---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended ______________________________

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

For the transition period from January 1, 2006 to
September 30, 2006

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                  |                                     
|Columbia, Canada                                                     | V5Z 4S6                             
|(Address of principal executive offices)                             | (Zip Code)                          

Issuers telephone number (604) 707-5800

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

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

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
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [   ]

---

- 2 -

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. $0

18,347,077 common shares @ $0.70(1)= $12,842,953 (1) Average of bid and ask prices on September,
29 2006.

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of equity stock, as of the latest practicable date.

44,847,077 common shares issued and outstanding as of December
  15, 2006.

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

---

- 3 -

PART I

ITEM 1.      DESCRIPTION OF
BUSINESS.

Forward Looking Statements

This transition 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 transition 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 transition 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 previous business plan and focussed
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

---

- 4 -

As of the closing date of the amended 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.

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.

We have not generated any revenues from our technologies to
date, including the nine month transition period ended September 30, 2006. 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. Once we have developed our technologies to commercialization,
we intend to generate revenues in one of two ways. We may elect to license our
diagnostic biomarkers 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 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.

During the nine month transition period ended September 30,
2006, we did not generate any revenues from the licensing of our technologies.

Our company had 44,847,077 common shares issued and outstanding
as of September 30, 2006.

RISK FACTORS

---

- 5 -

Much of the information included in this transition 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;                                                           
| |   |                                                                                                                    
| | - | 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 transition period ended September
  30, 2006, we have incurred aggregate net losses of $1,778,217 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

---

- 6 -

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 14, 2006.

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

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

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

Commercialization of our core technology will require
significant additional research and development as well as substantial clinical
trials. We believe that the United States will be the principal market for our
technology, although we may elect to expand into Japan and Western Europe. 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

---

- 7 -

resources to continue operations for the period required to
resolve the issue delaying commercialization and we may not be able to raise
capital to finance our continued operation during the period required for
resolution of that issue.

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

Our success and ability to compete depends to a significant
degree on our proprietary technology. If any of our competitors copy or
otherwise gain access to our proprietary technology or develop similar
technologies independently, we may not be able to compete as effectively. The
measures we have implemented to protect our proprietary technology and other
intellectual property rights are currently based upon a combination of
provisional patent applications 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.

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

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

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

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

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 is highly competitive and
subject to frequent technological innovation with

---

- 8 -

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 which 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 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 industry is characterized by rapidly
changing technology, evolving industry standards and varying customer demand. We
believe that our success will depend on our ability to generate income through
the commercialization and licensing of our technology and that it will require
us to continuously develop and enhance our technology that is currently being
developed and introduce new and more technologically advanced technologies
promptly into the market. We can make no assurance that our technology will not
become obsolete due to the introduction of alternative technologies. If we are
unable to continue to develop and introduce new genetic biomarkers 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 technology. We may also be required to
obtain additional approvals from foreign regulatory authorities to apply for any
sales activities we may carry out in those jurisdictions. If we cannot
demonstrate the safety, reliability and efficacy of our technology, the FDA or
other regulatory authorities could delay or withhold regulatory approval of our
technology.

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

---

- 9 -

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. Diagnostic
markers for cancer have been widely available for a number of years, and our
technology may not be accepted by the marketplace as readily as these or other
competing products, processes and methodologies. Additionally, our technology
may not be employed in all potential applications being investigated, and any
reduction in applications may limit the market acceptance of our technology and
our potential revenues. As a result, even if our technology is developed into a
marketable technology and we obtain all required regulatory approvals, we cannot
be certain that our technology will be adopted at a level that would allow us to
operate profitably.

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

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

Many of our competitors have significantly greater resources
and have developed products and processes that directly compete with our
technology. Our competitors may develop, or may in the future develop, new
technologies that directly compete with our technology or even render our
technology obsolete. Our technology is designed to develop diagnostic products.
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. 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

---

- 10 -

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.

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

Although we are organized under the laws of the State of
Nevada, United States, our principal business office is located in 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, all of our directors and
officers reside outside the United States, and nearly all of the assets of these
persons and our assets are located outside of the United States. As a result, it
may not be possible for investors to effect service of process within the United
States upon such persons or to enforce against us or such persons judgements
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 judgements 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

---

- 11 -

detrimental to our liquidity and our operations. Such
reductions may force us to reallocate funds from other planned uses and may have
a significant negative effect on our business plans and operations, including
our ability to develop new products and continue our current operations. If our
stock price declines, we can offer no assurance that we will be able to raise
additional capital or generate funds from operations sufficient to meet our
obligations. If we are unable to raise sufficient capital in the future, we may
not be able to have the resources to continue our normal operations.

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 44,847,077 common shares
were issued as of September 30, 2006. 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.

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

In addition to the penny stock rules described above, the
National Association of Securities Dealers (NASD) has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced

---

- 12 -

securities will not be suitable for at least some customers.
The NASD 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. The monthly fixed rent is $2,780
  (or CDN$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 rent
  is inclusive of utilities, security and computer facilities. Upon expiration
  of the lease, we intend to renew our lease, or move to a larger office space
  in Vancouver if additional space is required.

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 15, 2006. 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.

On September 18, 2006, shareholders holding a majority of our
issued and outstanding shares approved an amendment to our Articles of
Incorporation pursuant to a shareholder consent resolution in accordance with
Nevada law. The amendment altered our authorized share structure to include
100,000,000 preferred shares with a par value of $0.001, issuable in one or more
series, with the number of shares in, and the special rights and restrictions
attached to such series, to be designated by our board of directors. We filed a
Schedule 14C Information Statement on October 11, 2006 and delivered the
document to our shareholders of record as of the close of business on September
26, 2006. The amendment to our Articles of Incorporation was effective with the
State of Nevada on November 27, 2006 and in accordance with the expiration of
the 20 day period mandated by Rule 14C of the Securities Exchange Act of 1934.

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

---

- 13 -

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 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, 2006 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, 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
    $nilMarch 31, 2005
    $nil
    $nilDecember 31, 2004
    $nil
    $nilSeptember 30, 2004
    $nil
    $nilJune 30, 2004
    $nil
    $nil


On September 29, 2006, the closing price for the common stock
as reported by the quotation service operated by the OTC Bulletin Board was
$0.70.

As of September 30, 2006, there were 12 registered holders of
record of our common stock. As of such date, 44,847,077 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

We currently do not have any stock option or equity
compensation plans or arrangements but are committed to developing a stock
option plan in the near future.

Recent Sales of Unregistered Securities

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 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.

---

- 14 -

ITEM 6.      MANAGEMENTS
DISCUSSION AND ANALYSIS.

On July 7, 2006, our board of directors approved a change in
our fiscal year from December 31 to September 30. To facilitate the change, we
are reporting a one-time, nine month transition year covering the period ended
September 30, 2006. Subsequent to the transition year, our first full financial
year will cover the period from October 1, 2006 to September 30, 2007. We will
file quarterly reports on Form 10-QSB for our new fiscal year end of September
30.

The following is a discussion and analysis of our companys
results from operations and financial position for the audited consolidated nine
month transition period ended September 30, 2006 and the unaudited nine month
comparative period ended September 30, 2005 and the factors that could affect
our future financial condition and results of operations. 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 transition report. Our companys audited
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 Note on Forward Looking Statements and Risk Factors for a
list of our risk factors.

THE ACQUISITION OF UPSTREAM CANADA

As of the closing date of the amended 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.

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

---

- 15 -

pathways in which they are involved to better understand the
underlying molecular basis for the cause of human disease.

We have not generated any revenues from our technologies to
date, including the nine month transition period ended September 30, 2006. 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. Once we have developed our technologies to commercialization,
we intend to generate revenues in one of two ways. We may elect to license our
diagnostic biomarkers 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 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.

PLAN OF OPERATIONS

As of September 30, 2006, our company had cash and cash equivalents
  of $471,527 and working capital of $272,482. 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 PeriodOperating ExpensesEmployee and Consultant
      Compensation
    $
    480,000Business
      Development and Travel Expenses
    $
    194,000Professional Fees
    $
    170,000Royalties
    $
    50,000General and
      Administrative Expenses
    $
    40,000Total
    $
    934,000


Employee and Consultant Compensation

We estimate that our employee and consultant compensation
expenses for the next twelve month period will be approximately $480,000. Most
of our employee and consultant compensation expense consists of research and
development costs of our technology by Joel Bellenson, our Chief Executive
Officer, Dexster Smith, our President and Tim Fernback, our Chief Financial
Officer.

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 agreed to pay Mr. Bellenson and Mr. Smith a base salary of $85,000.
Upon our companys filing of a provisional patent application on the application
of our DNA biomarkers to enhance the accuracy of existing prostrate cancer
diagnostic tests, our company increased their respective salaries to $120,000.
Our company is also required to increase the respective salaries to $150,000 if
our company files provisional patent applications for DNA biomarkers for two
additional diseases. In addition to options that are anticipated to be issued to
Mr. Bellenson and Mr. Smith, our company also agreed to pay a bonus of $25,000
upon the filing of a provisional patent application on the same terms set out
above. This bonus was paid to Mr. Bellenson and Mr. Smith on March 31, 2006, in
conjunction with reaching this provisional patent application milestone. Our
company also agreed to pay a further bonus of $25,000 upon the filing of
provisional patent applications for DNA biomarkers for two additional diseases.
This particular milestone was reached on September 26, 2006 with the filing of
provisional patent applications for the second of two additional diseases. Mr.
Bellenson and Mr. Smith have agreed to accrue the addition compensation,
including an increase in salary from $120,000 annually to S$150,000 annually and
the individual bonuses of $25,000 each, resulting form filing the two additional
provisional patents until such time that the company has secured additional
funds for its operations.

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

---

- 16 -

Agreement dated February 7, 2006, as amended on February 13,
2006. In addition to the issuance of common shares and options as set out in the
agreement, our company agreed to pay the consultant $4,510 (CDN$5,000) per month
plus applicable taxes subject to adjustment as set out in the consulting
agreement, as well as, 400,000 options on March 1, 2006. The options are
exercisable until March 1, 2016 at the exercise price of $0.80 per share. Upon
reaching the first milestone as described in the consulting agreement on March
31, 2006, our company agreed to pay the consultant approximately $5,410
(CDN$6,000) per month plus applicable taxes subject to further upward adjustment
as set out in the consulting agreement. On April 12, 2006, Mr. Fernback became
our companys Chief Financial Officer.

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 additional services as and when
circumstances warrant. In the event we require such services, we intend to hire
such persons as independent contractors based upon terms to be determined when
needed.

Business Development and Travel Expenses

We estimate our business development and travel expenses for
the next twelve month period to be the approximately $194,000. We anticipate
that we will incur $94,000 in investor 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 also intends to incur travelling
expenses to attend biotech related conferences and investigate financing
opportunities should our company require additional financing during the next
twelve month period.

Professional Fees

We expect to incur significant legal expenses to prepare and
file a number of provisional patent applications over the next twelve month
period, as new discoveries are made in our research and development process.
Furthermore, as a publicly traded company, we expect the incur on-going legal
and accounting expenses to comply with our reporting responsibilities as public
company under the United States Securities Exchange Act of 1934, as amended.
During the next twelve month period, we 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 fiscal year to be approximately
$170,000.

Royalties

We estimate our royalty related expenditures on licensing
complementary technology for the next twelve month period to be in the aggregate
amount of $50,000.

General and Administrative Expenses

We anticipate spending $40,000 on general and administrative
costs in the next twelve month period. These costs primarily consist of expenses
such as rent, office supplies and office equipment.

Product Research and Development

Except for approximately $10,000 that we may spend in
connection with the development of our website, we do not anticipate that we
will expend any significant additional funds on research and development, other
than the salaries of Joel Bellenson, our Chief Executive Officer, Dexster Smith,
our President, and Tim Fernback, our Chief Financial Officer, over the next
twelve month period.

Purchase of Significant Equipment

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

Employees

---

- 17 -

As of September 30, 2006, we had four employees consisting of
  Joel Bellenson as our Chief Executive Officer, Dexster Smith as our President,
  Tim Fernback as our Chief Financial Officer and Steve Bajic as our Secretary
  and Treasurer. We plan to hire additional employees 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.

Financing

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 $1,601,862 for the nine month
  transition period ended September 30, 2006. As of September 30, 2006, we had
  working capital of $330,815. On March 1, 2006, effective February 1, 2006, we
  issued a 5% $1,000,000 convertible debenture and 400,000 warrants to purchase
  shares of our common stock. Each warrant entitles the holder to purchase one
  share of our common stock for an exercise price of $1.25 per share. The terms
  of the convertible debenture are set out in Item 1.01 of our Current Report
  on Form 8-K filed on March 7, 2006. As indicated above, our estimated working
  capital requirements and projected operating expenses for the next twelve month
  period total $934,000. As we had cash and cash equivalents of $471,527 and current
  assets of $503,706 as at September 30, 2006, we anticipate that such funds will
  not be sufficient to pay our estimated expenses for the next twelve month period.
  We intend to fulfil any additional cash requirement through the sale of our
  equity securities.

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.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2006, we had cash and cash equivalents of
  $471,527 and $231,224 in current liabilities. The current liabilities primarily
  consisted of accrued license fees of $25,802, amounts due to related parties
  of $68,798 and accounts payable and accrued liabilities of $136,624. We had
  working capital of $272,482 as of September 30, 2006.

---

- 18 -

During the nine month transition period ended September 30,
2006, our company received two allotments of $500,000 from the 5% $1,000,000
convertible debenture that we issued on February 1, 2006 to Novar Capital Corp.
The terms of the convertible debenture are set out in Item 1.01 of our Current
Report on Form 8-K filed on March 7, 2006.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We intend to pursue various
financing alternatives to meet our immediate and long-term financial
requirements. 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 be unable to conduct our operations as planned, and
we will not be able to meet our other obligations as they become due. In such
event, we will be forced to scale down or perhaps even cease our operations.

Going Concern

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on Upstream Canadas audited
financial statements for the nine month transition period ended September 30,
2006, Upstream Canadas independent auditors included an explanatory paragraph
regarding substantial doubt about its ability to continue as a going concern.
Our financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our independent auditors. Our
September 30, 2006 financial statements also reflect an explanatory paragraph
regarding substantial doubt about our ability to continue as a going concern.

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 subsidiary
engages in trading activities involving non-exchange traded contracts.

Capital Expenditures

Capital expenditures during the nine month transition period
ended September 30, 2006 amounted to $12,407 with $nil expended during the
comparative nine month period ended September 30, 2005. As of December 15, 2006,
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
will be accreted to its face value at maturity on February 1, 2009 through a
charge to interest expense on a straight line basis.

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

---

- 19 -

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

Convertible Debenture

In March and April 2006 the Company issued a three year 5%
$1,000,000 convertible debenture due on February 1, 2009. The debenture is
convertible into 1,000,000 shares of common stock anytime at our companys
option. In addition, 400,000 share purchase warrants were issued to the
debenture holder exercisable at $1.25 per share until the earlier of December
31, 2006 or when two patents have been filed with the United States patent
office claiming novel applications of our companys technology to assist in the
diagnosis of two diseases other than prostate cancer. The debenture holder
agreed to forfeit $200,000 of the outstanding balance under the debenture and a
corresponding reduction in common share convertibility following the filing, by
our company, of the two patent applications as required by the debenture. We
file the two patent applications as required by the debenture. The 5% interest
is being accrued during the three year term of the debenture but is not payable
until maturity. At September 30, 2006, accrued interest of $29,167 has been
recorded since issuance.

In late September 2006, we filed a provisional patent
application with the United States patent office for certain ovarian and thyroid
cancer biomarkers. This significant event triggered the expiry of the 400,000
share purchase warrants and the forfeiture of $200,000 of the face value of the
debenture. Accordingly, the maturity value on February 1, 2009 has been reduced
to $800,000 and the convertibility feature to 800,000 shares.

In accordance with EITF 98-5 Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios, we recognized the value of the embedded beneficial
conversion feature of $268,108. This value was recorded immediately as non-cash
interest expense for the nine month transition period ended September 30, 2006
as the debenture is convertible at any time.

In addition and in accordance with EITF 00-27 Application of
Issue No. 98-5 to Certain Convertible Instruments, we allocated the proceeds of
issuance between the convertible debt and the detachable warrants based on their
relative fair values. Accordingly, we recognized the fair value of the
detachable warrants of $360,964 as additional paid-in capital and will record
further interest expense over the term of the convertible debenture resulting
from this difference between the stated value and carrying value at the date of
issuance. As an offset, the carrying value of the convertible debenture will be
accreted to the face value of $1,000,000 at maturity, subsequently reduced to
$800,000 following the late September 2006 forfeiture described above. In this
connection, interest expense of $70,187 has been accreted for the nine month
transition period ended September 30, 2006 (nine month comparative period ended
September 30, 2005 - $nil), increasing the carrying value of the convertible
loans from $679,143 at the date the funds were received to $709,223 at September
30, 2006 before the forfeiture and $567,379 after the forfeiture.

Fund raising agreement

We have engaged Atlas Capital Services, LLC, an investment
banking firm, to raise financing up to $10 million on a best efforts basis over
the nine month period from August 21, 2006 to May 20, 2007, which agreement may
be extended by mutual consent. We have agreed to pay Atlas Capital Services a
cash transaction fee upon consummation of a financing, which fee will equal 8%
of the principal amount of the financing plus warrants. The warrants will allow
for the purchase of our common stock equal to 10% of the financing amount
exercisable on a cashless basis over a period of four years from the closing
date of the financing and at a price equal to the effective per share price paid
in the financing.

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

---

- 20 -

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. The future performance of
this business may materially affect the future performance of our company.

Summary Financial Information  Nine Month Transition Period
Ended September 30, 2006 Compared to Nine Month Comparative Period Ended
September 30, 2005

The following table sets forth selected financial data of our
company for the periods indicated. The selected financial data for the nine
month transition period ended September 30, 2006 and the comparative nine month
period ended September 30, 2005. The 2006 results have been derived from our
audited financial statements, while the 2005 results have been derived from our
unaudited financial statements, each of which appear elsewhere in this
transition report. The following unaudited summary financial information, in the
opinion of management, has been prepared on the same basis as the audited
financial statements and contains all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
condition and results of operations for such periods. The table sets forth, in
United States dollars, the selected financial data as prepared in accordance
with accounting principles generally accepted in the United States.

The results for the periods presented are not necessarily
indicative of the results that may be expected for any future period. The
financial data should be read in conjunction with the financial statements of
our company and the notes thereto included elsewhere in this transition report.

|Statements of Operations       |   | Nine Month Transition Period
      Ended September 30, 2006(audited) |   |   | Nine Month Comparative Period
      Ended September 30, 2005 (unaudited) |  
|------------------------------ | - | -------------------------------------------------------------------- | - | - | ------------------------------------------------------------------------ | -
|Revenue                        | $ | -                                                                    |   | $ | 38,384                                                                   |  
|Operating expenses             |   | 1,601,862                                                            |   |   | 90,179                                                                   |  
|                               |   |                                                                      |   |   |                                                                          |  
|Net loss                       |   | (1,601,862                                                           | ) |   | (51,795                                                                  | )
|Weighted average shares        |   |                                                                      |   |   |                                                                          |  
|outstanding                    |   | 51,264,775                                                           |   |   | 6,000,000                                                                |  
|Loss from operations per share | $ | (0.03                                                                | ) | $ | (0.01                                                                    | )
|Net loss per share             | $ | (0.03                                                                | ) | $ | (0.01                                                                    | )

|Balance Sheet         |   | September 30, 2006
      (audited) |  |   | September 30,
      2005(unaudited) | 
|--------------------- | - | ---------------------------------- |  | - | ----------------------------------- | 
|Total assets          | $ | 515,350                            |  | $ | 32,280                              | 
|Current liabilities   |   | 231,224                            |  |   | 86,001                              | 
|Long term liabilities |   | 567,378                            |  |   | -                                   | 

---

- 21 -

|Total stockholders equity deficiency | $ | (283,252 | ) | $ | (53,721 | )
|------------------------------------ | - | -------- | - | - | ------- | -

Summary of Key Results - Nine Month Transition Period Ended
September 30, 2006 Compared to Nine Month Comparative Period Ended September 30,
2005

Total revenue for the nine month transition period ended
September 30, 2006 was $nil, which represents a decrease from the total net
revenue of $38,384 for the nine month comparative period ended September 30,
2005.

Operating expenses, including management compensation expenses,
  both stock-based and cash, interest and bank charges, license fees and royalties,
  research and development, investor and corporate communications, professional
  fees and general and administrative expenses, for the nine month transition
  period ended September 30, 2006 were $1,601,862, which represents a 1,676% increase
  in operating expenses of $90,179 for the nine month comparative period ended
  September 30, 2005.

Interest expense for the nine month transition period ended
September 30, 2006 was $366,270, which represents a significant increase from
$177 for the nine month comparative period ended September 30, 2005.

Results of Operations  Nine Month Transition Period Ended
September 30, 2006 Compared to Nine Month Comparative Period Ended September 30,
2005

Our companys loss before taxes for the nine month transition
  period ended September 30, 2006 was $1,601,862, as compared to a loss before
  taxes of $51,795 for the nine month comparative period ended September 30, 2005.
  The loss was mainly attributable to the costs associated with the reverse merger,
  maintaining a public listing for our securities, compensation to management
  and consultants (both stock-based and cash), interest expenses, research and
  development related expenses and professional fees realized during this period.

Revenues and Cost of Revenues

Total net revenues for the nine month transition period ended
September 30, 2006 was $nil, which represents a decrease from the total net
revenue of $38,384 for the nine month comparative period ended September 30,
2005. The decrease in net revenues was primarily attributable to the elimination
of our bioinformatics consulting business.

Operating Expenses

Operating expenses for the nine month transition period ended
  September 30, 2006 were $1,601,862, which represents a significant increase
  in operating expenses of $90,179 for the nine month comparative period ended
  September 30, 2005. The increase in operating expenses during the nine month
  transition period ended September 30, 2006 reflects the increased operating
  costs of being a public company in the United States and increased compensation
  and research and development expenses. During the nine month comparative period
  ended September 30, 2005, we were a private company with no reporting obligations
  and minimal operating expenses.

Investor and corporate communications expenses for the nine
month transition period ended September 30, 2006 increased to $23,655 from $nil
for the nine month comparative period ended September 30, 2005. The increase
reflects increased costs as a result of the consulting fees and communications
activities during the period, directly attributable to the maintaining of our
public listing for our securities. Our company anticipates that we may require
additional and more extensive investor and corporate communications services in
the future.

License fees and royalties expenses increased during the nine
month transition period ended September 30, 2006 to $30,202 from $nil for the
nine month comparative period ended September 30, 2005. The increase was mainly
due license agreements for certain technologies acquired from the University of
British Columbia and the British Columbia Cancer Agency. Our company anticipates
that these costs may increase in the future as our companys operations continue
to expand and we acquire additional technologies from academic and corporate
organizations.

---

- 22 -

Management compensation expenses increased significantly during
  the nine month transition period ended September 30, 2006 to $923,196 from $73,431
  for the nine month comparative period ended September 30, 2005. During the nine
  month transition period ended September 30, 2006, stock-based compensation represented
  $700,150 or approximately 76% of the total management compensation expense,
  while cash compensation represented $223,046 or approximately 24% during the
  same period. This increase was due to an accrued retirement allowance of $58,000
  incurred during the nine month transition period ended September 30, 2006 and
  an increase in wages associated with our senior management team and the hiring
  of individuals during this period. Our company anticipates that these costs
  may increase in the future as our companys operations continue to expand.

Research and development expenses for the nine months ended
September 30, 2006 increased to $118,843 from $nil for the nine month
comparative period ended September 30, 2005. The increase reflects increased
costs associated with our biomarker and assay research and development
activities during the period, consisting primarily of wages to senior management
of our company. We anticipate that we will require additional and more extensive
research and development activities in the future.

Office and general and administrative expenses increased
approximately 309% during the nine month transition period ended September 30,
2006 to $41,179 from $10,064 for the nine month comparative period ended
September 30, 2005. The increase was mainly due to increased facilities rental
fees incurred as a result of the expansion of our companys operations. Our
company anticipates that these costs may increase in the future as our companys
operations continue to expand.

Professional fee expenses for the nine month transition period
ended September 30, 2006 increased to $99,083 from $6,507 for the nine month
comparative period ended September 30, 2005. The significant increase reflects
increased costs as a result of maintaining a public listing for our securities
during this period, and consists primarily of legal and accounting services. Our
company anticipates that we may require additional and more extensive legal and
accounting services in the future, as our companys operations continue to
expand.

Interest expense and bank charges for the nine month transition
period ended September 30, 2006 was $366,270, which represents a significant
increase from $177 for the nine month comparative period ended September 30,
2005. This increase is primarily due to the accrual of interest relating to a
convertible debenture issued to Novar Capital Corp. as part of a convertible
debenture financing for $1,000,000 that occurred during the nine month
transition period ended September 30, 2006.

Liquidity and Capital Resources - Nine Month Transition
Period Ended September 30, 2006 Compared to Nine Month Comparative Period Ended
September 30, 2005

Our companys principal cash requirements are for operating
expenses, including staff costs, professional fees, and general and
administrative expenses.

As of September 30, 2006, our company had net working capital
  of $272,482 compared with a deficit of $53,721 at September 30, 2005, which
  represents an increase of approximately $326,203. The cash and cash equivalents
  of our company increased to $471,527 as at September 30, 2006, compared to $22,389
  as at September 30, 2005.

The ability of our company to meet our financial commitments is
primarily dependent upon the continued extension of credit by our creditors, the
continued financial support of our directors and shareholders, the continued
issuance of equity to new shareholders, and our ability to achieve and maintain
profitable operations. Our company has raised and received additional capital of
$1,000,000 by issuing a convertible debenture during the nine month transition
period ended September 30, 2006.

Management believes that our companys cash and cash
equivalents, cash provided by operating activities, if any, and our unused
credit facilities will not be sufficient to meet our working capital
requirements for the next twelve months. Our company plans to raise the capital
required to satisfy our immediate short-term needs and additional capital
required to meet our estimated funding requirements for the next twelve months
primarily through the private placement of equity securities. The issuance of
additional equity securities by our company may result in a significant dilution
in the equity interests of our current shareholders. There is no assurance that
our company will

---

- 23 -

be able to obtain further funds required for our continued
working capital requirements. These factors, among others, indicate that we may
be unable to continue as a going concern.

Operating Activities

Operating activities used cash of $527,045 for the nine month
transition period ended September 30, 2006 as compared to $52,605 for the nine
month comparative period ended September 30, 2005. The increase of net cash used
for operating activities was mainly caused by increases relating to our
companys operations during the nine month transition period, including the
payment of our company expenses relating to accounts payable and accrued
liabilities, shares issued for operating expenses and the accretion of the
convertible debenture.

Investing Activities

Our company increased the cash used in investing activities to
$22,862 during the nine month transition period ended September 30, 2006 from
$nil during the nine month comparative period ended September 30, 2005. The
increase in investing activities was largely due to the purchase of furniture
and equipment and the increase in restricted cash due to the purchase of a
guaranteed investment certificate by the company to be used as collateral to
secure a corporate credit facility.

Financing Activities

The proceeds from the issuance of a convertible debenture
provided cash of $1,000,000 for the nine month transition period ended September
30, 2006, while cash from a related party loan provided cash of $68,001 during
the nine month comparative period ended September 30, 2005.

Capital Expenditures

Our company incurred $12,407 in capital expenditures during the
nine month transition period ended September 30, 2006 and had no capital
expenditures for the nine month comparative period ended September 30, 2005. As
of September 30, 2006, our company did not have any material commitments for
capital expenditures and management does not anticipate that our company will
spend additional material amounts on capital expenditures in the near future.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial
instruments, off-balance sheet guarantees, interest rate swap transactions or
foreign currency contracts. Our company does not engage in trading activities
involving non-exchange traded contracts.

CONTRACTUAL OBLIGATIONS

Operating Leases

Operating leases include non-cash commitments for office space
of $33,384 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 $2,782.

License agreement with the British Columbia Cancer Agency
Branch

Our company entered into a license agreement with the British
Columbia Cancer Agency Branch on March 10, 2005 for a seven year term expiring
March 2012 regarding bioinformatics technology developed at the University of
British Columbia. Under the terms of the contract, our company has agreed to pay
a license fee of approximately $20,000, payable in shares of our company at a
fair value subject to approval from the British Columbia Cancer Agency Branch.
This obligation was settled in shares valued at $17,747 prior to September 30,
2006.

---

- 24 -

In addition to the license fee, our company has agreed to pay
annual royalties starting September 13, 2006 equal to 10% of the gross revenue
from licensed product sales or $10,000, whichever is greater. At September 30,
2006, $5,000 has been accrued since the first year royalty was waived.

License Agreement with the University of British Columbia

Upstream Canada entered into a License Agreement with the University
  of British Columbia on March 23, 2005 for a ten year term expiring March 2015
  regarding bioinformatics technology developed at the University of British Columbia.
  Under the contract, Upstream Canada agreed to pay a license fee consisting of
  $7,500 cash plus an equity component that is subject to further negotiations.
  The equity component has been recorded at the estimated amount of $12,500 at
  September 30, 2006. Due to the share exchange agreement with Upstream Canada,
  our company is currently negotiating with the University of British Columbia
  to issue common shares of our company instead of Upstream Canada shares in order
  to satisfy the equity component of the license fee commitment.

In addition to the license fee, and commencing in 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: $7,500 for years 1 and 2; $15,000 for years
  3 through 7; and $20,000 for years 8 through 10. At September 30, 2006, royalties
  of $11,250 had been accrued but unpaid pending completion of on-going negotiations.

*Employment Contracts*

Our company entered into employment contracts with Tim Fernback,
  through his wholly-owned company, Joel Bellenson and Dexster Smith. The total
  annual compensation commitment was increased on October 1, 2006 from $303,000
  to $364,600, excluding the $50,000 bonus for each of Mr. Bellenson and Mr. Smith.
  Since both milestones were achieved during the nine months ended September 30,
  2006, the $100,000 in bonuses was expensed as part of management compensation.
  At April 30, 2007, the first year anniversary of these contracts, a minimum
  40% annual bonus will be established for Mr. Bellenson and Mr. Smith subject
  to achieving mutually agreed performance milestones yet to be determined.

In the event of contract termination by either party and subject
  to a 90-day termination clause, retiring allowances of approximately $300,000
  ($150,000 each) will become immediately payable to Joel Bellenson and Dexster
  Smith. As such, $58,333 of the contractual obligations has been charged to operations
  and included in accrued liabilities. The remaining balance of $241,667, of which
  $100,000 is current, will be accrued on a straight-line basis over the term
  of the contracts and expensed accordingly.

*Table of Contractual Obligations*

The aggregate minimum annual payments under the British Columbia
  Cancer Agency Branch and the University of British Columbia license agreements
  and the retirement obligations for the next five years ending September 30 are
  as follows:

2007
    $
      117,5002008
    
      166,7002009
    
    25,0002010
    
    25,0002011
    
    25,000Thereafter
    
    85,000$
      444,200  ITEM 7.      FINANCIAL STATEMENTS.


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

| | 1. | Report of Independent Registered Public
        Accounting Firm, dated December 14, 2006;                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                          
| | 2. | Consolidated balance sheets as of September
        30, 2006 and December 31, 2005;                                                                                                                                      
| |    |                                                                                                                                                                                                                          
| | 3. | Consolidated statements of operations
        for the nine months ended September 30, 2006 and the nine months ended
        September 30, 2005 (unaudited) and for the twelve months ended December
        31, 2005;   
| |    |                                                                                                                                                                                                                          
| | 4. | Consolidated statements of shareholders
        deficit from June 14, 2004 (inception) to September 30, 2006;                                                                                                           
| |    |                                                                                                                                                                                                                          
| | 5. | Consolidated statement of cash flows
        for the nine months ended September 30, 2006 and the nine months ended
        September 30, 2005 (unaudited) and for the twelve months ended December
        31, 2005; and
| |    |                                                                                                                                                                                                                          
| | 6. | Notes to Consolidated Financial Statements.                                                                                                                                                                              

---



- 25 -



**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 sheet of Upstream Biosciences,
  Inc. (a development stage company) as of September 30, 2006 and the related
  consolidated statements of operations, stockholders’ deficit and cash
  flows for the period from January 1, 2006 through September 30, 2006. 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 audit. The consolidated financial statements as of December 31, 2005
  and for the period from June 14, 2004 (inception) to December 31, 2005 were
  audited by other auditors whose report dated August 18, 2006 expressed an unqualified
  opinion on those financial statements. The consolidated financial statements
  for the period June 14, 2004 (inception) to December 31, 2005 reflect a total
  net loss of $78,509 of the related cumulative totals. Our opinion, insofar as
  it relates to amounts included for such prior periods, is based solely on the
  report of such other auditors.

We conducted our audit 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 audit 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 audit provides a reasonable
  basis for our opinion.

In our opinion, based on our audit and the report of other auditors, these
  consolidated financial statements present fairly, in all material respects,
  the financial position of Upstream Biosciences, Inc. as of September 30, 2006
  and the results of its operations and its cash flows for the period from January
  1, 2006 through September 30, 2006 in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying 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 is in the development stage, 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 14, 2006







---

- 26 -



UPSTREAM BIOSCIENCES INC.



CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2006

---

UPSTREAM BIOSCIENCES, INC.(Formerly Integrated Brands Solutions, Inc.)(A Development Stage Company) 
  CONSOLIDATED BALANCE SHEETS

|                                                    |   | September 30, |   |   | September 30, |   |   | December 31, |  
|--------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------ | -
|                                                    |   | 2006          |   |   | 2005          |   |   | 2005         |  
|                                                    |   |               |   |   | (Unaudited)   |   |   |              |  
|ASSETS                                              |  
|                                                    |   |               |   |   |               |   |   |              |  
|CURRENT ASSETS                                      |   |               |   |   |               |   |   |              |  
|Cash and cash equivalents                           | $ | 471,527       |   | $ | 22,389        |   | $ | 21,434       |  
|Restricted cash                                     |   | 10,455        |   |   | -             |   |   |              |  
|Receivables                                         |   | 16,075        |   |   | 9,891         |   |   | 1,287        |  
|Prepaid expenses                                    |   | 5,649         |   |   | -             |   |   | 5,927        |  
|                                                    |   |               |   |   |               |   |   |              |  
|                                                    |   | 503,706       |   |   | 32,280        |   |   | 28,648       |  
|                                                    |   |               |   |   |               |   |   |              |  
|FURNITURE AND EQUIPMENT, net (Note
      4)         |   | 11,644        |   |   | -             |   |   | -            |  
|                                                    |   |               |   |   |               |   |   |              |  
|                                                    | $ | 515,350       |   | $ | 32,280        |   | $ | 28,648       |  
|                                                    |   |               |   |   |               |   |   |              |  
|LIABILITIES AND STOCKHOLDERS'
      DEFICIT         |  
|                                                    |   |               |   |   |               |   |   |              |  
|CURRENT LIABILITIES                                 |   |               |   |   |               |   |   |              |  
|Accounts payable and accrued liabilities            | $ | 136,624       |   | $ | 21,714        |   | $ | 8,090        |  
|Accrued license
      fees (Note 10)                |   | 25,802        |   |   | -             |   |   | 23,707       |  
|Due to related parties (Note 5)                     |   | 68,798        |   |   | 64,287        |   |   | 78,487       |  
|                                                    |   | 231,224       |   |   | 86,001        |   |   | 110,284      |  
|                                                    |   |               |   |   |               |   |   |              |  
|CONVERTIBLE DEBENTURE(Note 6)                       |   | 567,378       |   |   | -             |   |   | -            |  
|                                                    |   |               |   |   |               |   |   |              |  
|                                                    |   | 798,602       |   |   | 86,001        |   |   | 110,284      |  
|                                                    |   |               |   |   |               |   |   |              |  
|COMMITMENTS AND CONTINGENCIES(Note
      10)        |   |               |   |   |               |   |   |              |  
|                                                    |   |               |   |   |               |   |   |              |  
|CAPITAL STOCK(Note 7)                               |   |               |   |   |               |   |   |              |  
|Authorized                                          |   |               |   |   |               |   |   |              |  
|100,000,000 preferred shares at $0.001 par value    |   |               |   |   |               |   |   |              |  
|750,000,000
      common shares at $0.001 par value |   |               |   |   |               |   |   |              |  
|Issued and outstanding                              |   |               |   |   |               |   |   |              |  
|44,847,077
      common shares (December 31 and     |   |               |   |   |               |   |   |              |  
|September 30, 2005 - 6,000,000)                     |   | 893           |   |   | 345           |   |   | 345          |  
|ADDITIONAL PAID-IN CAPITAL                          |   | 1,506,033     |   |   | -             |   |   | -            |  
|DEFERRED EXPENSE                                    |   | (2,782        | ) |   | -             |   |   | -            |  
|DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE    |   | (1,778,217    | ) |   | (51,413       | ) |   | (78,509      | )
|ACCUMULATED OTHER COMPREHENSIVE LOSS                |   | (9,179        | ) |   | (2,653        | ) |   | (3,472       | )
|                                                    |   |               |   |   |               |   |   |              |  
|                                                    |   | (283,252      | ) |   | (53,721       | ) |   | (81,636      | )
|                                                    |   |               |   |   |               |   |   |              |  
|                                                    | $ | 515,350       |   | $ | 32,280        |   | $ | 28,648       |  

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

F-1

---

UPSTREAM BIOSCIENCES INC.(Formerly Integrated Brands Solutions, Inc.)(A Development Stage Company) 
  CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

|                                         |   |                   |   |   |               |   |   |                |   |   | Cumulative Results |  
|---------------------------------------- | - | ----------------- | - | - | ------------- | - | - | -------------- | - | - | ------------------ | -
|                                         |   | Nine Months Ended |   |   | Year Ended    |   |   | From Inception |  
|                                         |   | September 30,     |   |   | September 30, |   |   | December 31,   |   |   | (June 14, 2004) to |  
|                                         |   | 2006              |   |   | 2005          |   |   | 2005           |   |   | September 30, 2006 |  
|                                         |   |                   |   |   | (Unaudited)   |   |   |                |   |   |                    |  
|                                         |   |                   |   |   |               |   |   |                |   |   |                    |  
|REVENUE                                  |   |                   |   |   |               |   |   |                |   |   |                    |  
|Consulting revenue                       | $ | -                 |   | $ | 38,384        |   | $ | 38,788         |   | $ | 67,600             |  
|                                         |   |                   |   |   |               |   |   |                |   |   |                    |  
|OPERATING EXPENSES                       |   |                   |   |   |               |   |   |                |   |   |                    |  
|Depreciation                             |   | 763               |   |   | -             |   |   | -              |   |   | 763                |  
|(Gain) loss on foreign exchange          |   | (1,329            | ) |   | -             |   |   | -              |   |   | (4,801             | )
|Interest and bank charges
      (Note 6) |   | 366,270           |   |   | 177           |   |   | 232            |   |   | 366,502            |  
|Investor and corporate communications    |   | 23,655            |   |   | -             |   |   | -              |   |   | 23,655             |  
|License fees and royalties               |   | 30,202            |   |   | -             |   |   | 17,021         |   |   | 47,223             |  
|Management compensation - cash           |   | 223,046           |   |   | 73,431        |   |   | 74,067         |   |   | 325,677            |  
|-
      stock-based                      |   | 700,150           |   |   | -             |   |   | -              |   |   | 700,150            |  
|Office and general administration        |   | 41,179            |   |   | 10,064        |   |   | 10,169         |   |   | 54,686             |  
|Research and development                 |   | 118,843           |   |   | -             |   |   | -              |   |   | 118,843            |  
|Professional fees                        |   | 99,083            |   |   | 6,507         |   |   | 16,190         |   |   | 115,273            |  
|                                         |   | 1,601,862         |   |   | 90,179        |   |   | 117,679        |   |   | 1,747,971          |  
|                                         |   |                   |   |   |               |   |   |                |   |   |                    |  
|NET LOSS                                 | $ | (1,601,862        | ) | $ | (51,795       | ) | $ | (78,891        | ) | $ | (1,680,371         | )
|                                         |   |                   |   |   |               |   |   |                |   |   |                    |  
|                                         |   |                   |   |   |               |   |   |                |   |   |                    |  
|BASIC AND DILUTED NET LOSS PER SHARE     | $ | (0.03             | ) | $ | (0.01         | ) | $ | (0.01          | ) |   |                    |  
|                                         |   |                   |   |   |               |   |   |                |   |   |                    |  
|WEIGHTED AVERAGE NUMBER OF BASIC AND     |   |                   |   |   |               |   |   |                |   |   |                    |  
|DILUTED COMMON SHARES OUTSTANDING        |   | 51,264,775        |   |   | 6,000,000     |   |   | 6,000,000      |   |   |                    |  

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

F-2

---

UPSTREAMBIOSCIENCES,INC.(FormerlyIntegratedBrandsSolutions,Inc.) 
  (ADevelopmentStageCompany) 
  CONSOLIDATEDSTATEMENTOFSTOCKHOLDERS'DEFICITFOR THEPERIODFROMMARCH18, 2002(INCEPTION)TOSEPTEMBER30, 2006

DeficitAccumulated
      
      
      AccumulatedCommon
        Stock
      
      
      Additional
      
      
      
      
      
      Other
      
      
      During the
      
      
      TotalNumber of
      
      
      
      
      
      Paid-in
      
      
      Deferred
      
      
      Comprehensive
      
      
      Development
      
      
      Stockholders'Shares
      
      
      Amount
      
      
      Capital
      
      
      Expense
      
      
      Income (Loss)
      
      
      Stage
      
      
      DeficitBalance - March 18, 2002 (Date of Inception)
      
      
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -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
      )
      
      
      
      
      
      
      
      
      
      
      -Net loss
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      (50,205
      )
      
      (50,205
      )Balance - December 31, 2005
      
      88,950,000
      
      
      88,950
      
      
      (39,950
      )
      
      -
      
      
      -
      
      
      (127,310
      )
      
      (78,310
      )Share exchange and recapitalization (Note 3)Shares issued to former
        shareholders of Upstream Canada
      
      24,000,000
      
      
      24,000
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      24,000UBSI shares canceled upon acquisition
      
      -68,650,000
      
      
      (68,650
      )
      
      
      
      
      
      
      
      
      
      
      
      
      
      (68,650
      )Recapitalization adjustment
      
      
      
      
      (43,955
      )
      
      39,950
      
      
      
      
      
      (3,472
      )
      
      (49,045
      )
      
      (56,522
      )Balance after share exchange
      
      44,300,000
      
      
      345
      
      
      -
      
      
      -
      
      
      (3,472
      )
      
      (176,355
      )
      
      (179,482
      )Fair value compensation to consultantIssuance of stock at $1.20 per
        share
      
      500,000
      
      
      500
      
      
      599,500
      
      
      
      
      
      
      
      
      
      
      
      600,000Grant of stock
        options
      
      
      
      
      
      
      
      100,150
      
      
      
      
      
      
      
      
      
      
      
      100,150Issuance of convertible debentureFair value of
        detachable warrants
      
      
      
      
      
      
      
      360,964
      
      
      
      
      
      
      
      
      
      
      
      360,964Embedded beneficial conversion
        feature
      
      
      
      
      
      
      
      268,108
      
      
      
      
      
      
      
      
      
      
      
      268,108Issuance of stock for operating expensePrepaid rent
      
      17,500
      
      
      18
      
      
      17,750
      
      
      (17,768
      )
      
      
      
      
      
      
      
      -Less: amount charged
        to operations
      
      
      
      
      
      
      
      
      
      
      14,986
      
      
      
      
      
      
      
      
      14,986Issuance of stock for BCCA license fee
      
      29,577
      
      
      30
      
      
      17,717
      
      
      
      
      
      
      
      
      
      
      
      17,747Partial forfeiture of convertible debenture
      
      
      
      
      
      
      
      141,844
      
      
      
      
      
      
      
      
      
      
      
      141,844Comprehensive income (loss)Foreign exchange
        translation adjustment
      
      
      
      
      
      
      
      
      
      
      
      
      
      (5,707
      )
      
      
      
      
      (5,707
      )Net loss
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      (1,601,862
      )
      
      (1,543,529
      )(1,778,217
      )Balance - September 30, 2006
      
      44,847,077
      
      $
      893
      
      $
      1,506,033
      
      $
      (2,782
      )
      $
      (9,179
      )
      $
      (1,778,217
      )
      $
      (224,919
      )


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

F-3

---

UPSTREAM BIOSCIENCES INC.(Formerly Integrated Brands Solutions, Inc.)(A Development Stage Company) 
  CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                            |   |                   |   |   |               |   |   |                |   |   | Cumulative Results |  
|----------------------------------------------------------- | - | ----------------- | - | - | ------------- | - | - | -------------- | - | - | ------------------ | -
|                                                            |   | Nine Months Ended |   |   | Year Ended    |   |   | From Inception |  
|                                                            |   | September 30,     |   |   | September 30, |   |   | December 31    |   |   | (June 14, 2004) to |  
|                                                            |   | 2006              |   |   | 2005          |   |   | 2005           |   |   | September 30, 2006 |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|CASH FLOWS FROM OPERATING ACTIVITIES                        |   |                   |   |   |               |   |   |                |   |   |                    |  
|Net loss                                                    | $ | (1,601,862        | ) | $ | (51,795       | ) | $ | (78,891        | ) | $ | (1,680,371         | )
|Adjustments to reconcile
      net loss to net cash used in |   |                   |   |   |               |   |   |                |   |   |                    |  
|operating activities                                        |   |                   |   |   |               |   |   |                |   |   |                    |  
|Depreciation                                                |   | 763               |   |   | -             |   |   | -              |   |   | 763                |  
|Shares issued
      for operating expenses                  |   | 735,665           |   |   | -             |   |   | -              |   |   | 735,665            |  
|Beneficial conversion feature (Note 6)                      |   | 268,108           |   |   | -             |   |   | -              |   |   | 268,108            |  
|Accretion
      of convertible debenture                    |   | 70,187            |   |   | -             |   |   | -              |   |   | 70,187             |  
|Foreign exchange translation adjustment                     |   | (5,707            | ) |   | (2,653        | ) |   | (3,472         | ) |   | (9,179             | )
|Changes in operating assets and liabilities                 |   |                   |   |   |               |   |   |                |   |   |                    |  
|Receivables                                                 |   | (14,788           | ) |   | 5,863         |   |   | 14,467         |   |   | (16,074            | )
|Prepaid expenses                                            |   | (2,504            | ) |   | -             |   |   | (5,927         | ) |   | (8,430             | )
|Accounts payable and accrued liabilities                    |   | 30,687            |   |   | (4,020        | ) |   | (5,023         | ) |   | 38,776             |  
|Accrued license
      fees                                  |   | 2,095             |   |   | -             |   |   | 23,707         |   |   | 25,801             |  
|Due to related parties                                      |   | (9,689            | ) |   | -             |   |   | -              |   |   | (9,689             | )
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|Net cash used in operating
      activities                 |   | (527,045          | ) |   | (52,605       | ) |   | (55,139        | ) |   | (584,443           | )
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|CASH FLOWS FROM INVESTING ACTIVITIES                        |   |                   |   |   |               |   |   |                |   |   |                    |  
|Increase in restricted cash                                 |   | (10,455           | ) |   | -             |   |   | -              |   |   | (10,455            | )
|Purchases of furniture
      and equipment                  |   | (12,407           | ) |   | -             |   |   | -              |   |   | (12,407            | )
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|Net cash used in investing
      activities                 |   | (22,862           | ) |   | -             |   |   | -              |   |   | (22,862            | )
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|CASH FLOWS FROM FINANCING ACTIVITIES                        |   |                   |   |   |               |   |   |                |   |   |                    |  
|Proceeds from Issuance of convertible
      debentures      |   | 1,000,000         |   |   | -             |   |   | -              |   |   | 1,000,000          |  
|Proceds from Issuance
      of common shares                |   | -                 |   |   | -             |   |   | -              |   |   | 345                |  
|Loan from related party                                     |   | -                 |   |   | 68,001        |   |   | 69,580         |   |   | 78,487             |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|Net cash provided by financing activities                   |   | 1,000,000         |   |   | 68,001        |   |   | 69,580         |   |   | 1,078,832          |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|NET INCREASE IN CASH                                        |   | 450,093           |   |   | 15,396        |   |   | 14,441         |   |   | 471,527            |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|CASH AND CASH EQUIVALENTS, BEGINNING                        |   | 21,434            |   |   | 6,993         |   |   | 6,993          |   |   | -                  |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|CASH AND CASH EQUIVALENTS, ENDING                           | $ | 471,527           |   | $ | 22,389        |   | $ | 21,434         |   | $ | 471,527            |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|Supplemental information                                    |   |                   |   |   |               |   |   |                |   |   |                    |  
|Cash paid for:                                              |   |                   |   |   |               |   |   |                |   |   |                    |  
|Interest                                                    | $ | 27,974            |   | $ | -             |   | $ | 142            |   | $ | 28,206             |  
|Income taxes                                                | $ | -                 |   | $ | -             |   | $ | -              |   | $ | -                  |  
|                                                            |   |                   |   |   |               |   |   |                |   |   |                    |  
|Non-cash investing and financing activities
      (Note 8)  |   |                   |   |   |               |   |   |                |   |   |                    |  

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

F-4

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTSSeptember 30, 2006

1.          
  NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

By share exchange agreement amended and dated February 24, 2006,
  Upstream Biosciences, Inc. (formerly Integrated Brand Solutions, Inc) (called
  UBSI or the Company), incorporated on March 20, 2002 under the laws
  of the State of Nevada, acquired 100% of the issued and outstanding shares of
  Upstream Biosciences Inc. (Upstream Canada), in exchange for 24,000,000
  shares of common stock of the Company representing 54.2% of the total issued
  and outstanding shares of the Company at the time (See Note 3). In connection
  with this transaction, Integrated Brand Solutions, Inc. changed its name to
  Upstream Biosciences, Inc. and its fiscal year end from March 31 to December
  31.

This acquisition has been accounted for as a recapitalization
  transaction, similar to reverse acquisition accounting, with Upstream Canada
  being treated as the accounting parent (legal subsidiary) and UBSI being treated
  as the accounting subsidiary (legal parent). Accordingly, the consolidated results
  of operations of the Company include those of Upstream Canada for the period
  from its inception on June 14, 2004 and those of UBSI since the date of the
  reverse acquisition, February 24, 2006.

Upstream Canada was incorporated on June 14, 2004 under the laws
  of Canada for the purpose of developing genetic diagnostic biomarkers for use
  in determining a patients susceptibility to disease and predicting a patients
  response to drugs. The business strategy is to obtain United States patent protection
  for the biomarkers and 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.

Going concernThese consolidated financial statements have been prepared in accordance
  with United States generally accepted accounting principles, 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, 2006, the Company has working capital of $272,482 but has incurred losses
  since inception of $1,778,217. 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
  stockholders. Obtaining commercial loans, assuming those loans would be available,
  will increase the Company's liabilities and future cash commitments. If the
  Company is unable to obtain financing in the amounts and on terms deemed acceptable,
  the business and future success may be adversely affected. Management intends
  to finance operating costs over the next twelve months with existing cash on
  hand, commercial loans and/or private placement of capital stock.

F-5

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

2.          
  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)          Basis
  of presentation 
  These consolidated financial statements have been prepared in accordance with
  generally accepted accounting principles in the United States of America and
  are presented in US dollars. They include the accounts of the Company and its
  wholly-owned subsidiary, Upstream Canada, which was acquired by share exchange
  on February 24, 2006. All significant inter-company transactions and account
  balances have been eliminated.

Effective September 30, 2006, Upstream Canada changed its fiscal
  year end from December 31 to September 30 for efficiency and administrative
  purposes. Accordingly, both the consolidated statements of operations and the
  consolidated statements of cash flows are presented for the nine months ended
  September 30, 2006 and the twelve months ended December 31, 2005.

(b)           
  Development stage companyThe Company is currently considered a development stage enterprise, under
  the guidelines of Statement of Financial Accounting Standards (SFAS)
  No. 7. Since its formation, the Company has not yet realized any revenues from
  its planned operations.

(c)             Use
  of estimates and assumptionsThe preparation of financial statements in conformity with accounting principles
  generally accepted in the United States of America 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. Significant estimates used in preparing these financial statements are:
  (i) the capital transactions pertaining to the convertible debenture, including
  the fair value calculation of the detachable warrants and the embedded beneficial
  conversion feature; (ii) the fair value of stock compensation expense; and (iii)
  the calculation of accrued license fees. Actual results could differ from these
  estimates.

(d)             
  Research and developmentThese costs are charged to expense when incurred, including direct material
  and personnel costs and related contract services and indirect costs. The Company
  has received government assistance in the past and may receive some in the future
  regarding its research and development activities. When the work is performed
  that qualifies for such grants, the related assistance amount is set up in receivables
  and credited to research and development expense.

(e)             
  Translation of foreign currenciesThe financial statements are presented in United States dollars. In accordance
  with SFAS No. 52, Foreign Currency Translation, foreign denominated
  monetary assets and liabilities are translated into their United States dollar
  equivalents using foreign exchange rates which prevailed 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 operationswhereas, adjustments
  arising from translation of the Companys subsidiarys financial statements
  are included as a separate component of shareholders deficit.

(f)               
  Revenue recognitionRevenue from all sources is recognized when the amount is fixed or determinable,
  delivery has occurred or initial services have been performed, and collection
  is reasonably assured. Any amounts received in advance of the goods being delivered
  or services being performed are recorded as deferred revenue.

F-6

---

**UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006**

(g)          
  Cash and cash equivalentsCash and cash equivalents consist of balances with banks, unrestricted cash
  balances in lawyer trust accounts and short-term investments in financial instruments
  with maturities within 90 days held for the purpose of meeting short-term cash
  commitments rather than for investing or other purposes. As of September 30,
  2006, cash and cash equivalents consist primarily of bank deposits and a short-term
  investment.

(h)            
  Furniture and equipmentFurniture and equipment is recorded at cost. Depreciation is provided using
  the straight-line method over 4 years. Maintenance and repairs are expensed
  as incurred.

(i)              
  Financial instrumentsThe Companys financial instruments consist of cash, cash equivalents
  and restricted cash, receivables, 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.

Fair values of long-term debt are based on market prices where
  available. When quoted market prices are not available, fair values are estimated
  using discounted cash flow analysis, based on the Company's current incremental
  borrowing rates for similar types of borrowing arrangements.

(j)               
  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 a charge to interest expense on a straight line basis.

(k)                
  Stock-based compensationIn December 2004, the Financial Accounting Standards Board (FASB)
  issued SFAS No. 123R, Share-Based Payment, which replaced SFAS No.
  123, Accounting for Stock-Based Compensation and superseded APB
  Opinion No. 25, Accounting for Stock Issued to Employees. In January
  2005, the Securities and Exchange Commission (SEC) issued Staff
  Accounting Bulletin (SAB) No. 107, Share-Based Payment,
  which provides supplemental implementation guidance for SFAS No. 123R. SFAS
  No. 123R requires all share-based payments to employees, including grants of
  employee stock options, to be recognized in the financial statements based on
  the grant date fair value of the award. SFAS No. 123R was to be effective for
  interim or annual reporting periods beginning on or after June 15, 2005, but
  in April 2005 the SEC issued a rule that will permit most registrants to implement
  SFAS No. 123R at the beginning of their next fiscal year, instead of the next
  reporting period as required by SFAS No. 123R. The pro-forma disclosures previously
  permitted under SFAS No. 123 no longer will be an alternative to financial statement
  recognition. Under SFAS No. 123R, the Company must determine the appropriate
  fair value model to be used for valuing share-based payments, the amortization
  method for compensation cost and the transition method to be used at date of
  adoption.

The transition methods include prospective and retroactive adoption
  options. Under the retroactive options, prior periods may be restated either
  as of the beginning of the year of adoption or for all periods presented. The
  prospective method requires that compensation expense be recorded for all unvested
  stock

F-7

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

options and restricted stock at the beginning of the first quarter
  of adoption of SFAS No. 123R, while the retroactive methods would record compensation
  expense for all unvested stock options and restricted stock beginning with the
  first period restated. The Company adopted the modified prospective approach
  of SFAS No. 123R for the fiscal year beginning on January 1, 2006. There were
  no stock-based compensation awards granted prior to January 1, 2006.

(l)         
   Income taxesThe Company follows the liability method of accounting for income taxes.
  Under this method, deferred tax assets and liabilities are recognized for the
  deferred tax consequences attributable to differences between the financial
  statement carrying amounts of existing assets and liabilities and their respective
  tax balances. Deferred tax assets and liabilities are measured using enacted
  tax rates expected to apply to the taxable income in the years in which those
  differences are expected to be recovered or settled. The effect on deferred
  tax assets and liabilities of a change in tax rates is recognized in income
  in the period that includes the date of enactment. For deferred tax assets,
  the full amount of the potential future benefit is recorded. A valuation allowance
  is then used to adjust for the probability of realization.

(m)          
  Loss per shareThe computation of basic loss per share is computed by dividing net loss
  available to common stockholders by the weighted average number of outstanding
  common shares of the Company during the period. The diluted loss per share gives
  effect to all potentially dilutive common shares outstanding during the period.
  The computation of diluted loss per share does not assume conversion, exercise
  or contingent exercise of securities that would have an anti-dilutive effect
  on net loss.

At September 30, 2006, the Company had 2,100,000 potentially
  dilutive securities outstanding in the form of 800,000 shares pertaining to
  the convertible debenture; 400,000 stock options granted; and 900,000 stock
  options to be granted, both under a stock option plan still under development.
  The basic loss per share equals the diluted net loss per share since the potentially
  dilutive securities are anti-dilutive.

(n)            
  Recent accounting pronouncementsIn February 2006, the FASB issued SFAS No. 155, Accounting for Certain
  Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140,
  to simplify and make more consistent the accounting for certain financial instruments.
  SFAS No. 155 amends SFAS No. 133, Accounting for Derivative Instruments
  and Hedging Activities, to permit fair value re-measurement for any hybrid
  financial instrument with an embedded derivative that otherwise would require
  bifurcation, provided that the whole instrument is accounted for on a fair value
  basis. SFAS No. 155 amends SFAS No. 140, Accounting for the Impairment
  or Disposal of Long-Lived Assets, to allow a qualifying special-purpose
  entity to hold a derivative financial instrument that pertains to a beneficial
  interest other than another derivative financial instrument. SFAS No. 155 applies
  to all financial instruments acquired or issued after the beginning of an entity's
  first fiscal year that begins after September 15, 2006, with earlier application
  allowed. This standard is not expected to have a significant effect on the Companys
  future reported financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for
  Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting
  for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
  This statement requires all separately recognized servicing assets and servicing
  liabilities be initially measured at fair value, if practicable, and permits
  for subsequent measurement using either fair value measurement with changes
  in fair value reflected in earnings or the amortization and impairment requirements
  of Statement No. 140. The subsequent measurement of separately recognized servicing
  assets and servicing liabilities at fair value eliminates the necessity for

F-8

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

entities that manage the risks inherent in servicing assets and
  servicing liabilities with derivatives to qualify for hedge accounting treatment
  and eliminates the characterization of declines in fair value as impairments
  or direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
  year beginning after September 15, 2006. This adoption of this statement is
  not expected to have any effect on the Companys future reported financial
  position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value
  Measures. This Statement defines fair value, establishes a framework for
  measuring fair value in generally accepted accounting principles, expands disclosures
  about fair value measurements, and applies under other accounting pronouncements
  that require or permit fair value measurements. SFAS No. 157 does not require
  any new fair value measurements. However, the FASB anticipates that for some
  entities, the application of SFAS No. 157 will change current practice. SFAS
  No. 157 is effective for financial statements issued for fiscal years beginning
  after November 15, 2007, which for the Company would be its fiscal year beginning
  October 1, 2008. The Company is currently evaluating the impact of SFAS No.
  157 but does not expect that it will have a material impact on its financial
  statements.

In September 2006, the FASB issued SFAS No. 158, Employers
  Accounting for Defined Benefit Pension and Other Postretirement Plans.
  This Statement requires an employer to recognize the over funded or under funded
  status of a defined benefit post retirement plan (other than a multiemployer
  plan) as an asset or liability in its statement of financial position, and to
  recognize changes in that funded status in the year in which the changes occur
  through comprehensive income. SFAS No. 158 is effective for fiscal years ending
  after December 15, 2006. The Company does not expect that the implementation
  of SFAS No. 158 will have any impact on its financial position and results of
  operations.

In September 2006, the SEC issued Staff Accounting Bulletin (SAB)
  No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
  Misstatements in Current Year Financial Statements. SAB No. 108 addresses
  how the effects of prior year uncorrected misstatements should be considered
  when quantifying misstatements in current year financial statements. SAB No.
  108 requires companies to quantify misstatements using a balance sheet and income
  statement approach and to evaluate whether either approach results in quantifying
  an error that is material in light of relevant quantitative and qualitative
  factors. SAB No. 108 is effective for periods ending after November 15, 2006.
  The Company is currently evaluating the impact of adopting SAB No. 108 but does
  not expect that it will have a material effect on its financial statements.

(o)          
  Comparative figures 
  Certain comparative figures have been reclassified to conform to the current
  periods presentation.

3.          
  SHARE EXCHANGE AGREEMENT WITH UPSTREAM CANADA

On February 24, 2006, the Company entered into an Amended and
  Restated Share Exchange Agreement (Amended Share Agreement)with
  Upstream Canada and the former shareholders of Upstream Canada. The Amended
  Share Agreement amended and restated the terms of a share exchange agreement
  initially dated February 3, 2006 that was entered into among the same parties.

The closing of the transactions contemplated in the Amended Share
  Agreement including the acquisition of all of the issued and outstanding common
  shares of Upstream Canada occurred on March 1, 2006. In accordance with the
  closing of the Amended Share Agreement, the Company issued 24,000,000 common
  shares to the former shareholders of Upstream Canada in exchange for the acquisition
  by the Company of all 6,000,000 issued and outstanding common shares of Upstream
  Canada on the basis of four common

F-9

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

shares of the Company for every one common share of Upstream
  Canada. The Company shares were issued under exemption of Regulation S and/or
  Section 4(2) of the Securities Act of 1933.

The Company had 44,300,000 common shares issued and outstanding
  as of March 1, 2006 after the issuance of the 24,000,000 common shares to former
  shareholders of Upstream Canada and the cancellation without consideration of
  68,650,000 common shares held by two former significant shareholders of the
  Company. As of the closing date, the former shareholders of Upstream Canada
  held 24,000,000 common shares, representing 54.2% of the issued and outstanding
  common shares of the Company. The share exchange was deemed to be a reverse
  acquisition for accounting purposes whereby Upstream Canada is treated as the
  accounting parent (legal subsidiary) and UBSI is treated as the accounting subsidiary
  (legal parent). Upstream Canada, the acquired entity, is regarded as the predecessor
  and continuing entity as of March 1, 2006.

4.          
  FURNITURE AND EQUIPMENT

September 30,
      
      
      December 31,2006
      
      
      2005Office furniture and computers
      $
      12,407
      
      $
      -Less: accumulated depreciation
      
      (763
      )
      
      -$
      11,644
      
      $
      -


Depreciation expense for the nine months ended September 30,
  2006 was $763.

5.          
  RELATED PARTY TRANSACTIONS

At September 30, 2006, the Company owed $68,798 (December 31,
  2005 - $78,487) to three officers of the Company for unpaid compensation, including
  a $25,000 bonus payable to each of the two senior officers, who are also directors,
  accrued at the year end as reward for achieving the second milestone described
  in Note 10.

During the nine months ended September 30, 2006, management fees
  of $283,556 (December 31, 2005 - $74,067 and September 30, 2005 - $73,431) were
  paid or accrued to the Companys three officers of which $118,843 (December
  31 and September 30, 2005 - $nil) was expensed as research and development.
  In addition, a bridge loan of $79,190 from a director, who is also a shareholder,
  was repaid without interest from the funds received on issuance of the convertible
  debenture in March and April, 2006.

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 three-year $1,000,000
  convertible debenture bearing interest at 5% per annum and due on February 1,
  2009. The debenture is convertible into 1,000,000 shares of common stock anytime
  at the Companys option. In addition, 400,000 share purchase warrants were
  issued to the debenture holder exercisable at $1.25 per share only until the
  earlier of (a) December 31, 2006 or (b) when two patents have been filed with
  the US patent office claiming novel applications of the Companys technology
  to assist in the diagnosis of two diseases other than prostate cancer. When
  event

F-10

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

(b) takes place, there will be a partial forfeiture of $200,000
  in debt and a corresponding reduction in common share convertibility. The 5%
  interest is being accrued during the three-year term of the debenture but is
  not payable until maturity. At September 30, 2006, accrued interest of $29,167
  has been recorded since issuance.

In late September 2006, the Company filed a provisional patent
  application with the US patent office for certain ovarian and thyroid cancer
  biomarkers. This significant event effectively triggered the expiry of the 400,000
  share purchase warrants and the forfeiture of $200,000 of the debenture face
  value following a 30-day waiting period which has expired. Accordingly, the
  maturity value on February 1, 2009 has been reduced to $800,000 and the convertibility
  feature to 800,000 shares.

In accordance with EITF 98-5 Accounting for Convertible
  Securities with Beneficial Conversion Features or Contingently Adjustable Conversion
  Ratios, the Company recognized the value of the embedded beneficial conversion
  feature of $268,108. This value was recorded immediately as non-cash interest
  expense for the nine months ended September 30, 2006 since the debenture is
  convertible at any time.

In addition, and in accordance with EITF 00-27 Application
  of Issue No. 98-5 to Certain Convertible Instruments, the Company has
  allocated the proceeds of issuance between the convertible debt and the detachable
  warrants based on their relative fair values. Accordingly, the Company recognized
  the fair value of the detachable warrants of $360,964 as additional paid-in
  capital and will record further interest expense over the term of the convertible
  debenture resulting from this difference between the stated value and carrying
  value at the date of issuance. As an offset, the carrying value of the convertible
  debenture will be accreted to the face value of $1,000,000 at maturity, subsequently
  reduced to $800,000 following the late September 2006 forfeiture described in
  (b) above. In this connection, interest expense of $70,187 has been accreted
  for the nine months ended September 30, 2006 (December 31 and September 30,
  2005 - $nil), increasing the carrying value of the debentures from $679,143
  at the date the funds were received to $709,223 at September 30, 2006 before
  the forfeiture and $567,378 after the forfeiture. The fair value of the convertible
  debentures at issuance was estimated to be $639,000. This value was based on
  an estimated fair value interest rate on debt with comparable risk profiles
  of 20% per annum.

7.          
  CAPITAL STOCK

The authorized capital of the Company was changed after approval
  by the board of directors on September 18, 2006 and acceptance by the State
  of Nevada on November 27, 2006 to the following:

| | (i)  | 100,000,000 non-voting preferred shares with $0.001
        par value (formerly nil shares), none of which have been issued to date;
        and
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                 
| | (ii) | 750,000,000 voting common shares (formerly 500,000,000
        shares) with $0.001 par value.                                                   

During the nine months ended September 30, 2006, the Company
  issued shares of Regulation S and/or Section 4(2) common stock for non-cash
  consideration as follows:

| | (i) | 24,000,000 shares to the former shareholders of Upstream
        Canada, representing 54.2% of the Companys outstanding shares at
        the closing date of March 1, 2006, in exchange for 100% of the shares
        of Upstream Canada. Concurrently, 68,650,000 shares held by two former
        significant shareholders of the Company were cancelled without consideration.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-11

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

| | (ii)  | 500,000 shares and 400,000 stock options pursuant to
        a consulting agreement for financial and administrative services. The
        consultant was subsequently appointed an officer of the Company. The estimated
        fair values were $600,000 and $100,150 respectively, based on the Black-Scholes
        option pricing model. These amounts were recorded as compensation expense
        during the nine months ended September 30, 2006.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iii) | 17,500 shares pursuant to an office lease agreement
        with the British Columbia Cancer Agency (BCCA) for six months
        rent from May 1 2006 to October 31, 2006 paid in advance and valued at
        $17,768. Five months rent was expensed and one month was recorded as deferred
        expense at September 30, 2006 as a component of stockholders deficit.                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iv)  | 29,577 shares pursuant to the license agreement with
        BCCA in settlement of the Companys license fee obligation valued
        at $17,747.                                                                                                                                                                                                                                                                                                          

Stock purchase warrants

At September 30, 2006, the 400,000 detachable warrants outstanding
  for the purchase of 400,000 common shares (December 31 and September 30, 2005
  - nil) at $1.25 per share in connection with the convertible debenture had expired
  (see Note 6).

The following table summarizes information about the warrants
  issued by the Company during the nine months ended September 30, 2006:

Number of
      
      
      ExerciseShares
      
      
      PriceBalance, December 31, 2005
      
      -
      
      $
      -Granted
      
      400,000
      
      
      1.25Expired
      
      (400,000
      )
      
      1.25Balance, September 30, 2006
      
      -
      
      $
      -


Stock options

During the nine months ended September 30, 2006, the Company
  granted 400,000 stock options to one officer of the Company exercisable at $0.80
  per share until March 1, 2016 in accordance with the terms and conditions of
  a stock option plan still under development. 100,000 of these options vested
  immediately and 300,000 options will vest equally over the following three years
  until February 2009.

The fair value of the 400,000 options was estimated to be $227,100,
  of which $100,150 has been expensed in the current period, using the Black-Scholes
  option pricing model incorporating the following assumptions: expected stock
  price volatility of 100%, risk-free interest rate of 4.45%, expected weighted
  average option life of 1 year, 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 addition, the Company has committed to grant 900,000 stock
  options under the terms and conditions of a stock option plan still under development
  as follows: (i) 800,000 to two senior officers, who are also directors, 300,000
  of these options will vest on February 28, 2007, 300,000 on February 28, 2008
  and the balance of 200,000 on February 20, 2009; and (ii) 100,000 to a corporate
  communications consultant.

F-12

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

Vesting in this case will occur equally on a monthly basis over
  the twelve month contract ending February, 2007.

A summary of stock option information for the nine months ended
  September 30, 2006 is as follows:

Number of
      
      
      ExerciseShares
      
      
      PriceBalance, December 31, 2005
      
      -
      
      $
      -Granted
      
      400,000
      
      
      0.80Balance, September 30, 2006
      
      400,000
      
      $
      0.80


8.          
  NON-CASH INVESTING AND FINANCING ACTIVITIES

During the nine months ended September 30, 2006, the Company
  issued shares of Regulation S and/or Section 4(2) common stock for non-cash
  consideration as follows:

| | (i)   | 24,000,000 shares to the former shareholders of Upstream
        Canada, representing 54.2% of the Companys outstanding shares at
        the closing date of March 1, 2006, in exchange for 100% of the shares
        of Upstream Canada. At the same time, 68,650,000 shares held by two former
        significant shareholders of the Company were cancelled without consideration.                                                                       
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (ii)  | 500,000 shares and 400,000 stock options pursuant to
        a consulting agreement for financial and administrative services. The
        consultant was subsequently appointed an officer of the Company. The estimated
        fair values were $600,000 and $100,150 respectively, based on the Black-Scholes
        option pricing model, and these amounts were recorded as management compensation
        for the nine months ended September 30, 2006.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (iii) | 17,500 shares pursuant to an office lease agreement
        with the BCCA for six months rent from May 1 2006 to October 31,
        2006 paid in advance and valued at $17,768.                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (iv)  | 29,577 shares pursuant to the license agreement with
        BCCA in settlement of the Companys license fee obligation valued
        at $17,747.                                                                                                                                                                                                                                                                                                              

9.          
  INCOME TAXES

The parent Company is subject to income taxes in Canada while
  its subsidiary is subject to income taxes in the United States. As of September
  30, 2006, the Company and its wholly-owned subsidiary had accumulated non-capital
  loss carryforwards of approximately $950,000, which are available to reduce
  taxable income in future taxation years. These losses begin to expire in 2015
  after carry forward periods ranging from 10 to 20 years. The Company is required
  to compute the deferred tax benefits from non-capital loss carryforwards. However,
  due to the uncertainty of realization of these loss carry-forwards, a full valuation
  allowance has been provided for this deferred tax asset.

F-13

---

UPSTREAM BIOSCIENCES, INC. 
  (formerly Integrated Brand Solutions, Inc.) 
  (A Development Stage Company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2006

The components of the deferred tax asset are shown below as of:

| |                                     |   | September 30, |   |   | September 30 |   |   | December 31, |  
| | ----------------------------------- | - | ------------- | - | - | ------------ | - | - | ------------ | -
| |                                     |   | 2006          |   |   | 2005         |   |   | 2005         |  
| |                                     |   |               |   |   | (Unaudited)  |   |   |              |  
| |                                     |   |               |   |   |              |   |   |              |  
| | Non-capital tax loss carry forwards | $ | 950,000       |   | $ | 54,000       |   | $ | 82,000       |  
| | Statutory tax rate                  |   | 35%           |   |   | 35%          |   |   | 35%          |  
| | Effective tax rate                  |   |              |   |   |             |   |   |             |  
| | Deferred tax asset                  |   | 332,500       |   |   | 18,900       |   |   | 28,700       |  
| | Less: valuation allowance           |   | (332,500      | ) |   | (18,900      | ) |   | (28,700      | )
| | Net deferred tax asset              | $ |              |   | $ |             |   | $ |             |  

10.         
  COMMITMENTS AND CONTINGENCIES

License agreements

(i) British Columbia Cancer Agency Branch (BCCA)

The Company entered into a license agreement with the 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 the terms of the contract, the Company has agreed to pay a license fee
  of approximately $20,000, payable in shares of the Company at a fair value subject
  to BCCA approval. This obligation was settled in shares valued at $17,747 prior
  to September 30, 2006.

In addition to the license fee, the Company has agreed to pay
  annual royalties starting September 13, 2006 equal to 10% of the gross revenue
  from licensed product sales or $10,000, whichever is greater. At September 30,
  2006, $5,000 has been accrued since the first year royalty was waived.

(ii) 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 the contract, Upstream Canada agreed to pay
  a license fee consisting of $7,500 cash plus an equity component subject to
  further negotiations has been recorded at the estimated amount of $12,500 at
  September 30, 2006. Due to the share exchange agreement with Upstream Canada
  described in Note 3, the Company is currently negotiating with UBC to issue
  common shares of the Company instead of Upstream Canada shares in order to satisfy
  the equity component of the license fee commitment.

In addition to the license fee and commencing in 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: $7,500 for years 1 and 2; $15,000 for years
  3 through 7; and $20,000 for years 8 through 10. At September 30, 2006, royalties
  of $11,250 had been accrued but unpaid pending completion of on-going negotiations.



F-14

---

UPSTREAM BIOSCIENCES, INC. 
    (formerly Integrated Brand Solutions, Inc.) 
    (A Development Stage Company) 
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    September 30, 2006


Employment contracts with Company officers

The Company entered into employment contracts with three officers
  of the Company. The total annual compensation commitment was increased on October
  1, 2006 from $303,000 to $364,600, excluding the $50,000 bonus for each of the
  two senior officers. Since both milestones were achieved during the nine months
  ended September 30, 2006, the $100,000 in bonuses was expensed as part of management
  compensation. The two milestones pertain to the filing of provisional patents
  for liver and prostate cancer biomarkers in March 2006 and for thyroid and ovarian
  cancer biomarkers in September 2006. At April 30, 2007, the first year anniversary
  of these contracts, a minimum 40% annual bonus will be established for the two
  senior officers subject to achieving mutually agreed performance milestones
  yet to be determined.

In addition and pursuant to these contracts; (i) 500,000 shares
  were issued as a signing bonus of which 300,000 shares vested immediately and
  200,000 shares were put into escrow pending achievement of specific objectives;
  (ii) 400,000 stock options were granted with 100,000 vesting immediately and
  300,000 vesting equally over the following three years; and (iii) 800,000 stock
  options were committed to be granted over the following three years as contemplated
  in the employment contracts, all in accordance with the terms and conditions
  of a stock option plan still under development. For (i) and (ii) above, the
  related amount of $700,150 was recorded as stock-based compensation for the
  nine months ended September 30, 2006.

In the event of contract termination by either party and subject
  to a 90-day termination clause, retiring allowances of approximately $300,000
  ($150,000 each) will become immediately payable to two senior officers of the
  company. As such, $58,333 of the contractual obligations has been charged to
  operations and included in accrued liabilities. The remaining balance of $241,667,
  of which $100,000 is current, will be accrued on a straight-line basis over
  the term of the contracts and expensed accordingly.

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



2007
      $
      117,5002008
      
      166,7002009
      
      25,0002010
      
      25,0002011
      
      25,000Thereafter
      
      85,000$
      444,200




Office lease agreement

The Company has entered into an agreement with BCCA to issue
  its common shares in advance every six months for payment of office rent valued
  at $2,782 per month. The price per share is determined by using the average
  price for the preceding six-month period less a 20% discount. The lease term
  is one year commencing May 2006 and is renewable by mutual consent.

Fund raising agreement

The Company has engaged an investment banker, Atlas Capital Services,
  LLC (Atlas), to raise financing up to $10 million on a best efforts
  basis over the nine month period from August 21, 2006 to May 20, 2007 and subsequently
  by mutual consent. Atlass sole compensation will be a cash transaction
  fee upon consummation of a financing equal to 8% of the principal amount of
  the financing plus warrants. The warrants allow for purchase of the Companys
  common stock in quantity equal to 10% of the financed amount exercisable on
  a cashless basis over a period of up to four years from the closing date of
  the financing and at a price equal to the effective per share or unit price
  paid in the financing.

F-15

---

|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 nine month transition report,
being September 30, 2006, 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.

None.

PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS; **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
    42Dexster Smith
    President and Director since
      March 1, 2006
    39Steve Bajic
    Director, Secretary and
      Treasurer. Secretary since May 4, 2004 and Director and Treasurer
      since May 26, 2006
    34Tim Fernback
    Chief Financial Officer since
      April 12, 2006
    39


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.

---

- 27 -

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.

Steve Bajic

Steve Bajic has been the Secretary of our company since May 4,
2004 and a director and the Treasurer of our company since May 26, 2005. Since
1996, Mr. Bajic has been President of LF Ventures Inc., a private company which
offers financial and business services to public and private companies. Mr.
Bajic obtained a financial management diploma majoring in finance and securities
from the British Columbia Institute of Technology. After spending a year as an
investment broker with Georgia Pacific Securities Corp., he took a position as
Vice-President of Corporation X Inc., a marketing and investor relations firm
where he worked with numerous public and private companies in the areas of
corporate finance, strategic planning and investor relations. From 1996 to 1998,
he was Vice-President of corporate communications of Getchell Resources Inc., a
resource exploration company based in Kamloops, British Columbia. Since October
1999, Mr. Bajic has been Vice-President of investor relations of Cassidy Gold
Corp., a TSX Venture-listed resource exploration company. Additionally since
1999, Mr. Bajic was President, Chief Executive Officer and director of the
following four venture capital pool companies that completed qualifying
transactions: (1) Duke Capital Corp., which acquired CCC Internet Solutions
Inc., now called Armada Data Corp.; (2) New Xavier Capital Corp. which acquired
RET Internet Services Inc.; (3) Marquette Capital Corp. which acquired On-Track
Learning Systems Ltd; and (4) Tulane Capital Corp. which acquired Fibre-Crown
Manufacturing Inc. Mr. Bajic currently serves as a director of Fibre-Crown.

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, an Okanagan-based
technology venture fund. Mr. Fernback is a graduate of McMaster University,
where he studied molecular biology and biochemistry, and also a graduate of the
University of British Columbia, where he completed his MBA with a concentration
in Finance.

---

- 28 -

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 and Steve Bajic. Our board
of directors has determined that Steve Bajic is the only member of our board of
directors that is 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;

---

- 29 -

(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 transition 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 the
nine month transition period, 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:

| | (a) | our Chief Executive Officer;                                                                                                                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                   
| | (b) | each of our four most highly compensated executive
      officers who were serving as executive officers at the end of the nine
      month transition period ended September 30, 2006 and our three most recent
      fiscal years prior to the change in our fiscal year, and whose total
      salary and bonus exceeded $100,000 per year; and
| |     |                                                                                                                                                                                                                                                                                                                                                   
| | (c) | any 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 nine month transition
      period ended September 30, 2006 and our three most recent fiscal years
      prior to the change in our fiscal year;    

who we will collectively refer to as the named executive
officers, are set out in the following summary compensation table.

---

- 30 -

SUMMARY COMPENSATION TABLEAnnual Compensation
      Long Term CompensationAwards
      PayoutsName andPositionof
        Principal
      FiscalYearEnding
      Salary(U.S.
        $)
      Bonus(U.S. $)
      OtherAnnualCompensation(U.S. $)
      SecuritiesUnderOptionsGranted
      RestrictedShares orRestrictedShare Units
      LTIPPay-Outs
      AllOtherCompen-sation(U.S. $)Joel L. Bellenson(1)
        Chief Executive Officer 
        and Director
      2006(2)
        2005
        2004 
        2003
      $66,257 
        $13,200 
        N/A 
        N/A
      $50,000 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/ADexster L. Smith(3)
        President and Director
      2006(2)
        2005 
        2004 
        2003
      $66,257 
        Nil 
        N/A 
        N/A
      $50,000 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/A
      Nil 
        Nil 
        N/A 
        N/ATim Fernback(4)
        Chief Financial Officer
      2006(2)
        2005 
        2004 
        2003
      $51,042 
        N/A 
        N/A 
        N/A
      Nil 
        N/A 
        N/A 
        N/A
      Nil 
        N/A 
        N/A 
        N/A
      400,000(5)
        N/A 
        N/A 
        N/A
      500,000(5)
        N/A 
        N/A 
        N/A
      Nil 
        N/A 
        N/A 
        N/A
      Nil 
        N/A 
        N/A 
        N/A


(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)Pursuant to the terms of a Consultant Engagement
  Agreement dated February 7, 2006, as amended, we agreed to pay TCF Ventures
  Corp., a wholly-owned company of Mr. Fernback, $4,510 per month in addition
  to the issuance of 500,000 common shares and 400,000 options in consideration
  for services to our company. The options are exercisable into common shares
  of our company at an exercise price of $0.80 per share. As of December 15, 2006,
  100,000 options have vested and another 100,000 options will vest in the next
  60 days in accordance with the rules of the Securities and Exchange Commission.
  Upon reaching the first milestone on March 31, 2006, as described in the consulting
  agreement, we agreed to pay Mr. Fernback $5,410 per month.

Executive Compensation

Two executive officers of our company received annual salary
and bonus in excess of $100,000 for our fiscal year ended September 30, 2006,
while no executive officers of our company received annual salary and bonus in
excess of $100,000 for our previous fiscal year, December 31, 2005. As of the
date of this transition report, we have no compensatory plan or arrangement with
respect to any officer that results or will result in the payment of
compensation in any form from the resignation, retirement or any other
termination of employment of such officers employment with our company, from a
change in control of our company or a change in such officers responsibilities
following a change in control.

Joel Bellenson, as Chief Executive Officer, was paid salary and
bonus of $116,257 for the nine month transition period ended September 30, 2006
and $13,200 for the year ended December 31, 2005. Dexster Smith, as President,
was paid salary and bonus of $116,257 for nine month transition period ended
September 30, 2006 and $nil for the year ended December 31, 2005.

During the nine month transition period ended September 30,
2006, both Joel Bellenson and Dexster Smith received bonuses of $50,000 each. Of
this amount, however, $25,000 was accrued by both Joel Bellenson and Dexster
Smith and not paid out to each individual. We do not maintain, and we did not
maintain at any time during our three most recently completed fiscal years, any
long-term compensation plans. As such, there were no long-term compensation

---

- 31 -

plan awards or payouts to any of the executive officers of our
company during our three most recently completed fiscal years.

Employment/Consulting Agreements

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
  agreed to pay Mr. Bellenson and Mr. Smith a base salary of $85,000. Upon our
  companys filing of a provisional patent application on the application
  of our DNA biomarkers to enhance the accuracy of existing prostrate cancer diagnostic
  tests, our company increased their respective salaries to $120,000. Our company
  is also required to increase the respective salaries to $150,000 if our company
  files provisional patent applications for DNA biomarkers for two additional
  diseases. In addition to options that are anticipated to be issued to Mr. Bellenson
  and Mr. Smith, our company also agreed to pay a bonus of $25,000 upon the filing
  of a provisional patent application on the same terms set out above. This bonus
  was paid to Mr. Bellenson and Mr. Smith on March 31, 2006, in conjunction with
  reaching this provisional patent application milestone. Our company also agreed
  to pay a further bonus of $25,000 upon the filing of provisional patent applications
  for DNA biomarkers for two additional diseases. This bonus was payable to both
  Mr. Bellenson and Mr. Smith upon the filing of the second relevant provisional
  patent on September 25, 2006.

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
  February 7, 2006, as amended on February 13, 2006. In addition to the issuance
  of common shares and options as set out in the agreement, our company agreed
  to pay the consultant $4,510 (CDN$5,000) per month plus applicable taxes subject
  to adjustment as set out in the consulting agreement, as well as 400,000 options
  on March 1, 2006. The options are exercisable until March 1, 2016 at the exercise
  price of $0.80 per share. Upon reaching the first milestone as described in
  the consulting agreement on March 31, 2006, our company agreed to pay the consultant
  approximately $5,410 (CDN$6,000) per month plus applicable taxes subject to
  further upward adjustment as set out in the consulting agreement. On April 12,
  2006, Mr. Fernback became our companys Chief Financial Officer.

Unless extended by written consent amongst the parties, the term
  of the Consultant Engagement Agreement is for 36 months. Any party to the consulting
  agreement may terminate the agreement at any time. If we terminate the agreement,
  we are required to pay any fees accrued plus all fees payable under the agreement
  for the next six months following the termination. If TCF Ventures terminates
  the agreement, however, our company is required to pay all accrued fees but
  no additional fees subsequent to the date that termination notice is received.

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.

Stock Options/SAR Grants

At September 30, 2006, there were 400,000 stock options
outstanding that we granted to a wholly-owned company controlled by Tim
Fernback, our Chief Financial Officer. The options were issued as partial
consideration for services pursuant to the terms of a Consultant Engagement
Agreement, as amended. The options are exercisable at $0.80 per share until
March 1, 2016. As specified in the Consultant Engagement Agreement, 100,000 of
the options vested immediately and 300,000 options vest equally over the
following three years until February 2009.

Aggregated Option Exercises

There were no options exercised by any officer or director of
our company during our nine month transition period ended September 30, 2006.

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

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

---

- 32 -

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.
During our nine month transition period ended September 30, 2006, there were no
payments to independent directors to attend director 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 15, 2006,
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.

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
    12,000,000 common shares
    26.8%Dexster L. Smith c/o Suite 100 570
      West 7th Avenue Vancouver, BC V5Z 4S6
    President and Director
    12,000,000 common shares
    26.8%Timothy Fernback 806  699 Cardero Street
      Vancouver, BC V6G 3H7 Canada
    Chief Financial Officer
    700,000(2)common
      shares
    1.5%Steve Bajic 5523 Oben Street
      Vancouver, BC V5R 4P2 Canada
    Director and Secretary
    2,000,000 common shares
    4.5%Directors and Executive Officers as a
      Group
    
    26,700,000 common shares
    59.5%


(1) Based on 44,847,077 shares of common stock
issued and outstanding as of September 30, 2006. 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) Consists of 500,000 common shares and 200,000 options held
by TCF Ventures Corp., a wholly-owned company of Mr. Fernback. Each option
entitles the holder to purchase an additional share of common stock at an
exercise price of $0.80 per share until the expiry date of March 1, 2016.

ITEM 12.     CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS

---

- 33 -

Other than as described below, we have not been a party to any
transaction, proposed transaction, or series of transactions during the nine
month transition period ended September 30, 2006 and our last two prior fiscal
years in which the amount involved exceeds $60,000, and in which, to our
knowledge, any of our directors, officers, five percent beneficial security
holders, or any member of the immediate family of the foregoing persons has had
or will have a direct or indirect material interest.

At September 30, 2006, our company owed $68,798 (December 31,
2005 - $78,487) to three officers of our company for unpaid compensation,
including a $25,000 bonus payable to each of the two senior officers, who are
also directors, accrued at the year end as reward for achieving the second
milestone in their respective employment contracts.

During the nine month transition period ended September 30,
2006, management fees of $283,556 (December 31, 2005 - $74,067 and September 30,
2005 - $73,431) were paid or accrued to our companys three officers of which
$118,843 (December 31 and September 30, 2005 - $nil) was expensed as research
and development. In addition, a bridge loan of $79,190 from a director, who is
also a shareholder, was repaid without interest from the funds received on
issuance of the convertible debenture in March and April, 2006.

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                                                                                       

---

- 34 -

|      | 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)                 
|      |                                                                                                                                                                                                                                         
|(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
        Certifications                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                         
|31.1* | Certification
      of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.                                                                                                               

---

- 35 -

|31.2* | Certification
        of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                         
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                       
|(32)  | Section 906
        Certifications                                                                                                                                    
|      |                                                                                                                                                                       
|32.1* | Certification
        of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|      |                                                                                                                                                                       
|32.2* | Certification
        of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

|* | Filed herewith.
|- | ---------------

ITEM 14.     PRINCIPAL ACCOUNTANT FEES
AND SERVICES

Fees Paid to Independent Accountant

On July 3, 2006, our company retained Dale Matheson Carr-Hilton
LaBonte, Chartered Accountants, an independent registered public accounting
firm, to provide audit services during the nine month transition period ended
September 30, 2006. We retained Cinnamon Jang Willoughby, Chartered Accountants,
as our independent registered public accounting firm to provide audit services
during the two fiscal years prior to our year end change.

Audit Fees.This category includes the fees for the
audit examination of our consolidated financial statements and quarterly reviews
of our interim financial statements. This category also includes advice on audit
and accounting matters that arose during or as a result of the audit or the
review of our interim financial statements.

The fees billed by our current auditors, Dale Matheson
Carr-Hilton LaBonte, Chartered Accountants, for professional services rendered
for the audit of our annual financial statements for the nine month transition
period ended September 30, 2006 were estimated at $14,800. For the years ended
December 31, 2005 and 2004, the fees billed by our former auditors, Cinnamon,
Jang, Willoughby, Chartered Accountants, for professional services were $3,300
and $3,300 respectively.

Audit Related Fees.We were not billed for any assurance
and related services which are not reported under the caption Audit Fees above
by either Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, or Cinnamon
Jang Willoughby, Chartered Accountants, for the nine month transition period
ended September 30, 2006 and for the fiscal years ended December 31, 2005 and
2004.

Tax Fees.We were not billed for tax compliance, tax
advice and tax planning on tax matters by either Dale Matheson Carr-Hilton
LaBonte, Chartered Accountants, or Cinnamon Jang Willoughby, Chartered
Accountants, for the nine month transition period ended September 30, 2006 and
for the fiscal years ended December 31, 2005 and 2004.

All Other Fees. We were not billed for any other non-audit
  professional services by either Dale Matheson Carr-Hilton LaBonte, Chartered
  Accountants, or Cinnamon Jang Willoughby, Chartered Accountants, for the nine
  month transition period ended September 30, 2006 and for the fiscal years ended
  December 31, 2005 and 2004, respectively.

Our board of directors, who acted as our audit committee during
the nine month transition period ended September 30, 2006, pre-approved all
services provided by our independent accountant. Our board of directors does not
have records of what percentage of the above fees were pre-approved. All of the
services and fees described under the categories of Audit Related Fees, Tax
Fees and All Other Fees were reviewed and approved by our board of directors
before or after the respective services were rendered.

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

---

- 36 -

SIGNATURES

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

UPSTREAM BIOSCIENCES INC.

By:

*/s/ Joel Bellenson*

Joel Bellenson, Chief Executive Officer and Director 
  (Principal Executive Officer) 
  January 4, 2007



*/s/ Tim Fernback*

Tim Fernback, Chief Financial Officer 
  (Principal Financial Officer and Principal Accounting Officer) 
  January 4, 2007

---