U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

|[X] | Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934    
|--- | ----------------------------------------------------------------------------------
|    |                                                                                   
|    | For the fiscal year ended August 31, 2011                                         
|    |                                                                                   
|[_] | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|    |                                                                                   
|    | For the transition period from __________ to __________.                          
|    | Commission File Number: 0-15482                                                   



ONCOLOGIX TECH, INC.

(Name of small business issuer in its
charter)

|Nevada                                                               |  | 86-1006416                               
|-------------------------------------------------------------------- |  | -----------------------------------------
|(State or other jurisdiction of incorporation or organization        |  | (I.R.S. Employer Identification No.)     
|                                                                     |  |                                          
|PO. Box 8832, Grand Rapids, MI                                       |  | 49518-8832                               
|(Address of principal executive offices)                             |  | Zip Code                                 
|                                                                     |  |                                          
|                                                                     |  |                                          
|(616) 977-9933                                                      
|(Issuer’s telephone number)                                         
|                                                                     |  |                                          
|Securities registered under Section 12(b) of the Exchange Act:  None
|                                                                     |  |                                          
|Securities registered under Section 12(g) of the Exchange Act:      
|                                                                     |  |                                          
|Title of Each Class                                                  |  | Name of Each Exchange on Which Registered
|Common Stock, $.001 par value                                        |  | OTC BB:  Pink Sheets                     
|                                                                     |  |                                          
|                                                                     |  |                                          



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

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

Indicate
by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934
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[_]No[X]

Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.[_]

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

|Large accelerated Filer[_] | Accelerated Filer[_]        
|-------------------------- | ----------------------------
|Non-accelerated Filer[_]   | Smaller Reporting Company[X]

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes[_]No[X]

The aggregate market
value of the Common Stock of the registrant held by non-affiliates as of November 4, 2011 was approximately $3,471,605 based on
closing stock price of the registrant’s common stock on that date.

The number of shares of Common Stock
outstanding as of November 4, 2011 was 54,037,076.

Documents Incorporated By Reference

None












|TABLE OF CONTENTS
|-----------------
|                 
|PART I           
|                 
|Item 1           
|Item 1A          
|Item 1B          
|Item 2           
|Item 3           
|Item 4           
|                 
|PART II          
|                 
|Item 5           
|                 
|Item 6           
|Item 7           
|Item 7A          
|Item 8           
|Item 9           
|Item 9A          
|Item 9B          
|                 
|PART III         
|                 
|Item 10          
|Item 11          
|Item 12          
|                 
|Item 13          
|Item 14          
|                 
|PART IV          
|                 
|Item 15          
|                 
|                 





1











PART I





FORWARD LOOKING STATEMENTS



The statements contained
in this Annual Report on Form 10-K that are not historical fact are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are based on
current expectations that involve a number of risks and uncertainties. These statements can be identified by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “should,”
or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions
of strategy that involve risks and uncertainties. The Company wishes to caution the reader that its forward-looking statements
that are not historical facts are only predictions. No assurances can be given that the future results indicated, whether expressed
or implied, will be achieved. While sometimes presented with numerical specificity, these projections and other forward-looking
statements are based upon a variety of assumptions relating to the business of the Company, which, although considered reasonable
by the Company, may not be realized. Because of the number and range of assumptions underlying the Company’s projections
and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable
control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may
occur subsequent to the date of this report. These forward-looking statements are based on current expectations and the Company
assumes no obligation to update this information. Therefore, the actual experience of the Company and the results achieved during
the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently,
the inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or
any other person that these estimates and projections will be realized. The Company’s actual results may vary materially.
There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained
herein will prove to be accurate.



Throughout this report,
unless otherwise indicated by the context, references herein to the “Company”, “Oncologix”, “we”,
our” or “us” means Oncologix Tech, Inc.., a Nevada corporation and its corporate subsidiaries and predecessors.



Item 1. Description of Business



OVERVIEW



We were originally formed
in 1995 as "Wavetech, Inc." a New Jersey corporation and changed our corporate domicile to Nevada in December 1997, by
merging into a Nevada corporation named, "Interpretel International, Inc." We subsequently changed our name, first to
"Wavetech International, Inc." and then, in 2000, to "BestNet Communications Corp." Our business at the time
was to provide worldwide long distance telephone communication and teleconferencing services to commercial and residential consumers
through the internet. That business was never profitable and we were able to continue it only by repeated equity and debt financings.
Accordingly, during December 2006, we determined to dispose of that business and sold it during February 2007.



We entered the medical
device business at the end of July 2006 through the acquisition of JDA Medical Technologies, Inc. ("JDA"), a development
stage company, which was merged into our wholly owned subsidiary, Oncologix Corporation. On January 22, 2007, we changed our name
to Oncologix Tech, Inc., to reflect this new business. During June 2007, we moved our principal offices from Grand Rapids, Michigan,
to our offices at 3725 Lawrenceville-Suwanee Road, Suite B-4, Suwanee, Georgia, 30024, telephone (770) 831-8818. At that address,
our business was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere”
(or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. It is a radioactive micro-particle
designed to deliver therapeutic radiation directly to a tumor site by introducing the micro-particles into the artery that feeds
the tumor tissue. Its first application is expected to be the treatment of liver cancer. Due to a lack of funding, we suspended
these activities on December 31, 2007, whereupon we closed the offices in Suwanee Georgia.



Our new mailing address
is P.O. Box 8832, Grand Rapids, MI 49518-8832, telephone (616) 977-9933.



During May 2008, we determined
to dispose of most of the assets of the Oncosphere project. This information is being presented as discontinued operations for
all periods shown.



2













In February 2009, we entered
into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”) whereunder the
parties have agreed that:



(a)The Company has granted an exclusive license to a new IUT subsidiary, called “IUTM”,
to develop and manufacture products based on the Company’s proprietary information. This proprietary information is not based
on the technology that had been subject to the Master License Agreement with the University of Maryland – Baltimore. The
Company has also transferred to IUTM a number of items of laboratory equipment and inventory useful in connection with the licensed
information.

(b)The Company retains rights to market products based on such information as well as first consideration
for marketing rights for other possible IUTM products.

(c)In consideration of the license, the Company has received a 10% equity interest in IUTM, which
is organized as a private German limited liability company and IUT has assumed approximately $82,000 of the Company’s indebtedness.

(d)The Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation
and have issued IUTM 10% of the equity ownership of that subsidiary.



In addition, on April 7,
2009, the Company entered into a Termination Agreement with the University of Maryland – Baltimore, The Master License Agreement
between the Company and the University has been formally terminated and each party has released the other from all liabilities
arising under the Master License Agreement.



We have been advised that
IUTM is continuing the development of a brachytherapy device generally as described above but based on proprietary technology not
developed by the University of Maryland. During recent discussions with IUTM management, the prior understandings were reaffirmed.
It is now our expectation that we will receive information on at least two potential product lines under consideration and/or development
by IUTM. Upon receipt we plan to determine the extent to which we will be able to market them and to finance a marketing organization.
While our Management is optimistic as to the outcome of those discussions and future success in financing, it is not possible to
predict the probabilities of success with any degree of certainty.



On May 19, 2011, the Company
effected a one-for-four reverse stock split. All share and per share information have been restated to retroactively show the effect
of this stock split. The reverse split was previously approved by a majority of the Company’s shareholders on March 24, 2011.



Because the development
of the brachytherapy device is not complete and it cannot be marketed at this time, the Company’s management and Board of
Directors have determined that the Company has reentered the development stage effective June 1, 2011.  Since the Company
has limited operations at this point in time, the Company will be considered a development stage company.  The Company is
advised and believes that IUTM continues the development of that and other medical products that we would market under the terms
of the Agreement described above.



MICROSPHERE PRODUCT



The following terms which
are used throughout this Report have the following meanings:



“Brachytherapy”
refers to the process of placing therapeutic radiation sources in or near diseased tissue.

“FDA”
refers to the United States Food and Drug Administration.

“Investigational
Device Exemption” or “IDE” refers to a procedure whereby the FDA grants permission to test a new product
with human patients in the United States.

“Micro-arterial
brachytherapy” refers to the delivery of radiation into or near a tumor through the artery carrying the blood supply
to the tumor.

“Microsphere”
refers to a spherical microparticle, approximately one-quarter the width of a human hair, capable of containing or binding a radioisotope
for the purpose of delivering radiation treatment directly to a tumor through the system of arteries (vasculature) supplying blood
to the tumor. Our product is an innovative version of a microsphere that we call the “Oncosphere.”



3











The Microsphere Product



The product being
developed by IUTM is a microsphere intended for use as a means of micro-arterial brachytherapy in the treatment of soft tissue
cancer tumors in the liver. Soft tissue tumors are connected to the blood supply and this kind of therapy is administered through
the patient’s blood supply system.

Soft tissue tumors
are among the most difficult forms of cancer to treat. If not cured by initial therapy, these tumors eventually become unresponsive
to chemotherapy and spread (metastasize) throughout the body. While there has been some progress in recent years in treating these
cancers with surgery and chemotherapy, the five-year survival rates remain less than five percent. We believe that there is a strong
demand from patients and physicians confronting this type of cancer for effective, easy-to-use therapies with acceptable side effects.
We believe that if and when it is fully developed and approved for use the IUTM product will provide such a therapy if developed.

Currently the standard
treatment for patients with advanced cancerous tumors is chemotherapy, which is not specific to (that is, does not discriminate
as to) various types of cancer and has side effects that damage or destroy many normal cells as well as the cancer cells. Thus,
chemotherapy may result in additional illness and even death. High doses of chemotherapy have typically resulted in extended, unpleasant
and sometimes life-threatening hospital stays. Patients often require expensive, invasive medical attention before they recover
and are discharged to their homes.

An alternative
therapy, radiation, is most often administered by delivering a beam from outside of the patient’s body (“external beam
radiation”) through the patient's body to the cancer tumor. Cells do not become resistant to radiation as they do to chemotherapy.
Therefore, radiation delivered to the cell in sufficient doses will cause the death of the cell. However, because the radiation
originates from outside the body, the healthy tissues surrounding the tumor and those between the source and the tumor also receive
radiation and suffer damage that can cause significant adverse side effects.

Micro-arterial
brachytherapy is an improvement over both chemotherapy and external beam radiation. In this form of treatment, microspheres bearing
radiation are delivered directly through the bloodstream to the site of a cancer tumor, thereby avoiding healthy tissues. Micro-arterial
brachytherapy has the additional significant advantage of being administered in an outpatient procedure, with most patients being
able to return home the day of treatment.

We believe that
if and when the development of the IUTM product has been completed and it is approved by the FDA and used in the treatment of patients,
it will have significant competitive advantages over microspheres now in the market.



GOVERNMENT REGULATION



All activities in
the development, manufacture and sale of cancer therapy products are and will be subject to extensive laws, regulations, regulatory
approvals and guidelines. Within the United States, therapeutic radiological devices must comply with the U.S. Federal Food, Drug
and Cosmetic Act, which is enforced by the FDA. All those who are engaged in the manufacture of such products are required to adhere
to applicable FDA regulations for Good Manufacturing Practices, including extensive record keeping and periodic inspections of
manufacturing facilities. Medical devices such as the Oncosphere cannot be used or sold unless they are approved for specified
purposes by the FDA. There are two levels of FDA approval. The first is the granting of approval to test the device in human subjects
through an IDE; the second is obtaining approval to market the device to the public for the treatment of specified diseases through
a PMA. Separate FDA approval will be required for each such stage.

If our discussions
with IUTM and subsequent financing are successful, our business is expected to involve the importing, exporting, design, manufacture,
distribution, use and storage of beta- and gamma-emitting radioisotopes. These activities in the United States are subject to federal,
state and local rules relating to radioactive material promulgated by the Nuclear Regulatory Commission ("NRC"), and
states that have subscribed to certain standards and local authorities, known as “Agreement States.” In addition, we
must comply with NRC, state and U.S. Department of Transportation requirements for labeling and packaging shipments of radiation
sources to hospitals or others users of our devices. In order to market our devices commercially in the U.S., we will be required
to obtain a sealed source device registration from Agreement States and/or the NRC, depending on the states in which the device
will be distributed.

Additionally, hospitals
in the United States are required to have radiation licenses to hold, handle and use radiation. Many hospitals and/or physicians
in the United States will be required to amend their radiation licenses to include our isotopes before receiving and using them.
Depending on the state in which the hospital is located, the license amendment will be processed by the responsible subscribing
state department or agency or by the NRC.



4











Obtaining such
registration, approvals and licenses can be complicated and time consuming and there is no assurance that any of them can be obtained.

COMPETITION



We are aware of
several companies that have developed competing products to address soft tissue cancers: DS Nordion a Canadian company whose
microsphere product is named "Therasphere”; Sirtex, an Australian company with approximately $11,000,000 in assets,
whose microsphere product is named "SIR-Spheres"; and pSivida, a British company.

We believe that other companies
are capable of developing technology that could, if embodied in a suitable product, compete with the IUTM product. We also believe
that one of those companies may have developed specifications for such a product but that its plans for further development are
now dormant. As with any technology-based product, there is a risk that other, more advanced, products will appear on the market.



INTELLECTUAL PROPERTY PROTECTION



We have been advised
by IUTM that it intends to rely on patent laws, software security measures, license agreements and nondisclosure agreements to
protect its products. No patent has yet been granted and there is no assurance that any will be granted or that any part of the
technology will be patentable. Even if granted however, any patent may be limited in scope and patents issued to others, or technologies
owned by them, may result in competitive products that do not infringe any patent and that may employ software for dose calculation
without infringing any patent that may be granted for the Oncosphere technology.

EMPLOYEES

We currently have two part
time employees: our Chief Financial Officer, who is located in Michigan and our Chief Executive Officer who is located in Arizona.
We do not anticipate hiring additional employees until we begin the marketing efforts referred to above.



Item 1A. Risk Factors



We are a “smaller
reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this
item pursuant to Regulation S-K.



Item 1B. Unresolved Staff
Comments



None.



Item 2. Properties



We do not own any real
property. The Company’s headquarters are located in the offices of our Chief Financial Officer, located in Grand Rapids,
Michigan. Our Chief Executive Officer works from his home in Scottsdale, Arizona. Currently we have no lease obligations for any
premises.



Item 3. Legal Proceedings



None.



Item 4. Removed and Reserved



5













PART II



Item 5. Market for Registrant’s
Common Equity, Related Stockholder matters and Issuer Purchases of Equity Securities



Market for Common Stock



On May 19, 2011, the Company
effected a one-for-four reverse stock split. All share and per share information have been restated to retroactively show the effect
of this stock split. The reverse split was previously approved by a majority of the Company’s shareholders on March 24, 2011.



Our common stock is traded
on the Pink Sheets beginning January 2009 when we were delisted from the OTC Bulletin Board. Our common shares trade on the Pink
Sheets under the symbol “OCLG.PK”. Prior to January 2009, the Company's common stock was quoted on the OTC Bulletin
Board under the symbol “OCLG.OB” The high and low close prices of the Company's common stock as reported for the last
two fiscal years, by fiscal quarter (i.e. first quarter = September 1 through November 30) were as follows:



|                   | High   | Low   
|------------------ | ------ | ------
|FISCAL YEAR ENDED: |        |       
|August 31, 2011    |        |       
|First Quarter      | $ 0.04 | $ 0.02
|Second Quarter     | $ 0.03 | $ 0.02
|Third Quarter      | $ 0.08 | $ 0.02
|Fourth Quarter     | $ 0.10 | $ 0.04
|                   |        |       
|FISCAL YEAR ENDED: |        |       
|August 31, 2010    |        |       
|First Quarter      | $ 0.04 | $ 0.02
|Second Quarter     | $ 0.06 | $ 0.02
|Third Quarter      | $ 0.06 | $ 0.02
|Fourth Quarter     | $ 0.04 | $ 0.02
|                   |        |       
|FISCAL YEAR ENDED: |        |       
|August 31, 2009    |        |       
|First Quarter      | $ 0.05 | $ 0.03
|Second Quarter     | $ 0.04 | $ 0.01
|Third Quarter      | $ 0.07 | $ 0.02
|Fourth Quarter     | $ 0.06 | $ 0.02



The closing stock price
of our common stock on November 4, 2011, was $0.06.



Recent Sales of Unregistered
Securities



The following table contains
information regarding our sales of unregistered securities during the past two fiscal years. We have made additional sales of unregistered
securities subsequent to our year end. See “LIQUIDITY AND CAPITAL RESOURCES.” The securities sold were a combination
of promissory notes convertible into shares of our common stock, conversion of Unit preferred shares into common stock, and sales
of common stock to accredited investors. The principal amount of each Note is equal to the amount borrowed from the investor.





|Date of Issuance   | Principal Amount of Note(s) | Further Description and Remarks                                                                                                                                                                                          
|------------------ | --------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|December 29, 2009  | $25,000                     | On December 29, 2009, we issued a 60-Day convertible promissory note to an accredited investor. This note bears interest at 6% per annum and is convertible into the Company’s common stock at a rate of $0.02 per share.
|Date of Conversion | Proceeds from Sale          | Further Description and Remarks                                                                                                                                                                                          
|March 22, 2010     | $2,660                      | On March 22, 2010, Holders of 13,300 Units contributed $2,660 to convert 13,300 shares of preferred stock into 26,600 shares of common stock.                                                                            
|April 8, 2010      | $4,160                      | On April 8, 2010, Holders of 20,800 Units contributed $4,160 to convert 20,800 shares of preferred stock into 41,600 shares of common stock.                                                                             





6













|Date of Sale       | Proceeds from Sale | Further Description and Remarks                                                                                                                          
|------------------ | ------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|September 30, 2009 | $25,000            | On September 30, 2009, the Company sold 1,250,000 (pre-split) shares of common stock to a non-related accredited investor at $0.02 per share.            
|November 3, 2009   | $25,000            | On November 3, 2009, the Company sold 1,250,000 (pre-split) shares of common stock to a non-related accredited investor at $0.02 per share.              
|February 1, 2010   | $25,000            | On February 1, 2010, the Company sold 1,000,000 (pre-split) shares of common stock to a non-related accredited investor at $0.025 per share.             
|March 22, 2010     | $2,660             | On March 22, 2010, Holders of 13,300 Units contributed $2,660 to convert 13,300 shares of preferred stock into 26,600 (pre-split) shares of common stock.
|April 8, 2010      | $4,160             | On April 8, 2010, Holders of 20,800 Units contributed $4,160 to convert 20,800 shares of preferred stock into 41,600 (pre-split) shares of common stock. 
|April 16, 2010     | $50,000            | On April 16, 2010, the Company sold 1,666,667 (pre-split) shares of common stock to a non-related accredited investor at $0.03 per share.                
|May 13, 2010       | $25,000            | On May 13, 2010, the Company sold 833,333 (pre-split) shares of common stock to a non-related accredited investor at $0.03 per share.                    
|June 17, 2010      | $25,000            | On June 17, 2010, the Company sold 833,333 (pre-split) shares of common stock to a non-related accredited investor at $0.03 per share.                   
|August 11, 2010    | $25,000            | On August 11, 2010, the Company sold 1,666,667 (pre-split) shares of common stock to a non-related accredited investor at $0.015 per share.              
|October 11, 2010   | $25,000            | On October 11, 2010, the Company sold 1,666,667 (pre-split) shares of common stock to a non-related accredited investor at $0.015 per share.             
|January 18, 2011   | $50,000            | On January 18, 2011, the Company sold 3,333,333 (pre-split) shares of common stock to a non-related accredited investor at $0.015 per share.             
|July 05, 2011      | $100,000           | On July 05, 2011, the Company sold 2,500,000 (post-split) shares of common stock to a non-related accredited investor at $0.04 per share.                



Issuer Repurchases of
Equity Securities



We did not repurchase any
of our equity securities during the fourth quarter of the year ended August 31, 2011..



Holders



As of November 4, 2011,
the Company had 267 shareholders of record of its common stock. As of November 4, 2011, 1,195 owners of our common stock held them
in the names of various broker-dealers.  As of November 4, 2011, the Company had one Unit holder of record.  As of November
4, 2011, the Company had ten owners of Units who held them in the names of various brokers.



Dividend Policy



The Company has never declared
any cash dividends on any of the Company’s equity securities and currently plans to retain future earnings, if any, for business
growth.



7













Stock Performance Graph



We are a “smaller
reporting company”, as defined by regulation S-K and as such, are not required to provide the information contained in this
item pursuant to Regulation S-K.



Equity Compensation
Plan Information



On May 19, 2011, the Company
effected a one-for-four reverse stock split. All share and per share information have been restated to retroactively show the effect
of this stock split. The reverse split was previously approved by a majority of the Company’s shareholders on March 24, 2011.



The following table sets
forth information regarding the number of shares of our common stock that may be issued pursuant to our equity compensation plans
or arrangements as of the end of fiscal 2011.





|                             | Number of Securities    |  |                     |  | Number of Securities
|---------------------------- | ----------------------- |  | ------------------- |  | --------------------
|                             | To Be Issued Upon       |  | Weighted Average    |  | Remaining Available 
|                             | Exercise of Outstanding |  | Exercise Price of   |  | For Future          
|                             | Options                 |  | Outstanding Options |  | Issuance Under Plans
|                             |                         |  |                     |  |                     
|Equity compensation plans    |                         |  |                     |  |                     
|approved by stockholders     | 297,085                 |  | $1.43               |  | 6,362,418           
|                             |                         |  |                     |  |                     
|Equity compensation plans    |                         |  |                     |  |                     
|not approved by stockholders | -                       |  | $0.00               |  | -                   
|                             |                         |  |                     |  |                     
|TOTAL                        | 297,085                 |  | $1.43               |  | 6,362,418           
|                             |                         |  |                     |  |                     







(1) We maintain a 2000
Stock Incentive Plan under which we have 6,362,418 shares of common stock available for future issuance as of August 31, 2011.
Under the 2000 Stock Incentive Plan, the sale price of the shares of common stock is equal to the fair market value of such shares
on the date of the option grant. In January 2007, our shareholders approved an increase in the number of shares authorized for
our 2000 Stock Incentive Plan to 7,500,000 from 5,000,000. We also maintain a 1997 Stock Incentive Plan under which we have 4,525,000
shares of common stock available for future issuance as of August 31, 2011. The sale price of the shares of common stock available
under our 1997 Stock Incentive Plan is equal to the fair market value of such shares on the date of grant. Both of these plans
have been approved by our shareholders.



For a description of our 1997 and 2000 Stock
Incentive Plans, please see the description set forth in Note 7 of our Consolidated Financial Statements.



Transfer Agent



Our transfer agent and
registrar are American Stock Transfer and Trust Co., 6201 15th Avenue, 3rd Floor, Brooklyn, NY 11219, Telephone
(718) 921-8210.





Item 6. Selected Financial Data



We are a “smaller
reporting company”, as defined by regulation S-K and as such, are not required to provide the information contained in this
item pursuant to Regulation S-K.



Item 7. Management’s
discussion and Analysis of Financial Condition and Results of Operations



The following discussion
and analysis should be read in conjunction with our Consolidated Financial Statements and notes appearing elsewhere in this Report.



8













CRITICAL
ACCOUNTING POLICIES







“Management's
Discussion and Analysis of Financial Condition and Results of Operations ” (“MDA”) discusses our consolidated
financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amount
of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis,
we evaluate our estimates and judgments, including those related to research and development costs, deferred income taxes and the
impairment of long-lived assets. We base our estimates and judgments on historical experience and on various other factors that
are believed to be reasonable under the circumstances. The result of these estimates and judgments form the basis for making conclusions
about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions; changes in these estimates as a result of future events may have
a material effect on the Company’s financial condition. The SEC suggests that all registrants list their most “critical
accounting policies” in MDA. A critical accounting policy is one which is both important to the portrayal of the Company’s
financial condition and results of operations and requires management’s most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management believes
the following critical accounting policies affect its more significant judgments and estimates in the preparation of its consolidated
financial statements: The impairment of long-lived assets, stock based compensation, deferred income tax valuation allowances,
pending or threatening litigation and the allocation of assets acquired and liabilities assumed in acquisitions.

Impairment or
Disposal of long-lived assets. In accordance with ASC 360 “Impairment or Disposal of Long-lived Assets”, the Company
periodically evaluates whether events and circumstances have occurred that may indicate that the carrying amount of such assets
may not be recoverable. If the carrying amount of an asset or group of assets exceeds its net realizable value, the asset will
be written down to its fair market value. In the period when the plan of sale criteria of ASC 360 are met, long-lived assets are
reported as held for sale, depreciation and amortization cease, and the assets are reported at the lower of carrying value or fair
value less costs to sell.

Deferred tax
assets. In assessing the realizability of deferred tax assets, management assesses the likelihood that deferred tax assets
will be recovered from future taxable income, and to the extent that recovery is not likely a valuation allowance is established.
We adjust the valuation allowance in the period management determines it is more likely than not that deferred tax assets will
or will not be realized. To date, we have fully reserved for our deferred tax assets based primarily on our history of recurring
losses.

Use of Estimates.
The preparation of financial statements in accordance 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 reportable amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Convertible
Debt. Interest on convertible debt is calculated using the simple interest method. The company recognizes a beneficial conversion
feature to the extent the conversion price is less than the closing stock price on the issuance of the convertible notes. The Company
also follows ASC 470-50 and ASC 470-20 regarding changes in the terms of the convertible notes and the induced conversion of its
convertible debt.



9







RESULTS OF OPERATIONS



Comparison of the two years ended August
31, 2011 and 2010



Revenue



There are no revenues reflected in our financial
statements for the years ended August 31, 2011 and 2010.



General and Administrative Expense



General and administrative
expenses included in our results from continuing operations include legal and accounting fees, license fees, travel, payroll and
related expenses, directors and officers insurance, and public relations expenses. These expenses relate primarily to general corporate
overhead and accordingly are segregated from general and administrative expenses that related directly to our medical device business,
which are included in the results from discontinued operations. General and administrative expenses that are specific to our medical
device business include primarily storage fees.

General and administrative
expense increased to $195,067 during fiscal 2011, from $190,656, an increase of 2% or $4,411 from the comparable period in fiscal
2010. Payroll and related expenses increased to $89,977 during the fiscal 2011, from $80,615 in the comparable period in fiscal
2010, due primarily to increased hours from our CFO due to SEC filings of our 10-K, 10-Q, SEC Correspondence, a proxy statement
and an information statement. Legal expense increased to $30,578 fiscal 2011, from $8,694 in the comparable period in fiscal 2010,
due primarily to increased legal fees regarding a potential new joint venture with Watchme Media. Accounting expense decreased
to $10,290 during fiscal 2011, from $45,474 in the comparable period in fiscal 2010, as a result of reduced audit and review fees
from changing our registered accounting firm. Insurance expense decreased to $13,016 during fiscal 2011, from $24,920 in the comparable
period in fiscal 2010, due primarily to better pricing on our Directors and Officers Insurance policy. Investor relations and press
release expenses increased to $14,994 during fiscal 2011, from $235 in the comparable period in fiscal 2010, due primarily to printing,
mailing and processing charges for our definitive information statement regarding our reverse stock split mailed to our shareholders.

Depreciation and Amortization



Depreciation and amortization
decreased to $1,471 during fiscal 2011, from $1,418 during fiscal 2010. The decrease in depreciation and amortization from fiscal
2010 to fiscal 2011 was the result of assets becoming fully depreciated during fiscal 2011.



Interest Income



We had no interest income
in fiscal 2011 or fiscal 2010.



10









Interest and Finance Charges



Interest and finance charges
decreased to $32,948 during fiscal 2011 from $80,261, a decrease of 59% from fiscal 2010. The decrease is primarily attributable
to conversions of convertible promissory notes during the first quarter of fiscal 2010.



A summary of interest and finance charges is
as follows:





|                                                                |  |                    |        |            |  | Cumulative Since
|--------------------------------------------------------------- |  | ------------------ | ------ | ---------- |  | ----------------
|                                                                |  |                    |        |            |  | Reentering      
|                                                                |  |                    |        |            |  | Development     
|                                                                |  | For the Year Ended |        | Stage on  
|                                                                |  | August 31,         |        | August 31, |  | June 1,         
|                                                                |  | 2011               |        | 2010       |  | 2011            
|Interest expense on non-convertible notes                       |  | $                  | 340    |            |  | $               
|Interest expense on non-convertible notes - related parties     |  |                    | 4,139  |            |  |                 
|Interest expense on convertible notes payable                   |  |                    | 11,786 |            |  |                 
|Interest expense on convertible notes payable - related parties |  |                    | 14,102 |            |  |                 
|Amortization of note payable discounts                          |  |                    | —      |            |  |                 
|Other interest and finance charges                              |  |                    | 2,581  |            |  |                 
|                                                                |  |                    |        |            |  |                 
|Total interest and finance charges                              |  | $                  | 32,948 |            |  | $               







We had outstanding convertible
notes payable during fiscal 2010. A discount to those notes was recorded due to the value of warrants and the beneficial conversion
terms inherent to these convertible notes. The amortization of these discounts was recorded as interest and finance charge expense
over the life of the notes. See Note 6 of Notes to Consolidated Financial Statements included in Item 8 in this Report. Cash paid
for interest and finance charges increased by over 100% from fiscal 2010 to fiscal 2011 as a result of paying down accrued interest
on several promissory notes held by the company. The overall decrease in interest expense resulted from conversions of the majority
of outstanding convertible notes payable during fiscal 2010.



Conversion Expense



Conversion
expense decreased to $6,076 during fiscal 2011, from approximately $413,841, a decrease of 99% during fiscal 2010. The decrease
was due to the conversion only one convertible promissory notes in fiscal 2011 compared to thirty-five in fiscal 2011. The conversion
expense resulted from reducing the conversion price to induce conversion of our convertible notes. See Note 6 for more information
on these conversions.





Income Taxes



At August 31, 2011, the
Company had federal net operating loss carryforwards totaling approximately $30,800,000. At August 31, 2011, the Company did not
have any state net operating loss carryforwards. The federal net operating loss carryforwards expire in various amounts beginning
in 2004 and ending in 2031. Due to our history of incurring losses from operations, we have provided a valuation allowance for
our net operating loss carryforward.



Discontinued Operations



Loss
from discontinued operations for our medical device business decreased to $0 for fiscal 2011, from $2,822 during fiscal 2010. The
decrease was due to the disposal of the remaining discontinued assets during fiscal 2010.



11















|                                                  |  | For the Year Ended
|------------------------------------------------- |  | ------------------
|                                                  |  | August 31,        
|                                                  |  | 2011              
|Operating expenses:                               |  |                   
|General and administrative                        |  | $                 
|Depreciation and amortization                     |  |                   
|                                                  |  |                   
|Total operating expenses                          |  |                   
|                                                  |  |                   
|Loss from operations                              |  |                   
|                                                  |  |                   
|Other income (expense):                           |  |                   
|                                                  |  |                   
|Total other income (expense)                      |  |                   
|                                                  |  |                   
|Loss from discontinued operations                 |  |                   
|Gain on disposal of discontinued operations       |  |                   
|                                                  |  |                   
|Loss from discontinued operations                 |  |                   
|                                                  |  |                   
|Less loss attributable to noncontrolling interest |  |                   
|                                                  |  |                   
|Net loss from discontinued operations             |  | $                 
|                                                  |  |                   
|                                                  |  |                   



Liquidity
and Capital Resources



We were unable to obtain
the financing necessary to continue development operations after December 31, 2007. Consequently, we terminated the employment
of all of our personnel, effective as of that date. We anticipate that we will require $250,000 to operate for the next twelve
months. Additional funds will have to be raised for the Watchme joint venture. These funds are expected to be raised through small
private placements, although there is no assurance of any success in doing so. During recent discussions with IUTM management,
the prior understandings were reaffirmed. It is now our expectation that we will receive information on at least two potential
product lines under consideration and/or development by IUTM. Upon receipt we plan to determine the extent to which we will be
able to market them and to finance a marketing organization.



Our operating losses to
date have been covered by equity and debt financing obtained from private investors, including certain present and former members
of our Board of Directors. We never achieved positive cash flow or profitability in our telephone business because we did not generate
a volume of business sufficient to cover our overhead costs.



On August 31, 2011,
we had cash and cash equivalents of $11,067. We have historically relied upon the issuance of debt or equity in order to finance
our operations. Our operating losses to date have been covered by equity and debt financing obtained from private investors, including
certain current and former members of our Board of Directors.

Below is a summary listing
for the next 12 months, as of August 31, 2011, of our required minimum cash payments including our short-term notes payable, short-term
convertible notes payable and their respective due dates. To the extent the convertible notes are not converted, funds for repayment
will have to be raised through additional debt or equity financings.



12











Inflation and Other Factors



The Company’s operations
are influenced by general economic trends and technology advances in the medical industries.



Our activities in the development,
manufacture and sale of cancer therapy products are, and will be subject to extensive laws, regulations, regulatory approvals and
guidelines. Within the United States, therapeutic radiological devices must comply with the U.S. Federal Food, Drug and Cosmetic
Act, which is enforced by the FDA. We are also required to adhere to applicable FDA regulations for Good Manufacturing Practices,
including extensive record keeping and periodic inspections of manufacturing facilities. Medical devices such as the Oncosphere
cannot be used or sold unless they are approved for specified purposes by the FDA. There are two levels of FDA approval. The first
is the granting of approval to evaluate use of the device in human subjects (through an IDE); the second is obtaining approval
to market the device to the public for the treatment of specified diseases (PMA).



If we are successful in
implementing our plans, our business will involve the importing, exporting, design, manufacture, distribution, use and storage
of beta and gamma emitting radioisotopes. These activities in the United States are subject to federal, state and local rules relating
to radioactive material promulgated by the Nuclear Regulatory Commission ("NRC"), and states that have subscribed to
certain standards and local authorities, known as “Agreement States” In addition, we must comply with NRC, state and
U.S. Department of Transportation requirements for labeling and packaging shipments of radiation sources to hospitals or others
users of our devices. In order to market our devices commercially, we will be required to obtain a sealed source device registration
from Agreement States and/or the NRC, depending on the states in which the device will be distributed.



Additionally, hospitals
in the United States are required to have radiation licenses to hold, handle and use radiation. Many hospitals and/or physicians
in the United States will be required to amend their radiation licenses to include our isotopes before receiving and using them.
Depending on the state in which the hospital is located, the license amendment will be processed by the responsible subscribing
state department or agency or by the NRC.



Obtaining such registration,
approvals, and licenses can be complicated and time consuming and there is no assurance that any of them can be obtained.



Code of Ethics



Our
Board of Directors has adopted a code of ethics that applies to our principal executive officer, principal financial officer and
to other persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical
conduct, full, fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt
internal reporting of violations of the code and accountability for adherence to the code. We will provide a copy of our code of
ethics, without charge, to any person upon receipt of written request for such delivered to our corporate headquarters. All such
requests should be send to Oncologix Tech, Inc., P.O. Box 8832, Grand Rapids, MI 49518-8832.



13













Off-Balance Sheet Arrangements



As of August 31, 2011 and 2010, we had no off-balance
sheet arrangements.



Recent Accounting
Pronouncements



We have evaluated all Accounting
Standards Updates through the date the financial statements were issued and do not believe any will have a material impact.



Item 7A. Quantitative and Qualitative Disclosures
About Market Risk



We are a “smaller
reporting company”, as defined by regulation S-K and as such, are not required to provide the information contained in this
item pursuant to Regulation S-K.



14









Item 8. Financial Statements and Supplementary
Data



Oncologix Tech, Inc. and Subsidiaries

(Formerly BestNet Communications Corp.)

(A Development Stage Company)

Consolidated Financial Statements

Year Ended August 31, 2011 and 2010



Contents



|Report of Seale and Beers, CPAs, Independent Registered Public
    Accounting Firm | F-1
|---------------------------------------------------------------------------------- | ---
|                                                                                   |    
|Audited Financial Statements                                                       |    
|                                                                                   |    
|Consolidated Balance Sheets                                                        | F-2
|Consolidated Statements of Operations                                              | F-3
|Consolidated Statements of Changes in Stockholders' Deficit                        | F-4
|Consolidated Statements of Cash Flows                                              | F-5
|Notes to Consolidated Financial Statements                                         | F-6



15















SEALE AND BEERS, CPAs

PCAOB & CPAB REGISTERED AUDITORS

www.sealebeers.com





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Board of Directors and Stockholders of

Oncologix
Tech, Inc.

(A
Development Stage Company)



We
have audited the accompanying balance sheets of Oncologix Tech, Inc. (A Development Stage Company) as of August 31, 2011
and 2010, and the related statements of operations, stockholders’ deficit and cash flows for the years ended August
31, 2011 and 2010 and since inception on June 1, 2011 through August 31, 2011. Oncologix Tech, Inc.’s management is
responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based
on our audits.



We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about 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, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.



In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
Oncologix Tech, Inc. (A Development Stage Company) as of August 31, 2011 and 2010, and the related statements of operations,
stockholders’ deficit and cash flows for the years ended August 31, 2011 and 2010 and since inception on June 1, 2011
through August 31, 2011, 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 3 to
the financial statements, the Company has no revenues, has negative working capital at August 31, 2011, has incurred recurring
losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt
about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note
3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Seale and Beers,
CPAs



Seale and Beers,
CPAs

Las Vegas, Nevada

November 18, 2011





50 S.
Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351











F-1











ONCOLOGIX
TECH, INC. AND SUBSIDIARIES

(FORMERLY
BESTNET COMMUNICATIONS CORP.)

(A DEVELOPMENT
STAGE COMPANY)

CONSOLIDATED
BALANCE SHEETS

AUGUST 31,
2011 AND 2010





|                                                                             |  | August 31, |             | August 31,
|---------------------------------------------------------------------------- |  | ---------- | ----------- | ----------
|                                                                             |  | 2011       |             | 2010      
|                                                                             |  |            |             |           
|ASSETS                                                                       |  |            |             |           
|Current Assets:                                                              |  |            |             |           
|Cash and cash equivalents                                                    |  | $          | 11,067      |           
|Prepaid expenses and other current assets                                    |  |            | 3,940       |           
|                                                                             |  |            |             |           
|Total current assets                                                         |  |            | 15,007      |           
|                                                                             |  |            |             |           
|Property and equipment (net of accumulated depreciation                      |  |            |             |           
|of $21,682 and $20,211)                                                      |  |            | 364         |           
|Long-term assets of discontinued operations                                  |  |            | —           |           
|                                                                             |  |            |             |           
|Total assets                                                                 |  | $          | 15,371      |           
|                                                                             |  |            |             |           
|LIABILITIES
    AND STOCKHOLDERS' DEFICIT                                    |  |            |             |           
|Current liabilities:                                                         |  |            |             |           
|Convertible notes payable (net of discount of $0 and $0)                     |  | $          | 150,000     |           
|Convertible notes payable - related parties                                  |  |            | 235,025     |           
|Notes payable - related parties                                              |  |            | 70,000      |           
|Accounts payable and other accrued expenses                                  |  |            | 139,801     |           
|Accrued interest payable                                                     |  |            | 32,803      |           
|Accrued interest payable - related parties                                   |  |            | 34,789      |           
|                                                                             |  |            |             |           
|Total current liabilities                                                    |  |            | 662,418     |           
|                                                                             |  |            |             |           
|Long-term liabilities:                                                       |  |            |             |           
|Convertible notes payable                                                    |  |            | —           |           
|Convertible notes payable - related parties                                  |  |            | —           |           
|                                                                             |  |            |             |           
|Total long-term liabilities                                                  |  |            | —           |           
|                                                                             |  |            |             |           
|Total liabilities                                                            |  |            | 662,418     |           
|                                                                             |  |            |             |           
|Stockholders' Deficit:                                                       |  |            |             |           
|Preferred stock, par value $.001 per share; 10,000,000 shares
    authorized |  |            |             |           
|129,062 and 261,762 shares issued and outstanding at                         |  |            |             |           
|August 31, 2011 and August 31, 2010, respectively                            |  |            | 129         |           
|Common stock, par value $.001 per share; 200,000,000 shares authorized;      |  |            |             |           
|50,998,814 and 47,155,660 shares issued and outstanding at                   |  |            |             |           
|August 31, 2011 and August 31, 2010, respectively                            |  |            | 50,999      |           
|Additional paid-in capital                                                   |  |            | 57,358,582  |           
|Accumulated deficit prior to reentering development stage                    |  |            | (58,004,869 | )         
|Deficit accumulated during the development stage                             |  |            | (48,427     | )         
|Noncontrolling interest                                                      |  |            | (3,461      | )         
|                                                                             |  |            |             |           
|Total stockholders' deficit                                                  |  |            | (647,047    | )         
|                                                                             |  |            |             |           
|Total liabilities and stockholders' deficit                                  |  | $          | 15,371      |           
|                                                                             |  |            |             |           



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



F-2











ONCOLOGIX
TECH, INC. AND SUBSIDIARIES

(FORMERLY
BESTNET COMMUNICATION CORP.)

A DEVELOPMENT
STAGE COMPANY)

CONSOLIDATED
STATEMENTS OF OPERATIONS







|                                                  |  |                    |            |            |  | Cumulative Since
|------------------------------------------------- |  | ------------------ | ---------- | ---------- |  | ----------------
|                                                  |  |                    |            |            |  | Reentering      
|                                                  |  |                    |            |            |  | Development     
|                                                  |  | For the Year Ended |            | Stage on  
|                                                  |  | August 31,         |            | August 31, |  | June 1,         
|                                                  |  | 2011               |            | 2010       |  | 2011            
|Revenue                                           |  | $                  | —          |            |  | $               
|Cost of Revenues                                  |  |                    | —          |            |  |                 
|Gross margin                                      |  |                    | —          |            |  |                 
|Operating expenses:                               |  |                    |            |            |  |                 
|General and administrative                        |  |                    | 195,067    |            |  |                 
|Depreciation and amortization                     |  |                    | 1,471      |            |  |                 
|Total operating expenses                          |  |                    | 196,538    |            |  |                 
|Loss from operations                              |  |                    | (196,538   | )          |  |                 
|Other income (expense):                           |  |                    |            |            |  |                 
|Interest and finance charges                      |  |                    | (14,707    | )          |  |                 
|Interest and finance charges - related parties    |  |                    | (18,241    | )          |  |                 
|Conversion expense                                |  |                    | (6,076     | )          |  |                 
|Discounted stock issue expense                    |  |                    | —          |            |  |                 
|Loss on impairment                                |  |                    | —          |            |  |                 
|Cancellation of debt                              |  |                    | —          |            |  |                 
|Other income (expense)                            |  |                    | (47        | )          |  |                 
|Total other income (expense)                      |  |                    | (39,071    | )          |  |                 
|Loss from continuing operations                   |  |                    | (235,609   | )          |  |                 
|Less loss attributable to noncontrolling interest |  |                    | (13        | )          |  |                 
|Net loss from continuing operations               |  |                    | (235,596   | )          |  |                 
|Discontinued operations:                          |  |                    |            |            |  |                 
|Operating loss from discontinued operations       |  |                    | —          |            |  |                 
|Loss from discontinued operations                 |  |                    | —          |            |  |                 
|Less loss attributable to noncontrolling interest |  |                    | —          |            |  |                 
|Net loss from discontinued operations             |  |                    | —          |            |  |                 
|Net loss before income taxes                      |  |                    | (235,596   | )          |  |                 
|Income taxes                                      |  |                    | —          |            |  |                 
|Net loss                                          |  | $                  | (235,596   | )          |  | $               
|Loss per common share, basic and diluted:         |  |                    |            |            |  |                 
|Continuing operations                             |  | $                  | (0.00      | )          |  | $               
|Discontinued operations                           |  |                    | —          |            |  |                 
|                                                  |  | $                  | (0.00      | )          |  | $               
|Weighted average number of shares                 |  |                    |            |            |  |                 
|outstanding - basic and diluted                   |  |                    | 47,915,734 |            |  |                 





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



F-3













ONCOLOGIX
TECH, INC. AND SUBSIDIARIES

(FORMERLY
BESTNET COMMUNICATION CORP.)

(A DEVELOPMENT
STAGE COMPANY)

CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE PERIOD
SEPTEMBER 1, 2009 THROUGH AUGUST 31, 2011





|                                            |  |                     |          |                  |  |         |      |             |  |            |            |             |  | Deficit     |        |            |  |          |            |      
|------------------------------------------- |  | ------------------- | -------- | ---------------- |  | ------- | ---- | ----------- |  | ---------- | ---------- | ----------- |  | ----------- | ------ | ---------- |  | -------- | ---------- | -----
|                                            |  |                     |          |                  |  |         |      |             |  |            |            |             |  | Accumulated |        |            |  |          |            |      
|                                            |  |                     |          |                  |  |         |      |             |  |            |            |             |  | Since       |        |            |  |          |            |      
|                                            |  |                     |          |                  |  |         |      |             |  |            |            | Accumulated |  | Reentering  |        |            |  |          |            |      
|                                            |  |                     |          |                  |  |         |      |             |  |            |            | Deficit     |  | the         |        |            |  |          |            |      
|                                            |  |                     |          |                  |  |         |      |             |  |            |            | Prior to    |  | Development |        |            |  |          |            |      
|                                            |  |                     |          |                  |  |         |      |             |  | Additional |            | Reentering  |  | Stage on    |        | Common     |  | Non-     |            |      
|                                            |  | Preferred
    Stock |          | Common
    Stock |  | Paid-in |      | Development |  | June 1,    |            | Stock       |  | Controlling |        |           
|                                            |  | Shares              |          | Amount           |  | Shares  |      | Amount      |  | Capital    |            | Stage       |  | 2011        |        | Subscribed |  | Interest |            | Total
|                                            |  |                     |          |                  |  |         |      |             |  |            |            |             |  |             |        |            |  |          |            |      
|Balance, August 31, 2009                    |  |                     | 295,862  |                  |  | $       | 296  |             |  |            | 38,975,389 |             |  | $           | 38,975 |            |  | $        | 55,221,010 |      
|Issuance of stock purchased for cash        |  |                     | —        |                  |  |         | —    |             |  |            | 2,125,000  |             |  |             | 2,125  |            |  |          | 197,875    |      
|Discounted stock issuance expense           |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | 123,334    |      
|Conversion of notes payable                 |  |                     | —        |                  |  |         | —    |             |  |            | 6,038,376  |             |  |             | 6,038  |            |  |          | 1,201,637  |      
|Induced conversion expense - conversion     |  |                     |          |                  |  |         |      |             |  |            |            |             |  |             |        |            |  |          |            |      
|notes payable                               |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | 413,840    |      
|Issuance of stock for unit conversions      |  |                     | (34,100  | )                |  |         | (34  | )           |  |            | 17,050     |             |  |             | 17     |            |  |          | 6,837      |      
|Beneficial conversion feature notes payable |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | 12,500     |      
|Net loss                                    |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | —          |      
|Balance, August 31, 2010                    |  |                     | 261,762  |                  |  | $       | 262  |             |  |            | 47,155,815 |             |  | $           | 47,155 |            |  | $        | 57,177,033 |      
|Issuance of stock purchased for cash        |  |                     | —        |                  |  |         | —    |             |  |            | 1,250,001  |             |  |             | 1,250  |            |  |          | 73,750     |      
|Stock based compensation                    |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | 464        |      
|Net loss                                    |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | —          |      
|Balance, June 01, 2011                      |  |                     | 261,762  |                  |  | $       | 262  |             |  |            | 48,405,816 |             |  | $           | 48,405 |            |  | $        | 57,251,247 |      
|Issuance of stock purchased for cash        |  |                     | —        |                  |  |         | —    |             |  |            | 2,500,000  |             |  |             | 2,500  |            |  |          | 97,500     |      
|Conversion of notes payable                 |  |                     | —        |                  |  |         | —    |             |  |            | 92,998     |             |  |             | 94     |            |  |          | 3,626      |      
|Cancellation of preferred shares for        |  |                     |          |                  |  |         |      |             |  |            |            |             |  |             |        |            |  |          |            |      
|unit conversions                            |  |                     | (132,700 | )                |  |         | (133 | )           |  |            | —          |             |  |             | —      |            |  |          | 133        |      
|Induced conversion expense - conversion     |  |                     |          |                  |  |         |      |             |  |            |            |             |  |             |        |            |  |          |            |      
|notes payable                               |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | 6,076      |      
|Net loss                                    |  |                     | —        |                  |  |         | —    |             |  |            | —          |             |  |             | —      |            |  |          | —          |      
|Balance, August 31, 2011                    |  |                     | 129,062  |                  |  | $       | 129  |             |  |            | 50,998,814 |             |  | $           | 50,999 |            |  | $        | 57,358,582 |      







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







F-4















ONCOLOGIX
TECH, INC. AND SUBSIDIARIES

(FORMERLY
BESTNET COMMUNICATIONS CORP.)

(A
DEVELOPMENT STAGE COMPANY)

CONSOLIDATED
STATEMENTS OF CASH FLOWS





|                                                                  |  |                    |          |            |  | Cumulative      
|----------------------------------------------------------------- |  | ------------------ | -------- | ---------- |  | ----------------
|                                                                  |  |                    |          |            |  | Since Reentering
|                                                                  |  |                    |          |            |  | the Development 
|                                                                  |  | For the Year Ended |          | Stage on  
|                                                                  |  | August 31,         |          | August 31, |  | June 1,         
|                                                                  |  | 2011               |          | 2010       |  | 2011            
|Operating activities:                                             |  |                    |          |            |  |                 
|Net loss                                                          |  | $                  | (235,609 | )          |  | $               
|Net loss from discontinued operations                             |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net loss from continuing operations                               |  |                    | (235,609 | )          |  |                 
|                                                                  |  |                    |          |            |  |                 
|Adjustments to reconcile net loss to net cash used                |  |                    |          |            |  |                 
|in operating activities:                                          |  |                    |          |            |  |                 
|Depreciation and amortization                                     |  |                    | 1,471    |            |  |                 
|Stock based compensation expense                                  |  |                    | 464      |            |  |                 
|Amortization of discount on notes payable and warrants            |  |                    | —        |            |  |                 
|Induced conversion expense notes payable                          |  |                    | 6,076    |            |  |                 
|Discounted stock issuance expense                                 |  |                    | —        |            |  |                 
|Impairment loss                                                   |  |                    | —        |            |  |                 
|Issuance of stock and warrants for services                       |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Changes in operating assets and liabilities:                      |  |                    |          |            |  |                 
|Prepaid expenses and other current assets                         |  |                    | 10,301   |            |  |                 
|Prepaid commissions                                               |  |                    | —        |            |  |                 
|Accounts payable and other accrued expenses                       |  |                    | 8,732    |            |  |                 
|Accrued interest payable - related parties                        |  |                    | 18,240   |            |  |                 
|Accrued interest payable                                          |  |                    | 11,787   |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net operating cash flows - continuing operations                  |  |                    | (178,538 | )          |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net operating cash flows - discontinued operations                |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net cash used in operating activities                             |  |                    | (178,538 | )          |  |                 
|                                                                  |  |                    |          |            |  |                 
|Investing activities:                                             |  |                    |          |            |  |                 
|Purchase of property and equipment                                |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net investing cash flows - continuing operations                  |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net investing cash flows - discontinued operations                |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net cash used in investing activities                             |  |                    | —        |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Financing activities:                                             |  |                    |          |            |  |                 
|Proceeds from issuance of convertible notes                       |  |                    |          |            |  |                 
|payable - related parties                                         |  |                    | —        |            |  |                 
|Proceeds from issuance of notes payable - related parties         |  |                    | 75,000   |            |  |                 
|Proceeds from conversion of units                                 |  |                    | —        |            |  |                 
|Proceeds from the issuance of common stock                        |  |                    | 175,000  |            |  |                 
|Repayment of notes payable                                        |  |                    | (8,078   | )          |  |                 
|Repayment of notes payable - related parties                      |  |                    | (60,661  | )          |  |                 
|Repayment of convertible notes payable                            |  |                    | (2,252   | )          |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net cash provided by financing activities - continuing operations |  |                    | 179,009  |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Net increase (decrease) in cash and cash equivalents              |  |                    | 471      |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Cash and cash equivalents, beginning of period                    |  |                    | 10,596   |            |  |                 
|                                                                  |  |                    |          |            |  |                 
|Cash and cash equivalents, end of period                          |  | $                  | 11,067   |            |  | $               
|                                                                  |  |                    |          |            |  |                 





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



F-5





ONCOLOGIX
TECH, INC. AND SUBSIDIARIES

(FORMERLY
BESTNET COMMUNICATIONS CORP.)

(A DEVELOPMENT
STAGE COMPANY)

CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)





Supplemental
disclosure of cash flow information (continued):



|                               |  |                    |       |            |  | Cumulative      
|------------------------------ |  | ------------------ | ----- | ---------- |  | ----------------
|                               |  |                    |       |            |  | Since Reentering
|                               |  |                    |       |            |  | the Development 
|                               |  | For the Year Ended |       | Stage on  
|                               |  | August 31,         |       | August 31, |  | June 1,         
|                               |  | 2011               |       | 2010       |  | 2011            
|                               |  |                    |       |            |  |                 
|Cash paid during the year for: |  |                    |       |            |  |                 
|                               |  |                    |       |            |  |                 
|Interest                       |  | $                  | 8,675 |            |  | $               
|Income Taxes                   |  | $                  | —     |            |  | $               
|                               |  |                    |       |            |  |                 







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



F-6







NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS



NOTE
1 - ORGANIZATION AND BASIS OF PRESENTATION



The
consolidated financial statements of Oncologix Tech, Inc. (formerly BestNet Communications Corp., a Nevada corporation, and also
formerly Wavetech International, Inc.) include the accounts of Oncologix Tech, Inc. and its wholly owned subsidiaries, Oncologix
Corporation, Interpretel, Inc., Interpretel Canada Inc., and Telplex International Communications, Inc. (collectively the “Company,”
“Oncologix,” “we,” “us,” or “our”). The cost method of accounting is used for
the Company’s joint venture. On January 22, 2007, we changed our name from BestNet Communications Corp. to Oncologix Tech,
Inc. On July 26, 2006, we launched a medical device segment through the acquisition of JDA Medical Technologies, Inc. ("JDA"),
a development stage medical device company. Since the acquisition of JDA, our principal activities have been primarily limited
to research and development activities to continue product development in efforts to obtain government approval for the use of
the medical device, and to seek sources of financing for these research and development activities. We entered into discussions
to dispose of this business in the 3rd quarter of fiscal 2008. Accordingly, the Medical Device business is treated
as discontinued operations. We had operated an internet based telephone business (the "Telephone Business") from our
inception until it was disposed of during February 2007. The Telephone Business is accordingly presented as discontinued operations.
The Company’s fiscal year ends on August 31. All significant intercompany accounts and transactions have been eliminated
in consolidation. The Company has recorded net operating losses in each of the previous sixteen years.



The
preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States
of America requires the Company's management to make estimates and assumptions that affect the amounts reported in these financial
statements and accompanying notes. Actual results could differ from those estimates. The Company makes significant assumptions
concerning the amount of the accounts receivable reserve, and reserves related to deferred tax assets. Due to the uncertainties
inherent in the estimation process and the significance of these items, it is at least reasonably possible that the estimates
in connection with these items could be further materially revised within the next year.



NOTE
2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



CONSOLIDATION



The
consolidated financial statements for the years ended August 31, 2009 and 2008 include the accounts of Oncologix Tech, Inc. and
its wholly owned subsidiaries, Oncologix Corporation (90% Owned), Interpretel (Canada) Inc. and Interpretel Inc., collectively
the Company. Oncologix Corporation is a Nevada corporation. Interpretel Inc. is an Arizona corporation. Interpretel (Canada) Inc.
is a Canadian corporation. All significant intercompany accounts and transactions have been eliminated in consolidation.



USE OF ESTIMATES



The
preparation of financial statements in accordance 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 reportable amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.



REVENUE RECOGNITION



Revenue
is recognized by the Company when all the following criteria are met: persuasive evidence of an arrangement exists; delivery has
occurred; the seller’s price to the buyer is fixed and determinable; and collectability is reasonably assured. Currently
the company does not have products to sell.



CASH AND CASH
EQUIVALENTS



The
Company considers all highly liquid instruments, with an initial maturity of three (3) months or less to be cash equivalents.



F-7













PROPERTY AND
EQUIPMENT



Property
and equipment is recorded at cost. Depreciation is provided for on the straight-line method over the estimated useful lives of
the related assets as follows:



|Furniture and fixtures | 5 to 7 years
|---------------------- | ------------
|Computer equipment     | 5 years     
|Equipment              | 5 to 7 years
|Software               | 3 to 5 years



The
cost of maintenance and repairs is charged to expense in the period incurred. Expenditures that increase the useful lives of assets
are capitalized and depreciated over the remaining useful lives of the assets. When items are retired or disposed of, the cost
and accumulated depreciation are removed from the accounts and any gain or loss is included in income.



LONG-LIVED ASSETS



ASC
360 – Property, Plant and Equipment addresses financial accounting and reporting for the impairment or disposal of long-lived
assets. The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated
useful life of property and equipment or whether the remaining balance of property and equipment, or other long-lived assets,
should be evaluated for possible impairment. Instances that may lead to an impairment include: (i) a significant decrease
in the market price of a long-lived asset group; (ii) a significant adverse change in the extent or manner in which a long-lived
asset or asset group is being used or in its physical condition; (iii) a significant adverse change in legal factors or in
the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment
by a regulatory agency; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition
or construction of a long-lived asset or asset group; (v) a current-period operating or cash flow loss combined with a history
of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a
long-lived asset or asset group; or (vi) a current expectation that, more likely than not, a long-lived asset or asset group
will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

An
estimate of the related undiscounted cash flows, excluding interest, over the remaining life of the property and equipment and
long-lived assets is used in assessing recoverability. Impairment loss is measured by the amount which the carrying amount of
the asset(s) exceeds the fair value of the asset(s). The Company primarily employs two methodologies for determining the fair
value of a long-lived asset: (i) the amount at which the asset could be bought or sold in a current transaction between willing
parties or (ii) the present value of estimated expected future cash flows grouped at the lowest level for which there are
identifiable independent cash flows.



NONCONTROLLING
INTEREST



ASC
810 - Consolidation addresses the accounting and reporting standards for ownership interest in subsidiaries held by parties other
than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes
in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated.
During fiscal 2009, the Company issued a ten percent interest in its subsidiary, Oncologix Corporation, to IUTM as required in
a technology agreement. The Company valued this interest at $212. Through August 31, 2010, the Company has allocated $3,660 losses
to its noncontrolling interest. The Company has adopted ASC 810 to account for this noncontrolling interest.



ADVERTISING
COSTS



Advertising
costs included with selling, general and administrative expenses in the accompanying consolidated statements of operations were
nil for fiscal 2010 and fiscal 2009. Such costs are expensed when incurred.



F-8









INCOME TAXES



The
Company adopted the provisions of FASB ASC 740 -Income Taxes provides detailed guidance for the financial statement recognition,
measurement and disclosure of uncertain tax positions recognized in the financial statements. Income taxes are determined using
the asset and liability method. This method gives consideration to the future tax consequences associated with temporary differences
between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.



FAIR VALUE OF FINANCIAL INSTRUMENTS



The
estimated fair values for financial instruments are determined at discrete points in time based on relevant market information.
These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued
expenses, and notes payable approximate fair value.



STOCK-BASED
COMPENSATION



The
Company has a stock-based compensation plan, which is described more fully in Note 11. The Company accounts for stock-based compensation
in accordance with ASC 718. Under the fair value recognition provisions of this statement, share-based compensation cost is measured
at the grant date based on the fair value of the award and is recognized as expense over the vesting period. The Company estimates
the fair value of stock options granted using the Black-Scholes option valuation model. The fair value of all awards is amortized
on a straight-line basis over the vesting periods. The expected term of awards granted represent the period of time they are expected
to be outstanding. The Company determines the expected term based on historical experience with similar awards, giving consideration
to the contractual terms and vesting schedules. The Company estimates the expected volatility of its common stock at the date
of grant based on the historical volatility of its common stock. The risk-free interest rate is based on the U.S. treasury security
rate estimated for the expected life of the options at the date of grant. If actual results differ significantly from estimates,
stock-based compensation could be impacted.



CONVERTIBLE
DEBT



Interest
on convertible debt is calculated using the simple interest method. The company recognizes a beneficial conversion feature to
the extent the conversion price is less than the closing stock price on the issuance of the convertible notes. The Company also
follows ASC 470-50 and ASC 470-20 regarding changes in the terms of the convertible notes and the induced conversion of its convertible
debt.



F-9









NET LOSS PER
COMMON SHARE



Basic
earnings (loss) per share is calculated under the provisions of ASC 260 which provides for calculation of “basic”
and “diluted” earnings per share. Basic earnings per share includes no dilution and is calculated by dividing income
(loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted
earnings (loss) per share is calculated based on the weighted average number of common shares outstanding during the period
plus the dilutive effect of common stock purchase warrants and stock options using the treasury stock method and the dilutive
effects of convertible notes payable and convertible preferred stock using the if-converted method. Basic and diluted earnings
per share for the years ended August 31, 2011 and 2010 are as follows:





|                                             |  |                    |            |           |  | Cumulative      
|-------------------------------------------- |  | ------------------ | ---------- | --------- |  | ----------------
|                                             |  |                    |            |           |  | Since Reentering
|                                             |  |                    |            |           |  | the Development 
|                                             |  | For the Year Ended |            | Stage on 
|                                             |  | August 31,         |            | August31, |  | June 1,         
|                                             |  | 2011               |            | 2010      |  | 2011            
|Net loss attributable to common shareholders |  |                    |            |           |  |                 
|Continuing operations                        |  | $                  | (235,596   | )         |  | $               
|Discontinued operations                      |  |                    | —          |           |  |                 
|                                             |  | $                  | (235,596   | )         |  | $               
|Weighted average shares outstanding          |  |                    | 47,915,734 |           |  |                 
|Loss per common share, basic and diluted:    |  |                    |            |           |  |                 
|Continuing operations                        |  | $                  | (0.00      | )         |  | $               
|Discontinued operations                      |  | $                  | —          |           |  | $               
|                                             |  | $                  | (0.00      | )         |  | $               





Due
to the net losses during the fiscal 2011 and 2010, basic and diluted loss per share was the same, as the effect of potentially
dilutive securities would have been anti-dilutive. Shares attributable to convertible notes, stock options, preferred stock and
warrants not included the diluted loss per share calculation. Below lists all dilutive securities as of August 31, 2011 and 2010:





|                                      |                   |  |                   |  |  | For the Year Ended | 
|------------------------------------- | ----------------- |  | ----------------- |  |  | ------------------ | 
|                                      |                   |  |                   |  |  | August 31,         | 
|                                      |                   |  |                   |  |  | 2011               | 
|                                      |                   |  |                   |  |  | Underlying         | 
|Description                           | Common
    Shares |  | Common
    Shares | 
|Convertible preferred stock           | 64,531            |  | 130,881           | 
|Convertible notes payable             | 1,695,959         |  | 525,354           | 
|Options                               | 297,085           |  | 733,333           | 
|Warrants                              | -                 |  | -                 | 
|                                      |                   |  |                   |  |  |                    | 
|Total potentially dilutive securities | 2,057,575         |  | 1,389,568         | 
|                                      |                   |  |                   |  |  |                    | 





SEGMENT INFORMATION



ASC
280-10 defines operating segments as components of a company about which separate financial information is available that is evaluated
regularly by the chief decision maker in deciding how to allocate resources and in assessing performance. The Company currently
has one operating segments: medical device. Our medical device segment is presented as discontinued operations for all periods
presented.



F-10









RECENT ACCOUNTING
PRONOUNCEMENTS



We
have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will
have a material impact.



NOTE 3 - GOING
CONCERN



The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company
has incurred losses from operations over the past several years and anticipates additional losses in fiscal 2011 and prior to
achieving breakeven.



As
of the date of this report, we will need approximately $250,000 to fund operations for the next twelve (12) months, without regard
to repaying any short-term convertible or non-convertible notes payable as well as funding either of the joint ventures described
in Note 9. This funding will allow us to maintain basic operations and to bring our public filings current and keep them current.
Our Company has never been profitable and we have had to rely on debt and equity financings to fund operations. Significant delays
in development could affect the ability to obtain future debt and equity funding which may affect our ability to continue as a
going concern. Currently there is a substantial doubt in the Company’s ability to continue as a going concern.



On
May 19, 2011, the Company effected a 1 for 4 reverse stock split. This reverse split will give the Company the ability to raise
additional operating funds for both our potential joint ventures, and to fund further ongoing operations. While there is no guarantee
that funds will be available, we believe this reverse split will allow us to consummate our joint ventures and move towards a
positive cash flow position.



NOTE
4 - DISCONTINUED OPERATIONS



We
entered the medical device business at the end of July 2006 through the acquisition of JDA Medical Technologies, Inc. ("JDA"),
a development stage company, which was merged into our wholly owned subsidiary, Oncologix Corporation. On January 22, 2007, we
changed our name to Oncologix Tech, Inc., to reflect this new business. During June 2007, we moved our principal offices from
Grand Rapids, Michigan, to our offices at 3725 Lawrenceville-Suwanee Road, Suite B-4, Suwanee, Georgia, 30024, telephone (770)
831-8818. At that address, our business was the development of a medical device for brachytherapy (radiation therapy), called
the “Oncosphere” (or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers.
It is a radioactive micro-particle designed to deliver therapeutic radiation directly to a tumor site by introducing the micro-particles
into the artery that feeds the tumor tissue. Its first application is expected to be the treatment of liver cancer. Due to a lack
of funding, we had to suspend these activities on December 31, 2007, whereupon we closed the offices in Suwanee Georgia. During
fiscal 2010, we disposed of the remaining assets of our discontinued operations. Any future expenses will be treated as expenses
from continuing operations as we move toward marketing products with IUT and IUTM.



F-11











The
expenses shown below are part of the discontinued operations of our Oncosphere business.





|                                                      |  | For the Year Ended
|----------------------------------------------------- |  | ------------------
|                                                      |  | August 31,        
|                                                      |  | 2011              
|Operating expenses:                                   |  |                   
|General and administrative                            |  | $                 
|Depreciation and amortization                         |  |                   
|Total operating expenses                              |  |                   
|Loss from operations                                  |  |                   
|Other income (expense):                               |  |                   
|Total other income (expense)                          |  |                   
|Loss from discontinued operations                     |  |                   
|Gain on disposal of discontinued operations           |  |                   
|Loss from discontinued operations                     |  |                   
|Less loss attributable to noncontrolling
    interest |  |                   
|Net loss from discontinued operations                 |  | $                 





NOTE 5 - PROPERTY AND EQUIPMENT



Property
and equipment is composed of the following at August 31, 2011 and 2010:





|                                                |  | August 31, |         | August 31,
|----------------------------------------------- |  | ---------- | ------- | ----------
|                                                |  | 2011       |         | 2010      
|Computer equipment                              |  | $          | 8,939   |           
|Software                                        |  |            | 7,876   |           
|Equipment                                       |  |            | 5,231   |           
|Total property and equipment at cost            |  |            | 22,042  |           
|Less: accumulated depreciation and amortization |  |            | (21,682 | )         
|                                                |  | $          | 364     |           





For fiscal 2011
and 2010, depreciation expense from continuing operations related to property and equipment is $1,471 and $1,418, respectively.
No amount included in the above accumulated depreciation and amortization balances of $21,682 and $20,211 relates to capitalized
software.



NOTE 6 - NOTES PAYABLE



CONVERTIBLE
NOTES PAYABLE:



On
May 19, 2011, the Company effected a one-for-four reverse stock split. All share and per share information have been restated
to retroactively show the effect of this stock split. The reverse split was previously approved by a majority of the Company’s
shareholders on March 24, 2011.



Convertible
notes payable consist of the following as of August 31, 2011 and August 31, 2010:



F-12













|                                           |  | August 31, |          | August 31,
|------------------------------------------ |  | ---------- | -------- | ----------
|                                           |  | 2011       |          | 2010      
|12.0% convertible note due March 31, 2012  |  | $          | —        |           
|8.0% convertible notes due March 31, 2012  |  |            | 125,000  |           
|6% convertible note due November 30,, 2011 |  |            | 25,000   |           
|Total unsecured convertible notes payable  |  |            | 150,000  |           
|Less:  Current portion                     |  |            | (150,000 | )         
|Long-term portion                          |  | $          | —        |           





The
following is a summary of future minimum payments on convertible notes payable as of August 31, 2011:



|Convertible                       |  |                  
|--------------------------------- |  | -----------------
|Fiscal Year Ending August
    31, |  | Notes
    Payable
|2012                              |  | $                



During
May and June 2007, we issued nine Convertible Promissory Notes in an aggregate principal amount of $700,000. These Convertible
Promissory Notes are due May 7, 2008, bear interest at the rate of 8% per annum and are convertible into our common stock at a
rate of $1.00. Eight of these notes were converted into common stock in fiscal 2009. The remaining Convertible Promissory Note,
in the principal amount of $125,000, was extended on January 28, 2010 to March 31, 2012. In conjunction with the extension, the
conversion price was reduced to $0.60.



On
September 7, 2007, the Company issued to Stanley Schloz, a former member of the Company’s Board of Directors, a convertible
promissory note for bridge financing in the principal amount of $150,000. This note bears interest at a rate of 12% and is payable
monthly. Prior to fiscal 2009, $100,000 in principal was repaid and $50,000 in principal was converted into common stock. Mr.
Schloz elected to extend $2,712 in accrued interest until March 31, 2012 which is convertible at $0.60 per share. In July 2011,
the board of directors approved the reduction of the conversion price of this note to $0.04 per share to induce conversion of
the note. On July 18, 2011, Mr. Schloz converted the principal and accrued interest in the amount of $3,720 into 92,998 shares
of common stock.



On
December 29, 2009, the Company issued a 60-Day Convertible promissory note in the principal amount of $25,000 to a non-related
accredited investor who was not related to the Company. This convertible note bears interest at 6% and is convertible into the
Company’s common stock at $0.08 per share. The Company recognized a beneficial conversion feature in the amount of $12,500
in connection with the issuance of this note. This note has been extended several times and is currently due November 30, 2011.
See Note 15 – Subsequent Events for further information on this note.



CONVERTIBLE RELATED PARTY NOTES PAYABLE:





|                                                                |  | August 31, |         | August 31,
|--------------------------------------------------------------- |  | ---------- | ------- | ----------
|                                                                |  | 2011       |         | 2010      
|                                                                |  |            |         |           
|6.0% convertible note due March 31, 2012 (1)                    |  | $          | 235,025 |           
|                                                                |  |            |         |           
|Outstanding unsecured related party convertible notes payable   |  | $          | 235,025 |           
|                                                                |  |            |         |           
|(1)  Note Due 3/31/12 payable to former CEO who resigned 4/1/09 |  |            |         |           











On
April 1, 2009, we issued to Ms. Lindstrom, our former Chief Executive Officer and current member of our subsidiary’s Board
of Directors, a convertible promissory note in lieu of payment of $235,025 in accrued salary owed to Ms. Lindstrom. This note
accrues interest at a rate of 6% per annum and is due on March 31, 2012. The note is convertible into shares of the Company’s
common stock at a rate of $0.20 per common share. Ms. Lindstrom signed an abstention to convert this note until June 01, 2011.
There was no beneficial conversion feature recognized upon the issuance of this note.



F-13













RELATED
PARTY NOTES PAYABLE:





|                                                                        |  | August 31, |        | August 31,
|----------------------------------------------------------------------- |  | ---------- | ------ | ----------
|                                                                        |  | 2011       |        | 2010      
|6.00% note payable due November 30, 2011 (1)                            |  | $          | 25,000 |           
|6.00% note payable due November 30, 2011 (1)                            |  |            | 25,000 |           
|6.00% note payable due November 30, 2011 (1)                            |  |            | 20,000 |           
|                                                                        |  |            |        |           
|                                                                        |  |            |        |           
|Outstanding unsecured related party convertible notes payable           |  | $          | 70,000 |           
|                                                                        |  |            |        |           
|(1)  Note payable to Anthony Silverman, the Company's President and CEO |  |            |       
|                                                                        |  |            |        |           





On
September 11, 2009, the Company issued a 90-Day promissory note to Anthony Silverman, its President and CEO, in the principal
amount of $25,000. The note bears an interest rate of 6%. This note has been subsequently extended to November 30, 2011. On February
1, 2011, the Company paid accrued interest of $2,084 to Mr. Silverman. On July 11, 2011, the Company paid accrued interest of
$616 to Mr. Silverman. See Note 15 – Subsequent Events for further information on this note.



On
February 22, 2010, the Company issued a 60-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $25,000. The note bears an interest rate of 6%. This note has been subsequently extended to November 30 2011. On February 1,
2011, the Company paid accrued interest of $1,410 to Mr. Silverman. On July 11, 2011, the Company paid accrued interest of $616
to Mr. Silverman. See Note 15 – Subsequent Events for further information on this note.



On
December 16, 2010, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $20,000. The note bears an interest rate of 6%. This note has been subsequently extended to November 30, 2011. On February
1, 2011, the Company paid accrued interest of $151 to Mr. Silverman. On July 22, 2011, the Company paid accrued interest of $493
to Mr. Silverman. See Note 15 – Subsequent Events for further information on this note.



On
January 20, 2011, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $20,000. The note bears an interest rate of 6%. This note was repaid on February 19, 2011 along with $26 in accrued interest.



On
April 26, 2011, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $10,000. The note bears an interest rate of 6%. This note was repaid on July 11, 2011 along with $125 in accrued interest.



On
May 26, 2011, the Company issued a 60-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $10,000. The note bears an interest rate of 6%. This note was repaid on July 11, 2011 along with $76 in accrued interest.



On
June 15, 2011, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $15,000. The note bears an interest rate of 6%. This note was repaid on July 11, 2011 along with accrued interest.



F-14









OTHER
NOTES PAYABLE:



On
October 31, 2010, the Company entered into a note payable agreement to finance $8,078 of directors and officer’s insurance
premiums. The note bears interest at a rate of 9.99% per annum and is due in nine monthly installments of $935, including principal
and interest, beginning on November 30, 2010. This note was paid in full on July 31, 2011.



NOTE
7 - STOCKHOLDERS' EQUITY



PREFERRED STOCK:



On
May 19, 2011, the Company effected a one-for-four reverse stock split. All share and per share information have been restated
to retroactively show the effect of this stock split. The reverse split was previously approved by a majority of the Company’s
shareholders on March 24, 2011.



The
Company is authorized to issue up to 10,000,000 shares of preferred stock, in one or more series, and to determine the price,
rights, preferences and privileges of the shares of each such series without any further vote or action by the stockholders. The
rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any shares
of preferred stock that may be issued in the future.  In January 2003, our Board of Directors authorized up to 4,500,000
shares of Series A Convertible Preferred Stock.  Each share of Series A Convertible Preferred stock has a par value
of $0.001 and is convertible into one-half share of common stock in upon a cash payment by the holder to the Company of $0.40
per common share.  The Series A Convertible Preferred Stock is entitled to receive, in preference to the common stock,
of noncumulative dividends, if declared by the Board of Directors, and a claim on the Company's assets upon any liquidation of
the Company senior to the common stock.  These preferred shares are not entitled to voting rights. There are presently
outstanding 261,762 shares of Series A Preferred Stock.



On
March 30, 2003, the Company completed the private placement of Units pursuant to the terms of a Unit Purchase Agreement (the “Units”)
with accredited investors. Each Unit consists of the following underlying securities: (i) three shares of the Company’s
common stock; (ii) one share of Series A Convertible Preferred Stock, par value $.001 per share; and (iii) one three-year warrant
to purchase one share of common stock at a per share price of $0.30. The warrants expired on March 31, 2006. Each share of Series
A Convertible Preferred Stock is convertible into one half share of the Company’s common stock in exchange for $0.40 per
common share ($.20 for each Series A Convertible Preferred share converted). The securities underlying the Units are not to be
separately tradable or transferable apart from the Units until such time as determined by the Company’s Board of Directors.
A total of 4,032,743 Units were issued. As of August 31, 2011 and August 31, 2010, there were 129,062 and 261,762 Units outstanding
that had not been separated, respectively. These units are presented as their underlying securities on our balance sheet and consist
of 129,062 shares of Series A Preferred Stock and 96,797 shares of common stock which is included in the issued and outstanding
shares.



Below
is a table detailing the outstanding Series A Convertible Preferred Stock shares outstanding during the last two fiscal years:





|                             |  |             |          | Number of     |  |             |         | Weighted Avg      
|---------------------------- |  | ----------- | -------- | ------------- |  | ----------- | ------- | ------------------
|                             |  | Preferreds  |          | Common Shares |  | Proceeds if |         | Per Common Sh     
|                             |  | Outstanding |          | Convertible   |  | Converted   |         | Exercise
    Price
|Outstanding, August 31, 2009 |  |             | 295,862  |               |  |             | 147,931 |                   
|                             |  |             |          |               |  |             |         |                   
|Expired/Retired              |  |             | —        |               |  |             | —       |                   
|Converted                    |  |             | (34,100  | )             |  |             | (17,050 | )                 
|Issued                       |  |             | —        |               |  |             | —       |                   
|Outstanding, August 31, 2010 |  |             | 261,762  |               |  |             | 130,881 |                   
|                             |  |             |          |               |  |             |         |                   
|Expired/Retired              |  |             | (132,700 | )             |  |             | (66,350 | )                 
|Converted                    |  |             | —        |               |  |             | —       |                   
|Issued                       |  |             | —        |               |  |             | —       |                   
|Outstanding, May 31, 2011    |  |             | 129,062  |               |  |             | 64,531  |                   
|                             |  |             |          |               |  |             |         |                   





F-15









Our
Board of Directors authorized the separation of the Units into their component parts in July 2004, February 2005, April 2008,
March 2010 and July 2011. The table below describes the proceeds received for the conversion of preferred shares into common stock:



|Date
    of Conversion | Proceeds
    from Conversion | Further
    Description and Remarks                                                                                                                                                             
|---------------------- | ---------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|July-August
    2004   | $487,523                     | During
    July and August 2004, holders of 2,437,614 Units contributed $487,523 to convert 2,437,614 shares of Series A. Convertible
    Preferred stock into 4,875,228 shares of common stock.
|February
    2005      | $230,393                     | During
    February 2005, holders of 1,151,967 Units contributed $230,393 to convert 1,151,967 shares of Series A. Convertible Preferred
    stock into 2,303,934 shares of common stock.       
|April/June
    2008    | $29,460                      | During
    April and June 2008, holders of 147,300 Units contributed $29,460 to convert 147,300 shares of Series A. Convertible Preferred
    stock into 294,600 shares of common stock.        
|March/April
    2010   | $6,820                       | During
    March and April 2010, holders of 34,100 Units contributed $6,820 to convert 34,100 shares of Series A. Convertible Preferred
    stock into 68,200 shares of common stock.           
|July
    2011          | $0                           | During
    July 2011, holders of 132,700 Units elected to relinquish conversion of 132,700 shares of Convertible Preferred stock as part
    of splitting their Units.                          



SUBSCRIBED
COMMON STOCK:





As
of August 31, 2011 and 2010, there were no shares of subscribed stock issuable.



COMMON STOCK:



On
May 19, 2011, the Company effected a one-for-four reverse stock split. All share and per share information have been restated
to retroactively show the effect of this stock split. The reverse split was previously approved by a majority of the Company’s
shareholders on March 24, 2011.



Under
the terms of our acquisition of JDA, we issued 43,000,000 (pre-split) shares of our common stock to the previous owners of JDA.
Of these shares, 29,843,160 were placed into escrow pending the achievement of certain development and operating goals. These
escrowed shares were not included in the calculation of the purchase price of JDA and will be included in that calculation if
and to the extent that the applicable contingencies are resolved and the shares are released from escrow. The development and
operating goals that relate to the release of these shares, and the number of shares to be released at the time the goal is achieved
are as follows: (i) 7,460,790 shares upon the completion of the “Development Phase”, as defined in the Merger Agreement
between the Company and JDA (already released as stated below); (ii) 9,325,986 shares upon the completion of the “Pre-Clinical
Testing Phase as defined in the merger agreement; and (iii) 13,056,382 shares upon the completion of the Clinical Approval Phase.
On September 10, 2009, the remaining 22,382,368 shares in escrow were released back to the Company and subsequently retired. Below
is a listing of recent stock sales:



F-16











|Date
    of Sale       | Proceeds
    from Sale | Further
    Description and Remarks                                                                                                                  
|---------------------- | ---------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|September
    30, 2009 | $25,000                | On
    September 30, 2009, the Company sold 1,250,000 (pre-split) shares of common stock to a non-related accredited investor at
    $0.02 per share.
|November
    3, 2009   | $25,000                | On
    November 3, 2009, the Company sold 1,250,000 (pre-split) shares of common stock to a non-related accredited investor at $0.02
    per share.  
|February
    1, 2010   | $25,000                | On
    February 1, 2010, the Company sold 1,000,000 (pre-split) shares of common stock to a non-related accredited investor at $0.025
    per share. 
|April
    16, 2010     | $50,000                | On
    April 16, 2010, the Company sold 1,666,667 (pre-split) shares of common stock to a non-related accredited investor at $0.03
    per share.    
|May
    13, 2010       | $25,000                | On
    May 13, 2010, the Company sold 833,333 (pre-split) shares of common stock to a non-related accredited investor at $0.03 per
    share.        
|June
    17, 2010      | $25,000                | On
    June 17, 2010, the Company sold 833,333 (pre-split) shares of common stock to a non-related accredited investor at $0.03 per
    share.       
|August
    11, 2010    | $25,000                | On
    August 11, 2010, the Company sold 1,666,667 (pre-split) shares of common stock to a non-related accredited investor at $0.015
    per share.  
|October
    11, 2010   | $25,000                | On
    October 11, 2010, the Company sold 1,666,667 (pre-split) shares of common stock to a non-related accredited investor at $0.015
    per share. 
|January
    18, 2011   | $50,000                | On
    January 18, 2011, the Company sold 3,333,333 (pre-split) shares of common stock to a non-related accredited investor at $0.015
    per share. 
|July
    05, 2011      | $100,000               | On
    January 18, 2011, the Company sold 2,500,000 (post-split) shares of common stock to a non-related accredited investor at $0.04
    per share. 





During the year
ended August 31, 2011 and 2010, we recognized nil and $123,334 of financing expense related to the sales of discounted stock to
non-related accredited investors.



F-17









NON-CONTROLLING INTEREST



On
February 27, 2009, in connection with the Technology Agreement we entered into with Institut für Umwelttechnologien GmbH,
a German Company (“IUT”) whereunder the parties have agreed that the Company’s marketing rights have been transferred
to its subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary. On February 27,
2009, the value of the noncontrolling interest was $212. As of August 31, 2011, $3,673 net loss was attributable to the noncontrolling
interest.



WARRANTS:



The
Company had no outstanding warrants at August 31, 2011 or 2010.



Additional
information relative to our warrants outstanding at August 31, 2011 is summarized as follows:





|                             |  |        |            | Weighted Avg      
|---------------------------- |  | ------ | ---------- | ------------------
|                             |  | Number |            | Exercise
    Price
|Outstanding, August 31, 2009 |  |        | 3,690,832  |                   
|Expired/Retired              |  |        | (3,690,832 | )                 
|Exercised                    |  |        | —          |                   
|Issued                       |  |        | —          |                   
|Outstanding, August 31, 2010 |  |        | —          |                   
|                             |  |        |            |                   
|Expired/Retired              |  |        | —          |                   
|Exercised                    |  |        | —          |                   
|Issued                       |  |        | —          |                   
|Outstanding, August 31, 2011 |  |        | —          |                   
|                             |  |        |            |                   





The
Company does not have any outstanding warrants that are not immediately exercisable.



STOCK OPTIONS:



The
Company is authorized to issue up to 4,600,000 shares of common stock under its 1997 Stock Incentive Plan. Shares may be issued
as incentive stock options, non-statutory stock options, deferred shares or restricted shares. Options are granted at the fair
market value of the common stock on the date of the grant and have terms of up to ten years.



The
Company is authorized to issue up to 7,500,000 shares of common stock under its 2000 Stock Incentive Plan. Shares may be issued
as incentive stock options, non-statutory stock options, deferred shares or restricted shares. Options are granted at the fair
market value of the common stock on the date of the grant and have terms of up to ten years. The 2000 Stock Incentive Plan also
provides for an annual grant of options to members of our Board of Directors. For fiscal years ended August 31, 2010, 2009 and
2008, our Board of Directors have elected to waive the grant of these annual options.



ASC
718 requires the estimation of forfeitures when recognizing compensation expense and that this estimate of forfeitures be adjusted
over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized
through a cumulative adjustment, which is recognized in the period of change and which impacts the amount of unamortized compensation
expense to be recognized in future periods. On January 7, 2011, the Company’s Board of Directors granted 53,750 options
to current board members in exchange for the retirement of 268,750 stock options. The Company recorded $465 in stock compensation
expense as a result of this transaction.



During
the fiscal years ended August 31, 2011 and 2010, we granted 53,750 and zero options from the stock incentive plans described above,
respectively. During the fiscal years ended August 31, 2011 and 2010, zero options were exercised, respectively; 268,750 and zero
options were forfeited, respectively; and 221,250 and 20,215 options were expired, respectively. During the fiscal years ended
August 31, 2011 and 2010, $465 and $0 was expensed as stock based compensation, respectively. Additional information relative
to our employee options outstanding at August 31, 2011 is summarized as follows:



F-18













|                             |  |                     |          |                            |  | Weighted                    
|---------------------------- |  | ------------------- | -------- | -------------------------- |  | ----------------------------
|                             |  | Number of           |          |                            |  | Average                     
|                             |  | Options
    Granted |          | Option
    Price Per Share |  | Exercise
    Price Per Share
|                             |  |                     |          |                            |  |                             
|Outstanding, August 31, 2009 |  |                     | 753,550  |                            |  |                             
|Granted                      |  |                     | —        |                            |  |                             
|Exercised                    |  |                     | —        |                            |  |                             
|Cancelled                    |  |                     | (20,215  | )                          |  |                             
|Outstanding, August 31, 2010 |  |                     | 733,335  |                            |  |                             
|Granted                      |  |                     | 53,750   |                            |  | $                           
|Exercised                    |  |                     | —        |                            |  |                             
|Cancelled                    |  |                     | (490,000 | )                          |  |                             
|Outstanding, August 31, 2011 |  |                     | 297,085  |                            |  |                             
|                             |  |                     |          |                            |  |                             



The
aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing
stock price on the last trading day of the third quarter of fiscal 2010 and the exercise price, multiplied by the number of in-the-money
options) that would have been received by the option holders had all option holders exercised their options on August 31, 2011.





|                                                    |  | Options     |         | Options    
|--------------------------------------------------- |  | ----------- | ------- | -----------
|                                                    |  | Outstanding |         | Exercisable
|Number of options                                   |  |             | 297,085 |            
|Aggregate intrinsic value of options                |  | $           | —       |            
|Weighted average remaining contractual term (years) |  |             | 2.82    |            
|Weighted average exercise price                     |  | $           | 1.43    |            
|                                                    |  |             |         |            





Expected
volatility is based primarily on historical volatility. Historical volatility is computed using weekly average pricing observations
for an applicable historic period. We believe this method produces an estimate that is representative of our expectations of the
future volatility over the expected term of our options. We currently have no reason to believe future volatility over the expected
life of these options is likely to differ materially from historical volatility. The weighted-average expected life is based upon
share option exercises, pre and post vesting terminations and share option term expirations. The risk-free interest rate is based
on the U.S. treasury security rate estimated for the expected life of the options at the date of grant.





|                                      |  | Year
    Ended August 31,
|------------------------------------- |  | -------------------------
|                                      |  | 2011                     
|Volatility                            |  |                          
|Risk free rate                        |  |                          
|Expected dividends                    |  | $                        
|Expected term (in years)              |  |                          
|                                      |  |                          
|No options were issued in Fiscal 2010 |  |                          
|                                      |  |                          





We
have 6,362,418 and 4,525,000 shares of common stock available for future issuance under our 2000 Stock Incentive Plan and 1997
Stock Incentive Plan, respectively, as of August 31, 2011. Under the 2000 Stock Incentive Plan and 1997 Stock Incentive Plan,
the price of the granted common stock options are equal to the fair market value of such shares on the date of grant. Both of
these plans have been approved by our shareholders.



ASC
718 requires modification of the terms or conditions of an equity award is to be treated as an exchange of the original award
for a new award. This event is accounted for as if the entity repurchases the original instrument by issuing a new instrument
of equal or greater value, incurring additional compensation cost for any incremental value. During fiscal 2011 we granted 53,750
options to current board members in exchange for the retirement of 268,750 stock options. Due to this stock option modification,
the Company recorded $465 in stock based compensation expense. During fiscal 2010, we did not grant any options to employees or
members of our Board of Directors.



F-19













NOTE 8 - JOINT
VENTURE



Institut
für Umwelttechnologien GmbH (IUT)



In
February 2009, we entered into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”)
whereunder the parties have agreed that:



(a)The Company has granted an exclusive license to a new IUT subsidiary, called “IUTM”, to develop and manufacture
products based on the Company’s proprietary information. This proprietary information is not based on the technology that
had been subject to the Master License Agreement with the University of Maryland – Baltimore. The Company has also transferred
to IUTM a number of items of laboratory equipment and inventory useful in connection with the licensed information.

(b)The Company retains rights to market products based on such information as well as first consideration for marketing rights
for other possible IUTM products.

(c)In consideration of the license, the Company has received a 10% equity interest in IUTM, which is organized as a private
German limited liability company and IUT has assumed approximately $82,000 of the Company’s indebtedness.

(d)The Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation and have issued IUTM
10% of the equity ownership of that subsidiary.



We
have been advised that IUTM is continuing the development of a brachytherapy device generally as described above but based on
proprietary technology not developed by the University of Maryland. During recent discussions with IUTM management, the prior
understandings were reaffirmed. It is now our expectation that we will receive information on at least two potential product lines
under consideration and/or development by IUTM. Upon receipt we plan to determine the extent to which we will be able to market
them and to finance a marketing organization. While our Management is optimistic as to the outcome of those discussions and future
success in financing, it is not possible to predict the probabilities of success with any degree of certainty. It
was determined at August 31, 2010, the value of the investment in IUTM was impaired. Accordingly, we recorded an impairment loss
in the amount of $3,186.



On
September 23, 2010, the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical
GMBH confirming certain understandings among the parties with respect to their future relationships and business activities as
originally contemplated in their Technology Agreement of February 27, 2009, which was reaffirmed.



WatchMe Profile Media Services,
Inc.



On
February 4, 2011, we entered into a Pre-Incorporation Agreement with Mr. Melvin Brown, of Gilbert, Arizona, providing for our
joint entry into a new business enterprise. The Pre-Incorporation Agreement is subject to the condition that we provide a minimum
of $150,000 in cash to fund the new enterprise not later than May 30, 2011. On April 2, 2011, an amendment to the Pre-Incorporation
Agreement was signed to extend the funding requirement date. These funds are not now available and we will seek to obtain them
from investors. There are presently no agreements providing for such investments and no assurance that they can be obtained. Even
if the funds are obtained, however, there is no assurance of any success in the conduct of the new enterprise. In addition to
the receipt of funds of $150,000, the Pre-Incorporation Agreement is subject to a series of agreements with Mr. Brown. On July
6, 2011, the Pre-Incorporation Agreement, executed in February, 2011, that we had entered into with Mr. Melvin Brown, of Gilbert,
Arizona was terminated because we were not successful in meeting our agreement to provide certain funding for the new “WatchMe”
enterprise.



F-20











NOTE 9 - COMMITMENTS AND CONTINGENCIES



LEASES:



In
an effort to streamline costs, we do not have a main corporate office. Our Chief Executive Officer works out of him home in Scottsdale,
Arizona and our Chief Financial Officer maintains all the corporate records out of his home in Grand Rapids, Michigan. Currently
we have no monthly lease requirements. We had no rent expense under operating leases in fiscal 2011 or 2010. There are no future
minimum lease payments on these operating leases as of August 31, 2011.



EMPLOYMENT AGREEMENTS:



Currently
there are no employment agreements as of August 31, 2011.



CONSULTING CONTRACT



In
September 2009, the company entered into a six month consulting agreement with its Chief Financial Officer, Michael Kramarz. Mr.
Kramarz is to perform all his regular duties he had previously performed as Chief Financial Officer including the preparation
of the Company’s financial statements, SEC Filings, maintenance of corporate records, etc. Mr. Kramarz is to be compensated
$70 per hour worked and will turn in weekly time sheets for approval. These consulting agreements have been extended for additional
six month periods through August 31, 2011 at the same hourly rate. During the fiscal 2011 and fiscal 2010, we incurred an expense
of $82,600 and $73,920 respectively, under these agreements.



NOTE
10 - RELATED PARTY TRANSACTIONS AND CONTINGENCIES:



FINANCING
WITH RELATED PARTIES:



During
fiscal 2011 and 2010, the Company entered into financing agreements with related parties of the Company. Please see Note 6 for
further descriptions of these transactions.



NOTE
11 - RETIREMENT PLAN



Currently, the
Company does not have a retirement plan in place.



NOTE 12 - INCOME TAXES



As
of August 31, 2011, the Company has federal net operating loss carryforwards totaling approximately $30,800,000. Currently there
are no state net operating loss carryforwards. The federal net operating loss carryforwards expire in various amounts beginning
in 2004 and ending in 2031. The Company does not have any current state net operating loss carryforwards. Certain of the Company's
net operating loss carryforwards may be subject to annual restrictions limiting their utilization in accordance with Internal
Revenue Code Section 382, which include limitations based on changes in control. Due to our history of losses from operations,
we have provided a valuation allowance for our net operating loss carryforwards and deferred tax assets, net of certain deferred
tax liabilities.



ASC
740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination
based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax
position to determine the amount to recognize in the financial statements. As a result of the implementation of ASC 740 –
Income Taxes, the Company performed a review of its material tax positions. At the adoption date of ASC 740, the Company had no
unrecognized tax benefit which would affect the effective tax rate.  As of August 31, 2011 and 2010, the Company had
no accrued interest and penalties related to uncertain tax positions. The Company is primarily subject to U.S. and Michigan income
taxes. The tax years 2008 to current remain open to examination by U.S. federal and state tax authorities.



A
reconciliation of the beginning and ending accrual for uncertain tax positions is as follows:



F-21















The
income tax benefit for the years ended August 31, 2011 and 2010 is comprised of the following amounts:



|                    |  | 2011 |          | 2010
|------------------- |  | ---- | -------- | ----
|Current:            |  | $    | —        |     
|                    |  |      |          |     
|Deferred:           |  |      |          |     
|Federal             |  |      | (322,000 | )   
|State               |  |      | —        |     
|                    |  |      | (322,000 | )   
|Valuation Allowance |  |      | 322,000  |     
|                    |  | $    | —        |     



The
Company's tax benefit differs from the benefit calculated using the federal statutory income tax rate for the following reasons:



|                              |  | 2011 |       | 2010
|----------------------------- |  | ---- | ----- | ----
|Statutory tax rate            |  |      | 34.0  | %   
|State income taxes            |  |      | —     |     
|Change in valuation allowance |  |      | (34.0 | )%  
|Effective tax rate            |  |      | 0.0   | %   



The
components of the net deferred tax assets (liabilities) are as follows:



|                                   |  | 2011 |             | 2010
|---------------------------------- |  | ---- | ----------- | ----
|Deferred tax assets (liabilities): |  |      |             |     
|Property and equipment             |  | $    | —           |     
|Intangible assets                  |  |      | —           |     
|Other                              |  |      | —           |     
|Net operating loss carryforward    |  |      | 10,486,000  |     
|                                   |  |      | 10,486,000  |     
|Valuation allowance                |  |      | (10,486,000 | )   
|                                   |  | $    | —           |     



ASC
740 - Income Taxes, requires a valuation allowance to reduce the deferred tax assets if, based on the weight of the evidence,
it is more likely than not that some or all of the deferred tax assets will not be realized. After consideration of all the evidence,
both positive and negative, management has determined that an $10,486,000 valuation allowance as of August 31, 2011 is necessary
to reduce the net deferred tax assets to the amount that will more likely than not be realized. The decrease in the valuation
allowance for the current year is $322,000.



NOTE 13 - RECENT
ACCOUNTING PRONOUNCEMENTS



We
have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will
have a material impact on our financial condition or results of operations.









F-22















NOTE
14 - STATEMENTS OF CASH FLOWS



During
fiscal 2011 and 2010, the Company recognized investing and financing activities that affected the balance sheet, but did not result
in cash receipts or payments.



For fiscal 2011,
these non-cash investing and financing activities are summarized as follows:



|                                                                                                                                                                                                                                                                                                                                                                             |  |   | Amount | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------ | 
|During fiscal 2011, the Company converted $3,720
    of principal and accrued interest into 92,998 shares of its common stock.  These shares were issued in July 2011                                                                                                                                                                                                        |  |   | 3,720  | 
|The Company recognized conversion expense as a result of reducing
    the conversion price on notes converted during fiscal 2011                                                                                                                                                                                                                                             |  |   | 6,076  | 
|On October 31, 2010, the Company entered
    into a note payable agreement to finance $8,078 of directors and officer’s insurance premiums.  The note bears
    interest at a rate of 9.99% per annum and was due in nine monthly installments of $935, including principal and interest,
    beginning on November 30, 2010.  This note was paid in full during fiscal 2011 |  |   | 8,078  | 
|Total
    non-cash transactions from investing and financing activities                                                                                                                                                                                                                                                                                                      |  | $ | 17,874 | 







For fiscal 2010,
these non-cash investing and financing activities are summarized as follows:



|                                                                                                                                                                                                                                                                                                                                                                               |  |   | Amount    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | - | --------- | 
|The Company recognized a discount on the Convertible
    Promissory Notes issued to many accredited investors (See Note 10).  This discount is related to warrants and beneficial
    conversion feature issued in connection with these notes                                                                                                                                 |  | $ | 12,500    | 
|The Company recognized $198,334 of discounted stock issuance
    expense in connection with the sales of its common stock during fiscal 2010 to funds its operations                                                                                                                                                                                                           |  |   | 123,334   | 
|During fiscal 2010, the Company converted $1,207,675 of principal
    and accrued interest into 24,153,499 shares of its common stock.  These shares were issued in November 2009 and January
    2010                                                                                                                                                                         |  |   | 2,048,553 | 
|The Company recognized conversion expense as a result of reducing
    the conversion price on notes converted during fiscal 2010                                                                                                                                                                                                                                               |  |   | 413,840   | 
|On October 31, 2009, the Company entered
    into a note payable agreement to finance $19,200 of directors and officer’s insurance premiums.  The note bears
    interest at a rate of 8.99% per annum and was due in nine monthly installments of $2,214, including principal and interest,
    beginning on December 1, 2009.  This note was paid in full during fiscal 2010 |  |   | 19,200    | 
|Total
    non-cash transactions from investing and financing activities                                                                                                                                                                                                                                                                                                        |  | $ | 2,617,427 | 



NOTE
15 - SUBSEQUENT EVENTS



On
September 1, 2011, Michael Kramarz, the Company’s Chief Financial Officer, signed an additional twelve month consulting
agreement. Mr. Kramarz is to perform all his regular duties he had previously performed as Chief Financial Officer including the
preparation of the Company’s financial statements, SEC Filings, maintenance of corporate records, etc. Mr. Kramarz is to
be compensated $70 per hour worked and will turn in weekly time sheets for approval. Mr. Kramarz had previously had consulting
contracts for the period of January 2008 through August 2011.



F-23













On
October 5, 2011, the Company’s Board of Directors authorized the reduction of the per share conversion price on a $25,000
convertible promissory note of the Company held by an non-affiliate from $0.08 to $0.04 to induce the holder to convert that note.
On October 6, 2011, that holder elected to convert the principal amount of the note plus accrued interest of $402.75 into 635,069
shares of the Company’s common stock.



On
October 6, 2011, the Company issued a convertible promissory note in principal amount of $70,000 to its President, Anthony Silverman,
who is also a member of the Board of Directors. This note was issued as payment in full of the principal and accrued interest
of three outstanding promissory notes in that aggregate amount. The newly issued convertible promissory note bears interest at
6% per annum and is convertible into the Company's common stock at $0.04 per share. On the same date, Mr. Silverman elected to
convert this note plus accrued interest of $1,127.70 into 1,778,193 shares of the Company’s Common Stock.



On
October 7, 2011, the Company issued a 90-day convertible promissory note in the principal amount of $10,000 to our President,
Anthony Silverman, who is also a member of the Board of Directors. This note, which was issued for operating capital, bears interest
at 6% per annum and is convertible into the Company’s common stock at $0.04 per share.



On
October 19, 2011, the Company sold 625,000 shares of its common stock to a non-related accredited investor at $0.04 per share.
The sale resulted in gross proceeds to the Company of $25,000.



On
October 31, 2011, the Company entered into a note payable agreement to finance $8,078 of directors and officer’s insurance
premiums. The note bears interest at a rate of 8.99% per annum and is due in nine monthly installments of $932, including principal
and interest, beginning on November 30, 2011.





F-24





Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



None



Item 9A.
Controls and Procedures



Evaluation of Disclosure
Controls and Procedures

We
maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange
Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports
that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified
in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.

Our
management is responsible for establishing and maintaining our disclosure controls and procedures. Our Chief Executive Officer
(“CEO”) and Chief Financial Officer (“CFO”) have evaluated the effectiveness of our disclosure controls
and procedures as of August 31, 2011. In light of the material weakness set forth below, our CEO and CFO have concluded that
our disclosure controls and procedures were not effective as of that date. Notwithstanding the material weakness described below,
our management performed additional analyses, reconciliations and other post-closing procedures and has concluded that our consolidated
financial statements for the periods covered by and included in this Annual Report on Form 10-K are fairly stated in all material
respects in accordance with generally accepted accounting principles in the United States.

Management’s Report
on Internal Control over Financial Reporting

Oncologix
Tech’s CEO and CFO are responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Oncologix’s internal controls were designed to provide reasonable
assurance as to the reliability of Oncologix’s financial reporting and the preparation o fthe consolidated financial statements
for external purposes in accordance with generally accepted accounting principles in the United States, as well as to safeguard
assets from unauthorized use of disposition.

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

Internal
control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of
our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the financial statements.

A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not
be prevented or detected on a timely basis.

Oncologix’s
CEO and CFO conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria
for effective internal control over financial reporting established in “Internal Control — Integrated Framework,”
issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based upon this assessment, we concluded
that Oncologix did not maintain effective internal control over financial reporting as of August 31, 2011. The material weaknesses
are as follows:



16











·We did not maintain a sufficient complement of personnel with the appropriate level of knowledge, experience and training
to analyze, review and monitor the accounting of our financial transactions. All accounting and financial transactions are currently
recorded by our principal financial officer and sole employee.   However, it is to be noted that during the period covered
by this Report, we had no revenue producing operations or related expenses. Our current expenses primarily include our principal
financial officer’s wages, transfer agent fees, accounting fees, legal fees, insurance premiums and other expenses necessary
to maintain our current status with our SEC filings. We do not expect revenue producing operations to commence until such time
as we are able to fulfill our plans to conduct business operations with IUTM (as initially described in our Current Report on
Form 8-K filed on March 4, 2009) As previously reported, this plan is contingent on our ability to raise funds to finance the
operations.



·Oncologix lacks the necessary corporate accounting resources to maintain adequate segregation of duties.  We
currently rely heavily on our only employee, our principal financial officer, for almost every key financial duty and he has access
to all of the Company’s financial information.  Such a lack of segregation of duties is typical in a company with
limited resources.  Although the Company’s CEO and Board of Directors review the financial statements and would
most likely discover any misappropriation of funds, this cannot be assured by the existing system.



·In addition, we have a lack of a functioning Audit Committee as we only have one independent director is not considered
a Financial Expert within the meaning of Section 407 of the Sarbanes-Oxley Act. Currently, our Board of Directors acts as the
Audit Committee.



Our
annual report does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting due to an exemption for smaller reporting companies from the internal control audit requirements of Section
404(b)of the Sarbanes-Oxley Act.

Implemented or Planned
Remedial Actions in response to the Material Weaknesses



In
response to the material weaknesses discussed above, we have implemented or plan to implement the following measures:



Our
management believes the weaknesses identified above have not had a material effect on our financial results. Our present management
will continue to address our need for additional financial personnel and other independent members for our Board of Directors
and identify an “expert” for the Audit Committee to advise other members as to accounting and reporting procedures.



We
have written internal control policies in place to address the inadequate segregation of duties including a complete review of
all cash receipts and cash disbursements by our principal executive officer on a monthly basis.



We
will continue to strive to correct the above noted weaknesses in internal control once we have adequate funds to do so. When funds
become are available, we will be able to hire additional financial personnel. Appointing additional independent members to our
Board and finding of a financial expert to serve on our Audit Committee will improve the overall performance of Company’s
controls over our financial reporting. With the addition of other Board Members and staff, the segregation of duties issue will
be addressed and will no longer be a concern to management. We will continue to update our written policy manual outlining our
control procedures.

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



Changes in
Internal Control Over Financial Reporting



There
were no changes in our internal controls over financial reporting that occurred during the three months ended August 31, 2011
that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.





Item 9B. Other Information



None



17







PART III



Item
10. Directors, Executive Officers and Corporate Governance



The
following table sets forth our directors, and executive officers, their ages and all offices and positions held. Directors are
elected and serve thereafter until their successors are duly elected by the stockholders. Officers and other employees serve at
the will of the Board of Directors. The information is presented as of November 4, 2011:



|Name                | Age | Position
    held with Company                                                 
|------------------- | --- | -------------------------------------------------------------------------------
|Anthony Silverman   | 68  | Chief Executive Officer, President and
    Director                            
|Michael Kramarz     | 42  | Chief Financial Officer                                                        
|Barry Griffith      | 43  | Director                                                                       
|Judy Lindstrom      | 67  | Chief Executive Officer, Director, of
    Oncologix Corporation, our subsidiary
|Steven Kurtzman, MD | 49  | Director, Oncologix Corporation, our subsidiary                                



ANTHONY
SILVERMAN,who resigned as a member of our Board of Directors on October 12, 2007, was appointed President and CEO on April
3, 2009 and is also Chairman of the board. Mr. Silverman also manages his personal investments. Mr. Silverman has been a shareholder
of BestNet since April 2002. Mr. Silverman was Founder, Chairman and CEO of Paradise Valley Securities from 1987 to 1999. For
most of his 40-year career in the securities business, Mr. Silverman concentrated in transactions for the financing of micro-cap
and small-cap companies. Mr. Silverman has led financings aggregating over $500 million for close to 100 companies, including
diverse industries such as airlines, food products, telecommunications, retail, media and life sciences.



MICHAEL
A. KRAMARZ has served as Chief Financial Officer of the Company since July 15, 2004. Mr. Kramarz was first employed by the Company
in September 2002, as its Controller. Mr. Kramarz is responsible for all financial statement, accounting and tax functions. From
1995 to 2002, Mr. Kramarz was employed as Accounting Manager for Assurant Group, where he was responsible for the accounting and
payroll functions for two inbound call centers. In addition, Mr. Kramarz was responsible for quarterly consolidations into the
parent company. From 1992 to 1995, Mr. Kramarz was a staff accountant at VandenToorn & Associates CPA firm where his was responsible
for compilations and reviews of financial statements, as well as tax return preparation. Mr. Kramarz holds a Certified Management
Accountant Designation (CMA) and a Certified Public Accountant Designation (CPA). Mr. Kramarz holds a Bachelor of Science and
Business Administration in Accounting from Aquinas College and a Masters in the Science of Taxation from Grand Valley State University.



BARRY
GRIFFITH has been a director of the company since December of 2004. Mr. Griffith brings 20 years of early stage and upstart medical
device company experience to Oncologix. Mr. Griffith has been involved in the introduction of novel medical devices in the Orthopedic,
Vascular, Neurological and Cancer markets for companies such as Mitek, Schneider, Novoste and Medtronic. His present position
is founder and principal of The Bench which is and executive search firm within the medical device industry  based out of
Newport Beach Ca. Prior to that, he was Director of Sales with Cardiovascular Systems, Inc., Director of Sales for Calypso Medical
Technologies and held the Western Area Director roles with Novoste and Isoray.



JUDY
LINDSTROM was appointed to our Board of Directors on June 25, 2007. On January 4, 2008 Ms. .Lindstrom was elected Chairman of
the Board. On February 18, 2008, Ms. Lindstrom was appointed President and Chief Executive Officer. On April 1, 2009, Ms. Lindstrom
resigned her positions but still serves as President and Director on the Board of our Subsidiary, Oncologix Corporation. Prior
to Oncologix, Ms. Lindstrom was Chief Operating Officer of the U.S. division of Portland Orthopedics. A privately-held company
headquartered in Sydney, Australia. She has also been a director and business consultant for Genis, a private company in Iceland,
developing bone regeneration technology. Ms Lindstrom was Executive Vice President, Global Sales and Marketing, for Wright Medical
Technology, Inc. She was President and Chief Executive Officer of Neovision. Ms Lindstrom was President for MicroAire Surgical
Instruments, Inc. Ms. Lindstrom also served as General Manager for two operating divisions of Baxter International, V. Mueller
Endoscopy and Edward Orthopedics. She was the first woman promoted to General Manager for a Baxter operating unit. Ms. Lindstrom
served on the board of directors of Everest Medical Corporation (a NASDAQ listed company prior to its acquisition in April, 2000),
Novoste (a NASDAQ listed company) and served on the board of AdvaMed (formerly the Health Industry Manufacturers Association).



18













STEVEN
KURTZMAN, MD.was elected to our Board of Directors on June 25, 2007. On April 1, 2009, Dr. Kurtzman resigned his position
but still serves as Director on the Board of our Subsidiary, Oncologix Corporation. He has been an advisor to our Company and
has been the Medical Director of IsoRay Medical, Inc. a publicly traded company since January 2006. IsoRay manufactures and markets
radiation devices for brachytherapy primarily for the treatment of prostate cancer. He has, since 1998, been practicing medicine
in the San Francisco, California, Bay area specializing in radiation oncology. He is currently the Director of Brachytherapy for
Western Radiation Oncology, P.C. He is considered an expert in the management of prostate cancer and has lectured on and taught
prostate brachytherapy nationally. He holds a BA from Cornell University and is a graduate of Case Western Reserve University
School of Medicine. He completed his residency training in radiation oncology at the Hospital of the University of Pennsylvania.



Compliance
with Section 16(a) of the Exchange Act



Directors,
executive officers and holders of more than 10% of our outstanding common stock are required to comply with Section 16(a) of the
Securities Exchange Act of 1934, which requires generally that such persons file reports regarding ownership of transactions in
securities of the Company on Forms 3, 4, and 5. Based solely on its review of such forms received by it, or written representations
from certain reporting persons, the Company believes that all Section 16(a) filing requirements applicable to its officers and
directors were complied with during the fiscal year ended August 31, 2009.



Code of Ethics



Our
Board of Directors has adopted a code of ethics that applies to our principal executive officer, principal financial officer and
to other persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical
conduct, full, fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt
internal reporting of violations of the code and accountability for adherence to the code. We will provide a copy of our code
of ethics, without charge, to any person upon receipt of written request for such delivered to our corporate headquarters. All
such requests should be send to Oncologix Tech, Inc., P.O. Box 8832, Grand Rapids, MI 49518-8832.



19







Item 11.
Executive Compensation



The
following table summarizes all compensation paid for services rendered to Oncologix for the fiscal years ended August 31, 2011
and 2010 by our Principal Executive Officer and our two most highly compensated executive officers other than our principal executive
officer. None of the Company's other employees received compensation in excess of $100,000 during the last completed fiscal year.





|SUMMARY COMPENSATION TABLE  |  | 
|--------------------------- |  | 
|                            |  | 
|Name and Principal Position |  | 
|                            |  | 
|Michael A. Kramarz          |  | 
|Chief Financial Officer (1) |  | 
|                            |  | 





(1)Mr. Kramarz was hired by Oncologix as our Controller on September 16, 2002. Mr. Kramarz was appointed Chief Financial Officer
on July 15, 2004. Mr. Kramarz salary was set at $76,000 annually on June 25, 2007. Effective January 1, 2008, Mr. Kramarz has
been serving as Chief Financial Officer and is being compensated on a consulting basis.



EMPLOYMENT
AGREEMENTS



In
September 2009, the company entered into a six month consulting agreement with its Chief Financial Officer, Michael Kramarz. Mr.
Kramarz is to perform all his regular duties he had previously performed as Chief Financial Officer including the preparation
of the Company’s financial statements, SEC Filings, maintenance of corporate records, etc. Mr. Kramarz is to be compensated
$70 per hour worked and will turn in weekly time sheets for approval. The Company entered into another six month consulting contract
with Mr. Kramarz on March 1, 2010 at an hourly rate of $70. Mr. Kramarz previously had similar consulting agreements for fiscal
2009. During the fiscal 2011 and 2010, we incurred an expense of $82,600 and $73,920, respectively, under these agreements.



20

















|OUTSTANDING EQUITY AWARDS AT
    FISCAL YEAR END
|------------------------------------------------
|                                                
|Name and
    Principal Position                 
|                                                
|Anthony Silverman                               
|CEO & President as of                           
|April 1, 2009                                   
|                                                
|Judy Lindstrom                                  
|Former CEO & President                          
|Resigned April 1, 2009                          
|                                                
|Michael A. Kramer                               
|Chief Financial Officer                         



Options
Grants

During
fiscal 2011 we granted 53,750 options to current board members in exchange for the retirement of 268,750 stock options. No options
were granted to any members of our Board of Directors during fiscal 2010.



Option Exercise



There
were no other options exercised by the Named Executive Officers and the Company did not amend or adjust the exercise price of
any stock options during fiscal 2011 or 2010.



21















|DIRECTOR COMPENSATION
|---------------------
|                     
|                     
|                     
|Name and Principal   
|Position             
|                     
|Barry Griffith       
|                     
|Dr. Steven Kurtzman  
|                     
|Anthony Silverman    
|                     
|Judy Lindstrom       





All
directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with attendance of board meetings
and advising and consulting with the officers and management from time to time. In addition, each director receives options to
purchase 20,000 shares of common stock upon election to the board and annual grants of 10,000 options for each year of service
thereafter. The board of directors elected to waive the annual options due for fiscal years 2010 and 2009. The options vest one
year from the date of the grant and terminate upon the earlier of 10 years from the date of grant or six months after the director
ceases to be a member of the Board.



Since
suspension of its research operations on December 31, 2007, no compensation has been paid to any members of the Company’s
Board of Directors.



22









Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters



The
following table sets forth as of November 4, 2011, certain information with regard to the beneficial ownership of our common stock
held by (i) each shareholder known by us to beneficially own 5% or more of our outstanding common stock, (ii) each director individually,
(iii) the named executive officers and (iv) all of our officers and directors as a group:





|                   | Name
    and Address                       | Amount
    and Nature       |     | Percent             | 
|------------------ | ------------------------------------------ | --------------------------- | --- | ------------------- | 
|Title
    of Class | of
    Beneficial Owner (2)                | of
    Beneficial Owner (1) |     | of
    Class (1)(3) | 
|                   |                                            |                             |     |                     | 
|Common Stock       | Anthony Silverman                          | 4,446,213                   | (4) | 8.23%               | 
|                   |                                            |                             |     |                     | 
|Common Stock       | Michael Kramarz                            | 12,750                      | (5) | 0.02%               | 
|                   |                                            |                             |     |                     | 
|Common Stock       | Judy Lindstrom                             | 5,000                       | (6) | 0.01%               | 
|                   |                                            |                             |     |                     | 
|Common Stock       | Barry Griffith                             | 34,000                      | (7) | 0.06%               | 
|                   |                                            |                             |     |                     | 
|Common Stock       | Steven Kurtzman, MD                        | 50,000                      | (8) | 0.09%               | 
|                   |                                            |                             |     |                     | 
|Common Stock       | All directors and executive officers group | 4,547,963                   |     | 8.40%               | 





Less
than 1%

(1)Unless otherwise noted, the address of each holder is P.O. Box 8832, Grand Rapids, MI 49518-8832.

(2)A person is deemed to be the beneficial owner of securities that can be acquired within 60 days from November 4, 2011,
through the exercise of any option, warrant or other right. Shares of Common Stock subject to options, warrants or rights which
are currently exercisable or exercisable within 60 days are deemed outstanding solely for computing the percentage of the person
holding such options, warrants or rights, but are not deemed outstanding for computing the percentage of any other person.

(3)The amounts and percentages in the table are based upon 54,037,076 shares of Common Stock outstanding as of November 4,
2011

(4)Includes 3,500 shares subject to vested options, direct ownership of 4,442,713 shares

(5)Includes 12,750 shares subject to vested options.

(6)Includes 5,000 shares subject to vested options.

(7)Includes 20,000 shares subject to vested options and 9,000 shares of stock underlying units held.

(8)Includes 50,000 shares subject to vested options.

(9)Includes direct ownership of 4,442,713 shares.



Item 13.
Certain Relationships and Related Transactions, and Director Independence









On
September 11, 2009, the Company issued a 90-Day promissory note to Anthony Silverman, its President and CEO, in the principal
amount of $25,000. The note bears an interest rate of 6%. This note has been subsequently extended to November 30, 2011. On February
1, 2011, the Company paid accrued interest of $2,084 to Mr. Silverman. On July 11, 2011, the Company paid accrued interest of
$616 to Mr. Silverman. See Note 15 – Subsequent Events for further information on this note.



On
February 22, 2010, the Company issued a 60-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $25,000. The note bears an interest rate of 6%. This note has been subsequently extended to November 30 2011. On February 1,
2011, the Company paid accrued interest of $1,410 to Mr. Silverman. On July 11, 2011, the Company paid accrued interest of $616
to Mr. Silverman. See Note 15 – Subsequent Events for further information on this note.



On
December 16, 2010, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $20,000. The note bears an interest rate of 6%. This note has been subsequently extended to November 30, 2011. On February
1, 2011, the Company paid accrued interest of $151 to Mr. Silverman. On July 22, 2011, the Company paid accrued interest of $493
to Mr. Silverman. See Note 15 – Subsequent Events for further information on this note.



On
January 20, 2011, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $20,000. The note bears an interest rate of 6%. This note was repaid on February 19, 2011 along with $26 in accrued interest.



On
April 26, 2011, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $10,000. The note bears an interest rate of 6%. This note was repaid on July 11, 2011 along with $125 in accrued interest.



On
May 26, 2011, the Company issued a 60-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $10,000. The note bears an interest rate of 6%. This note was repaid on July 11, 2011 along with $76 in accrued interest.



On
June 15, 2011, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount
of $15,000. The note bears an interest rate of 6%. This note was repaid on July 11, 2011 along with accrued interest.



23













Director
Independence



The
board has determined that one of the current directors would qualify as independent director as that term is defined in the listing
standards of the NYSE Amex. Such independence definition includes a series of objective tests, including that the director is
not an employee of the company and has not engaged in various types of business dealings with the company.



Item 14. Principal Accountant
Fees and Services



The
following table sets forth approximate fees billed to us by our auditors during the fiscal years ended August 31, 2011 and 2010
for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements;
(ii) services by our auditor that are reasonably related to the performance of the audit or review of our financial statements
and that are not reported as Audit Fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning;
and (iv) all other fees for services rendered.



|                           |  | August
    31, 2010 |        | August
    31, 2009
|-------------------------- |  | ------------------- | ------ | -------------------
|                           |  |                     |        |                    
|(i)    
    Audit Fees     |  | $                   | 10,290 |                    
|(ii)    Audit Related Fees |  | $                   | —      |                    
|(iii)   Tax Fees           |  | $                   | —      |                    
|(iv)   All Other Fees      |  | $                   | —      |                    



24









PART IV



Item 15. Exhibits, Financial
Statement Schedules



(a)(1) The financial
statements listed in the index set forth in Item 7 of this Form 10-K is filed as part of this report.



(a)(2) Exhibits



|Number | Description
    of Filing                                                                                                                                                                              | Method
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------
|2.1    | Agreement of Merger
    and Plan of Reorganization between BestNet Communications Corp, Oncologix Corporation and JDA Medical Technologies, Inc.                                                       | (9)   
|3.1    | Articles of Incorporation,
    as originally filed with the Nevada Secretary of State on February 19, 1998, and as amended to date                                                                     | (1)   
|3.3    | Certificate of Amendment
    to Articles of Incorporation, as originally filed with the Nevada Secretary of State.                                                                                     | (6)   
|3.4    | Amended Certificate
    of Designations, Rights, Preferences and Limitations of Series A Convertible Preferred Stock, as originally filed with the
    Nevada Secretary of State on November 19, 2003. | (6)   
|3.5    | Amended Certificate
    of Designations, Rights, Preferences and Limitations of Series B Convertible Preferred Stock, as originally filed with the
    Nevada Secretary of State on November 19, 2003. | (6)   
|3.6    | Amended Certificate
    of Designations, Rights, Preferences and Limitations of Series C Convertible Preferred Stock, as originally filed with the
    Nevada Secretary of State on November 19, 2003. | (6)   
|3.7    | Amended and Restated
    Bylaws of BestNet Communications Corp.                                                                                                                                        | (8)   
|3.8    | Certificate of Amendment
    of Articles of Incorporation, as originally filed with the Nevada Secretary of State.                                                                                     | (11)  
|4      | 2000 Incentive Stock
    Plan                                                                                                                                                                          | (2)   
|4.1    | Form of Unit Purchase
    Agreement                                                                                                                                                                    | (7)   
|10.1   | Securities Purchase
    Agreement between Wavetech and the investor and the Placement Agent                                                                                                            | (3)   
|10.2   | Registration Rights
    Agreement between Wavetech, the Investor and the Placement Agent                                                                                                               | (3)   
|10.3   | Registration Right
    Agreement                                                                                                                                                                       | (3)   
|10.4   | Securities Purchase
    Agreement                                                                                                                                                                      | (3)   
|10.5   | Product Customization
    Agreement                                                                                                                                                                    | (4)   
|10.6   | Purchase Agreement
    by and among Softalk, Inc., Interpretel (Canada) Inc. and Wavetech International, Inc. dated October 25, 1999                                                                   | (5)   
|10.7   | Amendment No. 1 to
    Amended and Restated License Agreement                                                                                                                                          | (5)   
|10.8   | Amended and Restated
    License Agreement                                                                                                                                                             | (5)   
|10.9   | Share Exchange Agreement
    by and among Wavetech International, Inc., Interpretel (Canada) Inc. and Softalk, Inc. dated November 13, 1999                                                            | (5)   
|10.10  | Minutes of Settlement between BestNet
    Communications Corp. and Softalk, Inc.                                                                                                                       | (8)   
|10.11  | Lease Agreement Dated
    November 1, 2005, by and between Noto’s Properties LLC. and Bestnet                                                                                                          | (10)  



25















|10.12 | Lease
    Agreement Dated July 25, 2006, by and between R & J Ventures LLC. and Oncologix Corporation         | (10)
|----- | ------------------------------------------------------------------------------------------------------------- | ----
|10.13 | Lease Agreement Dated
    July 12, 2006, by and between Office Suites Plus and Oncologix Corporation          | (10)
|10.14 | Form of Note and
    Warrant Purchase Agreement between BestNet and Mountainview Opportunistic Growth Fund LP | (10)
|10.15 | Form of Note Purchase
    Agreement Issued July 7, 2006                                                       | (10)
|10.16 | Franco Consulting
    Agreement                                                                               | (9) 
|10.17 | Kennedy Employment
    Agreement                                                                              | (9) 
|10.18 | Green Employment
    Agreement                                                                                | (9) 
|10.19 | Lowe Employment Agreement                                                                                     | (9) 
|10.20 | License to Fountain
    Pharmaceuticals, Inc.                                                                 | (11)
|14.1  | Oncologix Tech, Inc.
    Code of Ethics                                                                       | (6) 
|21    | Subsidiaries of the
    Registrant                                                                            | *   
|32.1  | Section 906 Certification
    of Andrew M. Green                                                              | *   
|32.2  | Section 906 Certification
    of Michael A. Kramarz                                                           | *   
|31.1  | Certification of
    Chief Executive Officer                                                                  | *   
|31.2  | Certification of
    Chief Financial Officer                                                                  | *   
|99    | Consent of Seale
    and Beers, CPAs                                                                          | *   



*
	Filed herewith

(1)	Incorporated
by reference to the like numbered exhibit to Form 10-QSB for the quarter ended February 28, 1998.

(2)	Incorporated
by reference to the like numbered exhibit to Form S-8 as filed on May 29, 2001.

(3)	Incorporated
by reference to exhibit 4.2 to Form 8-K filed on May 16, 2000.

(4)	Incorporated
by reference to exhibit 10.1 to the Form 10-K for the fiscal year ended August 31, 2000.

(5)	Incorporated
by reference to the Form 10-KSB for the fiscal year ended August 31, 1999, exhibits 10.6, 10.7, 10.8 and 10.9 were numbered exhibits
10.1, 10.2, 10.3 and 10.4 respectively in the Form 10-KSB for the year ended August 31, 1999.

(6)	Incorporated
by reference to the Form 10-KSB for the fiscal year ended August 31, 2003.

(7)	Incorporated
by reference to the Form 10-QSB for the quarter ended May 31, 2003, exhibit 4.4 was exhibit 10.1 in the Form 10-QSB for the quarter
ended May 31, 2003.

(8)	Incorporated
by reverence to the Form 10-KSB for the fiscal year ended August 31, 2004.

(9)	Incorporated
by reference to the Current Report on Form 8-K, dated July 26, 2006.

(10)	Incorporated
by reference to the Form 10-KSB for the fiscal year ended August 31, 2006.

(11)	Incorporated
by reference to the Form 10-KSB for the fiscal year ended August 31, 2007







(b)	Reports
on Form 8-K Filed during the Last Quarter of The Period Covered by This Report are as Follows:



None.



26









SIGNATURES



In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|                        | ONCOLOGIX
    TECH, INC.                    
|----------------------- | --------------------------------------------
|                        |                                             
|                        |                                             
|Date: November 30, 2011 | By:	/s/ Anthony
    Silverman               
|                        | Name:  Anthony Silverman                    
|                        | Title: Chief Executive Officer and President
|Date: November 30, 2011 | By:	/s/ Michael
    A. Kramarz              
|                        | Name:  Michael A. Kramarz                   
|                        | Title: Chief Financial Officer              
|                        |                                             



In
accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.



|By: /s/
    Anthony Silverman                                          | Date:  November 30, 2011
|---------------------------------------------------------------------- | ------------------------
|Anthony
    Silverman, Chief Executive Officer, President and Director |                         
|                                                                       |                         
|By: /s/ Michael A.
    Kramarz                                         | Date:  November 30, 2011
|Michael
    A. Kramarz, Chief Financial Officer                        |                         
|                                                                       |                         
|By: /s/ Barry Griffith                                                 | Date:  November 30, 2011
|Barry
    Griffith, Director                                           |                         





27