. On September 12, 2006, we identified and filed a provisional patent application on genetic markers that, following successful development and testing, may assist in determining the susceptibility of patients to ovarian
cancer. On September 26, 2006, we identified and filed a provisional patent application on genetic markers that, following successful development and testing, may assist in determining the susceptibility of patients to thyroid cancer.

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 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 currently 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 currently 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.

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Business Subsequent to the Acquisition of Pacific Pharma Technologies Inc. (PPT)

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

PPT was acquired by our company from its founders, Mr. Gary Morrison and Dr. Artem Cherkasov. The PPT technology, together with several compounds that are identified by PPTs 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 a current member of Upstreams Scientific Advisory Board.  Subsequent to the
acquisition of PPT, Dr. Artem Cherkasov has entered into a multi-year consulting agreement with Upstream.

The technology developed by PPT, 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, PPT filed a provisional patent with the United States Patent and Trademark Office with respect to technology
developed by its founders. On November 7, 2007 and subsequent to the end of our September 30, 2007 fiscal year end, we filed an additional 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 PPT.

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 complete current research and development efforts associated with our biomarker program and wait until sufficient financial resources exist prior to spending additional and significant funds for the
commercialization of our biomarker program. The 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 two ways. We may elect to 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.

To date and during the twelve month period ended September 30, 2007, we did not generate any revenues from the licensing of our technologies or sale of products relating to our technologies.

Our company had 47,827,710 common shares issued and outstanding as of September 30, 2007.

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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 such as the following publicly traded companies: Compugen, Ltd., Epigenomics AG, Myriad Genetics, Inc. and Diagnocure Inc. 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 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 disease-predisposing genes, characterize their
functions, develop predictive medicine products and related information services based on such discoveries, obtain regulatory and other approvals, and launch such services or products before our competitors, we may be adversely affected. Moreover,
any products and technologies that we may develop may be made obsolete by less expensive or more effective tests or methods that may be developed from our competitors in the future.

INTELLECTUAL PROPERTY

Patent Applications

Our company has filed seven provisional patent applications. We have identified and 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 colorectal cancer. We have also filed a provisional patent application on an assay for
identifying genetic markers that may predict a patients response to a drug. On March 22, 2006, we identified and filed a provisional patent application on genetic markers that, following successful development and testing, may assist in
determining the susceptibility of patients to prostate cancer. On September 12, 2006, we identified and filed a provisional patent application on genetic markers that, following successful development and testing, may assist in determining the
susceptibility of patients to ovarian cancer. On September 26, 2006, we identified and filed a provisional patent application on genetic markers that, following successful development and testing, may assist in determining the susceptibility of
patients to thyroid cancer. On June 13, 2007, Pacific Pharma Technologies Inc. (PPT), our wholly owned subsidiary, filed a provisional patent with the United States Patent and Trademark Office with respect to technology developed by its founders. On
November 7, 2007 and subsequent to the end of our September 30, 2007 fiscal year end, we filed an additional 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

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predictive toxicology, and address drug resistant microorganisms" based on technology developed post-acquisition of PPT.

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 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

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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 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

The FDA sets out guidelines for clinical trials which are conducted in order to obtain FDA approval. 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 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.

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

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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 infectious diseases and cancers, biomarker validation expenses and biomarker assay related expenses. We
estimate that our research and development expenditures, for the next twelve months will be approximately $550,000 as follows: $100,000 for tissue and sera sample acquisition; $350,000 for third party lab and testing services;
$50,000 for third party drug candidate manufacturing services; and $50,000 for added research personnel costs.

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 wholly-owned subsidiary of Mr. Fernback. We have also entered into a consulting agreement with Dr. Artem Cherkasov to pay $50,000 per year plus the equivalent amount in restricted common shares for
his consulting services. We plan to 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.

Suppliers

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

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Report to Security Holders

We are not required to deliver an annual report to our
stockholders but will voluntarily send an annual report, together with our
annual audited financial statements. Any Securities and Exchange Commission
filings that we do file will be available to the public over the internet at the
Securities and Exchange Commission's website at http://www.sec.gov.

The public may read and copy any materials filed by us with the
Securities and Exchange Commission at the Securities and Exchange Commission's
Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Securities and Exchange Commission at 1-800-732-0330. We are an electronic
filer. The Securities and Exchange Commission maintains an internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Securities and Exchange
Commission. The internet address of the site is http://www.sec.gov.

RISK FACTORS

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

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

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

RISKS RELATED TO OUR BUSINESS

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

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

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

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- establish additional collaborative relationships; and
- market and develop our technologies.

We may not be able to obtain additional equity or debt
financing on acceptable terms as required. Even if financing is available, it
may not be available on terms that are 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. More importantly,
if we are unable to raise further financing when required, we may be forced to
scale down our operations and our ability to generate revenues may be negatively
affected.

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

Since inception through the annual period ended September 30,
  2007, we have incurred aggregate net losses of $3,653,398 from operations. 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,
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.

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 December 10, 2007 which is included in this
annual report.

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 seven provisional patent applications of 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

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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 technology 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 and Asia will be the principal market for our technology, although
we may elect to expand into Central and South America, Europe and the Middle East. 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 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.

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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 affects. As
a result, we may incur significant product liability exposure, which may exceed any insurance coverage that we obtain in the future. Even if we elect to purchase such issuance in the future, we may not be able to maintain adequate levels of
insurance at reasonable cost and/or reasonable terms. Excessive insurance costs or uninsured claims may increase our operating loss and affect our financial condition.

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, 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

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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 Food and Drug Administration in the United States (FDA) before we commence commercialization of our technology in the United States, the principal market
for our 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.

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 cancers and
infectious diseases, 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

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

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

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

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

RISKS RELATED TO OUR COMMON STOCK

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

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a significant portion of our operations has been and will be financed
through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a
significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional
capital or generate

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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.

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 47,827,710 common shares were issued as of
September 30, 2007. 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 corporation.

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

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

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

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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.

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. | DESCRIPTION OF PROPERTY.
|------- | ------------------------

Our principal office is located at 100  570 West
7th Avenue Vancouver British Columbia Canada. The 1,000 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 for the period from March 1, 2006, to
February 28, 2007, pursuant to an Amended and Restated Facilities Agreement
dated April 10, 2006. The lease is renewable in six-month increments and the
current lease term expires at the end of February 2008. The monthly fixed rent
is $3,100 plus applicable taxes) which is payable in shares or cash, at the sole
discretion of our company, at the prevailing market price. The current lease is
inclusive of facilities rental, utilities, security and computer facilities.
Upon expiration of the lease, we intend to either renew our lease, if acceptable
to our landlord, or move to a suitable office space in Vancouver.

|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 18, 2007. There are no
proceedings in which any of our companys directors, officers, or affiliates, or
any registered or beneficial shareholders, is an adverse party or has a material
interest adverse to our companys interest.

|ITEM 4. | SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY
      HOLDERS.
|------- | -----------------------------------------------------------

None.

PART II

|ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
      AND SMALL BUSINESS PURCHASES OF EQUITY SECURITIES.
|------- | --------------------------------------------------------------------------------------------------------------

Our stock is listed for quotation on the OTC Bulletin Board
under the trading symbol UPBS. 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. Our common shares initially began trading on the OTC Bulletin
Board on September 1, 2004 under the trading

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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, 2007 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
    LowSeptember 30, 2007
    $1.02
    $0.35June 30, 2007
    $1.29
    $0.80March 31, 2007
    $1.37
    $0.72December 31, 2006
    $1.17
    $0.38September 30, 2006
    $1.10
    $0.45June 30, 2006
    $1.42
    $0.51March 31, 2006
    $1.62
    $1.30December 31, 2005
    $nil
    $nilSeptember 30, 2005
    $nil
    $nilJune 30, 2005
    $nil
    $nil


On December 18, 2007, the closing price for the common stock as
reported by the quotation service operated by the OTC Bulletin Board was $0.121.

As of December 18, 2007, there were 11 registered holders of
record of our common stock. As of such date, 47,827,710 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 (the 2007 Plan). Under the terms of the 2007 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.

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.

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Equity Compensation Plan Information As At September 30,
2007

Plan
      Category
    Number of
      securities to be issued upon exercise of outstanding
      options, warrants and rights (a)
    Weighted-average exercise price
      of outstanding options, warrants and rights
      (b)
    Number of securities remaining available
      for issuance under equity compensation plans
      (excluding securities reflected in column (a))
      (c)Equity Compensation Plans approved by security
      holders
    Nil
    N/A
    N/AEquity Compensation Plans not approved
      by security holders
    2,200,000
    $0.92
    2,800,000Total
    2,200,000
    $0.92
    2,800,000


Recent Sales of Unregistered Securities

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

On August 24, 2007, we issued 745,000 common shares to two
persons in connection with the closing of the Share Exchange Agreement dated
August 17, 2007. The common shares issued to the former shareholders of Pacific
Pharma Technologies pursuant to the Share Exchange Agreement were issued in
reliance upon an exemption from registration under the Securities Act of 1933.
We issued the common shares to non U.S. persons (as that term is defined in
Regulation S of the Securities Act of 1933) in an offshore transaction relying
on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On June 5, 2007, pursuant to the terms of a Lease Agreement
with the British Columbia Cancer Agency dated April 10, 2006, we issued 19,724
common shares to the British Columbia Cancer Agency. These common shares were
issued for six months' rent from May 1, 2007 to October 31, 2007 paid in advance
and valued at $17,200. The common shares were issued to the British Columbia
Cancer Agency 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 May 8, 2007, we issued 666,667 units to one subscriber for
cash consideration of $1,000,000.50 at a subscription price of $1.50 per unit.
Each unit consisted of one common share, one Series A Warrant and one Series B
Warrant. Each Series A Warrant is exercisable into one common share at an
exercise price of $1.75 for a period of two years following the closing date and
each Series B Warrant is exercisable into one common share at an exercise price
of $1.85 for a period of two years following the closing date. The securities
were issued to 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 May 3, 2007, we granted stock options to one director under
our 2007 Stock Option Plan entitling him to purchase 100,000 shares of our
common stock at an exercise price of $1.41 per share. The 100,000 stock options
are exercisable until May 3, 2012. We issued the stock options relying on
Section 4(2) of the Securities Act of 1933.

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On May 3, 2007, we granted stock options to a member of our advisory board under our 2007 Stock Option Plan entitling him to purchase 100,000 shares of our common stock at an exercise price of $1.41 per share. The 100,000 stock options are
exercisable until May 3, 2012. We issued the stock options relying on Section 4(2) of the Securities Act of 1933.

On March 15, 2007, we issued 853,973 common shares to one person upon conversion of a 3-year 5% convertible debenture which was due on February 1, 2009. Under the terms of the debenture agreement, we exercised our option to convert the outstanding
principal of $800,000 and related interest payable of $53,973 at $1.00 per share. The common shares were issued to 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 27, 2007, we granted stock options to one director under our 2007 Stock Option Plan entitling him to purchase 100,000 shares of our common stock at an exercise price of $1.02 per share. The 100,000 stock options are exercisable until
March 27, 2012. We issued the stock options relying on Section 4(2) of the Securities Act of 1933.

On January 1, 2007, pursuant to the terms of a Lease Agreement with the British Columbia Cancer Agency dated April 10, 2006, we issued 28,602 common shares to the British Columbia Cancer Agency. These common shares were issued for six months
rent from November 1, 2006 to April 30, 2007 paid in advance and valued at $17,522. The common shares were issued to the British Columbia Cancer Agency 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 16, 2007, we granted stock options to two directors under our 2007 Stock Option Plan entitling them to purchase an aggregate of 800,000 shares of our common stock at an exercise price of $0.96 per share. The 800,000 stock options are
exercisable until March 16, 2017. We issued the options in an offshore transaction to the directors who were non-U.S. persons (as that term is defined in Regulation S under the Securities Act of 1933) relying on Regulation S promulgated under the
Securities Act of 1933.

On March 16, 2007, we granted stock options to one director under our 2007 Stock Option Plan entitling him to purchase 100,000 shares of our common stock at an exercise price of $0.96 per share. The 100,000 stock options were exercisable until
March 16, 2012. All of the options were cancelled upon the directors resignation on April 30, 2007. We issued the options in an offshore transaction to the director who was a non-U.S. person (as that term is defined in Regulation S under the
Securities Act of 1933) relying on Regulation S promulgated under the Securities Act of 1933.

On March 16, 2007, we granted stock options to two advisory board members under our 2007 Stock Option Plan entitling them to purchase an aggregate of 600,000 shares of our common stock at an exercise price of $0.96 per share. The 600,000 stock
options are exercisable until March 16, 2012. We issued the options in an offshore transaction to the advisory board members who were non-U.S. persons (as that term is defined in Regulation S under the Securities Act of 1933) relying on Regulation S
promulgated under the Securities Act of 1933.

On March 16, 2007, we granted stock options to a consultant under our 2007 Stock Option Plan entitling her to purchase an aggregate of 100,000 shares of our common stock at an exercise price of $1.00 per share. The 100,000 stock options are
exercisable until March 16, 2012. We issued the options in an offshore transaction to the consultant who was a non-U.S. person (as that term is defined in Regulation S under the Securities Act of 1933) relying on Regulation S promulgated under the
Securities Act of 1933.

On March 15, 2007, pursuant to the terms of an Amended and Restated Facilities Agreement dated April 10, 2006, we issued 28,602 common shares to the British Columbia Cancer Agency. The common shares were issued to the British Columbia Cancer Agency
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, 2007, we issued 666,667 units to one subscriber for cash consideration of $1,000,000.50 at a subscription price of $1.50 per unit. Each unit consisted of one common share, one Series A Warrant and one Series B Warrant. Each
Series A Warrant is exercisable into one common share at an exercise price of $1.75 for a period of two years following the closing date and each Series B Warrant is exercisable into one common share at an exercise price of $1.85 for a
period of two years following the closing date. The securities were issued to 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 September 13, 2006, pursuant to the terms of a License Agreement dated March 10, 2005, we issued 29,577 common shares to the British Columbia Cancer Agency. The common shares were issued to the British Columbia Cancer Agency 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 May 24, 2006, pursuant to the terms of an Amended and Restated Facilities Agreement dated April 10, 2006, we issued 17,500 common shares to the British Columbia Cancer Agency. The common shares were issued to the British Columbia Cancer Agency 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 17, 2006, we issued 500,000 shares of common stock to a consultant of our company pursuant to a consultant engagement agreement. The shares were issued in consideration for the consultant providing financial services to our company. We
issued the shares in an offshore transaction to the consultant as a non-U.S. person (as that term is defined in Regulation S under the Securities Act of 1933) relying on Section 4(2) or Regulation S promulgated under the Securities Act of 1933.

In connection with the closing of the amended and restated share exchange agreement, our company entered into a 5% $1,000,000 convertible debenture with Novar Capital Corp., a Turks and Caicos Islands company. The principal advanced under the
convertible debenture is convertible by our company into common shares at a price of $1.00 per share. Pursuant to the terms of the convertible debenture, our company also issued Novar Capital 400,000 warrants, each warrant of which entitled the
holder to purchase an additional common share of our common stock at an exercise price of $1.25 per share. The warrants were exercisable until the earlier of: (a) December 31, 2006; or (b) the date which is 30 days after the first milestone and
the second milestone are completed by our company. The first milestone is defined in the convertible debenture as the filing, by our company, of a provisional patent application at the United States patent office which expands the scope of our
current provisional patent application regarding the diagnosis of prostate cancer. The second milestone is defined in the convertible debenture as of the filing, by our company, of two additional patent applications in the United States patent
office which claim novel applications of our technology to assist in the diagnosis of two diseases other than prostate cancer. In the event that our company achieves the first and second milestones by December 1, 2006, and if Novar Capital does not
exercise all of the warrants by the expiration date of the warrants, Novar Capital has agreed to forgive $200,000 of the principal owing under the convertible debenture and the convertible debenture will not be collectable or accrue interest
effective January 1, 2007. The issuance of the convertible debenture and the warrants were, and the common shares that are convertible and exercisable, respectively, will be issued in reliance upon an exemption from registration in an offering of
securities in an offshore transaction to a non-U.S. Person (as that term is defined in Regulation S of the Securities Act of 1933), relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

In connection with the closing of the amended share exchange agreement on March 1, 2006, our company issued 24,000,000 shares of our common stock to the two former shareholders of Upstream Canada. We issued the common shares in an offshore
transaction relying on Regulation S and/or Section 4(2) of the

---

Securities Act of 1933 to non-U.S. Persons (as that term is
defined in Regulation S under the Securities Act of 1933).

On February 13, 2006, our company granted 400,000 options to
purchase shares of our common stock to TCF Ventures Corp. pursuant to a
consultant engagement agreement dated February 7, 2006, as amended on March 1,
2006. Each option is exercisable at $0.80 per share until March 1, 2016. The
grant of the options and the issuance of the common shares upon the exercise of
the options were issued in reliance upon an exemption from registration in an
offshore transaction to a non-US Person (as that term is defined in Regulation S
of the Securities Act of 1993), relying on Regulation S and/or Section 4(2) of
the Securities Act of 1933.

|ITEM 6. | PLAN OF OPERATION
|------- | -----------------

The following is a discussion and analysis of our consolidated
results of operations and financial position for the year ended September 30,
2007 compared to our transition period ended (nine months ended) September 30,
2006, and the factors that could affect our future results of operations and
financial position. Historical results may not be indicative of future
performance.

This discussion and analysis should be read in conjunction with
our consolidated financial statements and the notes thereto included elsewhere
in this Form 10-KSB. Our consolidated financial statements are prepared in
accordance with United States generally accepted accounting principles. All
references to dollar amounts in this section are in United States dollars unless
expressly stated otherwise. Please see the section entitled "Risk Factors" for a
complete list of our risk factors.

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
complete current research and development efforts associated with our biomarker
program and wait until sufficient financial resources exist prior to spending
additional and significant funds for the commercialization of our biomarker
program. The 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 two ways. We may elect to 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.

As of September 30, 2007, our company had cash and cash
equivalents of $1,618,728 and working capital of $1,384,777. We estimate our
operating expenses and working capital requirements for the next twelve month
period to be as follows:

---

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

Employee and Consultant Compensation

We estimate that our employee and consultant compensation
expenses for the next twelve months will be approximately $500,000 pertaining to
Joel Bellenson, our Chief Executive Officer, Dexster Smith, our President,
Secretary and Treasurer and Tim Fernback, our Chief Financial Officer, through
his management company TCF Ventures Corp.

All of our current research and development is carried out by
Mr. Bellenson and Mr. Smith. Both individuals have entered into employment
agreements with our company. Pursuant to the terms of the employment agreements,
our company currently pays Mr. Bellenson and Mr. Smith each a base salary of
$150,000 per year.

We have also entered into a management services agreement with
TCF Ventures Corp., a company beneficially owned by Mr. Fernback, and pay
$150,000 annually to TCF Ventures Corp. for consulting services.

We have also entered into a consulting agreement with Dr. Artem
Cherkasov to pay $50,000 per year plus the equivalent amount in restricted
common shares for his consulting services.

Research and Development

Although our company anticipates that the majority of our
research and development requirements will be met from the efforts of Mr.
Bellenson and Mr. Smith, we may retain independent contractors as and when
circumstances warrant.

Our research and development costs primarily consist of
research programs related to the development of drug candidates for the
treatment of infectious diseases and cancers, biomarker validation expenses and
biomarker assay related expenses. We estimate that our research and development
expenditures, for the next twelve months will be approximately $550,000 as
follows: $100,000 for tissue and sera sample acquisition; $350,000 for third
party lab and testing services; $50,000 for third party drug candidate
manufacturing services; and $50,000 for added research personnel costs.

Professional Fees

We expect to incur significant legal expenses to prepare and
file a number of provisional patent applications over the next twelve months, as
new discoveries are made in our research and development process. Furthermore,
as a publicly traded company, we expect to incur ongoing legal and accounting
expenses to comply with our reporting responsibilities as a public company under
the United States Securities Exchange Act of 1934, as amended. During this
period, we also intend to obtain director and officer insurance and perhaps
general insurance for our company. We estimate our legal, accounting and
insurance expenses for the next twelve months to be approximately $200,000.

---

Business Development and Travel Expenses

We estimate our business development and travel expenses for the next twelve months to be the approximately $200,000. We anticipate that we will incur $100,000 in investor relations, public relations and marketing costs and $100,000 in
travel costs and costs incurred from attending industry conferences. We have hired an investor relations person to, among other things, produce investor and marketing materials. Our company will also incur travel expenses to attend biotech related
conferences and investigate financing opportunities should additional financing be required during this period.

Royalties

We estimate our aggregate royalty related expenditures on licensing complementary technology for the next twelve months will be $50,000.

General and Administrative Expenses

We anticipate spending $130,000 on general and administrative costs in the next twelve months primarily consisting of rent, contract administrative staff, office supplies and equipment, communications, etc.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the next twelve months.

Employees

As of December 18, 2007, we had two employees consisting of Joel Bellenson as our Chief Executive Officer and Dexster Smith as our President, Secretary and Treasurer. We have also retained TCF Ventures, a company beneficially held by Tim Fernback,
to provide management services. We have also retained Dr. Artem Cherkasov for contract consulting services with respect to the acquired business of PPT. We plan to hire additional employees and retain additional consultants when circumstances
warrant.

Trends and Uncertainties

Our ability to generate revenues in the future is dependent on whether we successfully develop our technologies and create a marketable product and license or otherwise commercialize our products. We cannot predict whether or when this may happen
and this causes uncertainty with respect to the growth of our company and our ability to generate revenues.

LIQUIDITY AND CAPITAL RESOURCES

To date, we have had negative cash flows from operations and we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We expect this situation to continue for the foreseeable future. We anticipate
that we will have negative cash flows from operations in the next twelve month period.

Our company incurred a loss of $1,928,231 for the twelve month period ended September 30, 2007. As of September 30, 2007, we had working capital of $1,384,777. As indicated above, our estimated working capital requirements and projected
operating expenses for the next twelve month period total $1,630,000. With cash and cash equivalents of $1,618,728 as at September 30, 2007, we anticipate that such funds will not be sufficient to pay our estimated expenses for the next
twelve month period. We intend to fulfill any additional cash requirement through the sale of either equity or debt.

There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially
reasonable terms. If we are not able to obtain additional financing on a timely

---

basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

Given that we are a development stage company and have not generated significant revenues to date, our cash flow projections are subject to numerous contingencies and risk factors beyond our control, including market acceptance of our products,
competition from well-funded competitors, and our ability to manage our expected growth. We can offer no assurance that our company will generate cash flow sufficient to meet our cash flow projections or that our expenses will not exceed our
projections. If our expenses exceed estimates, we will require additional monies during the next twelve months to execute our business plan.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful development of our technologies into a marketable product and
successful and sufficient market acceptance of our products once developed and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in significant dilution of the equity interests of
our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Going Concern

Due to the uncertainty of our ability to meet current operating and capital expenses, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern in their audit report for
the year ended September 30, 2007.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Neither our company nor our operating subsidiaries engage in trading activities involving
non-exchange traded contracts.

Capital Expenditures

We spent $2,418 on capital expenditures during the twelve month period ended September 30, 2007 along with $12,407 during the nine month transition period ended September 30, 2006. As of December 18, 2007, there were no material commitments
for capital expenditures and none are anticipated in the next twelve month period.

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.

Convertible Debenture Accounting Policy

In accordance with EITF 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments, the proceeds received on issuance of the convertible debenture have been 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 convertible debenture and was recorded as additional paid-in
capital. The carrying value of the debenture is

---

accreted to its face value at maturity through straight line
charges to interest and finance charges over its term.

Stock-based compensation Accounting Policy

In accordance with SFAS No. 123R, Share-Based Payments, all
grants of stock options and share issuances to employees and consultants for
compensation are recognized in the financial statements based on the fair value
of the award at the grant date. The Black-Scholes fair value pricing model was
selected to value these share-based payments. The modified prospective approach
was adopted during our former fiscal year beginning on January 1, 2006 since
there were no stock-based compensation awards granted prior to this date.

RECENT DEVELOPMENTS

On August 24, 2007, the Company completed the acquisition of
  100% of the issued and outstanding common stock of PPT pursuant to a share exchange
  agreement with the shareholders of PPT. In accordance with this agreement, the
  Company issued 520,000 escrowed common shares into escrow for the benefit of
  the two shareholders of PPT. The fair value of the patent application and other
  proprietary technology acquired by the Company in the share exchange was $353,322
  comprised of $295,907 for the assets acquired plus $57,415 of deferred income
  tax (see Note 7) due to the difference between fair value for accounting purposes
  and the value for tax purposes. The total amount was accounted for using the
  purchase method and recorded as intellectual property rights on the Companys
  balance sheet as of September 30, 2007. The consideration paid was comprised
  of:

| | Non-refundable option to purchase shares             | $ | 23,600  | 
| | ---------------------------------------------------- | - | ------- | 
| | Certain liabilities paid on behalf of PPT at closing |   | 27,907  | 
| | Total cash
      consideration                       |   | 51,507  | 
| | Fair value of share consideration at date of closing |   | 244,400 | 
| | Total
      consideration                            | $ | 295,907 | 

The 520,000 common shares will be released from escrow in three
separate amounts: one-third when the Securities and Exchange Commission (SEC)
declares the Form SB-2, registering these shares, to be effective which it did
on October 18, 2007; one-third three months after the effective date; and
one-third five months after the effective date.

In addition and pursuant to the Agreement, the Company:

| | (i)   | issued 225,000 common shares to the former shareholders
      of PPT which were deposited in a performance-based escrow to be released
      in the future when certain agreed milestones are achieved pertaining to
      the successful use and implementation of the intellectual property rights
      owned by PPT. The fair value of the shares at date of closing was $105,750
      and was recorded in stockholders equity as deferred
  compensation.                                         
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (ii)  | will make contingent payments to the two former
      shareholders of PPT when any of the agreed milestones are achieved. The
      contingent payment for the achievement of each milestone is payable in
      either cash or shares at the sole discretion of the Company and will range
      from $150,000 to $500,000 in cash or an equivalent value of shares for
      each of the two individuals involved, not to exceed 1,000,000 common
      shares, depending on the degree of achievement.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (iii) | must spend a minimum $150,000 on third-party testing of
      the PPT intellectual property during the four years ending December 31,
      2011 or else the maximum contingent payment described above becomes
      payable .                                                                                                                                                                                                                                                                          

---

| | (iv) | entered into a three-year consulting agreement with one
      of the former shareholders of PPT to assist in meeting the agreed
      milestones for an annual consulting fee of $50,000 payable in cash monthly
      and $50,000 payable in common shares to be issued
  semi-annually.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Material Trends and Uncertainties

Periodic changes occur in our companys industry and business
that make it reasonably likely that aspects of our future operating results will
be materially different from our historical operating results. Sometimes these
matters have not occurred, but their existence is sufficient to raise doubt
regarding the likelihood that historical operating results are an accurate gauge
of future performance. Our company attempts to identify and describe these
trends, events, and uncertainties to assist investors in assessing the likely
future performance of our company. Investors should understand that these
matters typically are new, sometimes unforeseen, and often are fluid in nature.
Moreover, the matters described below are not the only issues that may result in
variances between past and future performance nor are they necessarily the only
material trends, events, and uncertainties that will affect our company. As a
result, investors are encouraged to use this and other information to judge for
themselves the likelihood that past performance will be indicative of future
performance.

The trends, events, and uncertainties set out in the remainder
of this section have been identified by our company as those we believe are
reasonably likely to materially affect the comparison of historical operating
results reported herein to either past period results or to future operating
results.

Following the acquisition of Upstream Biosciences Inc, our
company diversified our business into the research and development of genetic
diagnostic biomarkers for use in determining a patients susceptibility to
disease and predicting a patients response to drugs. Following the acquisition
of PPT, our company further diversified our business into research and
development of drugs to treat certain infectious diseases and certain cancers.
The future performance of this business may materially affect the future
performance of our company.

Capital Expenditures

Our company incurred $2,418 for the purchase of furniture and
equipment during the 2007 year and $12,407 during the 2006 period. As of
September 30, 2007, our company did not have any material commitments for
capital expenditures and management does not anticipate anything material in the
future.

CONTRACTUAL OBLIGATIONS

Operating Leases

Operating leases include non-cash commitments for office space
of $37,200 for each annual period. Our companys principal business office is
located at 100  570 West 7th Avenue Vancouver, British Columbia,
Canada V5Z 4S6. The 1,000 square feet office space serves as the base of our
corporate, managerial, accounting, financial, administrative, and research and
development functions. The monthly fixed rent is $3,100 paid in shares on a
semi-annual basis.

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 contract, the Company paid the initial license fee to BCCA prior to
September 30, 2007 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 13, 2006 equal to 10% of the gross revenue from licensed
product sales or $10,072, whichever is greater. At September 30, 2007, royalties
of $10,492 have been accrued but not yet paid.

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 contract, 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 $12,590, but is not yet paid as
of September 30, 2007.

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); $15,108 from April 1, 2007 to March 31, 2012 (5 years); and $20,144 from
April 1, 2012 to March 31, 2015 (3 years). At September 30, 2007, royalties of
$7,554 have been accrued but not yet paid.

Employment Contracts

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 for two of the three officers when certain performance milestones, yet to
be determined, are achieved.

In the event of contract termination by either party and
subject to 30 to 90-day termination clauses, retiring allowances of $450,000
($150,000 each) will become immediately payable to the three officers. In this
connection, $131,250 has been charged to operations for the year ended September
30, 2007 (for the nine months ended September 30, 2006 - $58,333). The remaining
unamortized balance of $260,417, of which $175,000 is current, will continue to
be expensed on a straight-line basis over the remaining 19 months of the initial
term of the contracts.

The stock option commitments included in the three employment
contracts prior to implementation of the new stock option plan were met
following approval of the plan in March 2007.

Minimum annual commitments

The aggregate minimum annual commitments under the BCCA and UBC
license agreements and the retirement obligations for the next five years ending
September 30 are as follows:

| | 2008                          | $ | 200,180 | 
| | ----------------------------- | - | ------- | 
| | 2009                          |   | 110,596 | 
| | 2010                          |   | 25,179  | 
| | 2011                          |   | 25,179  | 
| | 2012                          |   | 25,179  | 
| | Thereafter to 2015, inclusive |   | 70,499  | 
| |                               |   |         | 
| |                               | $ | 456,812 | 

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|ITEM 7. | FINANCIAL STATEMENTS.
|------- | ---------------------

The following consolidated financial statements and the notes
thereto are filed as part of this annual report:

| | 1. | Report of Independent Registered Public
        Accounting Firm, dated December 10, 2007;                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                       
| | 2. | Consolidated balance sheets as of September
        30, 2007 and September 30, 2006;                                                                  
| |    |                                                                                                                                                       
| | 3. | Consolidated statements of operations
        for the twelve months ended September 30, 2007 and the nine months ended
        September 30, 2006;    
| |    |                                                                                                                                                       
| | 4. | Consolidated statements of stockholders
        equity from March 20, 2002 to September 30, 2007;                                                    
| |    |                                                                                                                                                       
| | 5. | Consolidated statements of cash flows
        for the twelve months ended September 30, 2007 and the nine months ended
        September 30, 2006; and
| |    |                                                                                                                                                       
| | 6. | Notes to Consolidated Financial Statements.                                                                                                           

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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, 2007 and 2006 and the related consolidated statements of operations, stockholders
  equity and cash flows for the year ended September 30, 2007, the nine period
  ended September 30, 2006 and the period from June 14, 2004 (inception) through
  September 30, 2007. 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, 2007 and 2006 and the result of its operations and
  its cash flows for the year ended September 30, 2007, the period ended September
  30, 2006 and the period from June 14, 2004 (inception) through to September
  30, 2007 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.

| | DMCL                               
| | -------------------------------------
| |                                      
| | DALE MATHESON CARR-HILTON LABONTE LLP
| | CHARTERED ACCOUNTANTS                

Vancouver, Canada 
  December 6, 2007



F-1

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

|                                                                 |   | September 30, |   |   | September 30, |  
|---------------------------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                                                 |   | 2007          |   |   | 2006          |  
|                                                                 |   |               |   |   |               |  
|ASSETS                                                           |  
|                                                                 |   |               |   |   |               |  
|CURRENT ASSETS                                                   |   |               |   |   |               |  
|Cash and cash equivalents                                        | $ | 1,618,728     |   | $ | 471,527       |  
|Other receivables                                                |   | 44,793        |   |   | 16,075        |  
|Prepaid expenses                                                 |   | 44,919        |   |   | 5,649         |  
|                                                                 |   | 1,708,440     |   |   | 493,251       |  
|                                                                 |   |               |   |   |               |  
|RESTRICTED CASH                                                  |   | 32,643        |   |   | 10,455        |  
|EQUIPMENT,net                                                    |   | 10,789        |   |   | 11,644        |  
|INTELLECTUAL PROPERTY RIGHTS(Note 4)                             |   | 353,322       |   |   | -             |  
|                                                                 |   |               |   |   |               |  
|                                                                 | $ | 2,105,194     |   | $ | 515,350       |  
|                                                                 |   |               |   |   |               |  
|LIABILITIES                                                      |  
|                                                                 |   |               |   |   |               |  
|CURRENT LIABILITIES                                              |   |               |   |   |               |  
|Accounts payable and accrued liabilities                         | $ | 103,957       |   | $ | 162,426       |  
|Due to related parties
      (Note 5)                            |   | 219,706       |   |   | 68,798        |  
|                                                                 |   | 323,663       |   |   | 231,224       |  
|CONVERTIBLE DEBENTURE(Note 6)                                    |   | -             |   |   | 567,378       |  
|DEFFERED INCOME TAXES(Note 7)                                    |   | 57,415        |   |   | -             |  
|                                                                 |   |               |   |   |               |  
|                                                                 |   | 381,078       |   |   | 798,602       |  
|                                                                 |   |               |   |   |               |  
|STOCKHOLDERS' EQUITY                                             |  
|                                                                 |   |               |   |   |               |  
|CAPITAL STOCK(Note 8)                                            |   |               |   |   |               |  
|Authorized                                                       |   |               |   |   |               |  
|100,000,000
      preferred shares at $0.001 par value           |   |               |   |   |               |  
|750,000,000
      common shares at $0.001 par value              |   |               |   |   |               |  
|Issued and outstanding                                           |   |               |   |   |               |  
|47,827,710
      common shares (September 30, 2006 - 44,847,077) |   | 47,828        |   |   | 44,848        |  
|ADDITIONAL PAID-IN CAPITAL                                       |   | 5,464,752     |   |   | 1,462,078     |  
|DEFERRED COMPENSATION(Note 4)                                    |   | (108,872      | ) |   | (2,782        | )
|ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)                    |   | 26,856        |   |   | (9,179        | )
|DEFICIT ACCUMULATED DURING THE DEVELOPMENT
      STAGE           |   | (3,706,448    | ) |   | (1,778,217    | )
|                                                                 |   |               |   |   |               |  
|                                                                 |   | 1,724,116     |   |   | (283,252      | )
|                                                                 |   |               |   |   |               |  
|                                                                 | $ | 2,105,194     |   | $ | 515,350       |  

COMMITMENTS AND CONTINGENCIES(Notes 4 and 10)

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

F-2

---

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

|                                            |   |               |   |   | Nine          |   |   | Cumulative Results |  
|------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------------ | -
|                                            |   | Year Ended    |   |   | Months Ended  |   |   | From Inception     |  
|                                            |   | September 30, |   |   | September 30, |   |   | (June 14, 2004)    |  
|                                            |   | 2007          |   |   | 2006          |   |   | September 30, 2007 |  
|                                            |   |               |   |   |               |   |   |                    |  
|REVENUE                                     | $ | -             |   | $ | -             |   | $ | 67,600             |  
|                                            |   |               |   |   |               |   |   |                    |  
|OPERATING EXPENSES                          |   |               |   |   |               |   |   |                    |  
|Stock based compensation (Note 8)           |   | 771,809       |   |   | 700,150       |   |   | 1,471,959          |  
|Consulting fees                             |   | 12,598        |   |   | -             |   |   | 12,598             |  
|Depreciation                                |   | 3,273         |   |   | 763           |   |   | 4,036              |  
|Interest and finance
      charges (Note 6) |   | 262,825       |   |   | 368,578       |   |   | 629,327            |  
|Interest income                             |   | (36,357       | ) |   | (2,308        | ) |   | (36,357            | )
|Investor and corporate
      communications |   | 68,911        |   |   | 23,655        |   |   | 92,566             |  
|License fees and royalties                  |   | 8,226         |   |   | 30,202        |   |   | 55,449             |  
|Loss (Gain) on foreign
      exchange       |   | 12,019        |   |   | (1,329        | ) |   | 7,364              |  
|Management compensation (Note 5)            |   | 382,232       |   |   | 223,046       |   |   | 707,909            |  
|Office and general
      administration     |   | 120,826       |   |   | 41,179        |   |   | 220,162            |  
|Professional fees                           |   | 161,762       |   |   | 99,083        |   |   | 277,035            |  
|Research and development
      (Note 5)     |   | 160,107       |   |   | 118,843       |   |   | 278,950            |  
|                                            |   | 1,928,231     |   |   | 1,601,862     |   |   | 3,720,998          |  
|                                            |   |               |   |   |               |   |   |                    |  
|NET LOSS                                    | $ | (1,928,231    | ) | $ | (1,601,862    | ) | $ | (3,653,398         | )
|                                            |   |               |   |   |               |   |   |                    |  
|BASIC AND DILUTED NET LOSS PER SHARE        | $ | (0.04         | ) | $ | (0.03         | ) |   |                    |  
|                                            |   |               |   |   |               |   |   |                    |  
|WEIGHTED AVERAGE NUMBER OF BASIC AND        |   |               |   |   |               |   |   |                    |  
|DILUTED COMMON SHARES OUTSTANDING           |   | 46,071,666    |   |   | 51,264,775    |   |   |                    |  

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

F-3

---

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

|                                                            |   |               |   |   | Nine          |   |   | Cumulative Results |  
|----------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------------ | -
|                                                            |   | Year Ended    |   |   | Months Ended  |   |   | From Inception     |  
|                                                            |   | September 30, |   |   | September 30, |   |   | (June 14, 2004) to |  
|                                                            |   | 2007          |   |   | 2006          |   |   | September 30, 2007 |  
|                                                            |   |               |   |   |               |   |   |                    |  
|CASH FLOW FROM OPERATING ACTIVITIES                         |   |               |   |   |               |   |   |                    |  
|Net loss for the period                                     | $ | (1,928,231    | ) | $ | (1,601,862    | ) | $ | (3,653,398         | )
|Adjustments to reconcile
      net loss to net cash used in |   |               |   |   |               |   |   |                    |  
|operating activities:                                       |   |               |   |   |               |   |   |                    |  
|Depreciation                                                |   | 3,273         |   |   | 763           |   |   | 4,036              |  
|Shares
      issued for services                            |   | 59,189        |   |   | 635,515       |   |   | 794,854            |  
|Amortization of fair value of stock options granted         |   | 771,809       |   |   | 100,150       |   |   | 1,039,917          |  
|Beneficial
      conversion feature                         |   | -             |   |   | 268,108       |   |   | -                  |  
|Accretion of convertible debenture                          |   | 232,621       |   |   | 70,187        |   |   | 302,808            |  
|Changes in operating assets and
      liabilities:          |   |               |   |   |               |   |   |                    |  
|Other receivables                                           |   | (28,718       | ) |   | (14,788       | ) |   | (44,792            | )
|Prepaid
      expenses                                      |   | (39,270       | ) |   | (2,504        | ) |   | (47,700            | )
|Accounts payable and accrued liabilities                    |   | 29,031        |   |   | 32,782        |   |   | 138,404            |  
|Due
      to related parties                                |   | 92,575        |   |   | (9,689        | ) |   | 82,886             |  
|                                                            |   |               |   |   |               |   |   |                    |  
|Net cash used in operating activities                       |   | (807,721      | ) |   | (521,338      | ) |   | (1,382,985         | )
|                                                            |   |               |   |   |               |   |   |                    |  
|CASH FLOW FROM INVESTING ACTIVITIES                         |   |               |   |   |               |   |   |                    |  
|Increase in restricted
      cash                           |   | (22,188       | ) |   | (10,455       | ) |   | (32,643            | )
|Cash paid for acquisition of PPT
      shares               |   | (51,507       | ) |   | -             |   |   | (51,507            | )
|Purchases of equipment                                      |   | (2,418        | ) |   | (12,407       | ) |   | (14,825            | )
|                                                            |   |               |   |   |               |   |   |                    |  
|Net cash used in
      investing activities                 |   | (76,113       | ) |   | (22,862       | ) |   | (98,975            | )
|                                                            |   |               |   |   |               |   |   |                    |  
|CASH FLOW FROM FINANCING ACTIVITIES                         |   |               |   |   |               |   |   |                    |  
|Proceeds from issuance of convertible
      debentures      |   | -             |   |   | 1,000,000     |   |   | 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     |   |   | 1,000,000     |   |   | 3,073,832          |  
|                                                            |   |               |   |   |               |   |   |                    |  
|EFFECT OF EXCHANGE RATE CHANGES                             |   | 36,035        |   |   | (5,707        | ) |   | 26,856             |  
|                                                            |   |               |   |   |               |   |   |                    |  
|INCREASE IN CASH AND CASH EQUIVALENTS                       |   | 1,147,201     |   |   | 450,093       |   |   | 1,618,728          |  
|                                                            |   |               |   |   |               |   |   |                    |  
|CASH AND CASH EQUIVALENTS, BEGINNING                        |   | 471,527       |   |   | 21,434        |   |   | -                  |  
|                                                            |   |               |   |   |               |   |   |                    |  
|CASH AND CASH EQUIVALENTS, ENDING                           | $ | 1,618,728     |   | $ | 471,527       |   | $ | 1,618,728          |  
|                                                            |   |               |   |   |               |   |   |                    |  
|                                                            |   |               |   |   |               |   |   |                    |  
|Supplemental cash flow information                          |   |               |   |   |               |   |   |                    |  
|Cash paid for:                                              |   |               |   |   |               |   |   |                    |  
|Interest                                                    | $ | -             |   | $ | -             |   | $ | -                  |  
|Income
      taxes                                          | $ | -             |   | $ | -             |   | $ | -                  |  
|                                                            |   |               |   |   |               |   |   |                    |  
|Non-cash investing and financing
      activities (Note 9)  |   |               |   |   |               |   |   |                    |  

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

F-4

---

|UPSTREAM BIOSCIENCES, INC                          
|---------------------------------------------------
|(A Development Stage Company)                      
|CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY     
|FOR THE PERIOD FROM MARCH 20, 2002 TO JUNE 30, 2007

|                                                                   |  |              |   |   |            |   |   |           |   |   |              |   |   |               |   |   | Deficit     |   |   |               |  
|------------------------------------------------------------------ |  | ------------ | - | - | ---------- | - | - | --------- | - | - | ------------ | - | - | ------------- | - | - | ----------- | - | - | ------------- | -
|                                                                   |  |              |   |   |            |   |   |           |   |   |              |   |   | Accumulated   |   |   | Accumulated |   |   |               |  
|                                                                   |  | Common Stock |   |   | Additional |   |   |           |   |   | Other        |   |   | During the    |   |   | Total       |  
|                                                                   |  | Number of    |   |   |            |   |   | Paid-in   |   |   | Deferred     |   |   | Comprehensive |   |   | Development |   |   | Stockholders' |  
|                                                                   |  | Shares       |   |   | Amount     |   |   | Capital   |   |   | 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 (Note 3)                               |  |              |   |   |            |   |   | (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 shares of PPT                                          |  | 520,000      |   |   | 520        |   |   | 243,880   |   |   |              |   |   |               |   |   |             |   |   | 244,400       |  
|For performance-based escrow shares as
      deferred compensation |  | 225,000      |   |   | 225        |   |   | 105,525   |   |   | (105,750     | ) |   |               |   |   |             |   |   | -             |  
|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 |   | $ | (108,872     | ) | $ | 26,856        |   | $ | (3,706,448  | ) | $ | 1,724,116     |  

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

F-5

---

|UPSTREAM BIOSCIENCES, INC                 
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|September 30, 2007                        

|1. | NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS
|-- | ------------------------------------------------

Upstream Biosciences, Inc. (the Company) was incorporated
  on March 20, 2002 under the laws of the State of Nevada.

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 with the shareholders
  of Upstream Canada (see Note 3). In connection with this transaction, Integrated
  Brand Solutions, Inc. changed its name to Upstream Biosciences, Inc. to better
  reflect the intended future direction and business of the Company.

Upstream Canada was incorporated on June 14, 2004 under the laws
  of Canada for the purpose of discovering and developing novel drugs for tropical
  parasitic diseases and developing genetic diagnostics for determining a patients
  susceptibility to disease and predicting a patients response to drugs.
  The business strategy is to generate revenues through licensing proprietary
  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.

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 with the shareholders
  of PPT (See Note 4). PPT is a development stage biopharmaceutical company incorporated
  under the laws of British Columbia for the purpose of researching, developing
  and commercializing proprietary drugs for the treatment of certain widespread
  infectious diseases involving anti-protozan compounds using artificial intelligence,
  advanced computational methods and chemical diversity techniques.

Going concernThese consolidated financial statements have been prepared in accordance
  with generally accepted accounting principles in the United States of America
  (US) 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, 2007, the Company has working capital
  of $1,384,777 but has incurred losses since inception of $3,706,448. 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 working capital requirements, 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 can be no assurance that capital will be available
  as necessary to meet the Companys working capital 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

F-7

---

adversely affected. Management intends to finance its on-going
  operations over the next twelve months with existing cash and cash equivalents
  and private equity placements.

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

(a)          
  Basis of presentationThese consolidated financial statements and related notes are presented
  in accordance with generally accepted accounting principles in the US 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, 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.

Effective September 30, 2006, Upstream Canada changed its fiscal
  year end from December 31 to September 30 for administrative purposes. Accordingly,
  the consolidated statements of operations and the consolidated statements of
  cash flows are presented for the twelve months ended September 30, 2007 and
  the nine months ended September 30, 2006.

(b)          
  Use of estimates and assumptionsThe 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 fair value of stock-based
  compensation, accretion of convertible debenture, the carrying value of intellectual
  property rights and the computation of license fees, retiring allowances, deferred
  compensation and deferred income taxes.

(c)          
  Cash and cash equivalentsCash and cash equivalents consist of bank balances, unrestricted cash balances
  in lawyer trust accounts 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. As of September
  30, 2007, cash and cash equivalents consist primarily of short-term investments
  and bank deposits and the restricted cash consists of security deposits for
  Company credit cards.

(d)          
  Financial instrumentsThe Companys financial instruments consist of cash and cash equivalents,
  other receivables, restricted cash, accounts payable and accrued liabilities,
  and amounts due to related parties. It is managements opinion that the
  Company is not 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.

F-8

---

(e)          
  EquipmentEquipment is recorded at cost and depreciation is recorded using the straight-line
  method over four years and maintenance and repairs are expensed as incurred.

(f)          
  Translation of foreign currenciesThe financial statements are presented in US dollars in accordance with
  SFAS No. 52, Foreign Currency Translation. Foreign denominated monetary
  assets and liabilities are translated into their US dollar equivalents using
  foreign exchange rates which prevail at the balance sheet date. Non-monetary
  assets are translated at the exchange rates prevailing at the transaction date.
  Revenue and expenses are translated at average rates of exchange during the
  year. Gains or losses resulting from foreign currency transactions are included
  in the consolidated results of operations; whereas, adjustments arising from
  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).

(g)          
  Research and developmentThese costs are charged to expense 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 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.

(h)          
  Stock-based compensationEffective January 1, 2006 the Company 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, but not yet vested
  as of 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.

(i)          
  Convertible debentureIn 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 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 straight line charges to interest and finance charges
  over its term.

(j)          
  Deferred income taxesThe Company follows the asset and liability method of accounting for income
  taxes as set forth in SFAS No. 109, Accounting for Income Taxes.
  Under this method, deferred income tax assets and liabilities are recognized
  for the future income tax consequences attributable to differences between the
  financial statement carrying amounts of assets and liabilities and their respective
  tax balances. Deferred income tax assets and liabilities are measured using
  enacted or substantially enacted tax rates expected to apply to the taxable
  income in the years in which the differences are expected to be recovered or
  settled. The

F-9

---

effect on deferred income tax assets and liabilities of a change
  in tax rates is recognized in income in the period that includes the date of
  enactment or substantial enactment. For deferred income tax assets, the full
  amount of the potential future benefit is recorded; then a valuation allowance
  is used to adjust for the probability of realization.

(k)          
  Loss per shareThe 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.

(l)          
  Long-Lived AssetsIn 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.

(m)          
  Comparative figuresCertain comparative figures have been reclassified to conform to the current
  years presentation.

(n)          
  Recent accounting pronouncementsIn February 2007, the FASB issued SFAS No. 159, The Fair Value Option
  for Financial Assets and Financial Liabilities. This statement permits
  entities to choose to measure many financial assets and financial liabilities
  at fair value. Unrealized gains and losses on items for which the fair value
  option has been elected are reported in earnings. SFAS No. 159 is effective
  for fiscal years beginning after November 15, 2007. The Company does not expect
  the implementation of SAB No. 108 will have any material impact on its financial
  position and results of operations.

In December 2007, the FASB issued SFAS No. 160, Non-controlling
  Interests in Consolidated Financial Statements. This Statement amends
  ARB 51 to establish accounting and reporting standards for the non-controlling
  (minority) interest in a subsidiary and for the deconsolidation of a subsidiary.
  It clarifies that a non-controlling interest in a subsidiary is an ownership
  interest in the consolidated entity that should be reported as equity in the
  consolidated financial statements. The Company has not yet determined the impact,
  if any, that SFAS No. 160 will have on its consolidated financial statements.
  SFAS No. 160 is effective for the Companys fiscal year beginning October
  1, 2009

|3. | SHARE EXCHANGE AGREEMENT WITH SHAREHOLDERS OF
      UPSTREAM CANADA
|-- | -------------------------------------------------------------------

On February 24, 2006, the Company completed the acquisition of
  100% of the issued and outstanding common stock of Upstream Canada pursuant
  to a share exchange agreement (the Agreement) with the shareholders
  of Upstream Canada. In accordance with the Agreement, the Company cancelled
  without consideration 68,650,000 common shares owned by two shareholders of
  the Company and issued 24,000,000 common shares to the shareholders of Upstream
  Canada. This was done in exchange for all 6,000,000 issued and outstanding common
  shares of Upstream Canada on the basis of four common

F-10

---

shares of the Company for every one common share of Upstream
  Canada. There was no cash involved in the transaction.

After the closing, the Company had 44,300,000 common shares issued
  and outstanding, of which 24,000,000 were held by the former shareholders of
  Upstream Canada, resulting in Upstream Canada shareholders holding 54.2% of
  the issued and outstanding common shares of the Company. The share exchange
  was deemed to be a corporate reorganization and was accounted for as a recapitalization
  of Upstream Canada. Upstream Canada is the parent company for accounting purposes.

On consolidation, the recapitalization adjustment of $53,050
  was charged to the following equity accounts of the Company:

| | Accumulated deficit from date of inception
      (June 14, 2004) |   |         |  
| | ---------------------------------------------------------------- | - | ------- | -
| | to March 1, 2006                                                 | $ | (49,045 | )
| | Additional paid-in capital                                       |   | (4,005  | )
| | Recapitalization adjustment                                      | $ | (53,050 | )

|4. | PURCHASE OF PPT
|-- | ---------------

On August
  24, 2007, the Company completed the acquisition of 100% of the issued and outstanding
  common stock of PPT pursuant to a share exchange agreement with the shareholders
  of PPT. In accordance with this agreement, the Company issued 520,000 escrowed
  common shares into escrow for the benefit of the two shareholders of PPT. The
  fair value of the patent application and other proprietary technology acquired
  by the Company in the share exchange was $353,322 comprised of $295,907 for
  the assets acquired plus $57,415 of deferred income tax (see Note 7) due to
  the difference between fair value for accounting purposes and the value for
  tax purposes. The total amount was accounted for using the purchase method and
  recorded as intellectual property rights on the Companys balance sheet
  as of September 30, 2007. The consideration paid was comprised of:

| | Non-refundable option to purchase shares             | $ | 23,600  | 
| | ---------------------------------------------------- | - | ------- | 
| | Certain liabilities paid on behalf of PPT at closing |   | 27,907  | 
| | Total cash consideration                             |   | 51,507  | 
| | Fair value of share consideration at date of closing |   | 244,400 | 
| | Total consideration                                  | $ | 295,907 | 

The 520,000 common shares will be released from escrow in three
  separate amounts: one-third when the Securities and Exchange Commission (SEC)
  declares the Form SB-2, registering these shares, to be effective which it did
  on October 18, 2007; one-third three months after the effective date; and one-third
  five months after the effective date.

In addition and pursuant to the Agreement, the Company:

| | (i)  | issued 225,000 common shares to the former shareholders
        of PPT which were deposited in a performance-based escrow to be released
        in the future when certain agreed milestones are achieved pertaining to
        the successful use and implementation of the intellectual property rights
        owned by PPT. The fair value of the shares at date of closing was $105,750
        and was recorded in stockholders equity as deferred compensation.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii) | will make contingent payments to the two former shareholders
        of PPT when any of the agreed milestones are achieved. The contingent
        payment for the achievement of each milestone is payable in either cash
        or shares at the sole discretion of the Company and will                                                                                                                                                                             

F-11

---

| |       | range from $150,000 to $500,000 in cash or an equivalent
        value of shares for each of the two individuals involved, not to exceed
        1,000,000 common shares, depending on the degree of achievement.                                                                            
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                              
| | (iii) | must spend a minimum $150,000 on third-party testing
        of the PPT intellectual property during the four years ending December
        31, 2011 or else the maximum contingent payment described above becomes
        payable .                                                        
| |       |                                                                                                                                                                                                                                                                                              
| | (iv)  | entered into a three-year consulting agreement with
        one of the former shareholders of PPT to assist in meeting the agreed
        milestones for an annual consulting fee of $50,000 payable in cash monthly
        and $50,000 payable in common shares to be issued semi-annually.

|5. | RELATED PARTY TRANSACTIONS
|-- | --------------------------

At September 30, 2007, the Company owed $219,706 (September
  30, 2006 - $68,798) for unpaid compensation and accrued retiring allowances
  to three Company officers,two of whom are also directors. These amounts
  are unsecured and non-interest bearing. Of the $219,706, $30,526 of unpaid monthly
  compensation was paid immediately after September 30, 2007. The balance of $189,180
  of accrued retiring allowances will be paid in the event of employment termination
  (see Note 10c).

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

| |                                                           |   |               |  |   | Nine months   | 
| | --------------------------------------------------------- | - | ------------- |  | - | ------------- | 
| |                                                           |   | Year ended    |  |   | ended         | 
| |                                                           |   | September 30, |  |   | September 30, | 
| |                                                           |   | 2007          |  |   | 2006          | 
| | Management fees and statutory benefits                    | $ | 403,322       |  | $ | 288,720       | 
| | Amortization of retirement allowances                     |   | 131,250       |  |   | 58,333        | 
| | Amortization of fair value of stock options
      granted |   | 476,550       |  |   | 100,150       | 
| | Other stock-based compensation                            |   | -             |  |   | 600,000       | 
| | Total compensation to Company officers                    | $ | 1,011,122     |  | $ | 1,047,203     | 

Of the compensation incurred during the year, $152,340 was expensed
  as research and development (nine months ended September 30, 2006 - $118,843).

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.

|6. | CONVERTIBLE DEBENTURE
|-- | ---------------------

In March and April 2006, the Company issued a $1,000,000 three-year
  convertible debenture bearing interest at 5% per annum, due on February 1, 2009
  but convertible at anytime at the Companys option into 1,000,000 shares
  of common stock. The Companys achievement of a previously reported milestone

F-12

---

event in September 2006 triggered the forfeiture of $200,000
  of debenture face value and the expiry of all 400,000 stock purchase warrants
  which were attached and exercisable at $1.25 per share.

On March 16, 2007, the Company exercised its option, before maturity,
  to convert the remaining $800,000 of debenture face value along with related
  interest payable of $53,973 by issuing 853,973 common shares to the debenture
  holders at $1.00 per share (see Note 8b). The debenture carrying value of $567,379
  at September 30, 2006 was accreted to the date of conversion to its face value
  of $800,000 by expensing $232,621 to the statement of operations as finance
  charges. In the same period, interest of $24,806 was accrued bringing the total
  interest payable to $53,973 at the date of conversion.

|7. | DEFERRED INCOME TAXES
|-- | ---------------------

The parent Company is subject to income taxes in Canada and its
  wholly-owned subsidiary is subject to income taxes in the United States. As
  of September 30, 2007, both the Company and its subsidiary had accumulated non-capital
  loss carry-forwards of approximately $2,300,000, 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 $57,415 arising from the
  tax gross-up required by US GAAP on the acquisition of PPT (see
  Note 4). It represents the deferred income tax on the difference between fair
  value of the Intellectual Property acquired for accounting purposes and the
  related tax base.

At September 30, 2007 and 2006, the components of the deferred
  income tax accounts, the statutory tax rate, the effective tax rate and the
  elected amount of the valuation allowance are shown below:

| |                                     |   | September 30, |   |   | September 30 |  
| | ----------------------------------- | - | ------------- | - | - | ------------ | -
| |                                     |   | 2007          |   |   | 2006         |  
| |                                     |   |               |   |   |              |  
| | Non-capital tax loss carry forwards | $ | 2,300,000     |   | $ | 770,000      |  
| | Statutory tax rate                  |   | 35%           |   |   | 35%          |  
| | Effective tax rate                  |   |              |   |   |             |  
| | Future income tax asset             |   | 805,000       |   |   | 269,500      |  
| | Less: valuation allowance           |   | (805,000      | ) |   | (269,500     | )
| | Net deferred income tax asset       | $ |              |   | $ |             |  
| |                                     |   |               |   |   |              |  
| | Net deferred income tax liability   | $ | 57,415        |   | $ | -            |  

|8. | CAPITAL STOCK
|-- | -------------

a)          
  AuthorizedThe 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 outstandingNo preferred shares have been issued to date.

During the nine months ended September 30, 2006, the changes
  in common stock were as follows:

F-13

---

| | (i)   | 24,000,000 shares were issued pursuant to a share exchange
        agreement to the shareholders of Upstream Canada, representing 54.2% of
        the Companys outstanding shares at the closing date of February
        24, 2006, in exchange for 100% of the shares of Upstream Canada. Concurrently,
        68,650,000 shares held by two former shareholders of the Company were
        cancelled without consideration (see Note 3).
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii)  | 500,000 shares were issued with a fair value of $600,000
        pursuant to a consulting agreement for financial and administrative services.
        The consultant was subsequently appointed an officer of the Company.                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iii) | 17,500 shares were issued pursuant to an office lease
        agreement with the British Columbia Cancer Agency (BCCA) calling
        for advance payment of six months rent from May 1 2006 to October
        31, 2006 with a fair value of $17,768.                                                                                                                                                                                    
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iv)  | 29,577 shares were issued pursuant to a license agreement
        with BCCA in settlement of the Companys initial license fee obligation
        valued at $17,747.                                                                                                                                                                                                                                                                          

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 shares
        were issued pursuant to an office lease agreement with BCCA calling for
        advance rent payments every six months, November 1, 2006 to April 30,
        2007 and May 1 to October 31, 2007 respectively, with a combined fair
        value of $34,722.                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (ii)  | On February 28 and May 8, 2007, a total of 1,333,334
        units were issued in two lots of 666,667 each at a subscription price
        of $1.50 per unit pursuant to private placements with two different shareholders
        for total cash consideration of $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 the two year periods expiring February 28 and May 8, 2009 respectively.
        No value was attributed to the warrants issued as part of these unit placements.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iii) | On March 15, 2007, 853,973 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 escrowed shares were issued
        into escrow at fair value of $244,400 pursuant to a share exchange agreement
        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 when
        certain agreed milestones are achieved (see Note 4).                                                                                                                                                                                                                                                                                                                                                                         

c)          
  Stock OptionsDuring the nine months ended September 30, 2006, 400,000 options were granted
  to one of the Companys officers, who is not a director. These options
  are exercisable at $0.80 per share for 9 years ending March 1, 2016 with 200,000
  vested and expensed in the nine months ended September 30, 2006 with a fair
  value of $100,150; 100,000 vesting May 1, 2008 and 100,000 vesting May 1, 2009
  with a fair value of $50,075 respectively using the Black-Scholes option pricing
  model and the following assumptions: expected stock price volatility of 132%,
  risk-free interest rate of 3.5%, expected option life

F-14

---

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.

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.

During 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:

| | (i)   | 800,000 options exercisable at $0.96 per share for 10
        years ending March 16, 2017 with 300,000 vesting immediately, 300,000
        vesting one year from date of grant, and 200,000 vesting two years from
        date of grant. These options were granted in fulfillment of the Companys
        previous commitment to two senior officers, who are also directors, when
        the plan was under development.              
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (ii)  | 700,000 options exercisable from $0.96 to $1.00 per
        share for 5 years ending March 16, 2012 with 400,000 vesting immediately,
        200,000 vesting one year from date of grant, and 100,000 vesting two years
        from date of grant. 100,000 of these options were granted in fulfillment
        of the Companys previous commitment to a corporate communications
        consultant when the Plan was under development.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iii) | 100,000 options exercisable at $1.02 per share for 5
        years ending March 27, 2012 with 33,333 vesting immediately, 33,333 vesting
        one year from date of grant, and 33,334 vesting two years from date of
        grant.                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iv)  | 200,000 options exercisable at $1.41 per share for 5
        years ending May 3, 2012 with 66,666 vesting immediately, 66,666 vesting
        one year from date of grant, and 66,668 vesting two years from date of
        grant.                                                                                                                                                                                                         

The fair value of stock options granted during the year ended
  September 30, 2007 has been 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.

In connection with these and previously granted options, the
  Company recorded $771,809 as stock-based compensation expense for the year ended
  September 30, 2007 (nine months ended September 30, 2006 $100,150). The
  unamortized balance of $777,441 will be charged to operations in the future
  on a straight-line basis over the remaining vesting periods.

F-15

---

A summary of the Companys outstanding stock options as
  of September 30, 2007 is presented below:

| |                |                |                | Options       
| | -------------- | -------------- | -------------- | --------------
| |                |                |                | Outstanding at
| | Grant Date     | Expiry Date    | Exercise Price | September 30, 
| |                |                |                | 2007          
| | 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       
| | March 27, 2007 | March 27, 2012 | $1.02          | 100,000       
| | May 3, 2007    | May 3, 2012    | $1.41          | 200,000       
| |                |                |                |               
| |                | Totals         |                | 2,200,000     

The weighted average exercise price and remaining life of the
  stock options was $0.92 and 6.32 years, respectively.

d)          
  Share Purchase WarrantsOn both February 28 and May 8, 2007, the Company issued 666,667 Series A
  warrants to purchase 666,667 shares of the Companys common stock at a
  price of $1.75 per share and 666,667 Series B warrants to purchase an additional
  666,667 shares at a price of $1.85 per share pursuant to each of the two private
  placement subscription agreements described in Note 10(b). All warrants expire
  two years from date of issuance.

A summary of the Companys outstanding stock purchase warrants
  as of September 30, 2007 is presented below:

| |              |              |          | Warrants      
| | ------------ | ------------ | -------- | --------------
| |              |              |          | Outstanding at
| |              |              | Exercise | September 30, 
| | Issue Date   | Expiry Date  | Price    | 2007          
| |              |              |          |               
| | Feb 28, 2007 | Feb 28, 2009 | $1.75    | 666,667       
| | Feb 28, 2007 | Feb 28, 2009 | $1.85    | 666,667       
| | May 8, 2007  | May 8, 2009  | $1.75    | 666,667       
| | May 8, 2007  | May 8, 2009  | $1.85    | 666,667       
| |              |              |          |               
| |              | Totals       |          | 2,666,668     

The weighted average exercise price and remaining life of the
  stock purchase warrants was $1.80 and 1.51 years, respectively.

|9. | NON-CASH INVESTING AND FINANCING ACTIVITIES
|-- | -------------------------------------------

During the year ended September 30, 2007, the Company issued
  1,647,299 shares (nine months ended September 30, 2006 - 24,547,077) for non-cash
  consideration as follows:

| | (i) | On January 1 and June 5, 2007, a total of 48,326 shares
        were issued pursuant to an office lease agreement with BCCA calling for
        advance rent payments every six months, November 1, 2006 to April 30,
        2007 and May 1 to October 31, 2007 respectively, with a combined fair
        value of $34,722 (see Note 10).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-16

---

| | (ii)  | On March 15, 2007, 853,973 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 (see Note 6).
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                            
| | (iii) | On August 24, 2007, 520,000 escrow shares were issued
        into escrow at fair value of $244,400 pursuant to a share exchange agreement
        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 when
        certain agreed milestones are achieved (see Note 4).  

|10. | COMMITMENTS AND CONTINGENCIES
|--- | -----------------------------

|(a) | 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 contract, the Company paid the initial license fee to BCCA
  prior to September 30, 2007 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 13, 2006 equal to 10% of the gross revenue from licensed
  product sales or $10,072, whichever is greater. At September 30, 2007, royalties
  of $10,072 have been accrued but not yet paid.

|(b) | 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 contract, 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 $12,590, but is not yet paid as of
  September 30, 2007.

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);
  $15,108 from April 1, 2007 to March 31, 2012 (5 years); and $20,144 from April
  1, 2012 to March 31, 2015 (3 years). As of September 30, 2007, royalties of
  $7,554 have been accrued but not yet paid.

|(c) | 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 event of contract termination by either party and subject
  to 30 to 90-day termination clauses, retiring allowances of $450,000 ($150,000
  each) will become immediately payable to the three officers. In this connection,
  $131,250 has been charged to operations for the year ended September 30, 2007
  (for the nine months ended September 30, 2006 - $58,333). The remaining unamortized
  balance of $260,417,

F-17

---

of which $175,000 is current, will continue to be expensed on
  a straight-line basis over the remaining 19 months of the initial term of the
  contracts.

The stock option commitments included in the three employment
  contracts prior to implementation of the new stock option plan were met following
  approval of the plan in March 2007. (See Note 8c)

|(d) | Minimum annual commitments
|--- | --------------------------

The aggregate minimum annual commitments under the BCCA and UBC
  license agreements and the retirement obligations for the next five years ending
  September 30 are as follows:

| | 2008                          | $ | 200,180 | 
| | ----------------------------- | - | ------- | 
| | 2009                          |   | 110,596 | 
| | 2010                          |   | 25,179  | 
| | 2011                          |   | 25,179  | 
| | 2012                          |   | 25,179  | 
| | Thereafter to 2015, inclusive |   | 70,499  | 
| |                               |   |         | 
| |                               | $ | 456,812 | 

|(e) | Office lease agreement
|--- | ----------------------

The Company entered into an office lease agreement with BCCA
  in May 2006 at $3,100 per month calling for advance payment in common shares
  every six months. The price per share is determined by using the average price
  for the preceding six-month period less a 20% discount. The lease is renewable
  on an annual basis by mutual consent.

F-18

---



|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------------

None.

|ITEM 8A. | CONTROLS AND PROCEDURES.
|-------- | ------------------------

As required by Rule 13a-15 under the Securities Exchange Act of
1934, as of the end of the period covered by this annual report, being September
30, 2007, we have carried out an evaluation of the effectiveness of the design
and operation of our companys disclosure controls and procedures. This
evaluation was carried out under the supervision and with the participation of
our companys management, including our companys Chief Executive Officer and
our Chief Financial Officer. Based upon that evaluation, our companys Chief
Executive Officer and our Chief Financial Officer concluded that our companys
disclosure controls and procedures are effective as at the end of the period
covered by this report. There have been no changes in our companys internal
controls or in other factors, which could affect internal control subsequent to
the date we carried out our evaluation.

Disclosure controls and procedures and other procedures that
are designed to ensure that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time period specified in the
Securities and Exchange Commissions rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Securities Exchange Act of 1934 is accumulated and communicated to management
including our Chief Executive Officer and our Chief Financial Officer as
appropriate, to allow timely decisions regarding required disclosure.

---

|ITEM 8B. | OTHER INFORMATION.
|-------- | ------------------

Effective November 13, 2007, we entered into a services
agreement and a materials transfer agreement with Makerere University in
Kampala, Uganda, whereby Makerere University has agreed to assist with the
testing of our compounds. In consideration for the Makerere Universitys initial
services we have agreed to pay them the sum of $6,900. We plan to undertake
additional testing services from Makerere University over the next twelve month
period.

Effective December 7, 2007, we entered into a services
agreement and a materials transfer agreement with Provincial Laboratory for
Public Health (ProvLab) in Alberta, Canada whereby ProvLab has agreed to assist
with the testing of our compounds. In consideration for the ProvLab s initial
services we have agreed to pay them the sum of $11,028.50. We plan to undertake
additional testing services from ProvLab over the next twelve month period.

PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL
      PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF
      THE EXCHANGE ACT.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------

Directors and Executive Officers, Promoters and Control
Persons

All directors of our company hold office until the next annual
meeting of the stockholders or until their successors have been elected and
qualified. The executive officers of our company are appointed by our board of
directors and hold office until their death, resignation or removal from office.
Our directors, executive officers and the executive officers of our operating
subsidiaries, as well as the positions held, age and duration of appointment for
such persons are as follows:

Name
    Position Held with our Company
    AgeJoel
      Bellenson
    Chief Executive Officer and Director since March 1, 2006
    43Dexster Smith
    President and Director since March 1, 2006
    40Dr. Dale Pfost
    Director since April 30, 2007
    50Phil Rice
    Director since March 27, 2007
    50Tim Fernback
    Chief Financial Officer since April 12, 2006
    40


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 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.

Philip Rice

On March 27, 2007, we appointed Philip Rice as a member of board of directors. Mr. Rice is the Head of International Sales for Wells Fargo. Mr. Rice is a senior finance and accounting executive with experience in capital markets, mergers and
acquisitions, accounting and regulatory compliance, Sarbanes-Oxley compliance, Securities and Exchange Commission reporting and internal audit and tax. Currently, Mr. Rice operates a small consultancy firm in California and is the former Senior Vice
President, Finance for Gateway Bank. Mr. Rice holds his Bachelor of Arts, Cum Laude from Williams College and his Masters Business Administration from the Haas School of Business, University of California, Berkley.

Dale Pfost

On April 30, 2007, we appointed Dale Pfost as a member of our board of directors. Dr. Dale Pfost currently operates a small biotechnology consultancy firm and is the former President of Opko Health, Inc. and prior to its merger, served as the
President, Chief Executive Officer and Chairman of Acuity Pharmaceuticals from 2003 through March 2007. Dr. Pfost served as President, Chief Executive Officer and Chairman of Orchid BioSciences from 1996 through 2002. From 1988 until 1996, Dr. Pfost
served as President, Chief Executive Officer and Managing Director of Oxford GlycoSciences, where he was the founding Chief Executive Officer. Dr. Pfost was the founder and President of Infitek, Inc. from 1982 through 1984 until it was acquired by
SmithKline Beckman where Dr. Pfost served in varying levels of increasing responsibilities through 1988. Dr. Pfost holds a B.S. in Physics from the University of California Santa Barbara (1980) and a Ph.D. in Physics from Brown University
(1986).

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 beyond the directors and officers of the 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 offences);                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                        
|3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any 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 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 companys board of directors acts as our audit committee. Our board of directors 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. The members of our board of directors are Joel Bellenson, Dexster Smith, Dr. Dale Pfost and Phil Rice. Our board of directors has determined that Dr. Dale Pfost and Phil Rice are the only members of our board of
directors that are independent as the term is used in Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the definition of independent director as defined in section 4200 of the Marketplace Rules of the NASD.

Audit Committee Financial Expert

Our board of directors has determined that it does not have a member that qualifies as an audit committee financial expert as defined in Item 401(e) of Regulation S-B. We believe that our board of directors is 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.

---

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 including our
President (being our principal executive officer and principal financial and
accounting officer), 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.

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 of 1934, as
amended, 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 Forms
3, 4 and 5 (and amendments thereto) furnished to us during or in respect of our
year ended September 30, 2007, we are not aware of any director, executive
officer or beneficial owner of more than 10% of the outstanding common stock who
or which has not timely filed reports required by Section 16(a) of the Exchange
Act during or in respect of such fiscal year.

---

|ITEM 10. | EXECUTIVE COMPENSATION.
|-------- | -----------------------

The particulars of compensation paid to the following
persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were
  serving as executive officers at the end of the year ended September 30, 2007;
  and
- up to two additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as our
  executive officer at the end of the most recently completed financial year,

who we will collectively refer to as the named executive
officers, of our years ended September 30, 2007 and 2006, are set out in the
following summary compensation table:

SUMMARY COMPENSATION
      TABLEName and
      Principal Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards ($)
    Option Award
      s ($) (5)
    Non-Equity Incentive
      Plan Compensa- tion ($)
    Change in Pension
      Value and Nonqualified Deferred
      Compensation Earnings ($)
    All Other
      Compensa -tion ($)
    Total
      ($)Joel L.
      Bellenson(1)Chief Executive Officer and
      Director
    2007 2006(2)
    149,650 66,257
    Nil 50,000
    Nil Nil
    164,110 Nil
    Nil Nil
    Nil Nil
    52,690 31,754
    366,450
      148,011Dexster L.
      Smith(3)President and Director
    2007 2006(2)
    149,650 66,257
    Nil 50,000
    Nil Nil
    164,110 Nil
    Nil Nil
    Nil Nil
    52,690 31,753
    366,450
      148,010Tim Fernback(4)Chief Financial Officer
    2007 2006(2)
    98,642 51,042
    Nil Nil
    Nil 600,000
    148,331 100,150
    Nil Nil
    Nil Nil
    31,250 Nil
    278,223
      751,192


|(1) | Joel Bellenson was appointed director and officer of our
      company on March 1, 2006.                                                                                                                                                                                                                                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                     
|(2) | Nine month transition period ended September 30,
    2006.                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                     
|(3) | Dexster Smith was appointed director and officer of our
      company on March 1, 2006.                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                     
|(4) | Tim Fernback was appointed Chief Financial Officer on
      April 12, 2006.                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                     
|(5) | 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 Note 8(c) to our financial statements included in this
      Annual Report. Represents value of options granted to the named executive
      officer that have vested.

Employment/Consulting Agreements

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. Pursuant to the terms of the consulting contract, our company agreed to pay Mr. Cherkasov a consulting services fee of $50,000 plus the equivalent amount of common shares annually.

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.

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 salary, 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 salary, bonuses and benefits.

Our compensation program for our executive officers is administered and reviewed by our board of directors. 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.

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, 2007.

---

OUTSTANDING EQUITY AWARDS AT FISCAL
      YEAR-ENDOPTION AWARDS
    STOCK AWARDSName
    Number of
      Securities Underlying UnexercisedOptions (#) Exercisable(1)
    Number of
      Securities Underlying **Unexercised**Options (#)
      **Unexercisable**
    Equity Incentive
      Plan Awards: Number of
      Securities Underlying **Unexercised**UnearnedOptions(2)
      (#)
    **Option**
      **Exercise**Price($)
    Option
      **Expiration**Date
    Numberof
      Shares or Units of StockThat
      Have Not Vested (#)
    Market
      Valueof **Shares**or
      Units of **Stock**That
      Have Not Vested ($)
    Equity
      Incentive Plan **Awards:**
      Numberof UnearnedShares,
      Units or Other Rights That
      Have NotVested (#)
    Equity Incentive Plan
      Awards: Market **or Payout**
      Value of **Unearned** Shares,
      Units or Other Rights That
      **Have Not** Vested (#)Joel L. Bellenson Chief Executive Officer
      and Director
    150,000
    Nil
    250,000
    0.96
    March 16, 2017
    Nil
    Nil
    Nil
    NilDexster L. Smith President and Director
    150,000
    Nil
    250,000
    0.96
    March 16, 2017
    Nil
    Nil
    Nil
    NilTim Fernback Chief Financial Officer
    200,000
    Nil
    200,000
    0.80
    March 1, 2016
    Nil
    Nil
    Nil
    Nil


|(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.

At September 30, 2007, there were 2,200,000 stock options
issued.

During the nine months ended September 30, 2006, 400,000
options were granted to one of our officers, who is not a director. These
options are exercisable at $0.80 per share for 9 years ending March 1, 2016 with
200,000 vested and expensed in the nine months ended September 30, 2006 with a
fair value of $100,150; 100,000 vesting May 1, 2008 and 100,000 vesting May 1,
2009 with a fair value of $50,075 respectively using the Black-Scholes option
pricing model and 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.

---

In March 2007, our 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,
our employees, directors, officers, consultants and advisors (collectively the
Optionee Group) 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.

During March and May 2007, we 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:

| | (i)   | 800,000 options exercisable at $0.96 per share for 10
      years ending March 16, 2017 with 300,000 vesting immediately, 300,000
      vesting one year from date of grant, and 200,000 vesting two years from
      date of grant. These options were granted in fulfillment of the our
      previous commitment to two senior officers, who are also directors, when
      the plan was under development.          
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii)  | 700,000 options exercisable from $0.96 to $1.00 per share
      for 5 years ending March 16, 2012 with 400,000 vesting immediately,
      200,000 vesting one year from date of grant, and 100,000 vesting two years
      from date of grant. 100,000 of these options were granted in fulfillment
      of our previous commitment to a corporate communications consultant when
      the Plan was under development.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iii) | 100,000 options exercisable at $1.02 per share for 5
      years ending March 27, 2012 with 33,333 vesting immediately, 33,333
      vesting one year from date of grant, and 33,334 vesting two years from
      date of grant.                                                                                                                                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iv)  | 200,000 options exercisable at $1.41 per share for 5
      years ending May 3, 2012 with 66,666 vesting immediately, 66,666 vesting
      one year from date of grant, and 66,668 vesting two years from date of
      grant.                                                                                                                                                                                           

The fair value of stock options granted during the year ended
September 30, 2007 has been 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.

In connection with these and previously granted options, we
recorded $771,809 as stock-based compensation expense for the year ended
September 30, 2007 (nine months ended September 30, 2006 $100,150). The
unamortized balance of $777,441 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,
2007 is presented below:

|               |                |               | Options       
|-------------- | -------------- | ------------- | --------------
|               |                |               | Outstanding at
|Grant Date     | Expiry Date    | ExercisePrice | September 30, 
|               |                |               | 2007          
|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       
|March 27, 2007 | March 27, 2012 | $1.02         | 100,000       
|May 3, 2007    | May 3, 2012    | $1.41         | 200,000       
|               |                |               |               
|               | Totals         |               | 2,200,000     

---

The weighted average exercise price and remaining life of the
stock options was $0.92 and 6.32 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, 2007.

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, 2007, is set out in the following director compensation
table:

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)Dr. Dale Pfost
    Nil
    Nil
    8,925
    Nil
    Nil
    Nil
      8,925Phil Rice
    Nil
    Nil
    12,917
    Nil
    Nil
    Nil
      12,917


|(1) | 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 Note 8(c) to our financial statements included in this
      Annual Report. Represents value of options granted to the named director
      that have vested.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 11.** | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
      OWNERS AND MANAGEMENT.
|------------ | ---------------------------------------------------------------------

The following table sets forth, as of December 18, 2007,
certain information with respect to the beneficial ownership of our company's
common stock by each stockholder known by us to be the beneficial owner of more
than 5% of our common stock and by each of our current directors and executive
officers and the directors and executive officers of our operating subsidiaries.
Each person has sole voting and investment

---

power with respect to the shares of common stock, except as
otherwise indicated. Beneficial ownership consists of a direct interest in the
shares of common stock, except as otherwise indicated. A person is deemed to be
a beneficial owner of any securities of which the person has the right to
acquire beneficial ownership within 60 days.

Name and Address of Beneficial Owner
    Position
    Amount and Nature of Beneficial Ownership
    Percentage of Class(1)Joel L. Bellenson c/o Suite 100 570 West 7th Avenue
      Vancouver, BC V5Z 4S6
    Chief Executive Officer and Director
    12,150,000(2)
    25.32%Dexster L. Smith c/o Suite 100 570
      West 7th Avenue Vancouver, BC V5Z 4S6
    President and Director
    12,150,000(3)
    25.32%Timothy Fernback 806  699 Cardero
      Street Vancouver, BC V6G 3H7 Canada
    Chief Financial Officer
    700,000(4)
    1.46%Philip Rice
    Director
    Nil
    NilDale Pfost
    Director
    Nil
    NilDirectors and Executive Officers as a
      Group(5)
    
    25,000,000
    52.10%


|(1) | Based on 47,827,710 shares of common stock issued and
      outstanding as of December 18, 2007. 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 150,000 options had vested and may be exercisable as of, or within
      60 days after December 18, 2007.                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(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
      150,000 options had vested and may be exercisable as of, or within 60 days
      after December 18, 2007.                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4) | Consists of 500,000 common shares and 200,000 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 200,000 have vested and may be exercisable as of, or within 60 days
      after December 18, 2007.                                                                                                                                                                                                                                                                           

---

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.

|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS
|-------- | ----------------------------------------------------

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, 2007, 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
three completed fiscal years.

At September 30, 2007, we owed $219,706 (September 30,
2006 - $68,798) for unpaid compensation and accrued retiring allowances to three
of our officers, two of whom are also directors. These amounts are
unsecured and non-interest bearing. The $30,526 of unpaid monthly compensation
was paid immediately after the year end date. The $189,180 of accrued retiring
allowances will be paid in the event of employment termination.

Of the management compensation incurred during the year ended
September 30, 2007, $152,340 was expensed as research and development (nine
months ended September 30, 2006 - $118,843).

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.

|ITEM 13. | EXHIBITS.
|-------- | ---------

(a)          
Pursuant to Rule 601 of Regulation SB, the following exhibits are included
herein or incorporated by reference.

|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  | Collaborative Research Agreement dated August 11, 2004,
      among Upstream Canada, the University of British Columbia and Vancouver
      Coastal Health Authority (incorporated by reference from our Current
      Report on Form 8-K filed on March 7, 2006).
|      |                                                                                                                                                                                                                                                                   
|10.2  | Contract Service Agreement dated December 20, 2004,
      between Inimex Pharmaceuticals Inc. and Upstream Canada (incorporated by
      reference from our Current Report on Form 8-K filed on March 7, 2006).                                                   
|      |                                                                                                                                                                                                                                                                   
|10.3  | License Agreement dated March 10, 2005, between British
      Columbia Cancer Agency Branch and Upstream Canada (incorporated by
      reference from our Current Report on Form 8-K filed on March 7, 2006).                                                     
|      |                                                                                                                                                                                                                                                                   
|10.4  | License Agreement dated March 23, 2005, between The
      University of British Columbia and Upstream Canada (incorporated by
      reference from our Current Report on Form 8-K filed on March 7, 2006).                                                        
|      |                                                                                                                                                                                                                                                                   
|10.5  | Letter Agreement dated July 17, 2005 between Integrated
      Brand Solutions Inc. and ABS Capital Finance (incorporated by reference
      from our Current Report on Form 8-K filed on July 21, 2005).                                                          
|      |                                                                                                                                                                                                                                                                   
|10.6  | Termination Agreement dated September 19, 2005 between
      Integrated Brand Solutions Inc. and ABS Capital Finance Inc. (incorporated
      by reference from our Current Report on Form 8-K filed on September 27,
      2005).                                
|      |                                                                                                                                                                                                                                                                   
|10.7  | 5% $1,000,000 Convertible Debenture dated February 1,
      2006 issued to Novar Capital Corp. by our company (incorporated by
      reference from our Current Report on Form 8-K filed on March 7, 2006).                                                       
|      |                                                                                                                                                                                                                                                                   
|10.8  | 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).                                             
|      |                                                                                                                                                                                                                                                                   
|10.9  | 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).                                                   
|      |                                                                                                                                                                                                                                                                   
|10.10 | 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).                                                        
|      |                                                                                                                                                                                                                                                                   
|10.11 | Assignment of Invention Agreement dated February 27, 2006
      among Joel Bellenson, Dexster Smith and our company (incorporated by
      reference from our Current Report on Form 8-K filed                                                                    

---

|       | on March 7, 2006).                                                                                                                                                                                                                                                                            
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                               
|10.12  | Assignment of
        Invention Agreement dated February 27, 2006 among Joel Bellenson, Dexster
        Smith and our company (incorporated by reference from our Current Report
        on Form 8-K filed on March 7, 2006).                                                                 
|       |                                                                                                                                                                                                                                                                                               
|10.13  | 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).                                                                                                      
|       |                                                                                                                                                                                                                                                                                               
|10.14  | 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).                                                                                                        
|       |                                                                                                                                                                                                                                                                                               
|10.15  | Financing Services
        Agreement dated August 29, 2006 between our company and Atlas Capital
        Services, LLC (incorporated by reference from our Current Report on Form
        8-K filed on August 30, 2006)                                                                       
|       |                                                                                                                                                                                                                                                                                               
|10.16  | 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).                                                    
|       |                                                                                                                                                                                                                                                                                               
|10.17  | 2007 Stock Option
        Plan (incorporated by reference from our Registration Statement on Form
        SB-2 filed on October 1, 2007).                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                               
|10.18  | 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).                                                                
|       |                                                                                                                                                                                                                                                                                               
|10.19  | 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).                                                               
|       |                                                                                                                                                                                                                                                                                               
|10.20  | 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).                                                                  
|       |                                                                                                                                                                                                                                                                                               
|10.21  | 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).                                                                      
|       |                                                                                                                                                                                                                                                                                               
|10.22  | 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).                                                                      
|       |                                                                                                                                                                                                                                                                                               
|10.23  | 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).                                                           
|       |                                                                                                                                                                                                                                                                                               
|10.24  | 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)
|       |                                                                                                                                                                                                                                                                                               
|10.25* | Materials
        Transfer Agreement dated December 7, 2007, between our company and Provincial
        Lab for Public Health.                                                                                                                                                                

---

|10.26* | Services
        Agreement dated December 7, 2007, between our company and Provincial Lab
        for Public Health.                                                                        
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                             
|10.27* | Materials
        Transfer Agreement dated November 13, 2007, between our company and Makerere
        University.                                                                          
|       |                                                                                                                                                                                             
|10.28* | Services
        Agreement dated November 13, 2007, between our company and Makerere University.                                                                                            
|       |                                                                                                                                                                                             
|(14)   | Code of Ethics                                                                                                                                                                              
|       |                                                                                                                                                                                             
|14.1   | Code of Business
        Conduct and Ethics (incorporated by reference from our Annual Report on
        Form 10-KSB filed on July 2, 2004, as amended on July 6, 2004).                    
|       |                                                                                                                                                                                             
|(31)   | Section 302
        Certification                                                                                                                                                           
|       |                                                                                                                                                                                             
|31.1*  | Certification
        Statement of the Chief Executive Officer pursuant to Section 302 of the
        Sarbanes- Oxley Act of 2002                                                           
|       |                                                                                                                                                                                             
|31.2*  | Certification
        Statement of the Principal Accounting Officer pursuant to Section 302
        of the Sarbanes-Oxley Act of 2002                                                       
|       |                                                                                                                                                                                             
|(32)   | Section 906
        Certification                                                                                                                                                           
|       |                                                                                                                                                                                             
|32.1*  | Certification
        Statement of the 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
        Statement of the Principal Accounting Officer pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of
        2002

*  **Filed herewith.**

|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

Audit fees

The aggregate fees billed for the two most recently completed
fiscal periods ended September 30, 2007 and September 30, 2006 for professional
services rendered by Dale Matheson Carr-Hilton Labonte LLP Chartered
Accountants (DMCL) 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:

Year Ended September 30,
      2007
    Nine Months Ended
      September 30, 2006Audit Fees and Audit RelatedFees
    $30,263
    $18,924Tax Fees
    $7,505
    NilAll Other Fees
    Nil
    NilTotal
    $37,768(1)
    $18,924


(1)Audit fees for year ended September 30, 2007 have
not been billed to us yet

---

For the years ended December 31, 2005 and 2004 before the
change in year end to September 30, the audit fees billed by our former
auditors, Cinnamon Jang Willoughby  Chartered Accountants (CJW), were $3,300
for each year.

All Other Fees. We were not billed for any other
non-audit professional services by either DMCL for the year ended September 30,
2007 and the nine month period ended September 30, 2006 nor by CJW, for the
fiscal years ended December 31, 2005 and 2004.

Policy on Pre-Approval by the Board of Services Performed by
Independent Auditors

We do not use DMCL for financial information system design and
implementation. These services, which include designing or implementing a system
that aggregates source data underlying the financial statements or generates
information that is significant to our financial statements, are provided
internally or by other service providers. We do not engage DMCL to provide
compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Dale Matheson is engaged by us to render
any auditing or permitted non-audit related service, the engagement be:

- approved by our board of directors; or,
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

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 DMCL and believes that the provision of services for activities
unrelated to the audit is compatible with maintaining their independence.

---

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant 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: December 24, 2007.                                           
|                          |                                                                    
|                          |                                                                    
|By:                       | /s/ Tim Fernback                                                   
|                          | Tim Fernback                                                       
|                          | Chief Financial Officer                                            
|                          | Principal Financial Officer and
      Principal Accounting Officer,
|                          | Date: December 24, 2007.                                           

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: December 24, 2007.                                            | 
|    |                                                                     | 
|    |                                                                     | 
|By: | /s/ Tim Fernback                                                    | 
|    | Tim Fernback                                                        | 
|    | Chief Financial Officer                                             | 
|    | Principal Financial Officer and
      Principal Accounting Officer, | 
|    | Date: December 24, 2007.                                            | 
|    |                                                                     | 
|    |                                                                     | 
|By: | /s/ Dexter Smith                                                    | 
|    | Dexter Smith                                                        | 
|    | President and Director                                              | 
|    | Date: December 24, 2007                                             | 
|    |                                                                     | 
|    |                                                                     | 
|By: | /s/ Dale Pfost                                                      | 
|    | Dr. Dale Pfost                                                      | 
|    | Director                                                            | 
|    | Date: December 24, 2007                                             | 
|    |                                                                     | 
|    |                                                                     | 
|By: | /s/ Phil Rice                                                       | 
|    | Phil Rice                                                           | 
|    | Director                                                            | 
|    | Date: December 24, 2007                                             | 

---