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| NEVADA                                                         | 76-0674577                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| COMMON STOCK, PAR VALUE $.001 PER SHARE | NONE                                   |
|-----------------------------------------|----------------------------------------|
|                                    |                                   |
| (Title of Class)                        | (Name of exchange on which registered) |

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| Large accelerated filer            ̈ | Accelerated filer              ̈    |
|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|
| Non-accelerated filer            ̈   | Smaller reporting Company             x |

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CO

| PART I     |                                                                                                                   |   |
|------------|------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                   |   |
| Item 1.    | Description of Business                                                                                                | 4      |
| Item 1A    | Risk Factors                                                                                                           | 56     |
| Item 1B    | Unresolved Staff Comments                                                                                              | 75     |
| Item 2.    | Properties                                                                                                             | 75     |
| Item 3.    | Legal Proceedings                                                                                                      | 75     |
| Item 4.    | Submission of Matters to a Vote of Security Holders                                                                    | 75     |
|       |                                                                                                                   |   |
| PART II    |                                                                                                                   |   |
|       |                                                                                                                   |   |
| Item 5.    | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 76     |
| Item 6.    | Selected Financial Data                                                                                                | 81     |
| Item 7.    | Management’s Discussion and Analysis of Plan of Operation                                                        | 81     |
| Item 7A    | Quantitative and Qualitative Disclosures About Market Risk                                                             | 81     |
| Item 8.    | Financial Statements and Supplementary Data                                                                            | 94     |
| Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                   | 95     |
| Item 9A(T) | Controls and Procedures                                                                                                | 95     |
| Item 9B.   | Other Information                                                                                                      | 97     |
|       |                                                                                                                   |   |
| PART III   |                                                                                                                   |   |
|       |                                                                                                                   |   |
| Item 10.   | Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(A) of the Exchange Act.       | 97     |
| Item 11.   | Executive Compensation                                                                                                 | 98     |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                         | 100    |
| Item 13.   | Certain Relationships and Related Transactions and Director Independence                                               | 102    |
| Item 14.   | Principal Accountant Fees and Services                                                                                 | 103    |
|       |                                                                                                                   |   |
| PART IV    |                                                                                                                   |   |
|       |                                                                                                                   |   |
| Item 15.   | Exhibits, Financial Statement Schedules                                                                                | 104    |
|       |                                                                                                                   |   |
| SIGNATURES | 105                                                                                                                    |

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| 1. | KARD Scientific, Inc., MA. |
|----|----------------------------|

| 2. | Southern Research Institute, AL. |
|----|----------------------------------|

| 3 | TheVac, LLC, LA. |
|---|------------------|

| 4 | National (Central) Institute of Hygiene and Epidemiology (NIHE) (Vietnam), for H5N1 avian flu. |
|---|------------------------------------------------------------------------------------------------|

| 1.  | KARD Scientific, Inc., MA. |
|----------|----------------------------|

| 2.  | Southern Research Institute, Frederick, MD. |
|----------|---------------------------------------------|

| 3  | University of California at San Francisco (Dr. Cheryl Stoddart, PI), CA. |
|---------|--------------------------------------------------------------------------|

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| 1.  | The Long Island Jewish Medical System, Feinstein Institute of Medical Research (LIJMS), NY. |
|----------|---------------------------------------------------------------------------------------------|

| 2.  | TheVac, LLC. |
|----------|--------------|

| 1.  | TheVac, LLC |
|----------|-------------|

| 2.  | Northeastern Ohio Medical University (NEOMED), previously NEOUCOM, Prof. Ken Rosenthal Lab. |
|----------|---------------------------------------------------------------------------------------------|

| 1.  | University of California at Berkeley, Prof. Eva Harris Lab. |
|----------|-------------------------------------------------------------|

| 1.  | United States Army Medical Institute of Infectious Diseases (USAMRIID), Dr. Gene Olinger Lab. |
|----------|-----------------------------------------------------------------------------------------------|

| 1.  | Center for Disease Control and Prevention (CDC), Dr. Charles Rupprecht Lab. |
|----------|-----------------------------------------------------------------------------|

| 2.  | National (Central) Institute of Hygiene and Epidemiology (NIHE), Vietnam. |
|----------|---------------------------------------------------------------------------|

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| 1. | Each nanoviricide drug is designed as a specifically targeted antiviral agent for a particular type of virus or group of viruses. Often side effects of a drug may be correlated with non-specific interactions with the host cells, tissues, and organs. Most existing anti-viral agents are known to have non-specific effects against both host cells and viral machinery at the same time. Most existing anti-viral agents act inside human cells. It is believed that this intracellular mechanism leads to significant opportunities for non-specific effects against host cells. Nanoviricides, on the other hand, are designed to work directly against virus particles in bodily fluids. The Company believes that this approach may make nanoviricides inherently safer than existing approaches. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | A nanoviricide is designed to seek and attach to a specific virus particle, engulfing the virus particle in the process, thereby rendering it incapable of infecting new cells, and disabling it completely. This suggested mechanism of action comprises much more than what the current entry and fusion inhibitors are expected to do. The fusion and entry inhibitors do not completely cover the virus particle and likely block only a few sites on the virus particle, which means the virus particle may still be capable of infecting cells using its unblocked attachment sites. In contrast, a nanoviricide is expected to engulf the virus particle completely, because of its larger size and flexible nature, thus disabling the virus particle completely. The action of a nanoviricide, if it works as designed, in this regard may be expected to be superior to antibody agents that attack viruses . Antibodies, being large, are expected to block relatively greater portions of the virus particle surface compared to small molecule entry inhibitors. However, antibodies depend upon the human immune system responses for clearing up the virus particle. In contrast, nanoviricides are thought to be capable of acting as completely programmed chemical robots that finish their task of destroying the virus particle on their own. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | A nanoviricide is designed to be capable of encapsulating an active pharmaceutical ingredient (API) in its core, or “belly”. This is expected to reduce toxic effects of the API. Such encapsulating methods are currently being used in anti-cancer therapy and have shown reduced toxicity as well as increased efficacy (see http://nihroadmap.nih.gov/nanomedicine/). |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | A nanoviricide is designed to deliver any encapsulated API directly into the core of the virus particle. This is proposed to result in maximal effect against the anti-viral targets, such as the viral genomic materials. Our goal for this specifically targeted delivery of the API is to minimize toxic effects and also improve efficacy of the API. (see http://www.nci.nih.gov). |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | With this concerted targeted set of mechanisms, our objective is for the nanoviricide to be programmed to (a) prevent the virus particle from being able to infect new cells, (b) dismantle the virus particle, and (c) destroy the genetic material of the virus particle, thereby completely destroying the target. Our complete systems engineered approach to anti-viral therapy is in stark contrast with the current piece-meal approaches. Current drug therapies often have extensive toxicities, limited efficacies, and generation of mutants (mutated viruses) through selective incomplete pressure applied by the therapeutic regime onto the virus. |
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| Table 1. Products in Development |
|----------------------------------|
|                             |   | Project |   | Virus |   | Description |   | Development Stage |
| 1                                |   | FluCide(TM) |   | Influenza (Common), H5N1 Bird Flu, Highly Pathogenic Influenzas, novel H1N1/2009 |   | Broad-Spectrum Anti-Influenza nanoviricide |   | Preclinical |
| 2                                |   | HIVCide (TM) |   | HIV/AIDS |   | Escape-resistant Anti-HIV nanoviricide |   | Preclinical |
| 3                                |   | Nanoviricide Eye Drops |   | Adenoviruses, HSV-1 |   | Eye Drops for Viral Diseases of the External Eye |   | Preclinical |
| 4                                |   | HerpeCide (TM) |   | HSV-1, HSV-2 |   | Herpes “Cold Sores” and Genital Herpes, Topical Cream and Gel Formulations |   | Preclinical |
| 5                                |   | DengueCide(TM) |   | Dengue viruses, all types |   | Broad-Spectrum nanoviricide against all types of Dengue viruses |   | Preclinical |
| 6                                |   | RabiCide (TM) |   | Rabies |   | Anti-Rabies nanoviricide |   | Preclinical; Background Project |
| 7                                |   | Nanoviricide against Ebola/Marburg |   | Filoviruses (Ebola, Marburg, various strains) |   | Broad-Spectrum nanoviricide against all strains of Ebola and Marburg filoviruses |   | Preclinical; Background Project |
| 8                                |   | HepCCide (TM) |   | HCV |   | Anti-HCV nanoviricide |   | R&D, project delayed, expect to restart in 2011-2012 |

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| Table 2: Intellectual Property, Patents and Pending Patents Licensed by The Company |
|-------------------------------------------------------------------------------------|
|                                                                                |   | Patent or Application |   | Date of Issue/ Application |   | US Expiry Date |   | International |   | Owners |
| 1                                                                                   |   | US6,521,736 (Certain specific amphiphilic polymers). |   | Issued: Feb 18, 2003 |   | Feb 18, 2020 |   | N/A |   | TheraCour Pharma and Univ. of Massachusetts, Lowell. [Nonexclusive license from TheraCour Pharma]. |
| 2                                                                                   |   | PCT/US06/01820(SOLUBILIZATION AND TARGETED DELIVERY OF DRUGS WITH SELF-ASSEMBLING AMPHIPHILIC POLYMERS). |   | Applied: Jan 19, 2006 PCT Application. |   | Jan 18, 2023 (estimated) |   | Applications being filed. |   | TheraCour Pharma, Inc. [Exclusive License]. |
| 3                                                                                   |   | PCT/US2007/001607SELF-ASSEMBLING AMPHIPHILIC POLYMERS AS ANTIVIRAL AGENTS |   | Applied: Jan 22, 2007 |   | Jan 21, 2024 (estimated) |   | Applications to be filed. |   | TheraCour Pharma, Inc. [Exclusive License]. |

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|   | • | efficacy; |
|--------|---------|-----------|

|   | • | safety; |
|--------|---------|---------|

|   | • | tolerability; |
|--------|---------|---------------|

|   | • | acceptance by doctors; |
|--------|---------|------------------------|

|   | • | patient compliance; |
|--------|---------|---------------------|

|   | • | patent protection; |
|--------|---------|--------------------|

|   | • | ease of use; |
|--------|---------|--------------|

|   | • | price; |
|--------|---------|--------|

|   | • | insurance and other reimbursement coverage; |
|--------|---------|---------------------------------------------|

|   | • | distribution; |
|--------|---------|---------------|

|   | • | marketing; and |
|--------|---------|----------------|

|   | • | adaptability to various modes of dosing. |
|--------|---------|------------------------------------------|

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|   | · | Phase I. The drug is given to a small number of healthy human subjects or patients to test for safety, dose tolerance, pharmacokinetics, metabolism, distribution and excretion. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Phase II. The drug is given to a limited patient population to determine the effect of the drug in treating the disease, the best dose of the drug, and the possible side effects and safety risks of the drug. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Phase III. If a compound appears to be effective and safe in Phase II clinical trials, Phase III clinical trials are commenced to confirm those results. Phase III clinical trials are long-term, involve a significantly larger population, are conducted at numerous sites in different geographic regions and are carefully designed to provide reliable and conclusive data regarding the safety and benefits of a drug. It is not uncommon for a drug that appears promising in Phase II clinical trials to fail in the more rigorous and reliable Phase III clinical trials. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | demonstration and proof of principle in pre-clinical trials that a nanoviricide is safe and effective; |
|---------|--------------------------------------------------------------------------------------------------------|

| • | successful development of our first product candidates FluCide, Nanoviricide Eye Drops, HIVCide, HerpeCide or another one of the drug candidates in our pipeline; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | our ability to seek and obtain regulatory approvals, including with respect to the indications we are seeking; |
|---------|----------------------------------------------------------------------------------------------------------------|

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| • | the successful commercialization of our product candidates; and |
|---------|-----------------------------------------------------------------|

| • | market acceptance of our products. |
|---------|------------------------------------|

| • | the absence of an operating history; |
|---------|--------------------------------------|

| • | the lack of commercialized products; |
|---------|--------------------------------------|

| • | insufficient capital; |
|---------|-----------------------|

| • | expected substantial and continual losses for the foreseeable future; |
|---------|-----------------------------------------------------------------------|

| • | limited experience in dealing with regulatory issues; the lack of manufacturing experience and limited marketing experience; |
|---------|------------------------------------------------------------------------------------------------------------------------------|

| • | an expected reliance on third parties for the development and commercialization of our proposed products; |
|---------|-----------------------------------------------------------------------------------------------------------|

| • | a competitive environment characterized by numerous, well-established and well capitalized competitors; and |
|---------|-------------------------------------------------------------------------------------------------------------|

| • | reliance on key personnel. |
|---------|----------------------------|

| • | our ability to develop drugs, obtain approval for such drugs, and if approved, to successfully commercialize our nanoviricide drug(s); |
|---------|----------------------------------------------------------------------------------------------------------------------------------------|

| • | our R&D efforts, including the timing and cost of clinical trials; and |
|---------|----------------------------------------------------------------------------|

| • | our ability to enter into favorable alliances with third-parties who can provide substantial capabilities in clinical development, regulatory affairs, sales, marketing and distribution. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | research and development programs; |
|---------|------------------------------------|

| • | preclinical studies and clinical trials; material characterization studies, regulatory processes; |
|---------|---------------------------------------------------------------------------------------------------|

| • | establishment of our own laboratory or a search for third party marketing partners to market our products for us. |
|---------|-------------------------------------------------------------------------------------------------------------------|

| • | progress, timing and scope of our research and development programs; |
|---------|----------------------------------------------------------------------|

| • | progress, timing and scope of our preclinical studies and clinical trials; |
|---------|----------------------------------------------------------------------------|

| • | time and cost necessary to obtain regulatory approvals; |
|---------|---------------------------------------------------------|

| • | time and cost necessary to establish our own marketing capabilities or to seek marketing partners; |
|---------|----------------------------------------------------------------------------------------------------|

| • | time and cost necessary to respond to technological and market developments; |
|---------|------------------------------------------------------------------------------|

| • | changes made or new developments in our existing collaborative, licensing and other commercial relationships; and |
|---------|-------------------------------------------------------------------------------------------------------------------|

| • | new collaborative, licensing and other commercial relationships that we may establish. |
|---------|----------------------------------------------------------------------------------------|

| • | enter into leases for new facilities and capital equipment; |
|---------|-------------------------------------------------------------|

| • | enter into additional licenses and collaborative agreements; and |
|---------|------------------------------------------------------------------|

| • | incur additional expenses associated with being a public company. |
|---------|-------------------------------------------------------------------|

| • | develop products internally or obtain rights to them from others on favorable terms; |
|---------|--------------------------------------------------------------------------------------|

| • | complete laboratory testing and human studies; |
|---------|------------------------------------------------|

| • | obtain and maintain necessary intellectual property rights to our products; |
|---------|-----------------------------------------------------------------------------|

| • | successfully complete regulatory review to obtain requisite governmental agency approvals; |
|---------|--------------------------------------------------------------------------------------------|

| • | enter into arrangements with third parties to manufacture our products on our behalf; and |
|---------|-------------------------------------------------------------------------------------------|

| • | enter into arrangements with third parties to provide sales and marketing functions. |
|---------|--------------------------------------------------------------------------------------|

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| • | are found to be unsafe or ineffective in clinical trials; |
|---------|-----------------------------------------------------------|

| • | do not receive necessary approval from the FDA or foreign regulatory agencies; |
|---------|--------------------------------------------------------------------------------|

| • | fail to conform to a changing standard of care for the diseases they seek to treat; or |
|---------|----------------------------------------------------------------------------------------|

| • | are less effective or more expensive than current or alternative treatment methods. |
|---------|-------------------------------------------------------------------------------------|

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|   | • | The FDA or foreign regulators may interpret data from pre-clinical testing and clinical trials in different ways than we interpret them. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | If regulatory approval of a product is granted, the approval may be limited to specific indications or limited with respect to its distribution. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | In addition, many foreign countries control pricing and coverage under their respective national social security systems. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | • | The FDA or foreign regulators may not approve our manufacturing processes or manufacturing facilities. |
|--------|---------|--------------------------------------------------------------------------------------------------------|

|   | • | The FDA or foreign regulators may change their approval policies or adopt new regulations. |
|--------|---------|--------------------------------------------------------------------------------------------|

|   | • | Even if regulatory approval for any product is obtained, the marketing license will be subject to continual review, and newly discovered or developed safety or effectiveness data may result in suspension or revocation of the marketing license. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | If regulatory approval of the product candidate is granted, the marketing of that product would be subject to adverse event reporting requirements and a general prohibition against promoting products for unapproved or “off-label” uses. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | In some foreign countries, we may be subject to official release requirements that require each batch of the product we produce to be officially released by regulatory authorities prior to its distribution by us. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We will be subject to continual regulatory review and periodic inspection and approval of manufacturing modifications, including compliance with current GMP regulations. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | the number and outcome of clinical studies we are planning to conduct; for example, our R&D expenses may increase based on the number of late-stage clinical studies that we may be required to conduct; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | the number of drugs entering into pre-clinical development from research; for example, there is no guarantee that internal research efforts will succeed in generating sufficient data for us to make a positive development decision; |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | licensing activities, including the timing and amount of related development funding or milestone payments; for example, we may enter into agreements requiring us to pay a significant up-front fee for the purchase of in-process R&D that we may record as R&D expense. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | significant time and effort from our management team; |
|---------|-------------------------------------------------------|

| • | coordination of our marketing and R&D programs with the marketing and R&D priorities of our collaborators; and |
|---------|------------------------------------------------------------------------------------------------------------------------|

| • | effective allocation of our resources to multiple projects. |
|---------|-------------------------------------------------------------|

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| • | Our executive officers or directors or their affiliates may have an economic interest in, or other business relationship with, partner companies that invest in us. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Our executive officers or directors or their affiliates have interests in entities that provide products or services to us. |
|---------|-----------------------------------------------------------------------------------------------------------------------------|

| • | Our executive officers or directors may have a conflict between our current interests and their personal financial and other interests in another business venture. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Our executive officers or directors may have conflicting fiduciary duties to us and the other entity. |
|---------|-------------------------------------------------------------------------------------------------------|

| • | The terms of transactions with the other entity may not be subject to arm’s length negotiations and therefore may be on terms less favorable to us than those that could be procured through arm’s length negotiations. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | suspend or prevent us for a set period of time from receiving new contracts or extending existing contracts based on violations or suspected violations of laws or regulations; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | terminate our existing contracts; |
|---------|-----------------------------------|

| • | reduce the scope and value of our existing contracts; |
|---------|-------------------------------------------------------|

| • | audit and object to our contract-related costs and fees, including allocated indirect costs; |
|---------|----------------------------------------------------------------------------------------------|

| • | control and potentially prohibit the export of our drug candidates; and |
|---------|-------------------------------------------------------------------------|

| • | change certain terms and conditions in our contracts. |
|---------|-------------------------------------------------------|

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| • | pre-clinical study results that may show the product to be less effective than desired (e.g., the study failed to meet its primary objectives) or to have harmful or problematic side effects; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis or a IND and later NDA, preparation, discussions with the FDA, an FDA request for additional pre-clinical or clinical data or unexpected safety or manufacturing issues; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | manufacturing costs, pricing or reimbursement issues, or other factors that make the product not economical; and |
|---------|------------------------------------------------------------------------------------------------------------------|

| • | the proprietary rights of others and their competing products and technologies that may prevent the product from being commercialized. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------|

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| • | obtaining financial and investment information from the investor; |
|---------|-------------------------------------------------------------------|

| • | obtaining a written suitability questionnaire and purchase agreement signed by the investor; and |
|---------|--------------------------------------------------------------------------------------------------|

| • | providing the investor a written identification of the shares being offered and the quantity of the shares. |
|---------|-------------------------------------------------------------------------------------------------------------|

| • | progress of our products through the regulatory process; |
|---------|----------------------------------------------------------|

| • | results of preclinical studies and clinical trials; |
|---------|-----------------------------------------------------|

| • | announcements of technological innovations or new products by us or our competitors; |
|---------|--------------------------------------------------------------------------------------|

| • | government regulatory action affecting our products or our competitors' products in both the United States and foreign countries; |
|---------|-----------------------------------------------------------------------------------------------------------------------------------|

| • | developments or disputes concerning patent or proprietary rights; |
|---------|-------------------------------------------------------------------|

| • | general market conditions for emerging growth and pharmaceutical companies; |
|---------|-----------------------------------------------------------------------------|

| • | economic conditions in the United States or abroad; |
|---------|-----------------------------------------------------|

| • | actual or anticipated fluctuations in our operating results; |
|---------|--------------------------------------------------------------|

| • | broad market fluctuations; and |
|---------|--------------------------------|

| • | changes in financial estimates by securities analysts. |
|---------|--------------------------------------------------------|

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| Quarter ended      |   | Low price |   |   | High price |   |
|--------------------|--------|-----------|--------|--------|------------|--------|
|               |   |      |   |   |       |   |
| June 30, 2011      |   | $         | 1.20   |   |       | $      | 1.28 |   |
| March 31, 2011     |   | $         | 1.22   |   |       | $      | 1.27 |   |
| December 31,2010   |   | $         | 1.43   |   |       | $      | 1.52 |   |
| September 30, 2010 |   | $         | 1.00   |   |       | $      | 1.03 |   |
| June 30, 2010      |   | $         | 1.80   |   |       | $      | 1.92 |   |
| March 31, 2010     |   | $         | 1.67   |   |       | $      | 1.75 |   |
| December 31, 2009  |   | $         | .81    |   |       | $      | .87 |   |
| September 30, 2009 |   | $         | .80    |   |       | $      | .84 |   |

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| Table 3: R&D Cost Allocations                                                                                                  |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                               |   | Year Ended June 30, 2011 |   |   | Year Ended June 30, 2010 |   |   | For the Cumulative Period From May 12, 2005 (Inception) through June 30, 2011 |   |
| All Influenzas: FluCideTM, (Note: FluCide-HP, and AviFluCide are now consolidated into a single drug candidate, viz. FluCide) |   |   | 1,000,000 |   |   |   | 762,500 |   |   |   | 4,624,887 |   |
| EKC-CideTM, other Eye Viral Infections                                                                                        |   |   | 200,000 |   |   |   | 495,454 |   |   |   | 1,431,557 |   |
| HIV-CideTM                                                                                                                    |   |   | 1,000,000 |   |   |   | 410,604 |   |   |   | 2,609,4091,084,816 |   |
| Herpes nfections                                                                                                                   |   |   | 300,000 |   |   |   | 392,408 |   |   |   | 703,290 |   |
| Dengue                                                                                                                             |   |   | 300,000 |   |   |   | 201,620 |   |   |   |   |   |
| Other (Ebola, and other projects)                                                                                                  |   |   | 200,000 |   |   |   | 75,000 |   |   |   | 2,199,668 |   |
| Unallocated stock compensation                                                                                                     |   |   | 555,846 |   |   |   | 1,029,823 |   |   |   | 1,591,591 |   |
| Total Research and development                                                                                                     |   |   | 4,155,846 |   |   |   | 3,367,409 |   |   |   | 14,245,218 |   |

| Table 4: Drug Development Status                                                                                                                                         |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Project                                                                                                                                                                  |   | Drug Development of FluCideTM for All Influenzas |
| Current status                                                                                                                                                           |   | We have declared a clinical candidate for influenza, NV-INF-1. This single drug is expected to be effective against most if not all influenza viruses. It is expected to be highly effective against all Influenza A viruses including bird flu H5N1 all clades, Highly Pathogenic Avian Influenzas of all types, subtypes and strains, seasonal Influenzas, as well as the novel 2009/H1N1 epidemic virus.We expect to file a pre- IND application with the FDA soon. |
| Nature, timing and estimated costs                                                                                                                                       |   | The Company has budgeted approximately $2,000,000 for the material development, production and testing of this drug. These costs will be paid from our available cash balances. Should management determine the results to be satisfactory, we will need to obtain additional financing to perform material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, which we have presently budgeted at $2,500,000. |
| Anticipated completion date                                                                                                                                              |   | Preclinical stage is expected to be completed in 12-18 months, depending upon financing. An IND could be filed within a few months after the completion of preclinical stage. |
| Risks and uncertainties associated with completing development on schedule, and the consequences to operations, financial position and liquidity if not completed timely |   | The Company has not yet raised the financing necessary to complete the preclinical stage and file an IND with the FDA. |
| Timing of commencement of expected material net cash inflows                                                                                                             |   | If we file an IND in the next 18~24 months, we can expect human clinical trials to be completed at the earliest by 2015. Revenues are expected to occur after FDA approval and marketing of the drug. Revenues may occur earlier if the BARDA authority determines that FluCide should be stockpiled in the USG CDC stockpile of drugs for defense against pandemic influenza. If we are successful in partnering the drug with another pharmaceutical Company, we may see revenues much earlier than FDA approval. |

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| Project                                                                                                                                                                  |   | Drug Development of Nanoviricide Eye Drops for all Viral Infections of the External Eye                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Current status                                                                                                                                                           |   | This year, we developed new, broad-spectrum. ligands that should be capable of enabling nanoviricide binding to herpes simplex viruses, while retaining the features that were previously successful against adenoviral EKC in clinical studies. The resulting nanoviricides have been tested against HSV-1 in cell cultures against two different strains of HSV-1, and a lead drug candidate has been identified. We are developing nanoviricide eye drop solution that should be capable of resolving the broad range of viruses that can cause infections of the external eye resulting in conjunctivitis or keratitis. Majority of these viruses are adenoviruses or HSV. |
| Nature, timing and estimated costs                                                                                                                                       |   | The Company has budgeted approximately $750,000 for the material development, production and testing of this drug. These costs will be paid from our available cash balances. Should management determine the results to be satisfactory, we will need to obtain additional financing to perform material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, which we have presently budgeted at $1,500,000.                                                                                                                                                                                                                                         |
| Anticipated completion date                                                                                                                                              |   | Not known                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Risks and uncertainties associated with completing development on schedule, and the consequences to operations, financial position and liquidity if not completed timely |   | The outcome of clinical testing cannot be known at this time, and this poses substantial risk and uncertainty as to whether or when if ever, this drug will become marketable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Timing of commencement of expected material net cash inflows                                                                                                             |   | It is not known or estimable when net cash inflows from this project will commence if ever, due to the uncertainties associated with the completion of the product, regulatory submissions, approvals and market purchases of this product.                                                                                                                                                                                                                                                                                                                                                                                                                                    |

| Project                                                                                                                                                                  |   | Drug Development of HIVCideTM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Current status                                                                                                                                                           |   | HIV-Cide is currently in preclinical studies. It is designed to mimic the site at which all HIV gp120 bind to the CD4 receptor. It is therefore expected to work against all HIV-1 subtypes and strains. HIV-Cide has been successfully tested in SCID-huThy/Liv mouse model and was found to have very high efficacy, equal to that of >25X (2,500%) dosage level of the triple drug HAART combination therapy. In vitro studies against two different HIV-1 strains were very successful. The Company is planning additional in-vivo and in-vitro studies at various institutions and subcontractors during 2011-2012 to further optimize the drug candidate. |
| Nature, timing and estimated costs                                                                                                                                       |   | The Company has budgeted approximately $3,000,000 for the material development, production and testing of this drug. These costs will be paid from our available cash balances. Should management determine the results to be satisfactory, we will need to obtain additional financing to perform material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, which we have presently budgeted at $5000,000.                                                                                                                                                                                                                                 |
| Anticipated completion date                                                                                                                                              |   | Not known                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Risks and uncertainties associated with completing development on schedule, and the consequences to operations, financial position and liquidity if not completed timely |   | The outcome of clinical testing cannot be known at this time, and this poses substantial risk and uncertainty as to whether or when if ever, this drug will become marketable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Timing of commencement of expected material net cash inflows                                                                                                             |   | It is not known or estimable when net cash inflows from this project will commence if ever, due to the uncertainties associated with the completion of the product, regulatory submissions, approvals and market purchases of this product.                                                                                                                                                                                                                                                                                                                                                                                                                             |

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| Project                                                                                                                                                                  |   | Drug Development of HerpeCideTM for Oral and Genital Herpes ”Cold Sores, “Fever Blisters” and Herpetic Ulcers                                                                                                                                                                                                                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Current status                                                                                                                                                           |   | HerpeCide is currently in preclinical studies against oral and genital herpes virus infections. It is being developed as a skin cream and gel formulations, which may result in two separate drugs. The Company is planning additional in-vivo and in-vitro studies at various institutions and subcontractors during 2011-2012.                                                                                                    |
| Nature, timing and estimated costs                                                                                                                                       |   | The Company has budgeted approximately $1,500,000 for the material development, production and testing of this drug. These costs will be paid from our available cash balances. Should management determine the results to be satisfactory, we will need to obtain additional financing to perform material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, which we have presently budgeted at $2,000,000. |
| Anticipated completion date                                                                                                                                              |   | Not known                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Risks and uncertainties associated with completing development on schedule, and the consequences to operations, financial position and liquidity if not completed timely |   | The outcome of clinical testing cannot be known at this time, and this poses substantial risk and uncertainty as to whether or when if ever, this drug will become marketable.                                                                                                                                                                                                                                                           |
| Timing of commencement of expected material net cash inflows                                                                                                             |   | It is not known or estimable when net cash inflows from this project will commence if ever, due to the uncertainties associated with the completion of the product, regulatory submissions, approvals and market purchases of this product.                                                                                                                                                                                              |

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| Project                                                                                                                                                                  |   | Drug Development of DengueCide(TM)                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Current status                                                                                                                                                           |   | Anti-dengue nanoviricide drug candidates are currently in preclinical studies. These candidates are being designed to mimic the human cell binding sites common to all types of dengue viruses. The best nanoviricide resulted in a 50% survival of mice in a uniformly lethal animal protocol simulating the ADE effect.The Company is planning additional in-vivo and in-vitro studies at various institutions and subcontractors during 2011-2012. |
| Nature, timing and estimated costs                                                                                                                                       |   | The Company has budgeted approximately $2,000,000 for the material development, production and testing of this drug. These costs will be paid from our available cash balances. Should management determine the results to be satisfactory, we will need to obtain additional financing to perform material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, which we have presently budgeted at $3,000,000.              |
| Anticipated completion date                                                                                                                                              |   | Not known                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Risks and uncertainties associated with completing development on schedule, and the consequences to operations, financial position and liquidity if not completed timely |   | The outcome of clinical testing cannot be known at this time, and this poses substantial risk and uncertainty as to whether or when if ever, this drug will become marketable.                                                                                                                                                                                                                                                                        |
| Timing of commencement of expected material net cash inflows                                                                                                             |   | It is not known or estimable when net cash inflows from this project will commence if ever, due to the uncertainties associated with the completion of the product, regulatory submissions, approvals and market purchases of this product.                                                                                                                                                                                                      |

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|   | · | An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability consistent with the unit of account. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Additional disclosures about fair value measurements. |
|--------|--------|-------------------------------------------------------|

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

AND SUPPLEMENTARY 

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DISAGREEMENTS WITH 

 AND 

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Other Information

VE

| Name                    | Age    | Title                                                             |
|-------------------------|--------|-------------------------------------------------------------------|
|                    |   |                                                              |
| Anil Diwan, PhD.        | 53     | President; Chairman of the Board                                  |
| Eugene Seymour, MD, MPH | 70     | Chief Executive Officer; Acting Chief Financial Officer; Director |

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OMP

| Name and Principal Position |   | Year   |   | Salary |    |   | Bonus ($) |   |    | StockAward(s) ($) |   |   | OptionAwards(#) |   |   | All Other Compensation ($) |    |   | Total ($) |   |
|-----------------------------|--------|--------|--------|--------|---------|--------|-----------|--------|---------|-------------------|--------|--------|-----------------|--------|--------|----------------------------|---------|--------|-----------|--------|
|                        |   |   |   |   |    |   |      |   |    |              |   |   |            |   |   |                       |    |   |      |   |   |   |   |   |   |   |
| Eugene Seymour,             |   | 2011   |   | $      | 275,000 |   |      | $      |    |              |   |   | 574,581         |   |   |                       |    |   |      | $      | 1,917 |   |   | $ | 851,498 |   |
| CEO, Director               |   | 2010   |   | $      | 254,167 |   |      | $      | — |              |   |   | 513,823         |   |   |                       | — |   |      | $      | — |   |   | $ | 767,990 |   |
|                        |   | 2009   |   | $      | 250,000 |   |      | $      | — |              |   |   | —         |   |   |                       | — |   |      | $      | — |   |   | $ | 250,000 |   |
|                        |   |   |   |   |    |   |      |   |    |              |   |   |            |   |   |                       |    |   |      |   |   |   |   |   |   |   |
| Anil Diwan,                 |   | 2011   |   | $      | 275,000 |   |      | $      |    |              |   |   | 574,581         |   |   |                       |    |   |      | $      | 1,917 |   |   | $ | 851,498 |   |
| President, Director         |   | 2010   |   | $      | 252,000 |   |      | $      | — |              |   |   | 513,823         |   |   |                       | -       |   |      | $      | — |   |   | $ | 765,823 |   |
|                        |   | 2009   |   | $      | 252,000 |   |      | $      | — |              |   |   | -               |   |   |                       | -       |   |      | $      | — |   |   | $ | 252,000 |   |

|                              |   | Option awards                                              |      | Stock awards |                                                         |
|-----------------------------------|--------|------------------------------------------------------------|-----------|--------------|--------------------------------------------------------------|
| Name and Principal Position       |   | Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable |      |         | Numberof SecuritiesUnderlyingUnexercisedOptionsUnexercisable |   |   | OptionExercise Price($) |   | OptionExpirationDate |   | Numberof Sharesor Unitsof StockthatHave NotVested |   |   | MarketValueofShares orUnits ofStockthatHave NotVested |   |   | EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRights thatHave NotVested |   |   | EquityIncentive PlanAwards:Market orPayout Valueof UnearnedShares, Unitsor OtherRights thatHave NotVested |   |
| Eugene Seymour,CEO and Director   |   |                                                       | 500,000   |         |                                                         |   | — |   |   | $ | 0.10 |   | September 26,2015 |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                              |   |                                                       |      |         |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Anil Diwan,President and Director |   |                                                       | 1,000,000 |         |                                                         |   | — |   |   | $ | 0.10 |   | September 26,2015 |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |

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12. SECURITY 

| Name and Address of Beneficial Owner                            |   | Amount and Nature ofBeneficial Owner (1) |       |   | Percent of Class |   |
|-----------------------------------------------------------------|--------|------------------------------------------|------------|--------|------------------|--------|
| TheraCour Pharma, Inc.(2)                                       |   |                                     |       |   |             |   |
| 135 Wood Street                                                 |   |                                     |       |   |             |   |
| West Haven, CT 06516                                            |   |                                     | 33,360,000 |   |             |   | 23.24 | % |
| Anil Diwan (2) (3)                                              |   |                                     |       |   |             |   |   |   |
| 135 Wood Street                                                 |   |                                     |       |   |             |   |   |   |
| West Haven, CT 06516                                            |   |                                     | 42,096,155 |   |             |   | 29.33 | % |
| Eugene Seymour (4)                                              |   |                                     |       |   |             |   |   |   |
| 135 Wood Street                                                 |   |                                     |       |   |             |   |   |   |
| West Haven, Connecticut 06516                                   |   |                                     | 6,500,000  |   |             |   | 4.53 | % |
| All Directors and Executive Officers as a Group (2 persons) (5) |   |                                     | 48,596,155 |   |             |   | 33.85 | % |

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INCIPA

| June 30, 2011 |   | $ | 90,000 |   | Li & Company, P.C.        |
|---------------|--------|---|--------|--------|-------------------------------|
| June 30, 2010 |   | $ | 70,000 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 35,000 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 77,000 |   | Holtz Rubenstein Reminick LLP |

| June 30, 2011 |   | $ | 0 |   | Li & Company, P.C.        |
|---------------|--------|---|---|--------|-------------------------------|
| June 30, 2010 |   | $ | 0 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 0 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 0 |   | Holtz Rubenstein Reminick LLP |

| June 30, 2011 |   | $ | 0 |   | Li & Company, P.C.        |
|---------------|--------|---|---|--------|-------------------------------|
| June 30, 2010 |   | $ | 0 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 0 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 0 |   | Holtz Rubenstein Reminick LLP |

| June 30, 2011 |   | $ | 0 |   | Li & Company, P.C.        |
|---------------|--------|---|---|--------|-------------------------------|
| June 30, 2010 |   | $ | 0 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 0 |   | Li & Company, P.C.        |
| June 30, 2009 |   | $ | 0 |   | Holtz Rubenstein Reminick LLP |

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. EXHIBITS

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                        |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                               |
| 3.1*        |   | Articles of Incorporation, as amended, of the Registrant                                                                                                                                                                                                                           |
| 3.2*        |   | By-laws of the Registrant                                                                                                                                                                                                                                                          |
|        |   |                                                                                                                                                                                                                                                                               |
| 4.1*        |   | Specimen Stock Certificate of the Registrant                                                                                                                                                                                                                                       |
| 4.2*        |   | Series A Convertible Debenture                                                                                                                                                                                                                                                     |
| 4.3*        |   | Form of Warrant                                                                                                                                                                                                                                                                    |
| 10.1*       |   | Share Exchange Agreement between NanoViricide, Inc. and the Registrant                                                                                                                                                                                                             |
| 10.2*       |   | Employment Agreement Eugene Seymour                                                                                                                                                                                                                                                |
| 10.3*       |   | Employment agreement Anil Diwan                                                                                                                                                                                                                                                    |
| 10.4*       |   | Employment agreement Leo Ehrlich                                                                                                                                                                                                                                                   |
| 10.5*       |   | Form of Scientific Advisory Board Agreement                                                                                                                                                                                                                                        |
| 10.6*       |   | Amended License Agreement with TheraCour Pharma, Inc.                                                                                                                                                                                                                              |
| 10.7*       |   | Lease with landlord                                                                                                                                                                                                                                                                |
| 10.8*       |   | Form of First Subscription Agreement                                                                                                                                                                                                                                               |
| 10.9*       |   | Form of Second Subscription Agreement                                                                                                                                                                                                                                              |
| 10.10*      |   | Code of Ethics                                                                                                                                                                                                                                                                     |
| 10.11*      |   | Amended Agreement #2 with TheraCour Pharma, Inc.                                                                                                                                                                                                                                   |
| 10.12*      |   | Memorandum of Understanding with Vietnam’s National Institute of Hygiene and Epidemiology (NIHE) dated December 23, 2005                                                                                                                                                     |
| 31.1        |   | Certification of Chief Executive and Interim Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended                                                                                                            |
| 32.1        |   | Certification of Chief Executive Officer and Interim Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

| * | Incorporated by reference to the Company’s registration statement on Form 10-SB, filed with the Securities Commission on November 14, 2006, as amended. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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SIG

|   | NANOVIRICIDES, INC.                                                      |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |
|   | /s/ Eugene Seymour, MD                                                   |
|   | Eugene Seymour, M.D.                                                     |
|   | Chief Executive Officer and Interim Chief Financial Officer and Director |
|   | (Principal Executive and Accounting Officer)                             |
|   |                                                                     |
|   |                                                                     |
|   | /s/ Anil Diwan                                                           |
|   | Anil Diwan,                                                              |
|   | President and Chairman of the Board of Directors                         |

| October 13, 2011 |                                                                     |   |
|------------------|--------------------------------------------------------------------------|--------|
|             | /s/ Eugene Seymour, MD                                                   |   |
|             | Eugene Seymour, MD                                                       |   |
|             | Chief Executive Officer and Interim Chief Financial Officer and Director |   |
|             | (Principal Executive and Accounting Officer)                             |   |
|             |                                                                     |   |
| October 13, 2011 | /s/ Anil Diwan                                                           |   |
|             | Anil Diwan,                                                              |   |
|             | President and Chairman of the Board of Directors                         |   |

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| Contents                                                                                                                                          | Page(s) |
|---------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                                                                                                                                              |    |
| Reports of Independent Registered Public Accounting Firm                                                                                          | F-2     |
|                                                                                                                                              |    |
| Balance Sheets at June 30, 2011 and 2010                                                                                                          | F-4     |
|                                                                                                                                              |    |
| Statements of Operations for the Fiscal Years Ended June 30, 2011 and 2010 and for the Period from May 12, 2005 (Inception) through June 30, 2011 | F-5     |
|                                                                                                                                              |    |
| Statements of Stockholders’ Equityfor the Period from May 12, 2005 (Inception) through June 30, 2011                                        | F-6     |
|                                                                                                                                              |    |
| Statements of Cash Flows for the Fiscal Years Ended June 30, 2011 and 2010 and for the Period from May 12, 2005 (Inception) through June 30, 2011 | F-41    |
|                                                                                                                                              |    |
| Notes to the Financial Statements                                                                                                                 | F-43    |

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|  | The Company’s board of directors has no audit committee, independent director or member with financial expertise which causes ineffective oversight of the Company’s external financial reporting and internal control over financial reporting. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                      |   | June 30, 2011 |        |   | June 30, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|---------------|--------|
| ASSETS                                                                                                                                                    |   |          |        |   |          |
|                                                                                                                                                      |   |          |        |   |
| CURRENT ASSETS:                                                                                                                                           |   |          |        |   |          |   |
| Cash and cash equivalents                                                                                                                                 |   | $             | 9,224,023   |   |          | $      | 6,955,733 |   |
| Prepaid expenses                                                                                                                                          |   |          | 332,294     |   |          |   | 291,272 |   |
| Other current assets                                                                                                                                      |   |          | -           |   |          |   | 209,902 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| Total current assets                                                                                                                                      |   |          | 9,556,317   |   |          |   | 7,456,907 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| PROPERTY AND EQUIPMENT, net                                                                                                                               |   |          | 802,367     |   |          |   | 1,168,374 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| TRADEMARK, net                                                                                                                                            |   |          | 399,383     |   |          |   | 367,077 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| TOTAL ASSETS                                                                                                                                              |   | $             | 10,758,067  |   |          | $      | 8,992,358 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                |   |          |        |   |          |   |   |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                      |   |          |        |   |          |   |   |   |
| Accounts payable                                                                                                                                          |   | $             | 79,529      |   |          | $      | 127,620 |   |
| Accounts payable – related parties                                                                                                                  |   |          | 462,955     |   |          |   | 1,193,593 |   |
| Accrued expenses                                                                                                                                          |   |          | 27,173      |   |          |   | 85,716 |   |
| Accrued payroll to officers and related payroll tax expense                                                                                               |   |          | -           |   |          |   | 22,917 |   |
| Derivative liability                                                                                                                                      |   |          | 17,519      |   |          |   | 1,043,808 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| TOTAL CURRENT LIABILITIES                                                                                                                                 |   |          | 587,176     |   |          |   | 2,473,654 |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                             |   |          |        |   |          |   |   |   |
|                                                                                                                                                      |   |          |        |   |          |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                |   |          |        |   |          |   |   |   |
| Series A Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 8,217,500 and 7,593,750 shares issued and outstanding, respectively |   |          | 8,218       |   |          |   | 7,594 |   |
| Series B Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 10,000 and 260,000 shares issued and outstanding, respectively      |   |          | 10          |   |          |   | 260 |   |
| Common stock, $0.001 par value; 300,000,000 shares authorized; 143,548,494 and 133,980,411 shares issued and outstanding, respectively                    |   |          | 143,582     |   |          |   | 133,982 |   |
| Additional paid-in capital                                                                                                                                |   |          | 33,235,990  |   |          |   | 23,116,611 |   |
| Deficit accumulated during the development stage                                                                                                          |   |          | (23,216,909 | )      |          |   | (16,739,743 | ) |
| TOTAL STOCKHOLDERS’ EQUITY                                                                                                                          |   |          | 10,170,891  |   |          |   | 6,518,704 |   |
| TOTAL LIABILITIES AND STOCKHOLDER’ EQUITY                                                                                                           |   | $             | 10,758,067  |   |          | $      | 8,992,358 |   |

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|                                               |   | Fiscal Year EndedJune 30, 2011 |        |   | Fiscal Year Ended June 30, 2010 |   |        | For the Periodfrom May 12, 2005 (Inception) throughJune 30, 2011 |   |
|---------------------------------------------------------|--------|--------------------------------|-------------|--------|---------------------------------|--------|-------------|------------------------------------------------------------------|--------|
| Revenues                                                |   | $                              | -           |   |                            | $      | -           |                                                             |   |   |   |
|                                                    |   |                           |        |   |                            |   |        |                                                             |   |   |   |
| Operating expenses:                                     |   |                           |        |   |                            |   |        |                                                             |   |   |   |
| Research and development                                |   |                           | 4,155,846   |   |                            |   | 3,367,409   |                                                             |   |   | 14,245,218 |   |
| Refund credit research and development costs            |   |                           | -           |   |                            |   | (162,524    |                                                             |   |   | (420,842 | ) |
| General and administrative                              |   |                           | 2,273,609   |   |                            |   | 1,735,066   |                                                             |   |   | 8,901,562, |   |
|                                                    |   |                           |        |   |                            |   |        |                                                             |   |   |   |   |
| Total operating expenses                                |   |                           | 6,429,455   |   |                            |   | 4,939,951   |                                                             |   |   | 22,725,938 |   |
| Loss from operations                                    |   |                           | (6,429,455  | )      |                            |   | (4,939,951  | )                                                                |   |   | (22,725,938 | ) |
| Other income (expense):                                 |   |                           |        |   |                            |   |        |                                                             |   |   |   |   |
| Interest income, net                                    |   |                           | 14,339      |   |                            |   | 2,980       |                                                             |   |   | 165,324 |   |
| Discount on convertible debentures                      |   |                           | -           |   |                            |   | -           |                                                             |   |   | (73,930 | ) |
| Beneficial conversion feature of convertible debentures |   |                           | -           |   |                            |   | -           |                                                             |   |   | (713,079 | ) |
| Change in fair market value of derivatives              |   |                           | (62,049     | )      |                            |   | 192,736     |                                                             |   |   | 130,714 |   |
|                                                    |   |                           |        |   |                            |   |        |                                                             |   |   |   |   |
| Total other income (expense)                            |   |                           | (47,710     | )      |                            |   | 195,743     |                                                             |   |   | (490,971 | ) |
| Loss before income taxes                                |   |                           | (6,477,165  | )      |                            |   | (4,744,208  | )                                                                |   |   | (23,216,909 | ) |
| Income tax provision                                    |   |                           | -           |   |                            |   | -           |                                                             |   |   | - |   |
|                                                    |   |                           |        |   |                            |   |        |                                                             |   |   |   |   |
| Net loss                                                |   | $                              | (6,477,165  | )      |                            | $      | (4,744,208  | )                                                                |   | $ | ( 23,216,909 | ) |
|                                                    |   |                           |        |   |                            |   |        |                                                             |   |   |   |   |
| Net loss per share: basic and diluted                   |   | $                              | (0.05       | )      |                            | $      | (0.04       | )                                                                |   |   |   |   |
|                                                    |   |                           |        |   |                            |   |        |                                                             |   |   |   |   |
| Weighted average shares outstanding: basic and diluted  |   |                           | 139,180,915 |   |                            |   | 130,497,982 |                                                             |   |   |   |   |

----

Table of Contents

|                                                                                       |   | Common Stock |        |   |   |   |    |       |   |   |         |   |   |        |   |
|--------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|---------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                       |   |         |        |   |   |   |    | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                       |   | Number       |        |   | Par    |   |    | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                       |   | of Shares    |        |   | Value  |   |    | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |
| Shares issued May 12, 2005 (Inception)                                                     |   |         | 20,000      |   |   | $      | 20      |       |   | $      | -            |   |   | $           | (20    | ) |   | $ | - |   |   | $ | - |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Share exchange with Edot- com.com Inc., June 1, 2005                                       |   |         | (20,000     | )      |   |   | (20     | )          |   |   | -            |   |   |        | 20     |   |   |   | - |   |   |   | - |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares exchanged in reverse acquisition of Edot-com.com Inc., June 1, 2005                 |   |         | 80,000,000  |   |   |   | 80,000  |       |   |   | (79,980      | )      |   |        | (20    | ) |   |   | - |   |   |   | - |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares outstanding Edot- com.com Inc., June 1, 2005                                        |   |         | 20,000,000  |   |   |   | 20,000  |       |   |   | (20,000      | )      |   |        | -      |   |   |   | - |   |   |   | - |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Net loss period ended June 30, 2005                                                        |   |         | -           |   |   |   | -       |       |   |   | -            |   |   |        | -      |   |   |   | (66,005 | ) |   |   | (66,005 | ) |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Balance at June 30, 2005                                                                   |   |         | 100,000,000 |   |   |   | 100,000 |       |   |   | (99,980      | )      |   |        | (20    | ) |   |   | (66,005 | ) |   |   | (66,005 | ) |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Discount related to beneficial conversion feature of Convertible debentures, July 13, 2005 |   |         | -           |   |   |   | -       |       |   |   | 5,277        |   |   |        | -      |   |   |   | - |   |   |   | 5,277 |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Legal expenses related private placement of common stock, July 31, 2006                    |   |         | -           |   |   |   | -       |       |   |   | (2,175       | )      |   |        |   |   |   |   |   |   |   |   | (2,175 | ) |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Discount related to beneficial conversion feature of Convertible debentures, July 31, 2005 |   |         | -           |   |   |   | -       |       |   |   | 5,302        |   |   |        | -      |   |   |   | - |   |   |   | 5,302 |   |
|                                                                                       |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board, August 15, 2005                              |   |         | -           |   |   |   | -       |       |   |   | 4,094        |   |   |        | -      |   |   |   | - |   |   |   | 4,094 |   |

----

Table of Contents

|                                                                                                     |   | Common Stock |      |   |   |   |   |       |   |   |         |   |   |        |   |
|----------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                     |   |         |      |   |   |   |   | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                     |   | Number       |      |   | Par    |   |   | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                     |   | of Shares    |      |   | Value  |   |   | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |
|  Options issued to officers, September 23, 2005                                                     |   |         | -         |   |   |   | -      |       |   |   | 87,318       |   |   |        | -      |   |   |   | - |   |   |   | 87,318 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.081 per share, September 30, 2005              |   |         | 2,300,000 |   |   |   | 2,300  |       |   |   | 184,000      |   |   |        | -      |   |   |   | - |   |   |   | 186,300 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for interest on debentures, September 30, 2005                                       |   |         | 48,177    |   |   |   | 48     |       |   |   | 4,267        |   |   |        | -      |   |   |   | - |   |   |   | 4,315 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Discount related to beneficial conversion feature of Convertible debentures, October 28, 2005      |   |         | -         |   |   |   | -      |       |   |   | 166,666      |   |   |        | -      |   |   |   | - |   |   |   | 166,666 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Discount related to beneficial conversion feature of Convertible debentures, November 9, 2005      |   |         | -         |   |   |   | -      |       |   |   | 166,667      |   |   |        | -      |   |   |   | - |   |   |   | 166,667 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Discount related to beneficial conversion feature of Convertible debentures, November 10, 2005     |   |         | -         |   |   |   | -      |       |   |   | 45,000       |   |   |        | -      |   |   |   | - |   |   |   | 45,000 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Discount related to beneficial conversion feature of Convertible debentures, November 11, 2005     |   |         | -         |   |   |   | -      |       |   |   | 275,000      |   |   |        | -      |   |   |   | - |   |   |   | 275,000 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Discount related to beneficial conversion feature of Convertible debentures, November 15, 2005     |   |         | -         |   |   |   | -      |       |   |   | 49,167       |   |   |        | -      |   |   |   | - |   |   |   | 49,167 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board, November 15, 2005                                    |   |         | -         |   |   |   | -      |       |   |   | 25,876       |   |   |        | -      |   |   |   | - |   |   |   | 25,876 |   |
|                                                                                                     |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, November 28, 2005 |   |         | 340,000   |   |   |   | 340    |       |   |   | 169,660      |   |   |        | -      |   |   |   | - |   |   |   | 170,000 |   |

----

Table of Contents

|                                                                                                     |   | Common Stock |    |   |   |   |   |       |   |   |         |   |   |        |   |
|----------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                     |   |         |    |   |   |   |   | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                     |   | Number       |    |   | Par    |   |   | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                     |   | of Shares    |    |   | Value  |   |   | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, November 29, 2005 |   |         | 300,000 |   |   |   | 300    |       |   |   | 149,700      |   |   |        | -      |   |   |   | - |   |   |   | 150,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, November 30, 2005 |   |         | 150,000 |   |   |   | 150    |       |   |   | 74,850       |   |   |        | -      |   |   |   | - |   |   |   | 75,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 2, 2005  |   |         | 100,000 |   |   |   | 100    |       |   |   | 49,900       |   |   |        | -      |   |   |   | - |   |   |   | 50,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 6, 2005  |   |         | 850,000 |   |   |   | 850    |       |   |   | 424,150      |   |   |        | -      |   |   |   | - |   |   |   | 425,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for legal services rendered at $.95 per share, December 6, 2005                      |   |         | 20,000  |   |   |   | 20     |       |   |   | 18,980       |   |   |        | -      |   |   |   | - |   |   |   | 19,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 12, 2005 |   |         | 750,000 |   |   |   | 750    |       |   |   | 374,250      |   |   |        | -      |   |   |   | - |   |   |   | 375,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 13, 2005 |   |         | 50,000  |   |   |   | 50     |       |   |   | 24,950       |   |   |        | -      |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 14, 2005 |   |         | 50,000  |   |   |   | 50     |       |   |   | 24,950       |   |   |        | -      |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued in connection with debenture offering, December 15, 2005                             |   |         | 50,000  |   |   |   | 50     |       |   |   | 48,950       |   |   |        | -      |   |   |   | - |   |   |   | 49,000 |   |
|                                                                                                     |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 20, 2005 |   |         | 50,000  |   |   |   | 50     |       |   |   | 24,950       |   |   |        | -      |   |   |   | - |   |   |   | 25,000 |   |

----

Table of Contents

|                                                                                                      |   | Common Stock |        |   |   |   |    |       |   |   |         |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|---------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                      |   |         |        |   |   |   |    | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                      |   | Number       |        |   | Par    |   |    | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                      |   | of Shares    |        |   | Value  |   |    | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 29, 2005  |   |         | 50,000      |   |   |   | 50      |       |   |   | 24,950       |   |   |        | -      |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, December 30, 2005. |   |         | 50,000      |   |   |   | 50      |       |   |   | 24,950       |   |   |        | -      |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for interest on debentures, December 31, 2005                                         |   |         | 19,476      |   |   |   | 19      |       |   |   | 17,321       |   |   |        | -      |   |   |   | - |   |   |   | 17,340 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $1.46 per share, January 9, 2006                  |   |         | 3,425       |   |   |   | 4       |       |   |   | 4,997        |   |   |        | -      |   |   |   | - |   |   |   | 5,001 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on February 15, 2006                                   |   |         | -           |   |   |   | -       |       |   |   | 49,067       |   |   |        | -      |   |   |   | - |   |   |   | 49,067 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on May 15, 2006                                        |   |         | -           |   |   |   | -       |       |   |   | 51,048       |   |   |        | -      |   |   |   | - |   |   |   | 51,048 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for interest on debentures, March 31, 2005                                            |   |         | 7,921       |   |   |   | 8       |       |   |   | 22,184       |   |   |        | -      |   |   |   | - |   |   |   | 22,192 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Options exercised, May 31, 2006                                                                     |   |         | 1,800,000   |   |   |   | 1,800   |       |   |   | 88,200       |   |   |        | -      |   |   |   | - |   |   |   | 90,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, June 15, 2006      |   |         | 1,875,000   |   |   |   | 1,875   |       |   |   | 1,873,125    |   |   |        | -      |   |   |   | - |   |   |   | 1,875,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        | -      |   |   |   |   |   |   |   |   |   |
|  Shares issued for interest on debentures, June 30, 2006                                             |   |         | 14,426      |   |   |   | 14      |       |   |   | 22,424       |   |   |        | -      |   |   |   | - |   |   |   | 22,438 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Net loss year ended June 30, 2006.                                                                  |   |         | -           |   |   |   | -       |       |   |   | -            |   |   |        | -      |   |   |   | (3,284,432 | ) |   |   | (3,284,432 | ) |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Balance at June 30, 2006                                                                            |   |         | 108,878,425 |   |   |   | 108,878 |       |   |   | 4,480,035    |   |   |        | 20     |   |   |   | (3,350,437 | ) |   |   | 1,238,456 |   |

----

Table of Contents

|                                                                                              |   | Common Stock |      |   |   |   |   |       |   |   |         |   |   |        |   |
|---------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                              |   |         |      |   |   |   |   | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                              |   | Number       |      |   | Par    |   |   | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                              |   | of Shares    |      |   | Value  |   |   | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |
| Shares issued for interest on debentures, July 31, 2006                                           |   |         | 5,744     |   |   |   | 6      |       |   |   | 7,638        |   |   |        | -      |   |   |   | - |   |   |   | 7,644 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued in connection with conversion of convertible debentures, July 31, 2006        |   |         | 3,333,333 |   |   |   | 3,333  |       |   |   | 996,667      |   |   |        | -      |   |   |   | - |   |   |   | 1,000,000 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Exercise of stock warrants, July 31, 2006                                                   |   |         | 200,000   |   |   |   | 200    |       |   |   | 49,800       |   |   |        | -      |   |   |   | - |   |   |   | 50,000 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on August 15, 2006                                   |   |         | -         |   |   |   | -      |       |   |   | 30,184       |   |   |        | -      |   |   |   | - |   |   |   | 30,184 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on November 15, 2006                                 |   |         | -         |   |   |   | -      |       |   |   | 25,888       |   |   |        | -      |   |   |   | - |   |   |   | 25,888 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $.76 per share, January 2, 2007 |   |         | 216,000   |   |   |   | 216    |       |   |   | 163,944      |   |   |        | -      |   |   |   | - |   |   |   | 164,160 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on February 15, 2007                                 |   |         | -         |   |   |   | -      |       |   |   | 32,668       |   |   |        | -      |   |   |   | - |   |   |   | 32,668 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on May 15, 2007                                      |   |         | -         |   |   |   | -      |       |   |   | 25,664       |   |   |        | -      |   |   |   | - |   |   |   | 25,664 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $1.03 per share, June 12, 2007                  |   |         | 752       |   |   |   | 1      |       |   |   | 774          |   |   |        | -      |   |   |   | - |   |   |   | 775 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $1.15 per share, June 20, 2007            |   |         | 100,000   |   |   |   | 100    |       |   |   | 114,900      |   |   |        | -      |   |   |   | - |   |   |   | 115,000 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued upon conversion of convertible warrants at $1.00 per share, June 20, 2007     |   |         | 930,000   |   |   |   | 930    |       |   |   | 619,070      |   |   |        | -      |   |   |   | - |   |   |   | 620,000 |   |
|                                                                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                                                                      |   | Common Stock |        |   |   |   |    |       |   |   |         |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|---------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                      |   |         |        |   |   |   |    | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                      |   | Number       |        |   | Par    |   |    | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                      |   | of Shares    |        |   | Value  |   |    | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|  Shares issued upon conversion of convertible warrants at $1.00 per share, June 25, 2007             |   |         | 75,000      |   |   |   | 75      |       |   |   | 49,925       |   |   |        | -      |   |   |   | - |   |   |   | 50,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued upon conversion of convertible warrants at $1.00 per share, June 30, 2007             |   |         | 300,000     |   |   |   | 300     |       |   |   | 199,700      |   |   |        | -      |   |   |   | - |   |   |   | 200,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $1.06 per share, June 30, 2007          |   |         | 29,890      |   |   |   | 30      |       |   |   | 31,770       |   |   |        | -      |   |   |   | - |   |   |   | 31,800 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Options issued to officers June 30, 2007                                                            |   |         | -           |   |   |   | -       |       |   |   | 27,062       |   |   |        | -      |   |   |   | - |   |   |   | 27,062 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Net loss year ended June 30, 2007.                                                                  |   |         | -           |   |   |   | -       |       |   |   | -            |   |   |        | -      |   |   |   | (3,118,963 | ) |   |   | (3,118,963 | ) |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Balance at June 30, 2007                                                                            |   |         | 114,069,144 |   |   |   | 114,069 |       |   |   | 6,855,689    |   |   |        | (20    | ) |   |   | (6,469,400 | ) |   |   | 500,338 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on August 15, 2007                                     |   |         | -           |   |   |   | -       |       |   |   | 14,800       |   |   |        | -      |   |   |   | - |   |   |   | 14,800 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, September 21, 2007 |   |         | 1,500,000   |   |   |   | 1,500   |       |   |   | 748,500      |   |   |        | -      |   |   |   | - |   |   |   | 750,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $.75 per share September 30, 2007       |   |         | 25,244      |   |   |   | 25      |       |   |   | 18,375       |   |   |        | -      |   |   |   | - |   |   |   | 18,400 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, October 16, 2007   |   |         | 3,250,000   |   |   |   | 3,250   |       |   |   | 1,621,750    |   |   |        | -      |   |   |   | - |   |   |   | 1,625,000 |   |
|                                                                                                      |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Stock subscriptions received October 17,2007                                                        |   |         | -           |   |   |   | -       |       |   |   | -            |   |   |        | 20     |   |   |   | - |   |   |   | 20 |   |

----

Table of Contents

|                                                                                                    |   | Common Stock |        |   |   |   |    |       |   |   |         |   |   |        |   |
|---------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|---------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                    |   |         |        |   |   |   |    | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                    |   | Number       |        |   | Par    |   |    | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                    |   | of Shares    |        |   | Value  |   |    | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|  Shares and warrants issued in connection with private placement of common stock, October 16, 2007 |   |         | 250,000     |   |   |   | 250     |       |   |   | 124,750      |   |   |        | -      |   |   |   | - |   |   |   | 125,000 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on November 15, 2007                                 |   |         | -           |   |   |   | -       |       |   |   | 7,200        |   |   |        | -      |   |   |   | - |   |   |   | 7,200 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $.49 per share December 31, 2007      |   |         | 57,152      |   |   |   | 57      |       |   |   | 26,843       |   |   |        | -      |   |   |   | - |   |   |   | 26,900 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Options issued to officers January 1, 2008                                                        |   |         |        |   |   |   |    |       |   |   | 7,044        |   |   |        |   |   |   |   |   |   |   |   | 7,044 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on February 15, 2008                                 |   |         | -           |   |   |   | -       |       |   |   | 8,500        |   |   |        | -      |   |   |   | - |   |   |   | 8,500 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .45 per share March 31, 2008        |   |         | 61,546      |   |   |   | 62      |       |   |   | 27,838       |   |   |        | -      |   |   |   | - |   |   |   | 27,900 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.39 per share April , 2008                     |   |         | 27,750      |   |   |   | 28      |       |   |   | 10,795       |   |   |        | -      |   |   |   | - |   |   |   | 10,821 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on May 15, 2008                                      |   |         | -           |   |   |   | -       |       |   |   | 32,253       |   |   |        | -      |   |   |   | - |   |   |   | 32,253 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $1.03 per share June 30, 2008                   |   |         | 29,841      |   |   |   | 30      |       |   |   | 27,870       |   |   |        | -      |   |   |   | - |   |   |   | 27,900 |   |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Net loss year ended June 30, 2008.                                                                |   |         | -           |   |   |   | -       |       |   |   | -            |   |   |        | -      |   |   |   | (2,738,337 | ) |   |   | (2,738,337 | ) |
|                                                                                                    |   |         |        |   |   |   |    |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Balance at June 30, 2008                                                                          |   |         | 119,270,677 |   |   |   | 119,271 |       |   |   | 9,532,205    |   |   |        | -      |   |   |   | (9,207,737 | ) |   |   | 443,739 |   |

----

Table of Contents

|                                                                                                   |   | Common Stock |      |   |   |   |   |       |   |   |         |   |   |        |   |
|--------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                   |   |         |      |   |   |   |   | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                   |   | Number       |      |   | Par    |   |   | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                   |   | of Shares    |      |   | Value  |   |   | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|  Shares issued for consulting and legal services rendered at $ 1.22 per share July 31, 2008       |   |         | 4,098     |   |   |   | 4      |       |   |   | 4,996        |   |   |        |   |   |   |   |   |   | 5,000 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $1.22 per share July 31, 2008                  |   |         | 2,295     |   |   |   | 2      |       |   |   | 2,798        |   |   |        |   |   |   |   |   |   |   |   | 2,800 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on August 15, 2008                                  |   |         |      |   |   |   |   |       |   |   | 47,500       |   |   |        |   |   |   |   |   |   |   |   | 47,500 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued in connection with finders fee 9849                                              |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   | 0 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, August 22, 2008 |   |         | 3,136,000 |   |   |   | 3,136  |       |   |   | 3,132,864    |   |   |        |   |   |   |   |   |   |   |   | 3,136,000 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued to settle accounts payable August 22, 2008                                         |   |         | 150,000   |   |   |   | 150    |       |   |   | 149,850      |   |   |        |   |   |   |   |   |   |   |   | 150,000 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued to settle account payable                                                                |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Payment of Finder's Fee including 9849 warrants to Biotech Capital                               |   |         |      |   |   |   |   |       |   |   | (14,696      | )      |   |        |   |   |   |   |   |   |   |   | (14,696 | ) |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued in connection with Warrant Conversion, August 22, 2008                             |   |         | 125,000   |   |   |   | 125    |       |   |   | 106,125      |   |   |        |   |   |   |   |   |   |   |   | 106,250 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for legal services rendered at $1.24per share August 31, 2008                      |   |         | 4,032     |   |   |   | 4      |       |   |   | 4,996        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                   |   |         |      |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $1.24 per share August 31, 2008                |   |         | 2,258     |   |   |   | 2      |       |   |   | 2,798        |   |   |        |   |   |   |   |   |   |   |   | 2,800 |   |

----

Table of Contents

|                                                                                                |   | Common Stock |   |   |   |   |   |       |   |   |         |   |   |        |   |
|-----------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                |   |         |   |   |   |   |   | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                |   | Number       |   |   | Par    |   |   | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                |   | of Shares    |   |   | Value  |   |   | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |
|  Shares issued for legal services rendered at $1.00 per share September 30, 2008               |   |         | 5,000  |   |   |   | 5      |       |   |   | 4,995        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $1.00 per share September 30, 2008          |   |         | 5,600  |   |   |   | 6      |       |   |   | 5,594        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .71 per share October 31, 2008  |   |         | 7,042  |   |   |   | 7      |       |   |   | 4,993        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.71 per share October 31, 2008             |   |         | 7,887  |   |   |   | 8      |       |   |   | 5,592        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on November 15, 2008                             |   |         |   |   |   |   |   |       |   |   | 30,500       |   |   |        |   |   |   |   |   |   |   |   | 30,500 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .67 per share November 30, 2008 |   |         | 7,463  |   |   |   | 7      |       |   |   | 4,993        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.67 per share November 30, 2008            |   |         | 8,358  |   |   |   | 8      |       |   |   | 5,592        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .83 per share December 31, 2008 |   |         | 6,024  |   |   |   | 6      |       |   |   | 4,994        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.83 per share December 31 , 2008           |   |         | 6,747  |   |   |   | 7      |       |   |   | 5,593        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |   |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for legal services rendered at $ .60 per share January 20, 2009                 |   |         | 8,333  |   |   |   | 8      |       |   |   | 4,992        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |

----

Table of Contents

|                                                                                                |   | Common Stock |    |   |   |   |   |       |   |   |         |   |   |        |   |
|-----------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                |   |         |    |   |   |   |   | Additional |   |   | Stock        |   |   |        |   |   | Total |   |
|                                                                                                |   | Number       |    |   | Par    |   |   | Paid-in    |   |   | Subscription |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                |   | of Shares    |    |   | Value  |   |   | Capital    |   |   | Receivable   |   |   | Deficit     |   |   | Equity |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .78 per share January 31, 2009  |   |         | 7,463   |   |   |   | 7      |       |   |   | 4,992        |   |   |        |   |   |   |   |   |   |   |   | 4,999 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.78 per share January 31, 2009             |   |         | 8,358   |   |   |   | 8      |       |   |   | 5,592        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $ .70 per share February 1, 2009            |   |         | 50,000  |   |   |   | 50     |       |   |   | 34,950       |   |   |        |   |   |   |   |   |   |   |   | 35,000 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on February 15, 2009                             |   |         |    |   |   |   |   |       |   |   | 29,000       |   |   |        |   |   |   |   |   |   |   |   | 29,000 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .71 per share February 28, 2009 |   |         | 7,042   |   |   |   | 7      |       |   |   | 4,992        |   |   |        |   |   |   |   |   |   |   |   | 4,999 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.71 per share February 15, 2009            |   |         | 7,887   |   |   |   | 8      |       |   |   | 5,592        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .78 per share March 31, 2009    |   |         | 6,410   |   |   |   | 6      |       |   |   | 4,994        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.78 per share March 31 , 2009              |   |         | 7,179   |   |   |   | 7      |       |   |   | 5,593        |   |   |        |   |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued to acquire equipment at $ .79                                                   |   |         | 172,500 |   |   |   | 173    |       |   |   | 137,327      |   |   |        |   |   |   |   |   |   |   |   | 137,500 |   |
|                                                                                                |   |         |    |   |   |   |   |       |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .69 per share April 30, 2009    |   |         | 7,205   |   |   |   | 7      |       |   |   | 4,993        |   |   |        |   |   |   |   |   |   |   |   | 5,000 |   |

----

Table of Contents

|                                                                                                                  |   | Common Stock |        |   |   |   |    |       |   |   |         |   |   |        |     |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|---------|------------|--------|--------|--------------|--------|--------|-------------|----------|
|                                                                                                                  |   |         |        |   |   |   |    | Additional |   |   | Stock        |   |   |        |     |   | Total |   |
|                                                                                                                  |   | Number       |        |   | Par    |   |    | Paid-in    |   |   | Subscription |   |   | Accumulated |     |   | Shareholders' |   |
|                                                                                                                  |   | of Shares    |        |   | Value  |   |    | Capital    |   |   | Receivable   |   |   | Deficit     |     |   | Equity |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |
|  Shares issued for consulting services rendered at $.69 per share April 30, 2009                                 |   |         | 8,069       |   |   |   | 8       |       |   |   | 5,592        |   |   |        |     |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Warrants issued to Scientific Advisory Board on May 15, 2009                                                    |   |         |        |   |   |   |    |       |   |   | 30,600       |   |   |        |     |   |   |   |   |   |   |   | 30,600 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .66 per share May 31, 2009                        |   |         | 7,599       |   |   |   | 8       |       |   |   | 4,992        |   |   |        |     |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.66 per share May 31, 2009                                   |   |         | 8,511       |   |   |   | 9       |       |   |   | 5,590        |   |   |        |     |   |   |   |   |   |   |   | 5,599 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $ .61 per share June 30, 2009                                 |   |         | 24,721      |   |   |   | 25      |       |   |   | 14,975       |   |   |        |     |   |   |   |   |   |   |   | 15,000 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting and legal services rendered at $ .56 per share June 30, 2009                       |   |         | 8,961       |   |   |   | 9       |       |   |   | 4,991        |   |   |        |     |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares issued for consulting services rendered at $.56 per share June 30, 2009                                  |   |         | 10,038      |   |   |   | 10      |       |   |   | 5,590        |   |   |        |     |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with private placement of common stock, June 30, 2009                  |   |         | 150,000     |   |   |   | 150     |       |   |   | 74,850       |   |   |        |     |   |   |   |   |   |   |   | 75,000 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Shares and warrants issued in connection with warrant conversion, June 30, 2009 net of subscriptions receivable |   |         | 2,050,700   |   |   |   | 2,051   |       |   |   | 1,023,299    |   |   |        | (100,000 | ) |   |   |   |   |   |   | 925,350 |   |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|  Net loss for the year ended June 30, 2009                                                                       |   |         | --          |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   | (2,787,798 | ) |   |   | (2,787,798 | ) |
|                                                                                                                  |   |         |        |   |   |   |    |       |   |   |         |   |   |        |     |   |   |   |   |   |   |   |   |   |
|                                                                                                                  |   |         | 125,299,457 |   |   | $      | 125,299 |       |   | $      | 14,455,778   |   |   | $           | (100,000 | ) |   | $ | (11,995,535 | ) |   | $ | 2,485,542 |   |

----

Table of Contents

|                                                                                               |   | Common Stock |      |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|----------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                               |   | Number       |      |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                               |   | of Shares    |      |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ .66 per share July 31, 2009          |   |         | 7,576     |   |                     |   | 8      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,992 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $.66 per share July 31, 2009                     |   |         | 8,485     |   |                     |   | 8      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,592 |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on August 15, 2009                                    |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 41,400 |   |   |   |   |   |   |   | 41,400 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ .86 per share August 31, 2009        |   |         | 6,512     |   |                     |   | 7      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,993 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $.86 per share August 31, 2009                   |   |         | 5,814     |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,594 |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $ .89 per share September 30, 2009               |   |         | 6,292     |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,594 |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ .89 per share September 30, 2009     |   |         | 5,618     |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,994 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Payment of Finder's Fee                                                                            |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (5,250 | ) |   |   |   |   |   |   | (5,250 | ) |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares and warrants issued in connection with private placement of common stock,September 30, 2009 |   |         | 2,675,000 |   |                     |   | 2,675  |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,334,825 |   |   |   |   |   |   |   | 1,337,500 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares and warrants issued in connection with warrant conversion, September 30, 2009               |   |         | 3,759,800 |   |                     |   | 3,760  |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,876,140 |   |   |   |   |   |   |   | 1,879,900 |   |
|                                                                                               |   |         |      |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ .57 per share October 1, 2009        |   |         | 35,088    |   |                     |   | 35     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 19,965 |   |   |   |   |   |   |   | 20,000 |   |

----

Table of Contents

|                                                                                          |   | Common Stock |   |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                          |   | Number       |   |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                          |   | of Shares    |   |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued for Legal services rendered at $56.50 per share on October 26, 2009             |   |         | 12,500 |   |                     |   | 13     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 7,050 |   |   |   |   |   |   |   | 7,063 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued for commissions on October 26, 2009                                           |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 3,570 |   |   |   |   |   |   |   | 3,570 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ ..73 per share October 31, 2009 |   |         | 6,859  |   |                     |   | 7      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,993 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $.73 per share October 31, 2009             |   |         | 7,682  |   |                     |   | 8      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,592 |   |   |   |   |   |   |   | 5,600 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued upon conversion of Warrants on November 10, 2009                                |   |         | 10,000 |   |                     |   | 10     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,430 |   |   |   |   |   |   |   | 1,440 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on November 15, 2009                             |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 39,600 |   |   |   |   |   |   |   | 39,600 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in payment of accounts payable November 25,2009                                 |   |         | 32,500 |   |                     |   | 33     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 25,167 |   |   |   |   |   |   |   | 25,200 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ .86 per share November 30, 2009 |   |         | 5,814  |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,994 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $.86 per share November 30, 2009            |   |         | 9,767  |   |                     |   | 10     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 8,390 |   |   |   |   |   |   |   | 8,400 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $ .85 per share December 31, 2009           |   |         | 9,917  |   |                     |   | 10     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 8,390 |   |   |   |   |   |   |   | 8,400 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $ .85 per share December 31, 2009 |   |         | 5,903  |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,994 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                          |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

|                                                                                                |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.043 per share on January 31, 2010    |   |         | 4,794   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,995 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on February 15, 2010                                   |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 40,200 |   |   |   |   |   |   |   | 40,200 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for TheraCour license .001 par value on February 15, 2010          |   |         |    |   |                     |   |   |                     |   |   | 7,000,000   |   |   |      | 7,000  |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,000 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $1.096 per share on February 28, 2010             |   |         | 4,562   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,995 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee stock compensation at $1.25 per share on March 3, 2010                   |   |         | 125,000 |   |                     |   | 125    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 156,125 |   |   |   |   |   |   |   | 156,250 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee stock compensation at $1.25 per share on March 3, 2010                   |   |         | 125,000 |   |                     |   | 125    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 156,125 |   |   |   |   |   |   |   | 156,250 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation at .001 par value on March 3, 2010 |   |         |    |   |                     |   |   |                     |   |   | 250,000     |   |   |      | 250    |   |        |   |   |   |   |   |   |   |   |   | 513,573 |   |   |   |   |   |   |   | 513,823 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation .001 par value on March 3, 2010    |   |         |    |   |                     |   |   |                     |   |   | 250,000     |   |   |      | 250    |   |        |   |   |   |   |   |   |   |   |   | 513,573 |   |   |   |   |   |   |   | 513,823 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation .001 par value on March 3, 2010    |   |         |    |   |                     |   |   |                     |   |   | 93,750      |   |   |      | 94     |   |        |   |   |   |   |   |   |   |   |   | 192,590 |   |   |   |   |   |   |   | 192,684 |   |
|                                                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal servies rendered at $1.25 per share on March 3, 2010         |   |         | 1,000   |   |                     |   | 1      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,249 |   |   |   |   |   |   |   | 1,250 |   |

----

Table of Contents

|                                                                                                                         |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                         |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                         |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting services rendered at $1.417 per share on March 31, 2010                                         |   |         | 3,529   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,996 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in payment of accounts payable - All Sciences                                                                  |   |         | 39,625  |   |                     |   | 40     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 31,660 |   |   |   |   |   |   |   | 31,700 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $2.087 per share on April 30, 2010                               |   |         | 2,396   |   |                     |   | 2      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,998 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on May 12, 2010                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | 500,000 |   |   |   | 500 |   |   |   | 4,999,500 |   |   |   |   |   |   |   | 5,000,000 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Placement Agents Fees related to sale of Convertible Preferred shares on May 12, 2010                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (400,000 | ) |   |   |   |   |   |   | (400,000 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Legal Fees related to Sale of Convertible Preferred Stock May 12, 2010                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (50,000 | ) |   |   |   |   |   |   | (50,000 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Issuance of Preferred Series B                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (1,787,379 | ) |   |   |   |   |   |   | (1,787,379 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.88 per share, .001 par value, on May 12, 2010 |   |         | 319,331 |   |                     |   | 319    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 319 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on May 12, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on May 12, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 128,053 |   |   |   |   |   |   |   | 128,053 |   |

----

Table of Contents

|                                                                                                                         |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                         |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                         |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on May 15, 2010                                                                 |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   | 82,800 |   |   |   |   |   |   |   | 82,800 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.51 per share, .001 par value, on May 26, 2010 |   |         | 398,189 |   |                     |   | 398    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 398 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on May 26, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.64 on May 26, 2010                            |   |         | 10,300  |   |                     |   | 10     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 16,867 |   |   |   |   |   |   |   | 16,877 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on May 26, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (16,877 | ) |   |   |   |   |   |   | (16,877 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on May 26, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 151,852 |   |   |   |   |   |   |   | 151,841 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $2.083 per share on May 31, 2010                                 |   |         | 2,400   |   |                     |   | 2      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,998 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of warrants to restricted Common Stock at $1.00 per share, .001 par value, on June 9, 2010       |   |         | 195,000 |   |                     |   | 195    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 194,805 |   |   |   |   |   |   |   | 195,000 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.41 per share, .001 par value, on June 9, 2010 |   |         | 426,721 |   |                     |   | 427    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 427 |   |

----

Table of Contents

|                                                                                                                          |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                          |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                          |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on June 9, 2010         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.41 on June 9, 2010                             |   |         | 10,366  |   |                     |   | 10     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 14,565 |   |   |   |   |   |   |   | 14,575 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on June 9, 2010                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (14,575 | ) |   |   |   |   |   |   | (14,575 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on June 9, 2010                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 149,364 |   |   |   |   |   |   |   | 149,354 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.77 per share on June 9, 2010                                   |   |         | 11,300  |   |                     |   | 11     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 19,989 |   |   |   |   |   |   |   | 20,000 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.77 per share on June 9, 2010                                   |   |         | 2,000   |   |                     |   | 2      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 3,538 |   |   |   |   |   |   |   | 3,540 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.59 per share, .001 par value, on June 23, 2010 |   |         | 377,905 |   |                     |   | 378    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 378 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on June 23, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.59 on June 23, 2010                            |   |         | 7,731   |   |                     |   | 8      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 12,266 |   |   |   |   |   |   |   | 12,274 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on June 23, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (12,274 | ) |   |   |   |   |   |   | (12,274 | ) |

----

Table of Contents

|                                                                                                                          |   | Common Stock |        |   | Series A Preferred Stock |   |    | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------------------------|--------|---------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                          |   | Number       |        |   | Par                      |   |    | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                          |   | of Shares    |        |   | Value $.001              |   |    | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on June 23, 2010                                                      |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 120,256 |   |   |   |   |   |   |   | 120,249 |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.043 per share on June 30, 2010                                 |   |         | 2,738       |   |                     |   | 3       |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,997 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ending 6/30/10                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,744,208 | ) |   |   | (4,744,208 | ) |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                          |   |         | 133,980,471 |   |                     |   | 133,983 |                     |   |   | 7,593,750   |   |   |      | 7,594  |   |        |   | 260,000 |   |   |   | 260 |   |   |   | 23,116,611 |   |   |   | (16,739,743 | ) |   |   | 6,518,677 |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.51 per share, .001 par value, on July 7, 2010  |   |         | 397,088     |   |                     |   | 397     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 397 |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on July 7, 2010         |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.65 on July 7, 2010                             |   |         | 6,061       |   |                     |   | 6       |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 9,967 |   |   |   |   |   |   |   | 9,973 |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on July 7, 2010                                                                              |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (9,973 | ) |   |   |   |   |   |   | (9,973 | ) |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on July 7, 2010                                                       |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 116,715 |   |   |   |   |   |   |   | 116,715 |   |
|                                                                                                                          |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.30 per share, .001 par value, on July 21, 2010 |   |         | 463,177     |   |                     |   | 463     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 463 |   |

----

Table of Contents

|                                                                                                                           |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                           |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                           |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on July 21, 2010         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.32 on July 21, 2010                             |   |         | 5,794   |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 7,665 |   |   |   |   |   |   |   | 7,671 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on July 21, 2010                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (7,671 | ) |   |   |   |   |   |   | (7,671 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on July 21, 2010                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 113,700 |   |   |   |   |   |   |   | 113,700 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $2.087 per share on July 31, 2010                                  |   |         | 3,086   |   |                     |   | 3      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,997 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.14 per share, .001 par value, on August 4, 2010 |   |         | 526,916 |   |                     |   | 527    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 527 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on August 4, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.14 on August 4, 2010                            |   |         | 4,716   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,365 |   |   |   |   |   |   |   | 5,370 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on August 4, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (5,370 | ) |   |   |   |   |   |   | (5,370 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on August 4, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 104,480 |   |   |   |   |   |   |   | 104,480 |   |

----

Table of Contents

|                                                                                                                              |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                              |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                              |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on August 15, 2010                                                                   |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | 1 |   |   |   |   |   |   |   | 45,000 |   |   |   |   |   |   |   | 45,000 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.99 per share, .001 par value, on August 18, 2010   |   |         | 606,367 |   |                     |   | 606    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 606 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on August 18, 2010          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (60,000 | ) |   |   | (60 | ) |   |   |   |   |   |   |   |   |   |   | (60 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.99 on August 18, 2010                              |   |         | 3,101   |   |                     |   | 3      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 3,065 |   |   |   |   |   |   |   | 3,068 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on August 18, 2010                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (3,068 | ) |   |   |   |   |   |   | (3,068 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on August 18, 2010                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 104,795 |   |   |   |   |   |   |   | 104,795 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.24 per share on August 31, 2010                                    |   |         | 4,032   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,996 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.93 per share, .001 par value, on September 1, 2010 |   |         | 215,332 |   |                     |   | 215    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 215 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on September 1, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (20,000 | ) |   |   | (20 | ) |   |   |   |   |   |   |   |   |   |   | (20 | ) |

----

Table of Contents

|                                                                                                                               |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                               |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                               |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.00 on September 1, 2010                             |   |         | 766     |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 766 |   |   |   |   |   |   |   | 767 |   |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on September 1, 2010                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (767 | ) |   |   |   |   |   |   | (767 | ) |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on September 1, 2010                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 34,841 |   |   |   |   |   |   |   | 34,841 |   |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on September 21, 2010                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | 250,000 |   |   |   | 250 |   |   |   | 2,499,750 |   |   |   |   |   |   |   | 2,500,000 |   |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Placement Agents Fees related to sale of Convertible Preferred shares on September 21, 2010                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (195,000 | ) |   |   |   |   |   |   | (195,000 | ) |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Legal Fees related to Sale of Convertible Preferred Stock September 21, 2010                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (10,000 | ) |   |   |   |   |   |   | (10,000 | ) |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Issuance of Preferred Series B                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (328,086 | ) |   |   |   |   |   |   | (328,086 | ) |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.93 per share, .001 par value, on September 21, 2010 |   |         | 430,015 |   |                     |   | 430    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 430 |   |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on September 21, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                               |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on September 21, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 103,012 |   |   |   |   |   |   |   | 103,012 |   |

----

Table of Contents

|                                                                                                                             |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                             |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                             |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.07 per share on September 30, 2010                                |   |         | 4,673   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,995 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.87 per share, .001 par value, on October 5, 2010  |   |         | 460,346 |   |                     |   | 460    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 460 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 5, 2010         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.87 on October 5, 2010                             |   |         | 9,268   |   |                     |   | 9      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 8,046 |   |   |   |   |   |   |   | 8,055 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on October 5, 2010                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (8,055 | ) |   |   |   |   |   |   | (8,055 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on October 5, 2010                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 103,330 |   |   |   |   |   |   |   | 103,330 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.88 per share, .001 par value, on October 19, 2010 |   |         | 452,965 |   |                     |   | 452    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 452 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 19, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.88 on October 19, 2010                            |   |         | 7,384   |   |                     |   | 7      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 6,514 |   |   |   |   |   |   |   | 6,521 |   |

----

Table of Contents

|                                                                                                                             |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                             |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                             |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on October 19, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (6,521 | ) |   |   | 1 |   |   |   | (6,521 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on October 19, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,635 |   |   |   |   |   |   |   | 69,635 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.03 per share on October 31, 2010                                  |   |         | 4,854   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,995 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation at .001 par value on November 1, 2010                           |   |         |    |   |                     |   |   |                     |   |   | 30,000      |   |   |      | 30     |   |        |   |   |   |   |   |   |   |   |   | 53,903 |   |   |   |   |   |   |   | 53,933 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.87 per share, .001 par value, on November 2, 2010 |   |         | 461,313 |   |                     |   | 461    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 461 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on August 4, 2010          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.87 on November 2, 2010                            |   |         | 5,751   |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,980 |   |   |   |   |   |   |   | 4,986 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on November 2, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (4,986 | ) |   |   |   |   |   |   | (4,986 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on November 2, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,104 |   |   |   |   |   |   |   | 69,104 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on November 15, 2010                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 55,800 |   |   |   |   |   |   |   | 55,800 |   |

----

Table of Contents

|                                                                                                                              |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                              |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                              |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.16 per share, .001 par value, on November 16, 2010 |   |         | 345,817 |   |                     |   | 346    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 346 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 16, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.16 on November 16, 2010                            |   |         | 2,984   |   |                     |   | 3      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 3,449 |   |   |   |   |   |   |   | 3,452 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on November 16, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (3,452 | ) |   |   |   |   |   |   | (3,452 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on November 16, 2010                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,187 |   |   |   |   |   |   |   | 69,187 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.35 per share, .001 par value, on November 30, 2010 |   |         | 310,566 |   |                     |   | 311    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 311 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 30, 2010        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.35 on November 30, 2010                            |   |         | 1,417   |   |                     |   | 1      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,917 |   |   |   |   |   |   |   | 1,918 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on November 30, 2010                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (1,918 | ) |   |   |   |   |   |   | (1,918 | ) |

----

Table of Contents

|                                                                                                                              |   | Common Stock |   |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                              |   | Number       |   |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                              |   | of Shares    |   |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on November 30, 2010                                                      |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,449 |   |   |   |   |   |   |   | 69,449 |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.46 per share on November 30, 2010                                  |   |         | 3,425  |   |                     |   | 3      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,997 |   |   |   |   |   |   |   | 5,000 |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of warrants to restricted Common Stock at $1.00 per share, .001 par value, on December 10, 2010       |   |         | 25,000 |   |                     |   | 25     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 24,975 |   |   |   |   |   |   |   | 25,000 |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as compensation pursuant to S-8 at $1.28 per share on December 10, 2010                                             |   |         | 50,000 |   |                     |   | 50     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 63,950 |   |   |   |   |   |   |   | 64,000 |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.10 per share, .001 par value, on December 14, 2010 |   |         | 90,840 |   |                     |   | 91     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 91 |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 14, 2010        |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (10,000 | ) |   |   | (10 | ) |   |   |   |   |   |   |   |   |   |   | (10 | ) |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.10 on December 14, 2010                            |   |         | 348    |   |                     |   | 1      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 383 |   |   |   |   |   |   |   | 384 |   |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on December 14 2010                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (384 | ) |   |   |   |   |   |   | (384 | ) |
|                                                                                                                              |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on December 14, 2010                                                      |   |         |   |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 17,438 |   |   |   |   |   |   |   | 17,438 |   |

----

Table of Contents

|                                                                                                                            |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                            |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                            |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on December 21, 2010                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | 250,000 |   |   |   | 250 |   |   |   | 2,499,750 |   |   |   |   |   |   |   | 2,500,000 |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Placement Agents Fees related to sale of Convertible Preferred shares on December 21, 2010                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (200,000 | ) |   |   |   |   |   |   | (200,000 | ) |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.32 per share on December 31, 2010                                |   |         | 4,545   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,995 |   |   |   |   |   |   |   | 6,000 |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ROUNDING                                                                                                                        |   |         |    |   |                     |   | 2      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2 |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| adjusting entry                                                                                                                 |   |         |    |   |                     |   | 21     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 21 |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.16 per share, .001 par value, on January 3, 2011 |   |         | 343,796 |   |                     |   | 344    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 344 |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on July 7, 2010           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.16 on January 3, 2011                            |   |         | 7,653   |   |                     |   | 8      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 8,896 |   |   |   |   |   |   |   | 8,904 |   |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on January 3, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (8,904 | ) |   |   |   |   |   |   | (8,904 | ) |
|                                                                                                                            |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on January 3, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 73,532 |   |   |   |   |   |   |   | 73,532 |   |

----

Table of Contents

|                                                                                                                             |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                             |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                             |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.26 per share, .001 par value, on January 17, 2011 |   |         | 317,965 |   |                     |   | 318    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   | 318 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 17, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.26 on January 17, 2011                            |   |         | 6,403   |   |                     |   | 6      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 8,049 |   |   |   |   |   |   |   | 8,055 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on January 17, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (8,055 | ) |   |   |   |   |   |   | (8,055 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on January 17, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 70,882 |   |   |   |   |   |   |   | 70,882 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.12 per share, .001 par value, on January 31, 2011 |   |         | 356,422 |   |                     |   | 356    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 356 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 31, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.24 on January 31, 2011                            |   |         | 5,271   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 6,516 |   |   |   |   |   |   |   | 6,521 |   |
|                                                                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on January 31, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (6,521 | ) |   |   |   |   |   |   | (6,521 | ) |

----

Table of Contents

|                                                                                                                              |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                              |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                              |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on January 31, 2011                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 72,432 |   |   |   |   |   |   |   | 72,432 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.47 per share on January 31, 2011                                   |   |         | 4,087   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,996 |   |   |   |   |   |   |   | 6,000 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of warrants to restricted Common Stock at $1.00 per share, .001 par value, on February 4, 2011        |   |         | 25,000  |   |                     |   | 25     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 24,975 |   |   |   |   |   |   |   | 25,000 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.08 per share, .001 par value, on February 14, 2011 |   |         | 370,017 |   |                     |   | 375    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 375 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 14, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.08 on February 14, 2011                            |   |         | 4,613   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,981 |   |   |   |   |   |   |   | 4,986 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on February 14, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (4,986 | ) |   |   |   |   |   |   | (4,986 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on February 14, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 71,699 |   |   |   |   |   |   |   | 71,699 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on Feburary 15, 2011                                                                 |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 54,000 |   |   |   |   |   |   |   | 54,000 |   |

----

Table of Contents

|                                                                                                                              |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                              |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                              |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.99 per share, .001 par value, on February 28, 2011 |   |         | 405,610 |   |                     |   | 409    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 409 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on February 28, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 71,490 |   |   |   |   |   |   |   | 71,490 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 28, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.99 on February 28, 2011                            |   |         | 3,500   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 3,448 |   |   |   |   |   |   |   | 3,452 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on February 28, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (3,452 | ) |   |   |   |   |   |   | (3,452 | ) |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.22 per share on February 28, 2011                                  |   |         | 4,902   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,995 |   |   |   |   |   |   |   | 6,000 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee stock compensation at $1.32 per share on March 3, 2010                                                 |   |         | 125,000 |   |                     |   | 125    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 158,000 |   |   |   |   |   |   |   | 158,125 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee stock compensation at $1.32 per share on March 3, 2010                                                 |   |         | 125,000 |   |                     |   | 125    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 158,000 |   |   |   |   |   |   |   | 158,125 |   |
|                                                                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation at .001 par value on March 3, 2010                               |   |         |    |   |                     |   |   |                     |   |   | 250,000     |   |   |      | 250    |   |        |   |   |   |   |   |   |   |   |   | 574,331 |   |   |   |   |   |   |   | 574,581 |   |

----

Table of Contents

|                                                                                                                           |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                           |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                           |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation .001 par value on March 3, 2010                               |   |         |    |   |                     |   |   |                     |   |   | 250,000     |   |   |      | 250    |   |        |   |   |   |   |   |   |   |   |   | 574,331 |   |   |   |   |   |   |   | 574,581 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series A Preferred Shares issued for employee stock compensation .001 par value on March 3, 2010                               |   |         |    |   |                     |   |   |                     |   |   | 93,750      |   |   |      | 94     |   |        |   |   |   |   |   |   |   |   |   | 215,374 |   |   |   |   |   |   |   | 215,468 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.09 per share, .001 par value, on March 14, 2011 |   |         | 367,274 |   |                     |   | 367    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 367 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on March 14, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.09 on March 14, 2011                            |   |         | 1,761   |   |                     |   | 2      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,916 |   |   |   |   |   |   |   | 1,918 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on March 14, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (1,918 | ) |   |   |   |   |   |   | (1,918 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on March 14, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 70,566 |   |   |   |   |   |   |   | 70,566 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.11 per share, .001 par value, on March 28, 2011 |   |         | 89,986  |   |                     |   | 90     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 90 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on March 28, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (10,000 | ) |   |   | (10 | ) |   |   |   |   |   |   |   |   |   |   | (10 | ) |

----

Table of Contents

|                                                                                                                           |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                           |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                           |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.11 on March 28, 2011                            |   |         | 345     |   |                     |   | 1      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 383 |   |   |   |   |   |   |   | 384 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on March 28, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (384 | ) |   |   |   |   |   |   | (384 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on March 28, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 17,525 |   |   |   |   |   |   |   | 17,525 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.28 per share on March 31, 2011                                  |   |         | 4,680   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,995 |   |   |   |   |   |   |   | 6,000 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of warrants to restricted Common Stock at $1.00 per share, .001 par value, on April 10, 2011       |   |         | 10,000  |   |                     |   | 10     |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 9,990 |   |   |   |   |   |   |   | 10,000 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on April 18, 2011                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | 250,000 |   |   |   | 250 |   |   |   | 2,499,750 |   |   |   |   |   |   |   | 2,500,000 |   |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Placement Agents Fees related to sale of Convertible Preferred shares on April 18, 2011                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (160,000 | ) |   |   |   |   |   |   | (160,000 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Legal Fees related to Sale of Convertible Preferred Stock April 18, 2011                                                       |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (25,000 | ) |   |   |   |   |   |   | (25,000 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Issuance of Preferred Series B                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (429,725 | ) |   |   |   |   |   |   | (429,725 | ) |
|                                                                                                                           |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.28 per share, .001 par value, on April 18, 2011 |   |         | 312,163 |   |                     |   | 312    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (272 | ) |   |   |   |   |   |   | 40 |   |

----

Table of Contents

|                                                                                                                        |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                        |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                        |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on April 18, 2011     |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   | 1 |   |   |   | (40 | ) |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on April 18, 2011                                                   |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 68,756 |   |   |   |   |   |   |   | 68,756 |   |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.47 per share on April 30, 2011                               |   |         | 4,087   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,996 |   |   |   |   |   |   |   | 6,000 |   |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.18 per share, .001 par value, on May 2, 2011 |   |         | 339,726 |   |                     |   | 340    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (300 | ) |   |   |   |   |   |   | 40 |   |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on May 2, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on May 2, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 68,941 |   |   |   |   |   |   |   | 68,941 |   |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.18 on May 2, 2011                            |   |         | 6,841   |   |                     |   | 7      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 8,048 |   |   |   |   |   |   |   | 8,055 |   |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on May 2, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (8,055 | ) |   |   |   |   |   |   | (8,055 | ) |
|                                                                                                                        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants issued to Scientific Advisory Board on May 15, 2011                                                                |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 50,400 |   |   |   |   |   |   |   | 50,400 |   |

----

Table of Contents

|                                                                                                                         |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                         |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                         |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.19 per share, .001 par value, on May 16, 2011 |   |         | 336,501 |   |                     |   | 337    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (297 | ) |   |   |   |   |   |   | 40 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on May 16, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on May 16, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,194 |   |   |   |   |   |   |   | 69,194 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.20 on May 16, 2011                            |   |         | 5,438   |   |                     |   | 5      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 6,516 |   |   |   |   |   |   |   | 6,521 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on May 16, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (6,521 | ) |   |   |   |   |   |   | (6,521 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.23 per share, .001 par value, on May 30, 2011 |   |         | 326,480 |   |                     |   | 326    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (286 | ) |   |   |   |   |   |   | 40 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on May 30, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on May 30, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,464 |   |   |   |   |   |   |   | 69,464 |   |
|                                                                                                                         |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.23 on May 30, 2011                            |   |         | 4,070   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 4,982 |   |   |   |   |   |   |   | 4,986 |   |

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Table of Contents

|                                                                                                                          |   | Common Stock |    |   | Series A Preferred Stock |   |   | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                                                          |   | Number       |    |   | Par                      |   |   | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                                                          |   | of Shares    |    |   | Value $.001              |   |   | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on May 30, 2011                                                                              |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (4,986 | ) |   |   |   |   |   |   | (4,986 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.47 per share on May 31, 2011                                   |   |         | 4,087   |   |                     |   | 4      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,996 |   |   |   |   |   |   |   | 6,000 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.18 per share, .001 par value, on June 13, 2011 |   |         | 339,971 |   |                     |   | 340    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (297 | )  |   |   |   |   |   |   | 40 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on June 13, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on June 13, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,727 |   |   |   |   |   |   |   | 69,727 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.18 on June 13, 2011                            |   |         | 2,934   |   |                     |   | 3      |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 3,449 |   |   |   |   |   |   |   | 3,452 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on June 13, 2011                                                                             |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (3,452 | ) |   |   |   |   |   |   | (3,452 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in conversion of Series B Preferred Shares to Common Stock at $1.02 per share, .001 par value, on June 27, 2011 |   |         | 391,850 |   |                     |   | 391    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (352 | ) |   |   |   |   |   |   | 39 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of Series B Preferred Shares converted into common stock by Seaside 88, LP, .001 par value on June 27, 2011        |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   | (40,000 | ) |   |   | (40 | ) |   |   |   |   |   |   |   |   |   |   | (40 | ) |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liability - Retirement of Preferred Series B on June 27, 2011                                                      |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 69,973 |   |   |   |   |   |   |   | 69,973 |   |
|                                                                                                                          |   |         |    |   |                     |   |   |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

|                                                                                               |   | Common Stock |        |   | Series A Preferred Stock |   |    | Series B Preferred Stock |   |   |        |   |   |      |   |   |        |   |
|----------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------------------------|--------|---------|--------------------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                               |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                                               |   | Number       |        |   | Par                      |   |    | Number                   |   |   | Par         |   |   | Number    |   |   | Par         |   |   | Paid-in |   |   | Accumulated |   |   | Shareholders' |   |
|                                                                                               |   | of Shares    |        |   | Value $.001              |   |    | of Shares                |   |   | Value $.001 |   |   | of Shares |   |   | Value $.001 |   |   | Capital |   |   | Deficit |   |   | Equity |   |
| Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $1.10 on June 27, 2011 |   |         | 1,741       |   |                     |   | 2       |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 1,916 |   |   |   |   |   |   | 1,918 |   |
|                                                                                               |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend to Seaside 88, LP, paid on June 27, 2011                                                  |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | (1,918 | ) |   |   |   |   |   | (1,918 | ) |
|                                                                                               |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for consulting and legal services rendered at $1.22 per share on June 30, 2011       |   |         | 4,902       |   |                     |   | 5       |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   | 5,995 |   |   |   |   |   |   | 6,000 |   |
|                                                                                               |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ending 06/30/2011                                                            |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,477,165 | ) |   |   | (6,477,165 | ) |
|                                                                                               |   |         |        |   |                     |   |    |                     |   |   |        |   |   |      |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                               |   |         | 143,548,494 |   |                     |   | 143,582 |                     |   |   | 8,217,500   |   |   |      | 8,218  |   |        |   | 10,000 |   |   |   | 10 |   |   |   | 33,235,990 |   |   |   | (23,216,908 | ) |   |   | 10,170,891 |   |

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|                                                                                                                             |   | Fiscal Year Ended June 30, 2011 |       |   | Fiscal Year Ended June 30, 2010 |   |       | For the Period from May 12, 2005 (Inception) through June 30, 2011 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|--------|--------------------------------------|--------|------------|------------------------------------------------------------------------------|--------|
| OPERATING ACTIVITIES:                                                                                                            |   |                                 |       |   |                                 |   |       |                                                                         |   |
| Net loss                                                                                                                         |   |                                 | (6,477,165 | )      |                                 |   | (4,744,208 | )                                                                            |   |   | (23,216,909 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:                                                      |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Preferred shares issued for license                                                                                              |   |                                 | -          |   |                                 |   | 7,000      |                                                                         |   |   | 7,000 |   |
| Preferred shares issued as compensation                                                                                          |   |                                 | -          |   |                                 |   | 1,220,330  |                                                                         |   |   | 1,220,330 |   |
| Common shares and warrants issued for services                                                                                   |   |                                 | 1,865,815  |   |                                 |   | 467,122    |                                                                         |   |   | 3,143,494 |   |
| Warrants granted to scientific advisory board                                                                                    |   |                                 | 205,200    |   |                                 |   | 204,000    |                                                                         |   |   | 854,041 |   |
| Amortization of deferred compensation                                                                                            |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | 121,424 |   |
| Depreciation and amortization                                                                                                    |   |                                 | 527,742    |   |                                 |   | 90,289     |                                                                         |   |   | 639,368 |   |
| Change in fair value of derivative liability                                                                                     |   |                                 | 62,049     |   |                                 |   | (192,763   | )                                                                            |   |   | (130,714 | ) |
| Amortization of deferred financing expenses                                                                                      |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | 51,175 |   |
| Discount convertible debentures                                                                                                  |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | 73,930 |   |
| Beneficial conversion feature of convertible debentures                                                                          |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | 713,079 |   |
| Changes in operating assets and liabilities:                                                                                     |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Prepaid expenses                                                                                                                 |   |                                 | (41,022    | )      |                                 |   | 38,273     |                                                                         |   |   | (324,294 | ) |
| Other current assets                                                                                                             |   |                                 | 209,902    |   |                                 |   | (108,592   | )                                                                            |   |   | (8,001 | )  |
| Deferred expenses                                                                                                                |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | (2,175 | ) |
| Accounts payable- trade                                                                                                          |   |                                 | (48,091    | )      |                                 |   | 37,453     |                                                                         |   |   | 423,909 |   |
| Accounts payable –related parties                                                                                          |   |                                 | (730,638   | )      |                                 |   | 892,624    |                                                                         |   |   | 462,955 |   |
| Accrued expenses                                                                                                                 |   |                                 | (58,543    | )      |                                 |   | 50,629     |                                                                         |   |   | 27,173 |   |
| Accrued payroll to officers and related payroll tax expense                                                                      |   |                                 | (22,917    | )      |                                 |   | (9,679     | )                                                                            |   |   | - |   |
|                                                                                                                             |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Net cash used in operating activities                                                                                            |   |                                 | (4,507,668 | )      |                                 |   | (2,047,522 | )                                                                            |   |   | (15,944,215 | ) |
|                                                                                                                             |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| INVESTING ACTIVITIES:                                                                                                            |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Purchase of property and equipment                                                                                               |   |                                 | (152,961   | )      |                                 |   | (561,270   | )                                                                            |   |   | (1,417,365 | ) |
| Purchase of trademark                                                                                                            |   |                                 | (41,081    | )      |                                 |   | (183,509   | )                                                                            |   |   | (423,755 | ) |
|                                                                                                                             |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Net cash used in investing activities                                                                                            |   |                                 | (194,042   | )      |                                 |   | (744,779   | )                                                                            |   |   | (1,841,120 | ) |
|                                                                                                                             |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| FINANCING ACTIVITIES:                                                                                                            |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Proceeds from issuance of Convertible Preferred Series B stock                                                                   |   |                                 | 6,910,000  |   |                                 |   | 4,550,000  |                                                                         |   |   | 12,460,000 |   |
| Proceeds from issuance of common stock and warrants in connection with private placements of common stock, net of issuance costs |   |                                 | -          |   |                                 |   | 1,432,252  |                                                                         |   |   | 11,296,748 |   |
| Proceeds from exercise of stock options                                                                                          |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | 90,000 |   |
| Proceeds from exercise of warrants                                                                                               |   |                                 | 60,000     |   |                                 |   | 2,076,340  |                                                                         |   |   | 3,162,590 |   |
| Collection of stock subscriptions received                                                                                       |   |                                 | -          |   |                                 |   | -          |                                                                         |   |   | 20 |   |
|                                                                                                                             |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| Net cash provided by financing activities                                                                                        |   |                                 | 6,970,000  |   |                                 |   | 8,058,592  |                                                                         |   |   | 27,009,338 |   |
|                                                                                                                             |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| NET INCREASE IN CASH AND CASH EQUIVALENTS                                                                                        |   |                                 | 2,268,290  |   |                                 |   | 5,266,291  |                                                                         |   |   | 9,224,023 |   |
| CASH AND CASH EQUIVALENTS, BEGINNING                                                                                             |   |                                 | 6,955,733  |   |                                 |   | 1,689,442  |                                                                         |   |   | - |   |
| CASH AND CASH EQUIVALENTS, ENDING                                                                                                |   | $                                    | 9,224,023  |   |                                 | $      | 6,955,733  |                                                                         |   | $ | 9,224,023 |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:                                                                               |   |                                 |       |   |                                 |   |       |                                                                         |   |   |   |   |
| INTEREST PAID                                                                                                                    |   | $                                    | -          |   |                                 | $      | -          |                                                                         |   | $ | - |   |
| INCOME TAX PAID                                                                                                                  |   | $                                    | -          |   |                                 |   | 4,092      |                                                                         |   | $ |   |   |

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|                                                                       |   | Fiscal Year EndedJune 30, |       |   | For the Cumulative Period From May 12, 2005 (Inception) through June 30, 2011 |   |
|----------------------------------------------------------------------------|--------|---------------------------|------------|--------|-----------------------------------------------------------------------------------------|--------|
|                                                                       |   | 2011                      |       |   | 2010                                                                                    |   |   |   |   |
| Common stock issued for services rendered                                  |   | $                         | 447,250    |   |                                                                                    | $      | 467,122 |   |   | $ | 11,724,929 |   |
| Preferred Stock Issued as compensation                                     |   |                      | 1,418,585  |   |                                                                                    |   | 1,220,330 |   |   |   | 2,638,915 |   |
| Stock options issued to the officers as compensation                       |   |                      | -          |   |                                                                                    |   | - |   |   |   | 121,424 |   |
| Stock warrants granted to scientific advisory board                        |   |                      | 205,200    |   |                                                                                    |   | 204,000 |   |   |   | 854,041 |   |
| Stock warrants granted to brokers                                          |   |                      | -          |   |                                                                                    |   | 3,563 |   |   |   | 3,563 |   |
| Common stock issued for interest on debentures                             |   |                      | -          |   |                                                                                    |   | - |   |   |   | 73,930 |   |
| Shares of common stock issued in connection with debenture offering        |   |                      | -          |   |                                                                                    |   | - |   |   |   | 49,000 |   |
| Common stock issued upon conversion of convertible debentures              |   |                      | -          |   |                                                                                    |   | - |   |   |   | 1,000,000 |   |
| Common Stock issued upon conversion of Series B Preferred Stock            |   |                      | 10,000,000 |   |                                                                                    |   | 2,400,000 |   |   |   | 12,400,000 |   |
| Common Stock issued for dividends on Series B Preferred Stock              |   |                      | 126,644    |   |                                                                                    |   | 28,397 |   |   |   | 155,041 |   |
| Debt discount related to beneficial conversion feature of convertible debt |   |                      | -          |   |                                                                                    |   | - |   |   |   | 713,079 |   |
| Stock Warrants issued in connection with Private Placement                 |   |                      | -          |   |                                                                                    |   | 5,097,300 |   |   |   | 7,681,578 |   |
| Common stock issued for accounts payable                                   |   |                      | -          |   |                                                                                    |   | 56,900 |   |   |   | 175,020 |   |
| Common stock issued for equipment                                          |   |                      | -          |   |                                                                                    |   | - |   |   |   | 137,500 |   |

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|                                   |   | As of June 30, 2011 |   |
|----------------------------------------|--------|---------------------|--------|
|                                   |   | Carrying            |   |   | Fair Value Measurements Using |   |
|                                   |   | Value               |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Liabilities                            |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative Liabilities associated with |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series B Preferred stock               |   |                | 17,519 |   |   |   |   |   |   |   |   |   |   |   | 17,519 |   |   |   | 17,519 |   |
| Total Derivative Liabilities           |   |                | 17,519 |   |   |   |   |   |   |   |   |   |   |   | 17,519 |   |   |   | 17,519 |   |

|                                        |   | Fair Value Measurements Using Level 3 Inputs |     |
|---------------------------------------------|--------|----------------------------------------------|----------|
|                                        |   | Derivative                                   |     |   |   |   |
|                                        |   | Liabilities                                  |     |   | Totals |   |
| Beginning Balance as of April 18, 2011      |   |                                         | 429,725  |   |   |   | 429,725 |   |
| Total Gains or Losses (realized/unrealized) |   |                                         |     |   |   |   |   |   |
| Included in Net Income                      |   |                                         | 3,849    |   |   |   | 3,849 |   |
| Included in Other Comprehensive Income      |   |                                         |     |   |   |   |   |   |
| Purchases, Issuances and Settlements        |   |                                         | (416,055 | ) |   |   | (416,055 | ) |
| Transfers in and/or out of Level 3          |   |                                         | -   |   |   |   | -  |   |
| Ending Balance at June 30, 2011             |   |                                         | 17,519   |   |   |   | 17,519 |   |

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| o | The Company uses historical data to estimate employee termination behavior. The expected life of options granted is derived from paragraph 718-10-S99-1 of the FASB Accounting Standards Codification and represents the period of time the options are expected to be outstanding. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | The expected volatility is based on a combination of the historical volatility of the comparable companies’ stock over the contractual life of the options. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability consistent with the unit of account. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Additional disclosures about fair value measurements. |
|--------|--------|-------------------------------------------------------|

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|                   |   | June 30, 2011 |    |   | June 30, 2010 |   |
|------------------------|--------|---------------|---------|--------|---------------|--------|
| TheraCour Pharma, Inc. |   | $             | 306,160 |   |          | $      | 263,656 |   |
| Kard Scientific, Inc.  |   |          | -       |   |          |   | - |   |
| Prepaid Others         |   |          | 26,134  |   |          |   | 27,616 |   |
|                   |   |          |    |   |          |   |   |   |
|                   |   | $             | 332,294 |   |          | $      | 291,272 |   |

|                          |   | June 30, 2011 |      |   | June 30, 2010 |   |
|-------------------------------|--------|---------------|-----------|--------|---------------|--------|
|                          |   |          |      |   |          |   |
| Leasehold Improvements        |   | $             | 332,476   |   |          | $      | 314,754 |   |
|                          |   |          |      |   |          |   |   |   |
| Office Equipment              |   |          | 30,048    |   |          |   | 30,048 |   |
|                          |   |          |      |   |          |   |   |   |
| Furniture and Fixtures        |   |          | 1,400     |   |          |   | 1,400 |   |
|                          |   |          |      |   |          |   |   |   |
| Lab Equipment                 |   |          | 1,053,441 |   |          |   | 918,202 |   |
|                          |   |          |      |   |          |   |   |   |
| Total Property and Equipment  |   |          | 1,417,365 |   |          |   | 1,264,404 |   |
|                          |   |          |      |   |          |   |   |   |
| Less Accumulated Depreciation |   |          | 614,998   |   |          |   | 96,030 |   |
| Property and Equipment, Net   |   | $             | 802,367   |   |          | $      | 1,168,374 |   |

|                          |   | June 30, 2011 |    |   | June 30, 2010 |   |
|-------------------------------|--------|---------------|---------|--------|---------------|--------|
|                          |   |          |    |   |          |   |
| Trademarks and Patents        |   | $             | 423,754 |   |          | $      | 382,673 |   |
| Less Accumulated Amortization |   |          | (24,371 | )      |          |   | (15,596 | ) |
| Trademarks and Patents, Net   |   | $             | 399,383 |   |          | $      | 367,077 |   |

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| Date of Conversion |   | Number of Shares of Series B Converted |   |   | Conversion Price |   |    | Number of Shares of .001 par value Common Stock Issued Pursuant to Conversion |   |   | Dividend Conversion Price |   |   | Dividend Shares Issued |    |   | Total Shares of .001 par value Common Stock Issued to Seaside |   |
|--------------------|--------|----------------------------------------|--------|--------|------------------|--------|---------|-------------------------------------------------------------------------------|--------|--------|---------------------------|--------|--------|------------------------|---------|--------|---------------------------------------------------------------|--------|
| 1/3/11             |   |                                   | 40,000 |   |             |   | 1.16348 |                                                                          |   |   | 343,796                   |   |   |                   | 1.16348 |   |                                                          |   | 7,653 |   |   |   | 351,449 |   |
| 1/14/11            |   |                                   | 40,000 |   |             |   | 1.258   |                                                                          |   |   | 317,965                   |   |   |                   | 1.258   |   |                                                          |   | 6,403 |   |   |   | 324,368 |   |
| 1/31/11            |   |                                   | 40,000 |   |             |   | 1.1226  |                                                                          |   |   | 356,422                   |   |   |                   | 1.237   |   |                                                          |   | 5,271 |   |   |   | 361,694 |   |
| 2/14/11            |   |                                   | 40,000 |   |             |   | 1.08103 |                                                                          |   |   | 370,017                   |   |   |                   | 1.08103 |   |                                                          |   | 4,613 |   |   |   | 374,630 |   |
| 2/28/11            |   |                                   | 40,000 |   |             |   | 0.98617 |                                                                          |   |   | 405,610                   |   |   |                   | 0.98617 |   |                                                          |   | 3,500 |   |   |   | 409,110 |   |
| 3/14/11            |   |                                   | 40,000 |   |             |   | 1.08911 |                                                                          |   |   | 367,274                   |   |   |                   | 1.08911 |   |                                                          |   | 1,761 |   |   |   | 369,035 |   |
| 3/28/11            |   |                                   | 10,000 |   |             |   | 1.11129 |                                                                          |   |   | 89,986                    |   |   |                   | 1.11129 |   |                                                          |   | 345 |   |   |   | 90,331 |   |

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| Date of Conversion |   | Number of Shares of Series B Converted |   |   | Conversion Price |   |    | Number of Shares of .001 par value Common Stock Issued Pursuant to Conversion |   |   | Dividend Conversion Price |   |   | Dividend Shares Issued |    |   | Total Shares of .001 par value Common Stock Issued to Seaside |   |
|--------------------|--------|----------------------------------------|--------|--------|------------------|--------|---------|-------------------------------------------------------------------------------|--------|--------|---------------------------|--------|--------|------------------------|---------|--------|---------------------------------------------------------------|--------|
| 04/18/2011         |   |                                   | 40,000 |   |             |   | 1.16348 |                                                                          |   |   | 312,163                   |   |   |                   | 1.28138 |   |                                                          |   | - |   |   |   | 312,163 |   |
| 05/02/2011         |   |                                   | 40,000 |   |             |   | 1.258   |                                                                          |   |   | 339,726                   |   |   |                   | 1.17742 |   |                                                          |   | 8055 |   |   |   | 346,567 |   |
| 05/16/2011         |   |                                   | 40,000 |   |             |   | 1.1226  |                                                                          |   |   | 336,502                   |   |   |                   | 1.1887  |   |                                                          |   | 6521 |   |   |   | 341.940 |   |
| 05/30/2011         |   |                                   | 40,000 |   |             |   | 1.08103 |                                                                          |   |   | 326,480                   |   |   |                   | 1.22519 |   |                                                          |   | 4986 |   |   |   | 330,550 |   |
| 06/13/2011         |   |                                   | 40,000 |   |             |   | 0.98617 |                                                                          |   |   | 339,971                   |   |   |                   | 1.17657 |   |                                                          |   | 3452 |   |   |   | 342,905 |   |
| 06/27/2011         |   |                                   | 40,000 |   |             |   | 1.08911 |                                                                          |   |   | 391,850                   |   |   |                   | 1.0208  |   |                                                          |   | 1918 |   |   |   | 393,591 |   |

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| Stock Options                |   | Number of Shares |      |   | Weighted Average Exercise Price per share ($) |   |   | Weighted Average Remaining Contractual Term (years) |   |   | Aggregate Intrinsic Value ($) |   |
|------------------------------|--------|------------------|-----------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|-------------------------------|--------|
| Outstanding at June 30, 2007 |   |             | 1,875,000 |   |                                          | $      | 0.10   |                                                |   |   | 8.25                          |   |   | $ | 1,537,500 |   |
| Granted                      |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Exercised                    |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2008 |   |             | 1,875,000 |   |                                          |   | 0.10   |                                                |   |   | 7.25                          |   |   | $ | 2,400,000 |   |
| Granted                      |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Exercised                    |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2009 |   |             | 1,875,000 |   |                                          |   | 0.10   |                                                |   |   | 6.24                          |   |   |   | 665,833 |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Granted                      |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Exercised                    |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -         |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2010 |   |             | 1,875,000 |   |                                          |   | 0.10   |                                                |   |   | 5.24                          |   |   |   | 2,493,332 |   |
| Granted                      |   |             | -         |   |                                          |   | -      |                                                |   |   |                          |   |   |   |   |   |
| Exercised                    |   |             | -         |   |                                          |   | -      |                                                |   |   |                          |   |   |   |   |   |
| Expired                      |   |             | -         |   |                                          |   | -      |                                                |   |   |                          |   |   |   |   |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
|                         |   |             |      |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2011 |   |             | 1,875,000 |   |                                          |   | 0.10   |                                                |   |   | 4.24                          |   |   |   | 1,572,499 |   |

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| Stock Warrants               |   | Number of Shares |       |   | Weighted Average Exercise Price per share ($) |   |   | Weighted Average Remaining Contractual Term (years) |   |   | Aggregate Intrinsic Value ($) |   |
|------------------------------|--------|------------------|------------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------------|--------|--------|-------------------------------|--------|
| Outstanding at June 30, 2007 |   |             | 2,695,000  |   |                                          |   | 1.95   |                                                |   |   | 1.94                          |   |   | $ | - |   |
| Granted                      |   |             | 1,680,000  |   |                                          |   | 1.00   |                                                |   |   | 2.25                          |   |   |   | - |   |
| Exercised                    |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |       |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2008 |   |             | 4,375,000  |   |                                          | $      | 1.58   |                                                |   |   | 1.49                          |   |   |   | - |   |
| Granted                      |   |             | 3,983,400  |   |                                          |   | 1.42   |                                                |   |   | 2.67                          |   |   |   | - |   |
| Exercised                    |   |             | 930,250    |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |       |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2009 |   |             | 7,428,150  |   |                                          |   | 1.53   |                                                |   |   | 1.78                          |   |   |   | - |   |
| Granted                      |   |             | 5,352,550  |   |                                          |   | 1.00   |                                                |   |   | 2.67                          |   |   |   | - |   |
| Exercised                    |   |             | 1,553,750  |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |       |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2010 |   |             | 11,226,950 |   |                                          |   | 1.16   |                                                |   |   | 1.90                          |   |   |   | - |   |
| Granted                      |   |             | 230,000    |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Exercised                    |   |             | 60,000     |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Expired                      |   |             | 25,000     |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
| Canceled                     |   |             | -          |   |                                          |   | -      |                                                |   |   | -                             |   |   |   | - |   |
|                         |   |             |       |   |                                          |   |   |                                                |   |   |                          |   |   |   |   |   |
| Outstanding at June 30, 2011 |   |             | 11,421,950 |   |                                          |   | 1.17   |                                                |   |   | 0.95                          |   |   |   | - |   |

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|                             |   | June 30, 2011 |       |   | June 30, 2010 |   |
|----------------------------------|--------|---------------|------------|--------|---------------|--------|
| Net operating loss carryforwards |   | $             | 4,283,519  |   |          | $      | 3,660,808 |   |
| Research and development credit  |   |          | 2,764,875  |   |          |   | 1,857,717 |   |
| Other                            |   |          | 1,701,915  |   |          |   | 947,815 |   |
| Gross deferred tax assets        |   |          | 8,750,309  |   |          |   | 6,466,340 |   |
| Valuation allowances             |   |          | (8,750,309 | )      |          |   | (6,466,340 | ) |
| Deferred tax assets, net         |   | $             | -          |   |          | $      | - |   |

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