UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A

(Mark One)

|X|   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 For the quarterly period ended March 31, 2004

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from _________________ to _________________


                        Commission file number 333-83152


                                   Inyx, Inc.
        (Exact name of small business issuer as specified in its charter)


               Nevada                                     75-2870720
  (State or other jurisdiction of                       (IRS Employer
   incorporation or organization)                    Identification No.)


                825 Third Avenue, 40th Floor, New York, New York
                    (Address of principal executive offices)


                                 (212) 838-1111
                           (Issuer's telephone number)

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:
Yes |X| No |_|

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

      Check whether the registrant filed all documents and reports required to
be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes |_| No |_|

APPLICABLE ONLY TO CORPORATE ISSUERS

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of May 19, 2004: 28,790,000 shares of common stock.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

Include whether Registrant is an accelerated filer: Yes |_| No |X|
<PAGE>

                                EXPLANATORY NOTE

      Inyx, Inc. (the "Company") is filing this Amended Form 10-QSB (the
"Amended Form 10-QSB/A") to restate Items 1 and 2 of Part I contained in the
Company's Quarterly Report on Form 10-QSB (the "Original Form 10-QSB") for the
first quarter ended March 31, 2004 as originally filed with the Securities and
Exchange Commission on May 19, 2004. This Amended Form 10-QSB/A reflects
restatements of the previously issued unaudited consolidated financial
statements as of March 31, 2004 and the previously filed audited consolidated
financial statements for the period from March 7, 2003 through December 31, 2003
and related changes in the Management's Discussion and Analysis of Financial
Condition and Results of Operations resulting from the matters discussed below.

      The restatement resulted primarily from correction of accounting for the
following transactions: (1) accounting for the acquisition of the Miza UK assets
as a purchase transaction rather than a reorganization of entities under common
control, (2) correction of the recognition and measurement of the fair value
assigned to warrants and the beneficial conversion feature relating to
convertible debt, (3) correction to classification of amortization of deferred
financing costs, (4) correction to classification of various non recurring
operating costs (see Note 3 to the financial statements).

      This Amended Form 10-QSB/A does not attempt to modify or update any other
disclosures set forth in the Original Form 10-QSB, except as required to reflect
the effects of the noted restatements. Additionally, this Amended Form 10-QSB/A
and the Original Form 10-QSB is subject to updating and supplementing as
provided in the periodic reports that the Company has filed and will file after
the original filing date with the Securities and Exchange Commission. In
addition, the filing on this Amended Form 10-QSB/A shall not be deemed an
admission that the original filing, when made, included any untrue statement of
material fact or omitted a material fact necessary to make a statement made
therein not misleading.
<PAGE>

                                   INYX, INC.

ITEM I. FINANCIAL STATEMENTS
        --------------------

<TABLE>
<CAPTION>
<S>                                                                                  <C>
        Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003.....  F-2

        Consolidated Statements of Operations for the Three Months Ended March
        31, 2004; for the period from March 7, 2003 through March 31, 2003; and
        for the period from January 1, 2003 through March 6, 2003..................  F-3

        Consolidated Statements of Stockholders' Equity (Deficit) and Other
        Comprehensive Loss for the Three Months Ended March 31, 2004; for the
        period from March 7, 2003 through Decemebr 31, 2003; and for the period
        from January 1, 2003 through March 6, 2003 ................................  F-4

        Consolidated Statements of Cash Flows for Three Months Ended March 31,
        2004; for the period from March 7, 2003 through March 31, 2003; and for
        the period from January 1, 2003 through March 6, 2003 .....................  F-5

        Notes to Consolidated Financial Statements.................................  F-6
</TABLE>


                                      F-1
<PAGE>

                                   INYX, INC.
                           Consolidated Balance Sheets
       (Expressed in thousands of U.S. dollars, except per share amounts)

<TABLE>
<CAPTION>
                                                            ----------------------------
                                                              MARCH 31,     DECEMBER 31,
                                                                2004           2003
                                                              RESTATED       RESTATED
                                                            (UNAUDITED)
                                                            ----------------------------
<S>                                                          <C>            <C>
                                     ASSETS

Current assets:
    Cash                                                     $    753       $    796
    Accounts receivable, net                                    3,290          3,395
    Inventory, net                                                915          1,089
    Prepaid expenses and other current assets                   2,397          1,089
                                                             --------       --------
          Total current assets                                  7,355          6,369
                                                             --------       --------

Property, plant and equipment, net                              5,089          5,183
Deferred financing costs, net                                     890            860
Other assets                                                       45             45
Deferred tax asset                                              1,687          1,294
Purchased intangible assets, net                                1,697          1,739
                                                             --------       --------
                                                                9,408          9,121
                                                             --------       --------

                  Total assets                               $ 16,763       $ 15,490
                                                             ========       ========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Borrowings under revolving line of credit                $  5,322       $  2,375
    Accounts payable                                            1,724          2,178
    Accrued expenses and other current liabilities              1,394            996
    Current portion of long-term debt                           1,483          1,483
                                                             --------       --------
          Total current liabilities                             9,923          7,032
                                                             --------       --------
Long term debt, net of current portion                          6,656          6,617
                                                             --------       --------
          Total liabilities                                    16,579         13,649
                                                             --------       --------

Commitments and contingencies

Stockholders' equity:
    Preferred stock - $0.001 par value, 10,000,000 shares
       authorized -0- shares issued and outstanding                --             --
    Common stock - $0.001 par value, 150,000,000 shares
       authorized, 28,790,000 shares issued and outstanding
       at March 31, 2004; 28,525,000 shares issued
       and outstanding at December 31, 2003                        29             29
    Additional paid-in capital                                 16,887         15,599
    Accumulated deficit                                       (16,079)       (13,392)
    Subscriptions receivable                                     (393)          (100)
    Accumulated other comprehensive loss -
       foreign currency translation adjustment                   (260)          (295)
                                                             --------       --------
           Total stockholders' equity                             184          1,841
                                                             --------       --------
           Total liabilities and stockholders'
            equity                                           $ 16,763       $ 15,490
                                                             ========       ========
</TABLE>

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


                                      F-2
<PAGE>

                                   INYX, INC.
                      Consolidated Statements of Operations
       (Expressed in thousands of U.S. dollars, except per share amounts)

<TABLE>
<CAPTION>
                                                         SUCCESSOR                     PREDECESSOR
                                          ------------------------------------------------------------
                                           For the Three        For the Period       For the Period
                                            Month Period      from March 7, 2003     from January 1,
                                          Ended March 31,          through            2003 through
                                                2004            March 31, 2003        March 6, 2003

                                                        Restated
                                                       (Unaudited)
                                          ------------------------------------------------------------
<S>                                         <C>                <C>                  <C>
Net revenues                                $      4,526       $         --         $      2,396
Cost of sales                                      3,911                 --                1,876
                                            ------------       ------------         ------------
Gross profit                                         615                 --                  520

Operating expenses:
   Research and development                          287                 --                   --
   General and administrative                      2,104                 25                  568
   Selling                                            84                 --                   51
   Depreciation and amortization                     152                 --                   75
   Amortization of intangible assets                  42                 --                   --
                                            ------------       ------------         ------------
            Total operating expenses               2,669                 25                  694
                                            ------------       ------------         ------------

Loss from continuing operations before
   interest and financing costs,
   income tax benefit and discontinued
   operations                                     (2,054)               (25)                (174)

Interest and financing costs                       1,026                 --                  176
                                            ------------       ------------         ------------

Loss before income tax benefit and
   discontinued operations                        (3,080)               (25)                (350)

Income tax benefit                                   393                 --                   --
                                            ------------       ------------         ------------

Loss before discontinued operations               (2,687)               (25)                (350)

Loss from discontinued operations,
   net of income taxes                                --                 --                  558
                                            ------------       ------------         ------------

Net loss                                    $     (2,687)      $        (25)        $       (908)
                                            ============       ============         ============

Basic and fully diluted loss per share
   Loss before discontinued operations      $      (0.09)                --                   --

   Loss from discontinued operations,
     net of income taxes                              --                 --                   --
                                            ------------       ------------         ------------
                                            $      (0.09)                --                   --
                                            ============       ============         ============

Weighted-average number of shares
   outstanding used in computing per
   share amounts                              28,747,582                 --                   --
</TABLE>

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


                                      F-3
<PAGE>

                                   INYX, INC.
            Consolidated Statement of Changes in Stockholders' Equity
                          and Other Comprehensive Loss
                    (Expressed in thousands of U.S. dollars)
                                   (Restated)

<TABLE>
<CAPTION>
                                                                                                   Accumu-
                                                                                                    lated
                                                                                                    Other
                                                  Common Stock       Additional       Stock        Compre-      Accumu-
                                             Number of                Paid-in      Subscription    hensive       lated
                                               Shares    Par Value    Capital       Receivable      loss        Deficit      Total
                                              --------   --------     --------       --------     ---------    ---------   --------
<S>                                           <C>        <C>          <C>            <C>          <C>          <C>         <C>
Predecessor
Balances at January 1, 2003                   5,000      $  8,022     $     --       $     --     $ (1,503)    $(30,464)   $(23,945)
Net loss for the period                          --            --           --             --           --         (908)       (908)
Foreign currency translation
  adjustment                                     --            --           --             --         (102)          --        (102)

                                             --------------------------------------------------------------------------------------
Balance at March 7, 2003                      5,000      $  8,022     $     --       $     --     $ (1,605)    $(31,372)   $(24,955)
                                             ======================================================================================

Successor
Balances at March 7, 2003                    16,000      $     16     $  2,081       $     --     $     --     $     --    $  2,097
Issuance of stock for reverse
  acquisition                                 5,000             5           18             --           --           --          23
Issuance of stock for finders fees
  (April 17)                                  2,450             2        1,302             --           --           --       1,304
Issuance of stock for services
  (April 21)                                  1,500             2          799             --           --           --         801
Issuance of stock on August 22 and
  November 4, net of offering costs
  of $11,800 and $310,702 respectively        3,500             4        3,174             --           --           --       3,178
Issuance of stock for options
  exercised (Nov 17)                             75            --           90             --           --           --          90
Issuance of stock options                        --            --        1,513             --           --           --       1,513
Issuance of warrants for services                --            --        1,261             --           --           --       1,261
Issuance of warrants with convertible
  debt and related beneficial
  conversion feature                             --            --        5,361             --           --           --       5,361
Subscriptions receivable                         --            --           --           (100)          --           --        (100)
Foreign currency translation adjustment          --            --           --             --         (295)          --        (295)
Net loss for the period                          --            --           --             --           --      (13,392)    (13,392)

                                             --------------------------------------------------------------------------------------
Balances at December 31, 2003                28,525            29       15,599           (100)        (295)     (13,392)      1,841
                                             --------------------------------------------------------------------------------------


Issuance of stock for options exercised
  in January 2004 (net of shares
  returned to treasury)                         265            --          290             --           --           --         290
Issuance of stock options                        --            --           66             --           --           --          66
Issuance of warrants with convertible
  debt and related beneficial
  conversion feature                             --            --          932             --           --           --         932
Subscription receivable                          --            --           --           (293)          --           --        (293)
Foreign currency translation adjustment          --            --           --             35           --           35
Net loss for the period                          --            --           --             --           --       (2,687)     (2,687)

                                             --------------------------------------------------------------------------------------
Balances at March 31, 2004                   28,790      $     29     $ 16,887       $   (393)    $   (260)    $(16,079)   $    184
                                             ======================================================================================
</TABLE>

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


                                      F-4
<PAGE>

                                   INYX, INC.
                      Consolidated Statements of Cash Flows
                    (Expressed in thousands of U.S. dollars)

<TABLE>
<CAPTION>
                                                                            SUCCESSOR                     PREDECESSOR
                                                                   ------------------------------------------------------
                                                                   For the Three      For the Period    For the Period
                                                                    Month Period    from March 7, 2003  from January 1,
                                                                   Ended March 31,        through         2003 through
                                                                        2004          March 31, 2003     March 6, 2003

                                                                              Restated
                                                                             (Unaudited)
                                                                   ------------------------------------------------------
<S>                                                                <C>                     <C>                    <C>
Cash flows from operating activities:
  Net loss for the period                                          $(2,687)                $   (25)               $  (908)
    Add: loss from discontinued operations                              --                      --                    558
                                                                   ------------------------------------------------------
    Income (loss) from continuing operations                        (2,687)                    (25)                  (350)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
    Depreciation and amortization                                      152                      --                     75
    Amortization of financing costs and debt discount                  823                      --                     --
    Amortization of intangible assets                                   42                      --                     --
    Deferred tax asset                                                (393)                     --                     --
    Issuance of stock for services                                      --                      --
    Reserve for inventory obsolescence                                 386                      --                     --
    Provision for bad debts                                             59                      --                     --
    Stock option compensation                                           66                      --                     --
    Issuance of shares for exercise of stock options                   290                      --                     --
    Subscription receivable                                           (293)                     --                     --
  Changes in assets and liabilities
    (Increase) decrease in accounts receivables                         46                      --                   (215)
    (Increase) decrease in inventory                                  (212)                     --                    385
    Increase (decrease) in prepaid and other current assets         (1,308)                     --                    267
    Increase in accounts payable and accrued liabilities               135                      --                    640
    Increase in deferred financing costs and debt discount            (107)                     --                     --
    Decrease in deferred revenues                                     (191)                     --                     --
    Increase in liabilities subject to compromise                       --                      --                    353
                                                                   ------------------------------------------------------

        Net cash (used in) provided by continuing operations        (3,192)                    (25)                 1,155
                                                                   ------------------------------------------------------

  Net cash provided by (used in) discontinued operations                --                      60                   (617)

                                                                   ------------------------------------------------------
        Net cash (used in) provided by operating activities         (3,192)                     35                    538
                                                                   ------------------------------------------------------

Cash flows from investing activities:
  Purchase of property, plant and equipment                            (58)                     --                    (18)
                                                                   ------------------------------------------------------

        Net cash  used in investing activities                         (58)                     --                    (18)
                                                                   ------------------------------------------------------

Cash flows from financing activities:
  Borrowings (repayments) under revolving line of credit, net        3,206                      --                   (522)
  Repayment of stockholder loan                                         --                     (60)                    --
  Proceeds of long-term debt                                            --                      --                    104
  Repayment of capital lease obligation                                (34)                     --                     --
                                                                   ------------------------------------------------------

        Net cash provided by (used in) financing activities          3,172                     (60)                  (418)
                                                                   ------------------------------------------------------

Effect of foreign exchange rate changes
  on cash and cash equivalents                                          35                      --                   (102)
                                                                   ------------------------------------------------------
Change in cash                                                         (43)                    (25)                    --

Cash at beginning of period                                            796                     458                     --
                                                                   ------------------------------------------------------
Cash at end of period                                              $   753                 $   433                $    --
                                                                   ======================================================
</TABLE>

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


                                      F-5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          (TABULAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)

NOTE 1:  BUSINESS DESCRIPTION AND PRESENTATION

      Inyx, Inc. ("Inyx" or the "Company") through its wholly-owned
subsidiaries, Inyx Pharma Limited and Inyx Canada Inc., is a specialty
pharmaceutical company which focuses on the development and manufacturing of
prescription and over-the-counter ("OTC") aerosol pharmaceutical products and
drug delivery technologies for the treatment of respiratory, allergy,
dermatological and topical conditions. Inyx's client base primarily consists of
large ethical pharmaceutical corporations, branded generic pharmaceutical
distributors, and biotechnology companies.

      The Company was incorporated on March 28, 2000, in the State of Nevada,
under the name Doblique, Inc. ("Doblique"). As Doblique, the Company was engaged
in the business of breeding and racing thoroughbred horses at various major
horse racing venues throughout the United States. On March 6, 2003, management
decided to discontinue the Company's thoroughbred horse operation by selling the
assets of that operation to a third party; such assets and operations were
nominal. Subsequent to the discontinuance of its horse racing operations, the
Company concluded a reverse acquisition of Inyx Pharma Limited ("Inyx Pharma");
an aerosol pharmaceutical manufacturing company incorporated under the laws of
England and Wales, and changed its name to Inyx, Inc. ("Inyx").

      The acquisition of Inyx Pharma was consummated on April 28, 2003, by
exchanging 16 million shares of the Company's restricted common stock for 100%
of the outstanding common stock of Inyx Pharma. As a result of the exchange, the
stockholders of Inyx Pharma became the Company's controlling stockholders, in
the aggregate, holding approximately 64% of the Company's outstanding shares.
The transaction was accounted for as a recapitalization of Inyx using the
reverse acquisition method of accounting and therefore, the historical financial
statements of Inyx Pharma are presented herein as the Company's historical
financial statements. As a result of the Inyx Pharma transaction, the Company
incurred costs of approximately $2.7 million consisting primarily of legal,
accounting, consulting and finders' fees. All such costs were expensed as
incurred.

      Prior to its reverse acquisition by the Company, on March 7, 2003, Inyx
Pharma had purchased the majority of the pharmaceutical business assets of Miza
Pharmaceuticals (UK) Ltd. ("Miza UK") out of Administration (a United Kingdom
equivalent of Chapter 11 bankruptcy protection and reorganization) for
approximately $8.3 million, consisting of an approximately $7.1 million cash
payment to the Administrator for Miza UK's assets and approximately $1.2 million
in direct transaction costs. The Inyx Pharma acquisition of Miza UK's business
assets was accounted for utilizing the purchase method of accounting.
Accordingly, the total purchase price was allocated to the tangible and
identifiable intangible assets acquired based on their estimated fair values.
The intangible assets acquired consisted of customer list and know-how which
were allocated a fair value of approximately $1.3 million and $600,000,
respectively, based on an independent third party evaluation.

      Prior to its acquisition of the majority of Miza UK's business assets,
Inyx Pharma was a non-operating private corporation with nominal net assets. As
the historical financial statements of Inyx Pharma are presented herein as the
Company's historical financial statements, and because as of March 7, 2003, Inyx
Pharma's sole operation was essentially the continuation of the Miza UK
business, the Company's historical financial statements for the period from
January 1, 2003 through March 6, 2003 and prior, are those of Miza UK, and are
therefore presented as "Predecessor" financial statements.

      The Company's financial statements for the periods commencing March 7,
2003 are referred to as "Successor" financial statements. The financial
statements for all periods are collectively referred to as "Inyx" or the
"Company". Additionally, as the Biopharma Division was historically part of the
Miza UK business but was an operation not acquired by Inyx Pharma, its results
of operations are presented as discontinued operations in the Company's
financial statements.

      Inyx currently manages and operates its business as one operating segment.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      a)    Consolidated Financial Statements

      The accompanying consolidated financial statements include the accounts of
Inyx and its wholly owned subsidiaries: Inyx Pharma Limited, an operating
company formed under the laws of England and Wales; Inyx Canada, Inc., a
federally incorporated Canadian corporation; and Inyx Realty, Inc., a Florida
corporation through the date of disposition of April 14, 2004. On April 14,
2004, Inyx Realty, Inc. was transferred to a related party. As consideration,
the related entity assumed all of the liabilities of Inyx Realty, Inc. including
a commitment of a ten year office space lease of approximately $1.5 million.


                                      F-6
<PAGE>

      All inter-company accounts and transactions have been eliminated in
consolidation

      b)    Unaudited Consolidated Interim Financial Statements

      The accompanying consolidated financial statements for the three months
ended March 31, 2004 and for the period from March 7, 2003 through March 31,
2003 are unaudited but, in the opinion of management, include all necessary
adjustments (consisting of normal, recurring in nature) for a fair presentation
of the financial position, results of operations and cash flow for the interim
periods presented. Interim results are not necessarily indicative of results for
a full year. Therefore, the results of operations for the three months ended
March 31, 2004 are not necessarily indicative of operating results to be
expected for a full year.

      c)    Use of Estimates

      The consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America. The
preparation of consolidated financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. The more significant estimates are those
used by management to measure the recoverability of intangible asset, deferred
tax asset, the allowances for doubtful accounts and inventory reserves and the
value of shares, options or warrants issued for services or in connection with
financing transactions. Actual results could differ from those estimates.

      Estimates and assumptions are periodically reviewed and the effects of any
material revisions are reflected in the consolidated financial statements in the
period that they are determined to be necessary.

      d)    Accounts Receivable

      Accounts receivable are stated at realizable value, net of an allowance
for doubtful accounts. Periodically, management reviews all accounts receivable
and based on an assessment of whether they are collectible, estimates the
portion, if any, of the balance that will not be collected in order to establish
an allowance for doubtful accounts. Such allowance was based on the specific
identification of accounts deemed uncollectible as of each period end. The
provision for the allowance for doubtful accounts is included in general and
administrative expenses in the accompanying consolidated statements of
operations.

      e)    Inventory

      Inventory is valued using the first-in, first-out method of accounting and
is stated at the lower of cost or net realizable value.

      f)    Property, Plant and Equipment

      Property, plant and equipment is stated at cost, net of accumulated
depreciation and amortization, which is provided for by charges to operations
over the estimated useful life of the assets using the straight line method. The
useful life of assets ranges from 3-10 years for equipment, and up to 25 years
for buildings. Leasehold improvements and capital leases are amortized over the
life of the related lease.

      Expenditures that extend the useful life of the respective assets are
capitalized and depreciated over the lives of the respective assets.
Maintenance, repairs and other expenses that do not extend their useful life are
expensed as incurred.

      g)    Purchased Intangible Assets

      The Company's purchased intangible assets consist of a customer list and
know-how. These intangible assets are accounted for in accordance with Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets"("SFAS No. 142") and are amortized on a straight line basis over their
estimated remaining useful lives in proportion to the underlying cash flows that
were used in determining the acquired value. Customer list is amortized over a
period of 12 years and know-how is amortized over 10 years.

      h)    Deferred Financing Costs

      Costs directly associated with obtaining financing are capitalized and
amortized on a straight-line basis over the estimated life of the financing
arrangement. The amortization of deferred financing costs is classified as
interest and financing costs on the consolidated statement of operations.

      i)    Business Combinations


                                       F-7
<PAGE>

      The Company accounts for business combinations in accordance with
Statement of Financial Accounting Standard No. 141 "Business Combinations"
("SFAS No.141"). SFAS No.141 requires that the purchase method of accounting be
used for all business combinations. SFAS No.141 requires that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead be tested for impairment at least annually by comparing carrying value
to the respective fair value in accordance with the provisions of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
("SFAS No.142"). This pronouncement also requires that intangible assets with
estimable useful lives be amortized over their respective estimated useful lives
to their estimated residual values, and reviewed for impairment by assessing the
recoverability of the carrying value, The Company has adopted the provisions of
SFAS 141 and SFAS 142 as of January 1, 2003.

      j)    Impairment of Long Lived Assets and Intangible Assets

      The Company reviews the carrying value of its long lived assets including
purchased intangible assets whenever events or changes in circumstances indicate
that the historical cost-carrying value of an asset may no longer be
appropriate. The Company assesses recoverability of the carrying value of the
assets by estimating the future net cash flows expected to result from the
assets, including eventual disposition. If the future net cash flows are less
than the carrying value of the assets, an impairment loss is recorded, equal to
the difference between the asset's carrying value and its fair value. In
performing such reviews, management takes into consideration the current
operating levels including any idle capacity, alternative uses for production
utilizing current equipment, and growth trends and industry projections.

      k)    Financial Instruments

      Financial instruments consist of cash, accounts receivable, accounts
payable, accrued liabilities, borrowings under the revolving line of credit and
loans payable. Non-derivative financial instruments include letters of credit,
commitments to extend credit and guarantees of debt. There were no derivative
financial instruments for any of the periods presented. The carrying values of
these financial instruments approximated their fair market value as of March 31,
2004 and December 31, 2003.

      l)    Revenue Recognition

      The Company recognizes revenue when (1) persuasive evidence of an
arrangement exists; (2) product delivery has occurred or services have been
rendered; (3) the fee is fixed or determinable; and (4) collectability is
reasonably assured. Revenues are recognized FOB shipping point, when products
are shipped, which is when legal title and risk of loss is transferred to the
Company's customers, and is recorded at the net invoiced value of goods supplied
to customers after deduction of sales discounts and sales and value added tax,
where applicable. In situations where the Company receives payment in advance of
the performance of research and development services, such amounts are deferred
and recognized as revenue as the related services are performed.

      As of March 31, 2004 and December 31, 2003, deferred revenues amounted to
$160,000 and $351,000, respectively and are included in accrued expenses and
other liabilities.

      Non-refundable fees are recognized as revenue over the term of the
arrangement, based on the percentage of costs incurred to date, estimated costs
to complete and total expected contract revenue. Product returns are not
accepted.

      Shipping costs are paid by the Company's customers. Any shipping and
handling costs incurred by the Company are included in costs of goods sold in
the accompanying consolidated statements of operations.

      m)    Convertible Debt

      Convertible debt with beneficial conversion features, whereby the
conversion feature is "in the money" are accounted for in accordance with
guidance supplied by Emerging Issues Task Force ("EITF") No. 98-5 "Accounting
for Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios" and EITF No. 00-27 "Application of Issue 98-5 to
Certain Convertible Instruments." The relative fair value of the warrants has
been recorded as a discount against the debt and is amortized over the term of
the debt.

      For convertible debt and related warrants, the recorded discount is
calculated at the issuance date as the difference between the conversion price
and the relative fair value of the common stock and warrants into which the
security is convertible or exercisable. It is recognized as interest expense
over the period the debt is outstanding and accelerated pro rata as the notes
are converted.

      In addition since the debt is convertible into equity at the option of the
note holder at the date of issuance at beneficial conversion rates, an embedded
Beneficial Conversion Feature ("BCF") has been charged to interest and financing
costs in the accompanying consolidated statement of operations and as an
increase to additional paid-in capital at the time of issuance.

      Notes 3, 11, 12 and 16 provide additional information on the valuation of
the warrants and the beneficial conversion feature.


                                       F-8
<PAGE>

      n)    Net Loss per Share

      The Company follows the guidelines of Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS No.128") in calculating its loss
per share. SFAS No.128 states basic and diluted earnings per share are based on
the weighted average number of shares of common stock and potential common stock
outstanding during the period. Potential common stock equivalents for purposes
of determining diluted earnings per share include the effects of dilutive stock
options, warrants and convertible securities. The effect on number of shares of
such potential common stock equivalents is computed using the treasury stock
method or the if-converted method, as applicable. The Company has excluded all
outstanding options and warrants as well as shares to be issued upon conversion
of convertible debt from the calculation of diluted net loss per share because
these securities are anti-dilutive. Accordingly, as of March 31, 2004 and
December 31, 2003, the Company had common stock equivalents of approximately
10,455,000 and 10,345,000 shares respectively, related to options and warrants;
and approximately 15,000,000 and 10,880,952 shares respectively related to
shares to be issued upon the conversion of the convertible debt.

      o)    Stock Based Compensation

      On May 1, 2003, the Company adopted a Stock Option Plan that provides for
the granting of incentive stock options and non qualified stock options for the
benefit of employees, officers, consultants, directors and persons who the
Company believes may have made a valuable contribution to the Company. The total
number of shares that may be issued under the plan amounts to 5,000,000. The
exercise price per share must be at least equal to the fair market price at the
time of the grant.

      The Company applies the fair value method of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock Based Compensation" ("SFAS
No. 123") in accounting for its stock option plan. This standard states that
compensation cost is measured at the grant date based on the value of the award
and is recognized over the service period, which is usually the vesting period.
The fair value of each option granted is estimated on the date of the grant
using the Black-Scholes option pricing model. The fair value of all vested
options granted has been charged to salaries, wages, and benefits in accordance
with SFAS No. 123.

      p)    Concentration of Credit Risk

      The Company obtains detailed credit evaluations of customers generally
without requiring collateral, and establishes credit limits as required.
Exposure to losses on receivables is principally dependent on each customer's
financial condition. The Company monitors its exposure for credit risk losses
and maintains an allowance for anticipated losses.

      For the three months ended March 31, 2004, the Company's three largest
customers accounted for 55% of net revenues. As of March 31, 2004 and December
31, 2003, the Company's three largest customers accounted for 46% and 49% of net
receivables, respectively. The loss of any of these customers may have a
material adverse effect on the operations of the Company.

      q)    Income Taxes

      The Company follows Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" ("SFAS No. 109"). Under the asset and liability
method of SFAS No. 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributed to differences between the financial
statements carrying amounts of existing assets and liabilities and their
respective tax base. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
No. 109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. If
it is more likely than not that some portion of a deferred tax asset will not be
realized, a valuation allowance is recognized.

      r)    Translation of Foreign Currency

      The functional currency of the Company's United Kingdom subsidiary is the
Great Britain Pound ("GBP"). The Company's financial statements are reported in
United States Dollars ("USD") and are translated in accordance with Statement of
Financial Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS No.
52"), which requires that foreign currency assets and liabilities be translated
using the exchange rates in effect at the balance sheet date. Results of
operations are translated using the average exchange rates prevailing during the
period. For purposes of SFAS No. 52, the Company considers the Dollar to be the
reporting currency. The effects of unrealized exchange fluctuations on
translating foreign currency assets and liabilities into Dollars are accumulated
as a cumulative translation adjustment which is included as a separate component
in the stockholders' equity. Realized gains and losses from foreign currency
transactions are included in the results of operations for the period.


                                       F-9
<PAGE>

      s)    Research and Development

      All research and development costs are expensed as incurred and include
salaries of, and expense relating to, employees and consultants who conduct
research and development.

      t)    Recently Issued Accounting Standards

      In January 2003, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143"). SFAS No. 143 addresses accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. As of the date of adoption of SFAS 143,
the Company had no tangible long-lived assets. During the second quarter of
2003, the Company, through the reverse acquisition of Inyx Pharma acquired
property, plant and equipment, including the manufacturing facility for
CFC-based inhalers. The Company evaluates the carrying value of property plant
and equipment to determine whether there is any impairment. Our evaluations have
indicated no such impairment to date. Management believes that as the Company
increases its marketing and commercial activities in the United States and Latin
America where the market for CFC-based respiratory inhalers still exists, the
Company will be increasingly utilizing its production line for such products and
any idle capacity will be eliminated.

      In January 2003, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities" ("SFAS No. 146"). This standard requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred rather than when a commitment to an exit plan is
made. The adoption of SFAS No. 146 did not have a material impact on the
Company's consolidated financial statements.

      In April 2003, the FASB issued Statement of Financial Accounting Standards
No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" ("SFAS No. 149"). SFAS No. 149 amends and clarifies accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS No. 133 and is effective
for contracts entered into or modified after June 30, 2003. The adoption of SFAS
No. 149 did not have a material effect on the Company's consolidated financial
statements. The Company does not currently have derivative instruments or
hedging activities. However, the Company is currently in the processes of
setting up an arrangement with a financial institution to participate in
currency forward contracts for the purpose of mitigating foreign exchange
fluctuations.

      In May 2003, the FASB issued Statement of Financial Accounting Standards
No. 150, "Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity" ("SFAS No. 150"). SFAS No. 150 provides guidance
with respect to the classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. This statement
requires that an issuer classify a financial instrument that is within its scope
as a liability rather than, under previous guidance, as equity. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a
material effect on the Company's consolidated financial statements.

      u)    Reclassifications

      Certain amounts from prior consolidated financial statements and related
notes have been reclassified to conform to the current period presentation.

NOTE 3: RESTATEMENT OF FINANCIAL STATEMENTS

      The Company determined that the previously filed interim unaudited
consolidated financial statements for the three month period ended March 31,
2004, the period from March 7, 2003 through March 31, 2003 and the previously
filed audited consolidated financial statements for the period from March 7,
2003 through December 31, 2003, contained errors that required restatement.

      The restatement resulted primarily from correction of accounting for the
following transactions: (1) accounting for the acquisition of the Miza UK assets
as a purchase transaction rather than a reorganization of entities under common
control, (2) the recognition and amortization of the fair value assigned to the
warrants and the expensing of the beneficial conversion feature relating to
convertible debt, (3) correction to classification of amortization of deferred
financing costs, (4) correction to classification of various non recurring
operating costs.

      The components of the restatement are explained in the notes below the
table

<TABLE>
<CAPTION>
                                                                                     Adjustment
                                                                     As filed        to restate       Restated
                                                                    ------------------------------------------------
                                                                  (Expressed in thousands, except per share amounts)
<S>                                                                 <C>              <C>              <C>
Balance sheet data as of March 31, 2004
Deferred financing costs, net (b)                                   $  1,282         $   (392)        $    890
Other assets (b)                                                          --               45               45
Purchased intangible assets, net (c)                                      --            1,697            1,697
Total assets                                                          15,413            1,350           16,763
Borrowings under revolving line of credit, net of discount (a)         6,339           (1,017)           5,322
Long-term debt, net of current portion and debt discount (a)           7,405             (749)           6,656
Accumulated deficit (a), (c)                                         (14,617)          (1,462)         (16,079)
Additional paid-in capital                                            12,309            4,578           16,887
Total liabilities and stockholders' equity                            (2,932)           3,116              184

Balance sheet data as at December 31, 2003
Deferred financing costs, net (b)                                   $    905         $    (45)        $    860
Other assets (b)                                                          --               45               45
Purchased intangible assets, net (c)                                      --            1,739            1,739
Total assets (a), (c)                                                 13,751            1,739           15,490
Borrowings under revolving line of credit, net of discount             3,133             (758)           2,375
Long-term debt, net of current portion and debt discount               7,439             (822)           6,617
Accumulated deficit (a), (c)                                         (12,696)            (696)         (13,392)
Additional paid in capital (d)                                        11,584            4,015           15,599
Total liabilities and stockholders' equity  (a), (c)                  13,751            1,739           15,490

<CAPTION>
                                                                                     Adjustment
                                                                     As filed        to restate       Restated
                                                                    ------------------------------------------------
                                                                  (Expressed in thousands, except per share amounts)
<S>                                                                 <C>                  <C>          <C>
Statement of operations data for the three months
ended March 31, 2004
Amortization of intangible assets (c-i)                             $     --         $     42         $     42
Depreciation and amortization (e-ii)                                    234              (82)             152
Loss from continuing operations before interest and
  financing costs, reorganization items, income
  tax benefit and discontinued operations (a), (c)                      (2,094)              40           (2,054)
Interest and financing costs  (a), (c), (e)                              220              806            1,026
Net loss (a), (c)                                                     (1,921)            (766)          (2,687)
Basic and fully diluted loss per share                                 (0.07)           (0.02)           (0.09)

Statement of operations data for the three months
ended March 31, 2003
Revenues (c-ii)                                                     $  2,730         $ (2,730)        $     --
Cost of Sales (c-ii)                                                   2,269           (2,269)              --
Gross Profit (c-ii)                                                      461             (461)              --
General and administrative (c-ii)                                        568             (543)              25
Selling expenses (c-ii)                                                   51              (51)              --
Depreciation and amortization (c-ii)                                     228             (228)              --
Loss from continuing operations before interest and                     (386)            (361)             (25)
  financing costs, reorganization items, income
  tax benefit and discontinued operations (c-ii)
Interest and financing costs (c-ii)                                      176             (176)              --
Reorganization items (c-ii)                                               55              (55)              --
Net loss (c-ii)                                                         (617)             592              (25)
Basic and fully diluted loss per share (c-ii)                          (0.04)            0.04               --
</TABLE>

        As a consequence of the changes made to the consolidated balance sheet
and statement of operations as noted above, the consolidated statement of cash
flows and changes in stockholders' equity and other comprehensive loss have been
restated accordingly.


                                      F-10
<PAGE>

      a) Valuation of Warrants and Beneficial conversion feature ("BCF")

      The Company completed its analysis of the accounting for the convertible
debt and warrants issued to Laurus Master Fund Ltd. ("Laurus Funds"). The
analysis indicated that the beneficial conversion feature and the fair value
assigned to the warrants relating to these instruments, as previously recorded
on the Company's financial statements, were understated and incorrectly
classified. Accordingly the historical financial statements presented herein are
restated to account for these items in accordance with Emerging Issues Task
Force ("EITF") No. 98-5 "Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios" and EITF No.
00-27 "Application of Issue 98-5 to Certain Convertible Instruments."

      These corrections increased additional paid-in capital by $4.0 million and
increased debt discount by $1.6 million as of December 31, 2003 and increased
interest and financing costs by $4.3 million, including interest relating to
amortization of debt discount amounting to approximately $48,000 for the period
from March 7, 2003 through December 31, 2003.

      These corrections increased additional paid-in capital by approximately
$4.6 million as of March 31, 2004 and increased interest and financing costs by
$806,000, including interest relating to amortization of debt discount amounting
to approximately $142,000 for the three months ended March 31, 2004.

      b) Reclassification of Other Assets

      The Company has revised its consolidated balance sheet classification to
separately disclose long term deposits and other long term assets amounting to
approximately $45,000 as of March 31, 2004 and December 31, 2003, which had
previously been reported as deferred financing costs and other assets.

      c) Accounting for the purchase of Miza Pharmaceuticals (UK) Ltd.'s assets

        On March 7, 2003, the Company's subsidiary, Inyx Pharma Ltd. ("Inyx
Pharma") had purchased the majority of the pharmaceutical business assets of
Miza Pharmaceuticals (UK) Ltd. ("Miza UK") out of Administration (a United
Kingdom equivalent of bankruptcy protection and reorganization) for
approximately $8.3 million, consisting of an approximately $7.1 million cash
payment to the Administrator for the acquired Miza UK assets plus approximately
$1.2 million in direct transaction costs. This transaction was corrected to
account for the acquisition value for the purchase method of accounting rather
than the original method used to account for reorganization of entities under
common control.

        Under the purchase method of accounting, the purchase price is allocated
to the fair value of the net assets acquired with any excess allocated to
identifiable tangible and intangible assets. Accordingly, the total purchase
price of approximately $8.3 million incurred by Inyx Pharma has been allocated
to the acquired identifiable tangible and intangible Miza UK assets. Based on an
independent third-party fair value valuation, the tangible assets acquired by
Inyx Pharma, which consisted of fixed assets and inventory, were allocated a
fair value of approximately $5.1 million and $1.3 million, respectively, and the
intangible assets, consisting of a customer list and know-how, have been
allocated a fair value of approximately $1.3 million and approximately $600,000,
respectively. As a consequence of such purchase price allocations, no goodwill
was recorded. The net adjustment to purchased intangible assets approximated
$1.7 million as of March 31, 2004 and December 31, 2003. This correction also
increased amortization of intangible assets by $42,000 for the three month
period ended March 31, 2004, increasing net loss by the same amount, in the
accompanying consolidated statements of operations.

        Previously under reorganization of entities under common control the net
assets of Miza UK were transferred to Inyx Pharma at Miza UK's historical book
basis and the results of operations of Miza UK have been included in the
consolidated financial statements since the beginning of the periods presented.
The correction of the accounting for this transaction resulted in classification
of Miza UK results of operations for the period from January 1, 2003 through
March 6, 2003 as predecessor company results. As the Biopharma division was
historically part of Miza UK's business but was not acquired by Inyx Pharma, its
results of operations are presented as discontinued operations in the
Predecessor Company financial statements.

        In addition previously the Company charged approximately $1.2 million of
transaction related costs and approximately $700,000 of goodwill to other
expenses. These amounts have now been reversed and capitalized to the cost of
acquisition for Miza UK's assets in accordance with the purchase method of
accounting rather than the reorganization of entities under common control.

        The Company is also presenting the Predecesser financial statements for
the period from January 1, 2003 to March 6, 2003 for Miza UK. These statements
were not included in previously filed financial statements of the Company and
are being presented for comparative purposes only.

      d) Additional Paid-In capital


                                      F-11
<PAGE>

      At March 31, 2004 and December 31, 2003, additional paid-in capital was
increased by approximately $4.6 million and $4.0 million, respectively, to
reflect the net adjustment relating to the correction of the accounting for the
beneficial conversion feature of the Laurus Funds debt and respective warrants
as detailed above in Note 3(a). In addition management determined that retained
earnings included approximately $196,000 relating to accumulated deficit of the
thoroughbred horse operations, this amount should instead be classified as
additional paid-in capital, therefore the Company corrected the classification
accordingly.

      e) Other Reclassifications

      Certain amounts in the restated consolidated financial statements for the
three month period ended March 31, 2004, and the period from March 7, 2003
through March 31, 2003 have been reclassified to conform with the current period
presentation, as follows:

      i. Management has evaluated the nature of the expenses previously
classified as other expenses in the consolidated statement of operations and
determined that although certain items are one-time non-recurring charges,
these amounts relate to the ongoing operations of the Company. Such amounts for
the three months ended March 31, 2003 were $220,000 and have now been
reclassified as interest and financing costs.

      ii. Approximately $1.2 million of transaction related costs and
approximately $700,000 of goodwill which previously have been charged to other
expenses, have now been capitalized as intangible assets (See Note 3 (c) above).

      iii. Amortization expense related to deferred financing costs had
previously been classified with depreciation and amortization expenses. The
amortization of deferred financing costs should be classified as interest
expense. Accordingly, the Company has revised its consolidated statement of
operations to reflect this change in classification. These corrections reduced
depreciation and amortization and increased interest expense by $77,000 for
three month period ended March 31, 2004.

      iv. Expenses related to the thoroughbred horse racing operations amounting
to approximately $25,000 have been classified and included as general and
administrative expenses for the period March 7, 2003 through March 31, 2003.

      v. Management determined that the relative fair value of the detachable
warrants issued to Laurus in relation to its convertible debt that had
originally been classified as deferred financing costs should instead be
recorded as a discount against the debt, and the discount is amortized over the
term of the debt. As of March 31, 2005, the convertible debt owed to Laurus
Funds was repaid in full as part of the acquisition concluded on March 31, 2005
which has not been reflected in these financial statements.

NOTE 4: ACQUISITION AND RECAPITALIZATION TRANSACTION

      Acquisition

      On March 7, 2003, Inyx Pharma acquired the business assets of Miza UK from
a court-appointed Administrator in the United Kingdom. The acquisition was
accounted for in accordance with the purchase method of accounting. Miza UK is
considered to be a predecessor business and accordingly results of operations
included in these consolidated financial statements prior to the acquisition of
Miza UK are those of Miza UK. Effective as of the purchase date the Company
established a new basis in the acquired assets based on the purchase
consideration and transaction costs totalling approximately $8.3 million. The
results of the operations of the acquired business have been included in the
consolidated financial statements since the acquisition date. In connection with
this acquisition, Inyx Pharma paid cash of approximately $7.1 million and
incurred approximately $1.2 million in direct transaction costs.

      The purchase price was allocated to the identifiable net assets purchased
based on their estimated fair market value at the date of acquisition as
follows:

      Property, plant and equipment                            $ 5,136
      Inventory                                                  1,319
      Intangible assets subject to amortization:
        Customer list                                            1,280
        Know-how                                                   598
                                                              --------
                                                               $ 8,333
                                                              ========

        The fair values assigned to the intangible assets acquired are based on
estimates and assumptions provided and other information compiled by management,
including independent valuations, that utilize established valuation techniques
appropriate for the industry the Company operates in.


                                      F-12
<PAGE>

      Recapitalization Transaction

      On April 28, 2003, the Company acquired all of the outstanding common
shares of Inyx Pharma by issuing 16 million of the Company's shares for all the
outstanding and issued shares of Inyx Pharma. As a result of the transaction,
the stockholders of Inyx Pharma received 64% of the Company's outstanding
shares, after the issuance of shares for finders' fees and consulting services.
The transaction was accounted for as a recapitalization of Inyx using the
reverse acquisition method of accounting. Consequently, the assets transferred
were recorded at historical value.

NOTE 5: ACCOUNTS RECEIVABLE, NET

      Accounts receivable consists of the following:

                                             March 31, 2004   December 31, 2003
                                             ---------------- ------------------
Trade receivables                                    $ 3,540             $3,586
Less allowance for doubtful accounts                   (250)              (191)
                                             ---------------- ------------------
                                                      $3,290             $3,395
                                             ================ ==================

      There were no write-offs during the three months ended March 31, 2004 and
the period from March 7, 2003 through December 31, 2003. Bad debt expense for
the three months ended March 31, 2004 was $59,000. There was no similar expense
for the period from March 7, 2003 through March 31, 2003 and the period from
January 1, 2003 through March 6, 2003.

NOTE 6: INVENTORY, NET

      Inventory is comprised of the following:


                                      F-13
<PAGE>

                                                       March 31,   December 31,
                                                         2004          2003
                                                      ----------- -------------
Finished goods                                           $    33       $    15
Work in process                                              251           266
Raw materials                                              1,224         1,015
                                                      ----------- -------------
                                                           1,508         1,296
Less provision for obsolescence                            (593)         (207)
                                                      ----------- -------------
                                                         $   915       $ 1,089
                                                      =========== =============

NOTE 7: PREPAID EXPENSES AND OTHER CURRENT ASSETS

      Prepaid expenses and other current assets consist of the following:

                                                       March 31,   December 31,
                                                         2004          2003
                                                      ---------   -------------
Deposit for equipment and other costs (a)              $ 1,105         $     -
Prepaid refundable deposit for business development(b)     599               -
Prepaid vendor invoices                                    300             347
Prepaid refundable deposit for acquisition candidate       170              71
Deferred legal and consulting fees                          68             152
Prepaid rent and property tax                                -             126
Prepaid insurance                                           35             128
Sales tax receivable, net                                   18             132
Other prepaid expenses                                     102             133
                                                      ---------   -------------
                                                       $ 2,397         $ 1,089
                                                      =========   =============

      (a) The Company's subsidiaries will be providing manufacturing technology
transition consulting services to a western hemisphere developing nation.
Consulting services to be provided include the installation of manufacturing
facilities, equipment, and systems to manufacture CFC-free or hydrofluoroalkane
("HFA") aerosol based respiratory inhalers for the treatment of asthma and
chronic obstructive respiratory disease conditions. As the parent company is a
U.S. corporation and because certain involved members of the Company's
management team are U.S. residents, to perform on the contract, the Company's
subsidiaries require United States government business authorizations and export
permits to do business in that developing nation. Due to political events or
changes to U.S. government laws, the U.S. government may not continue to provide
the Company's subsidiaries with the necessary permits and authorizations they
require to provide consulting services in that developing country. The failure
to receive or sustain such authorizations or permits may have a material adverse
affect on any costs, expenses, or prepaid fees and deposits that the Company and
its subsidiaries may have incurred or will incur in relation to this consulting
contract, or the subsidiaries' abilities to continue to provide their services
to that developing country. Additionally, although the Company's subsidiaries
will be paid directly by the United Nations Development Programme (UNDP) through
a series of progress payments, they are subject to risks of doing business in a
developing country, including dealing with import or export licensing
requirements; difficulties in enforcing aspects of the Company's subsidiaries'
contracts with the UNDP and that country; difficulties in protecting
intellectual property; unexpected changes in regulatory requirements; legal
uncertainty regarding liability, tax, tariffs and other trade barriers; foreign
exchange controls and other currency risks; inflation; challenges to credit and
collections; expropriation; and local government instability, war, riots,
insurrections and other political events.

      (b) The Company has commenced the development of its own proprietary
pharmaceutical products for respiratory, dermatological, topical and
cardiovascular drug delivery applications. The Company has not yet obtained the
required regulatory approvals to market such products.

NOTE 9: PROPERTY, PLANT AND EQUIPMENT, NET

      Property, plant and equipment consisted of the following:

                                      F-14
<PAGE>

<TABLE>
<CAPTION>
                                                    March 31, 2004  December 31, 2003
                                                    --------------- ------------------
<S>                                                        <C>                 <C>
Land                                                       $   546            $   546
Buildings                                                    1,059              1,059
Machinery, equipment and office furniture                    3,524              3,524
Computer hardware & software                                    77                 19
                                                    --------------  -----------------
                                                             5,206              5,148
Less accumulated depreciation                                 (478)              (340)
                                                    --------------  -----------------
                                                             4,728              4,808
                                                    --------------  -----------------
Computer hardware & software under capital lease               382                382
Less accumulated amortization                                  (21)                (7)
                                                    --------------  -----------------
                                                               361                375

                                                    --------------  -----------------
                                                           $ 5,089            $ 5,183
                                                    ==============  =================
</TABLE>

      For the three months ended March 31, 2004, depreciation of property, plant
and equipment was approximately $138,000. Amortization for equipment under
capital leases was approximately $14,000 for the three months ended March 31,
2004. There was no amortization of capital leases in the comparable period of
2003.

NOTE 9: PURCHASED INTANGIBLE ASSETS, NET

      Purchased intangible assets consist of the following:

                                            March 31,       December 31, 2003
                                              2004               Restated
                                            Restated
                                          (Unaudited)
                                          --------------   -------------------
        Customer list (12 year life)             $ 1,280               $ 1,280
        Know-how (10 year life)                      598                   598
                                          --------------   -------------------
                                                   1,878                 1,878
        Less accumulated amortization               (181)                 (139)
                                          --------------   -------------------
                                                 $ 1,697               $ 1,739
                                          ==============   ===================

Purchased intangible assets are carried at cost less accumulated amortization.
For the three months ended March 31, 2004, amortization expense related to
intangible assets totaled approximately $42,000. The aggregate estimated
amortization expense for intangible assets as of March 31, 2004 for each of the
following five years and thereafter is as follows:

        2005                                           $  166
        2006                                              166
        2007                                              166
        2008                                              166
        2009                                              166
        Thereafter                                        867
                                                     --------
        Total                                          $1,697
                                                     ========

NOTE 10: DEFERRED FINANCING COSTS, NET

      Deferred financing costs, net are comprised of fees related to the
issuance of long term convertible debt issued to Laurus Funds. These amounts are
amortized over the term of the loan.

      Deferred financing costs, net consist of the following:


                                      F-15
<PAGE>

                                                March 31,    December 31, 2003
                                                  2004            Restated
                                                Restated
                                              (Unaudited)
                                              ------------   -----------------
        Deferred financing costs                  $1,007                $900
        Less accumulated amortization               (117)                (40)
                                              ------------   -----------------
                                                    $890                $860
                                              ============   =================

      For the three months ended March 31, 2004 the amortization of deferred
financing costs approximated $77,000.

      For the period from January 1, 2003 through March 6, 2003 and for the
period from March 7, 2003 through March 31, 2003 there were no deferred
financing costs and no respective amortization.

NOTE 11: BORROWINGS UNDER REVOLVING LINE OF CREDIT, NET OF DEBT DISCOUNT

      On December 30, 2003, the Company issued to Laurus Funds (i) Secured
Revolving Convertible Note in the maximum principle amount of up to $2.5 million
and (ii) Secured Convertible Minimum Borrowing Note in the original principal
amount of $1.0 million. In connection with the issuance of the Revolving Note
and the Minimum Borrowing Note, the company issued 660,000 warrants to purchase
up to 660,000 shares of the Company's common stock having exercise prices
ranging from $1.84 to $2.57 per share. The warrants expire on December 30, 2008
and have a cashless exercise provision. The relative fair value of these
warrants was estimated at approximately $758,000 based on the Black-Scholes
option pricing model with the following assumptions; a risk free interest rate
of 3.14%, an expected life of four years, a volatility factor of 66%, and a
dividend yield of 0%. In accordance with EITF 00-27, the Company recorded the
relative fair value of the warrants as a discount against the revolving line of
credit, and is amortizing the discount over the term of the debt. In addition
since the debt is convertible into equity at the option of the note holder at
the date of issuance at beneficial conversion rates, an embedded conversion
feature related to the revolving ine of credit was charged to interest and
financing costs amounting to approximately $568,000 in the accompanying
consolidated statement of operations.

      The Company can elect to pay the outstanding balance in shares of common
stock at a fixed conversion price of $1.47 which was amended to $1.00 per share
on February 27, 2004 and amended again to $0.80 on August 31, 2004,
retroactively to the date of the original agreement. If the closing price of the
Company's stock for any of the 10 trading days preceding the repayment date is
less than 110% of the fixed conversion price, the Company shall pay cash
instead.

      On February 27, 2004 the Company issued Amendment #1 and increased the
principle borrowing amount under the Secured Revolving Convertible Note and the
Minimum Borrowing Note by $1.0 million, respectively. In addition, the Company
issued Laurus Funds 330,000 warrants to purchase 330,000 shares of the Company's
common stock at prices ranging between $1.25 and $1.75 per share. The fair value
assigned to these warrants was approximately $219,000 using the Black-Scholes
option pricing model with the following assumptions; a risk free interest rate
of 3.14%, an expected life of four years, a volatility factor of 57%, and a
dividend yield of 0%. In accordance with EITF 00-27, the Company recorded the
relative fair value of the warrants as a discount against the debt, and is
amortizing the discount over the term of the debt. In addition since the debt is
convertible into equity at the option of the note holder at the date of issuance
at beneficial conversion rates, an embedded conversion feature was charged to
interest and financing costs amounting to approximately $380,000 in the
accompanying consolidated statement of operations.

      On March 30, 2004, the aggregate principle amount available for borrowing
under these two notes was increased to $6.5 million by issuing Amendment #2 to
the Secured Revolving Convertible Note whereby the maximum principle amount was
increased by $1.0 million to $4.5 million. The Company issued Laurus Funds
165,000 warrants to purchase 165,000 of the Company's shares of common stock at
prices ranging between $1.25 and $1.75 per share. The additional beneficial
conversion feature recorded on this amendment was $209,000 and the fair value
allocated to the warrants was approximately $109,000 using the Black-Scholes
option pricing model with the following assumptions; a risk free interest rate
of 3.14%, an expected life of four years, a volatility factor of 57%, and a
dividend yield of 0%. In accordance with EITF 00-27, the Company recorded the
relative fair value of the warrants as a discount against the debt, and is
amortizing the discount over the term of the debt. The embedded beneficial
conversion feature was charged to interest and financing cost in the
accompanying consolidated statement of operations.

      The total unamortized debt discount at March 31, 2004 and December 31,
2003 amounted to $1.1 million and $758,000, respectively.

      Laurus Funds shall not be entitled to be issued shares of common stock in
repayment of any portion of the notes or upon exercise of either of the warrants
if and to the extent such issuance would result in Laurus Funds and its
affiliates beneficially owning more than 4.99% of the issued and outstanding


                                      F-16
<PAGE>

common stock upon issuance, unless Laurus Funds shall have provided at least 75
days prior written notice to the Company of its revocation of such restriction.
At May 19, 2004, the Company has not received any such notice.

NOTE 12: LONG TERM DEBT, NET OF CURRENT PORTION

      Long-term debt, net of current portion consists of the following:

<TABLE>
<CAPTION>
                                                                                                Successor
                                                                                     ---------------------------------
                                                                                        March 31,      December 31,
                                                                                          2004             2003
                                                                                       (Unaudited)
                                                                                     ---------------- ----------------
<C>                                                                                           <C>              <C>
7%  convertible  term  note  due  to  Laurus  Funds,   collateralized  by  accounts           $3,751           $3,678
     receivable  and other assets of the Company,  net of debt discount of $749,000
     at March 31, 2004 and $822,000 at December 31, 2003 (a)
Uncollateralized 6% convertible promissory note due to customer,(b)                            4,013            4,013
Uncollateralized  7% to 18% demand notes due to a  stockholder  and an executive of
     the Company, principal and interest due on demand                                           100              100
Capital  lease  obligations,  due  to  financial  institutions,  collateralized  by
     software  and  equipment,  due in monthly  installments  of $14,000  including
     interest of 10% to 27%, through 2006 (c)                                                    275              309
                                                                                     ---------------- ----------------
                                                                                               8,139            8,100
Less current portion                                                                         (1,483)          (1,483)
                                                                                     ---------------- ----------------
Debt, net of current portion                                                                 $ 6,656           $6,617
                                                                                     ================ ================
</TABLE>

      (a) On October 29, 2003, the Company issued to Laurus Funds a Convertible
Term Note in the maximum principle amount of $4.5 million. In connection with
the issuance of the Convertible Term Note, the Company issued 1,350,000 warrants
to purchase up to 1,350,000 shares of the Company's common stock having exercise
prices ranging from $1.25 to $1.75 per share. The warrants expire on October 29,
2008 and have a cashless exercise provision. The fair value of these warrants
was estimated at approximately $870,000 based on the Black-Scholes option
pricing model with the following assumptions; a risk free interest rate of
3.14%, an expected life of four years, a volatility factor of 66%, and a
dividend yield of 0%. The relative fair value allocated to the warrants was
recognized as debt discount and amortized over the term of the note.

      In addition, since this debt is convertible into equity at the option of
the note holder at beneficial conversion rates, an embedded beneficial
conversion feature amounting to approximately $3.2 million was recorded. The
value of the beneficial conversion feature has been recorded to interest and
financing costs in accordance with EITF No. 00-27.

      The principal is due in monthly installments of approximately $141,000
starting in April 2004 through November 2006, while interest on unpaid balances
is payable monthly. The Company has the option to issue common stock in lieu of
debt service payments at the then-market price of the stock. In addition, at the
option of the holder, the debt may be converted into common stock at a fixed
conversion price of $0.80 per share based on an agreed upon conversion formula.

      Pursuant to the Registration Rights Agreement with Laurus Funds, the
Company is liable for certain penalties as a result of not registering the
securities within a specified time frame.

      Laurus Funds shall not be entitled to be issued shares of common stock in
repayment of any portion of the notes or upon exercise of either of the warrants
if and to the extent such issuance would result in Laurus Funds and its
affiliates beneficially owning more than 4.99% of the issued and outstanding
common stock upon issuance, unless Laurus Funds shall have provided at least 75
days prior written notice to the Company of its revocation of such restriction.
To date, the Company has not received any such notice.

      (b) Principal is due in Great Britain Pounds, on March 6, 2007, while
interest is payable annually commencing on March 7, 2004. The holder has the
option to convert this note and any accrued interest into 4 million shares of
the Company's common stock at any time before March 6, 2007. Additionally, the
holder has the first right of refusal, for a period of four years on any
additional debt financing that may be required by the Company. In March of 2004,
the Company received, from the holder, a waiver of the first annual interest
payment amounting to approximately $240,000 in consideration of future product
development services.

      (c) The Company leases computers and furniture under capital leases that
expire at various dates through 2006. The recognition of these assets and
liabilities in the accompanying financial statements did not result in cash
payments by the Company. Interest rates range from 10% to 27%.

      As of March 31, 2004 the principal installments payable on the debt are as
follows:
<TABLE>
<S>                                              <C>
         2004                                      1,450
         2005                                      1,787
         2006                                      1,638
         2007                                      4,013
                                               ---------
        Total                                      8,888
                                               =========
</TABLE>


                                      F-17
<PAGE>

NOTE 13: SUBSEQUENT EVENTS

      On April 14, 2004, Inyx Realty, Inc., which the Company established solely
to operate a corporate office lease in Miami Florida, was acquired by a related
party for nominal consideration. The acquirer is a family trust in which the
Company's Chairman/CEO and his spouse are beneficiaries. The acquirer
unconditionally assumed all liabilities, thus terminating all of the Company's
obligations under that lease.

      On May 7, 2004, the Company entered into an Offset Agreement with a
customer and 6 percent uncollateralized convertible note holder. Under this
agreement, the Company is allowed to apply the unpaid interest for the first
year of the note, amounting to approximately $240,000 ((pound)150,000 Great
Brittan Pounds), against future product development services provided by the
Company to the note holder.

      On May 7, 2004, the Company terminated its investment banking relationship
with its present investment banker. As a termination fee, the Company agreed to
pay $120,000, plus eight percent interest on the outstanding principal over
twelve months, commencing May 15, 2004.

      On May 11, 2004, the Company announced the appointment of a new outside
director to chair the Company's Audit Committee. In consideration for joining
the Company's board, the new director was issued 200,000 Company Stock Options
at an exercise price of $1.10. The 350,000 stock options issued to the
predecessor director were cancelled, and in exchange, the Company issued to the
resigning director a three-year Common Purchase Warrant to purchase 100,000
shares of its common stock at an exercise price of $1.20.

NOTE 14: STOCKHOLDERS' EQUITY

      The stockholders' equity information presented in these consolidated
financial statements reflects the recognition of the effect of the reverse
acquisition transaction with Inyx Pharma (See Note 1).

      On April 17, 2003 the Company issued 2,450,000 shares of restricted common
stock as a fee to five entities as finders' fees for their role in facilitating
the transaction with Inyx Pharma. The value assigned to these shares of common
stock was approximately $1.3 million.

      On April 21, 2003 the Company issued 1,500,000 shares of restricted common
stock to an individual as consideration for business advisory and financial
consulting services. The value assigned to these shares of common stock was
approximately $799,000.

      On April 28, 2003 the Company issued 16,000,000 shares of restricted
common stock for 100% of the issued and outstanding shares of Inyx Pharma in a
reverse merger acquisition.

      On October 30, 2003, the Company closed the private placement of $3.0
million in common stock. The common stock private placement has resulted in the
issuance of 3 million shares, par value $0.01 to a group of institutions and
other accredited investors. Proceeds net of offering costs of approximately
$310,000 amounted to approximately $2,686,000. In addition to the common shares,
the purchasers received a five-year Stock Purchase Warrant to buy one share of
common stock for each two shares acquired in the placement, at a price of $1.00
per share for half of such warrants and $1.35 for the remaining half. The
Company can call these warrants for redemption if the Company's stock price has
closed above 200% of the strike price for 20 consecutive days.

      On November 17, 2003, pursuant to an exercise of 75,000 options the
Company issued 75,000 shares of common stock for net proceeds of $90,000.

      During the period from March 7, 2003 through December 31, 2003, the
Company recorded approximately $1.5 million of additional paid-in capital
resulting from stock options which vested during the period. This amount is
included in general and administrative expenses in the consolidated statement of
operations.

      Between October 29, 2003 and December 30, 2003, the Company issued Laurus
Funds a Convertible Term Note and a Secured Revolving Convertible Note with
attached warrants. The beneficial conversion feature and the fair value of the
warrants were recorded to additional paid-in capital. The value of the
beneficial conversion feature was $3.7 million and the fair value assigned to
the warrants was $1.6 million.

      During period from March 7, 2003 through December 31, 2003, the Company
recorded approximately $1.3 million resulting from the issuance of 920,000 stock
purchase warrants as consideration for services to consultants and stock options
to employees. These amounts are included in general and administrative expenses
in the consolidated statement of operations.


                                      F-18
<PAGE>

      On January 15, 2004, pursuant to an exercise of 200,000 options the
Company issued 200,000 shares of common stock at $1.10 per share issued.

      On January 16, 2004, pursuant to an exercise of 65,000 options the Company
issued 65,000 shares of common stock at $1.20 per share issued.

      During the three months ended March 31, 2004, the Company recorded
approximately $66,000 of additional paid-in capital resulting from stock options
which vested during the period. This amount is included in general and
administrative expenses in the consolidated statement of operations.

      During the three months ended March 31, 2004, the Company granted 495,000
warrants to a financial institution in consideration for an increase in its
secured revolving line of credit with that institution. These five-year warrants
allow the holder to purchase the Company's common stock at prices ranging from
$1.25 to $1.75 per share. The company recorded $589,000 as the beneficial
conversion feature on the convertible debt and $343,000 as the fair value of the
warrants using the Black-Scholes option pricing model.

NOTE 15: ACCUMULATED COMPREHENSIVE LOSS

      The accumulated comprehensive loss reflected in the Consolidated
Statements of Operations represents accumulated foreign currency translation
adjustments associated with the conversion of the Company's United Kingdom
subsidiary's accounts to US dollars. These amounts are not adjusted for income
taxes as they relate to an indefinite investment in a foreign subsidiary.

NOTE 16: STOCK OPTION PLAN

      On May 1, 2003, the Company's Board of Directors adopted the 2003 Stock
Option Plan, which provides for the granting of incentive stock options and
non-qualified stock options for the benefit of employees, officers, directors
and those persons who the Company believes may have made a valuable contribution
to the Company. The total number of shares that may be issued under the plan is
5,000,000. The exercise price per share must be at least equal to the fair
market price at the time of grant. The term of each option is 10 years from the
date of grant. The predecessor Company had no stock option plan.

      The weighted average fair value, at the date of the grant of the
individual options granted for the three months ended March 31, 2004 and for the
period ended December 31, 2003 was estimated at $1.12 and $1.12 respectively.
The fair value of these options was estimated using the Black-Scholes
option-pricing model, with the following assumptions for the three months ended
March 31, 2004 and for the period from March 7, 2003 through December 31, 2003,
volatility rate of 57% and 66% respectively, risk free interest rate of 3.14%,
an expected life of four years and no dividend yield for all periods.

      Total net compensation expense relating to options granted to employees,
officers, directors, and other persons approximated $66,000 for the three month
period ended March 31, 2004. These amounts are included in general and
administrative expenses in the consolidated statement of operations, as the
Company expects that it will continue to issue stock options to such persons.
There was no similar expense for options in the other periods presented.

      A summary of stock option activity under the plan is shown below:

                                  Successor                     Predecessor
                      ----------------------------------------------------------
                                          For the Period      For the Period
                       For the Three    from March 7, 2003  from January 1, 2003
                        Months Ended          through             through
                       March 31, 2004     March 31, 2003       March 6, 2003
                           (000's)            (000's)             (000's)
                      ----------------------------------------------------------

Beginning Balance           4,860                --                 --

Granted                        --                --                 --

Exercised                    (325)               --                 --

Forfeited                     (60)               --                 --

Cancelled                      --                --                 --
                      ----------------------------------------------------------
Ending Balance              4,475                --                 --
                      ==========================================================
Exercisable                 3,212                --                 --
                      ==========================================================

      The following table summarizes information concerning outstanding and
exercisable options at March 31, 2004 and at December 31, 2003; the predecessor
Company had no stock option plan. Options outstanding Options exercisable

<TABLE>
<CAPTION>
                                                                        Weighted
                                                                         Average       Weighted                         Weighted
                                                                        Remaining       Average                          Average
                                Range of              Shares           Contractual     Exercise         Shares           Exercise
                             Exercise Price        Outstanding         Life (Years)      Price        Exercisable         Price
---------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                     <C>                   <C>          <C>             <C>              <C>
March 31, 2004                $1.10 -$1.75            4,475                 9            $1.12           3,212            $1.12
December 31, 2003             $1.10 -$1.75            4,860                 9            $1.12           3,212            $1.12
=================================================================================================================================
</TABLE>

NOTE 17: WARRANTS



      For the three month period ended March 31, 2004, the Company issued to
Laurus Funds 495,000 stock purchase warrants in conjunction with the issuance of
debt during the period. The value assigned to these warrants was approximately
$342,000 based on the Black-Scholes Option pricing model with the following
weighted average assumptions: a risk free interest rate of 3.14%, an expected
life of four years, a volatility factor of 57%, and a dividend yield of 0% and
was recorded to debt discount and is being amortized over the period the debt is
outstanding. There was no similar expense for the period from March 7, 2003
through March 31, 2003

NOTE 18: SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                            --------------------------------------- ------------------
                                                                          Successor                    Predecessor
                                                            --------------------------------------- ------------------
                                                              For the Three       For the Period
                                                               month period       from January 1     For the Period
                                                             ended March 31,       2003 through      from January 1,
                                                                   2004           March 31, 2003      2003 through
                                                               (Unaudited)         (Unaudited)        March 6, 2003
                                                            ------------------- ------------------- ------------------
<S>                                                                        <C>                 <C>               <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest                                   $28                 $ -                $ -
                                                            =================== =================== ==================
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
                                                            =================== =================== ==================
Issuance of stock options                                                  356                   -                  -
                                                            =================== =================== ==================
Warrants issued for financing fees , convertible debt and
   services                                                                932                   -                  -
                                                            =================== =================== ==================
</TABLE>

NOTE 19: DISCONTINUED OPERATIONS

      On March 7, 2003, Inyx Pharma acquired the majority of the pharmaceutical
business assets of Miza UK out of Administration. The business assets of Miza
UK's Biopharma division were not purchased and therefore have been presented as
discontinued operations in the period from January 1, 2003 through March 6,
2003, the Biopharma Division generated net revenues of approximately $335,000
costs of sales of approximately $395,000 and a net loss of approximately
$558,000.

      All the assets and liabilities relating to the Biopharma division have
been included in the reorganization items as described in Note 5.

      Additionally, the loss from the thoroughbred horseracing business amounted
to $25,000 for the period from March 7, 2003 through March 31, 2003. This amount
has been included in the general and administrative expenses on the accompanying
consolidated statement of operations.

NOTE 20: RELATED PARTY TRANSACTIONS

      During the period from March 7, 2003 through March 31, 2003, the Company
paid rent to an affiliate for furnished office space amounting to approximately
$3,000. This amount is included in general and administrative expenses.


                                      F-19
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

      The financial information set forth in the following discussion should be
read in conjunction with, and qualified in its entirety by the Company's
consolidated financial statements and related notes appearing elsewhere in this
report.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

      Statements that are not historical facts included in this report are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties that could
cause actual results to differ from projected results. Such statements address
activities, events or developments that the Company expects, believes, projects,
intends or anticipates will or may occur, including such matters as future
capital, business strategies, expansion and growth of the Company's operations,
cash flow, marketing of products and services, and development of new products
and services. Factors that could cause actual results to differ materially
("Cautionary Disclosures") are described throughout this report. Cautionary
Disclosures include, among others: general economic conditions, the markets for
and market price of the Company's products and services, the Company's ability
to find, acquire, market, develop and produce new products and services, the
strength and financial resources of the Company's competitors, the Company's
ability to find and retain skilled personnel, labor relations, availability and
cost of material and equipment, the results of financing efforts, and regulatory
developments and compliance. All written and oral forward-looking statements
attributable to the Company are expressly qualified in their entirety by the
Cautionary Disclosures. The Company disclaims any obligation to update or revise
any forward-looking statement to reflect events or circumstances occurring
hereafter or to reflect the occurrence of anticipated or unanticipated events.

GENERAL

      Inyx, Inc. ("Inyx" or the "Company") through its wholly-owned
subsidiaries, Inyx Pharma Limited and Inyx Canada, Inc., is an emerging
specialty pharmaceutical company. We focus our expertise on the development and
manufacture of prescription and over-the-counter ("OTC") aerosol pharmaceutical
products and drug delivery technologies for the treatment of respiratory,
allergy, dermatological and topical conditions. Our client base primarily
consists of ethical pharmaceutical corporations, branded generic pharmaceutical
distributors, and biotechnology companies. We depend on our customers'
distribution channels or strategic partners to market and sell the
pharmaceutical products we develop and manufacture for them.

      We intend to expand our product development and manufacturing activities
into our own lines of prescription and OTC pharmaceutical products, but as of
March 31, 2004, we had not yet commercialized or marketed our own products or
drug delivery applications. Additionally, a material element of our growth
strategy is to expand our existing business through strategic acquisitions of
pharmaceutical products and drug delivery technologies that are complementary
with our expertise in the aerosol pharmaceutical sector.

      Our Company was incorporated under the laws of Nevada in March 2000 as
Doblique, Inc. In July 2002, we became a publicly-traded company when we
completed a registration statement for the sale by our principal stockholder of
2,450,000 shares of common stock. Since July 2002, we have filed annual,
quarterly and periodic reports with the Securities and Exchange Commission
pursuant to Section 15(d) of the Securities Exchange Act of 1934.

      Prior to March 2003, we were in the business of owning and racing
thoroughbred horses at various major horse racing tracks throughout the United
States. In March 2003, the assets of that operation were sold for cash to a
third party, and the Company discontinued the business of breeding and racing
thoroughbred race horses. On March 26, 2003, we announced that our controlling
stockholder had accepted an unsolicited offer to sell a controlling block of
2,250,000 shares of common stock, representing approximately 45% of the
Company's then issued and outstanding shares, to Medira Investments, LLC. At
that time, the Company also announced that it would pursue strategic investment
opportunities in a number of sectors within the pharmaceutical, biotechnology
and medical devices industries.


                                       20
<PAGE>

      We now operate in one business segment, contract manufacturing of
pharmaceutical products. At this time, all of our other business activities,
including product development and manufacturing consulting services are
supporting our contract manufacturing operations. Segment reporting on our
business will begin to occur as we move into the additional business activities
described elsewhere herein.

THE INYX PHARMA TRANSACTION

      Concurrent with the discontinuance of our thoroughbred horse racing
operations in the first half of 2003, we concluded a reverse acquisition of Inyx
Pharma, an aerosol manufacturing company incorporated under the laws of England
and Wales and changed our name to Inyx.

      The acquisition of Inyx Pharma was consummated on April 28, 2003, by
exchanging 16 million shares of the Company's restricted common stock for 100%
of the outstanding common stock of Inyx Pharma. As a result of the exchange, the
stockholders of Inyx Pharma became the Company's controlling stockholders, in
the aggregate, holding approximately 64% of Inyx's outstanding shares. The
transaction was accounted for as a recapitalization of Inyx using the reverse
acquisition method of accounting and therefore, the historical financial
statements of Inyx Pharma are presented herein as our own historical financial
statements. As a result of the Inyx Pharma transaction, we incurred costs of
approximately $2.7 million consisting primarily of legal, accounting, consulting
and finders' fees. All such costs were expensed as incurred.

      Prior to its reverse acquisition by Inyx, on March 7, 2003, Inyx Pharma
had purchased the majority of the pharmaceutical business assets of Miza
Pharmaceuticals (UK) Ltd. ("Miza UK") out of Administration (a United Kingdom
equivalent of bankruptcy protection and reorganization) for approximately $8.3
million, consisting of an approximately $7.1 million cash payment to the
Administrator for Miza UK's assets, plus approximately $1.2 million in direct
transaction costs. The assets acquired by Inyx Pharma consisted of one aerosol
manufacturing site and a pharmaceutical development operation. A third Miza UK
operation, the "Biopharma Division", was not acquired. As such, Inyx Pharma
received all of the property, plant, machinery and equipment, inventory,
customer base, employees, and know-how to continue to manage and run those
acquired assets of the Miza UK operation as a going concern.

      The Inyx Pharma acquisition of Miza UK's business assets was accounted for
utilizing the purchase method of accounting. Accordingly, the total purchase
price of $8.3 million incurred by Inyx Pharma was allocated to the identifiable
net tangible and intangible assets acquired based on their estimated fair
values. Based on an independent third-party fair value valuation, the tangible
assets acquired by Inyx Pharma, consisting of fixed assets and inventory, were
allocated a fair value of approximately $5.1 million and $1.3 million,
respectively, and the intangible assets, consisting of a customer list and
know-how, were allocated a fair value of approximately $1.3 million and
approximately $600,000, respectively. As a consequence of these purchase price
allocations, no goodwill was recorded.

RECENT DEVELOPMENTS

      On February 3, 2004, we announced that our Company was selected by the
United Nations Development Programme to assist a developing nation meet the
requirements of the Montreal Protocol to phase out the consumption of
ozone-depleting chorofluorocarbon ("CFC") gases in metered dose inhalers used in
the treatment of asthma and other respiratory conditions. The Montreal Protocol
is an international agreement signed by 180 countries (both developed and
undeveloped) designed to eliminate the production and consumption of substances
that deplete the stratospheric ozone layer including the reduction of the use of
CFC's within the pharmaceutical industry. With funding assistance for this
project provided by the United Nations Multilaterial Fund for the Implementation
of the Montreal Protocol, we expect to commence our initial contract providing
technology transition consulting services to a candidate country later this
year. These services will include assistance with the installation of
manufacturing facilities, equipment, and systems to manufacture CFC-free or
Hydrofluoroalkane ("HFA") aerosol based respiratory inhalers for the treatment
of asthma and chronic obstructive respiratory disease conditions.

      We have now also commenced research and development activities to develop
our own proprietary pharmaceutical products. We believe that we can improve our
revenue and profitability opportunities through the addition of our own
pharmaceutical product lines which may offer greater profit margins than those
provided by our contract manufacturing services. Our proprietary products


                                       21
<PAGE>

will be for respiratory, dermatological, topical and cardiovascular drug
delivery applications. Planned products include metered dose inhalers, nasal
pumps, topical aerosols, wound care sprays, and oral sprays. We are primarily
focusing our efforts on generic versions or extensions of established and
non-patented products, or those barrier delivery systems that overcome present
product and propellant incompatibility and consumer use issues in the aerosol
pharmaceutical sector. While we do not currently derive any revenues from the
sale of our own products, it is anticipated that our first proprietary product
should be ready for commercial marketing by the end of 2004 or early 2005. We
plan to distribute our proprietary products through our own customers'
distribution channels or in collaboration with strategic marketing partners,
although we do not as of yet have any distribution agreements for our products
finalized.

CRITICAL ACCOUNTING POLICIES

      Our accounting policies are disclosed in Note 2 to the Notes to the
Consolidated Financial Statements in our Annual Report on Form 10-KSB for the
year ended December 31, 2003. We consider the following policies to be important
to our financial statements.

REVENUE RECOGNITION

      The Company recognizes revenue when (1) persuasive evidence of an
arrangement exists; (2) product delivery has occurred or services rendered; (3)
the fee is fixed or determinable; and (4) collection is reasonably assured.
Revenues are recognized FOB (Freight-on-Board) shipping point, when products are
shipped, which is when legal title and risk of loss is transferred to the
Company's customers, and is recorded at the net invoiced value of goods supplied
to customers after deduction of sales discounts and sales and value added tax,
where applicable. In situations where the Company receives payment in advance of
the performance of research and development services, such amounts are deferred
and recognized as revenue as the related services are performed.

      Non-refundable fees are recognized as revenue over the term of the
arrangement, based on the percentage of costs incurred to date, estimated costs
to complete and total expected contract revenue. Product returns are not
accepted.

      Shipping costs are paid for by the Company's customers. Any shipping and
handling costs incurred by the company are included in costs of goods sold in
the accompanying consolidated statements of operations.

      TRANSLATION OF FOREIGN CURRENCY

      The functional currency of our Company's U.K. subsidiary is the Great
Britain Pound ("GBP"). Our Company's financial statements are reported in United
States Dollars ("USD") and are translated in accordance with Statement of
Financial Accounting Standards No. 52, which requires that foreign currency
assets and liabilities be translated using the exchange rates in effect at the
balance sheet date. Results of operations are translated using the average
exchange rates prevailing during the period. For purposes of SFAS No. 52, we
consider the dollar to be the reporting currency. The effects of unrealized
exchange fluctuations on translating foreign currency assets and liabilities
into Dollars are accumulated as a cumulative translation adjustment in
stockholders' equity. Realized gains and losses from foreign currency
transactions are included in the results of operation for the period.
Fluctuations arising from inter-company transactions are of long term in nature
and are accumulated as cumulative translation adjustments.

      As of March 31, 2004, we had not utilized any currency-hedging programs.
However, as we intend to continue to utilize US-based financing sources, and as
the significant majority of our revenues are in Pounds Sterling, we have
established a commercial banking relationship with a major US-based financial
institution that will also provide us with currency-hedging advisory services
including our participation in currency-forward contracts for the purpose of
mitigating foreign exchange losses.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 AND THE PERIOD FROM MARCH 7, 2003 THROUGH
MARCH 31, 2003

                                       22
<PAGE>

CONSOLIDATED RESULTS

      The financial information set forth in the following discussion should be
read in conjunction with and qualified in its entirety by the financial
statements of our Company presented elsewhere herein.

      The accompanying consolidated financial information includes the accounts
of Inyx, Inc. and its wholly-owned subsidiaries, Inyx Pharma Limited,
incorporated under the laws of England and Wales; Inyx Canada Inc., formed as a
federally incorporated Canadian corporation; and Inyx Realty, Inc., a Florida
corporation. All inter-company accounts and transactions have been eliminated in
consolidation.

COMBINED RESULTS OF OPERATIONS

      For comparative purposes and in order to present a full three months of
results for the three months ended March 31, 2003, managements' discussion and
analysis of results of operation will focus on the "combined" results. Such
combined results of operations include the results of the Company (the
"Successor Company") for the period from March 7, 2003 through to March 31, 2003
combined with the results of operations of Miza UK (the "Predecessor Company")
for the period from January 1, 2003 through March 6, 2003.

            UNAUDITED CONSOLIDATED COMBINED STATEMENT OF OPERATIONS
                    For the Three Months ended March 31, 2003
                    (Expressed in thousands of U.S. dollars)

<TABLE>
<CAPTION>
                                                             Miza UK      Inyx, Inc.    Combined
<S>                                                          <C>              <C>       <C>
Net Revenues                                                 $ 2,396          $ -       $ 2,396
Cost of sales                                                $ 1,876            -         1,876
                                                            ------------------------------------
                                                                 520            -           520
Operating expenses:
      General and administrative expenses                        568           25           593
      Selling expenses                                            51            -            51
      Depreciation and amortization                               75            -            75
      Amortization of intangibles                                  -            -             -
                                                            ------------------------------------
              Total operating expenses                           694           25           719

Loss from continuing operations before interest
expense, reorganization items and income tax benefit            (174)         (25)         (199)
      Interest expense                                           176            -           176
                                                            ------------------------------------
Loss from continuing operations before
reorganization items and income tax benefit                     (350)         (25)         (375)
      Reorganization items                                         -            -             -
                                                            ------------------------------------
Loss from continuing operations before income tax benefit       (350)         (25)         (375)
Income tax benefit                                                 -            -             -
                                                            ------------------------------------
Loss from continuing operations                               $ (350)       $ (25)       $ (375)
                                                            ------------------------------------
</TABLE>

NET REVENUES

      Total net revenues for the three months ended March 31, 2004 were $4.5
million as compared to combined revenues of $2.4 million for the combined three
months ended March 31, 2003. Revenues increased $2.1 million or 88% to
approximately $4.5 primarily attributed to three full months of operations as a
pharmaceutical company in 2004 as compared to 2003, when the predecessor company
was in Administration. The increase in net revenues is also as a result of our
efforts to increase our customer base, and manufacturing sales and associated
product development and support services to our customers, following our reverse
acquisition of Inyx Pharma.


                                       23
<PAGE>

      For the three months ended March 31, 2004, our three largest customers
accounted for approximately $2.5 million in net revenues or approximately 55% of
total net revenues. During the three months ended March 31, 2004, our top three
customers were the Merck Generics group of companies ("Merck Generics"), a large
international generic drug marketing and distribution company, accounting for
approximately $1.6 million in net revenues or approximately 36% of total net
revenues; Genpharm Inc., accounting for approximately $458,000 in net revenues
or approximately 10% of total net revenues; and SSL International Plc,
accounting for approximately $422,000 in net revenues or approximately 9% of
total net revenues.

      In comparison for the combined three months ended March 31, 2003, the
three largest customers accounted for approximately $1.6 million or 67% of total
net revenues. These customers were Merck Generics, accounting for $1 million in
net revenues or approximately 42% of total revenues for that period; Adams
Healthcare, accounting for $316,000 in net revenues or approximately 12% of
total net revenues for that period; and ConvaTec accounting for $265,000 in net
revenues or approximately 7% of total net revenues for that period. Since our
reverse acquisition of Inyx Pharma, Merck Generics continues to be our largest
client. There were no revenues for the period from March 7, 2003 through March
31, 2003.

      The loss of any one of our top three customers, particularly Merck
Generics, would have a material adverse affect on our Company's revenues and
profitability opportunities. As part of our strategic growth objectives in the
contract manufacturing area, we are continuing our efforts to broaden our
customer base and to generate revenues from our own product development program
to mitigate the risk of our economic dependence on any one client. We also
believe that by utilizing our existing or potential customers' distribution
channels to distribute our own proprietary products, we can broaden and
strengthen our relationship with such clients.

      Our revenues are now derived from pharmaceutical manufacturing and
associated product formulation and development outsourcing services, including
product stability, commercial scale-up, and validation and regulatory support
for our clients' products. These contract revenues are dependant upon our
clients' maintaining or obtaining regulatory approval for the sale of their
products in their designated markets.

      Although we have seen growth in our revenues since our reverse acquisition
of Inyx Pharma, our manufacturing capacity utilization and therefore our
contract manufacturing revenues must continue to increase in order for us to
become profitable, especially as we have not yet commercialized our own
proprietary pharmaceutical products.

      For the three months ended March 31, 2004, we experienced a delay in the
achievement of our target revenues due to extended delivery lead times from one
of our main component suppliers and due to a major customer's requirements to
obtain additional regulatory approvals for the sale of their products in
designated markets.

      We also continue to work to improve customer confidence at our Inyx Pharma
operation. Although most of Miza UK's customer base had been retained by Inyx
Pharma, revenues have not yet been restored to the levels experienced by the
predecessor company prior to Administration, as customer confidence was
adversely affected by that reorganization process. Clients of Miza UK had either
halted on-going production or development projects or did not initiate new
commercial activities due to product release delays, the lack of components, and
the general business uncertainties associated with the Administration process.

      We have already restarted a number of such client projects, but even with
the return of such clients, it has taken time to start-up a number of
manufacturing projects due to the required regulatory approvals and the
production commissioning and validation processes involved in the pharmaceutical
manufacturing industry. We believe that as we continue to meet our clients'
product development, commercialization and manufacturing requirements, and
invest to continually improve our production facilities' manufacturing and
quality systems, we can restore customer confidence and to try to restore
previously experienced revenue levels.

      Additionally, we have been actively marketing to our customer base and
expect that the manufacturing capacity utilization at our Inyx Pharma operation
will continue to increase as new customer contracts and purchase orders are
obtained and we begin to manufacture and sell our own proprietary products.

      For example, our chlorofluorocarbon (CFC) Metered Dose Inhaler (MDI)
production line is currently operating at less than two percent capacity
utilization. As we continue to develop and exploit greater commercial


                                       24
<PAGE>

opportunities in the United States and Latin American markets, where CFC-based
respiratory inhalers are still utilized, we expect to increase the utilization
of this production line for our own proprietary products.

      Furthermore, we expect that our expertise in converting from CFC to
CFC-free aerosol pharmaceuticals, particularly the production of
hydrolfuoroalkane (HFA) non-ozone-depleting aerosol pharmaceutical products,
should generate increasing business as the Montreal Protocol continues to be
implemented around the world. We are currently assisting a number of our clients
with the transition to non-CFC based respiratory inhalers and have commenced
manufacturing such inhalers at our Inyx Pharma production facility. We expect
revenue levels to gradually increase in this area as our clients continue to
receive regulatory approvals for their replacement products over the next 24
months.

      We also believe that with our significant expertise and product
development and manufacturing capabilities in the hydrocarbon aerosol
pharmaceutical manufacturing sector for dermatological and topical applications,
we will continue to see further revenue growth in this sector as the use of
non-CFC based pharmaceutical aerosol technology continues to grow.

      As we continue to evolve into a fully integrated specialty pharmaceutical
company, we believe that our revenues can grow not only from our contract
manufacturing and development services, but also from the sale of our own
proprietary pharmaceutical products, which may also potentially provide royalty
and licensing fees from potential product distributors or licensees. We expect
that our first proprietary product will be ready for commercial marketing at the
end of 2004 or early 2005. We also expect to start recognizing revenues from our
manufacturing consulting services later this year.

COST OF SALES

      Cost of sales for the three months ended March 31, 2004 were $3.9 million
or 86% of net revenues as compared to cost of sales of $1.9 million or 79% of
net revenues for the combined three months ended March 31, 2003. The increase in
the cost of sales for the three months ended March 31, 2004 compared to the
combined three months ended March 31, 2003 is primarily attributed to three full
months of operations as a pharmaceutical company in 2004 as compared to 2003,
when the predecessor company was in Administration.

      Our costs of sales are associated with manufacturing and development
revenues, and include materials, labor, factory overheads and other internal
costs including purchasing and customer service costs, and quality control and
quality assurance regulatory support.

      The cost of goods sold as a percentage of revenues has been high as
compared to our level of revenues, in the comparative periods, due to the
following two main factors:

      (1) For the majority of the three months ended March 31, 2003, Inyx
Pharma's predecessor company, Miza UK, had been in Administration which
adversely affected the overall sales levels and reduced operations from an
average of 50% manufacturing capacity utilization to an average of 25%
manufacturing capacity utilization. This lower capacity utilization level
significantly reduced fixed overhead cost absorption and concomitantly increased
the cost of sales because factory overheads contribute to our cost of sales. We
expect our manufacturing cost of sales to be reduced as more customer contracts
and purchase orders are initiated, thereby increasing the utilization of our
manufacturing capacity.

      (2) In addition, the phasing out of the CFC-based MDI respiratory product
line for the European market has gradually reduced manufacturing capacity
utilization and therefore, reduced overhead absorption rates and increased our
cost of sales in the manufacturing area. Additionally, CFC respiratory inhaler
products are approximately 20% lower in material costs than their non-CFC
equivalents. As we are now focused on phasing in the non-CFC version of these
products, primarily HFA-based respiratory MDIs, our cost of goods sold have
marginally increased as a result of the increased production of such inhalers
for our customers.

GROSS PROFIT

      For the three months ended March 31, 2004, gross profit amounted to
approximately $615,000 or approximately 14% of net revenues, as compared to a
combined gross profit of approximately $520,000 or approximately 22% of net
revenues, for the three months ended March 31, 2003.


                                       25
<PAGE>

      The decrease in gross profit is a result of the noted delays of a number
of customer contracts and purchase orders and concomitant increase in our cost
of sales as a result of the reduced fixed overhead.

      Additionally, we are anticipating improved gross profits as we increase
the utilization of our manufacturing capacity. As a result of lower factory
overhead absorption, the gross profit related to our contract manufacturing
services has been less than what would be expected if we were running our
manufacturing facilities at higher operating levels. We expect the gross profit
to significantly improve as we commence a number of new manufacturing projects
during the next twelve months.

      We also believe that our gross profits will be improved as more
development support service contracts, associated with these manufacturing
projects, are initiated. Our product research and development contract services,
historically, have had higher gross margins than our contract manufacturing
services because we only have to account for our own labor support costs while
charging out such professional services we provide to our customers at agreed
higher rates. We expect that our manufacturing consulting services, planned to
commence in 2004, should also offer greater profit margins than those provided
by contract manufacturing services.

OPERATING EXPENSES

      Operating expenses, consisting of research and development, general and
administrative, selling and depreciation and amortization expenses amounted to
approximately $2.7 million or approximately 59% of total net revenues, for the
three months ended March 31, 2004. In comparison, operating expenses for the
combined three months ended March 31, 2003 amounted to approximately $719,000 or
approximately 30% of net revenues.

      Operating expenses have increased between the comparative periods
primarily due to an increase in general and administrative expenses as a result
of our growing business operations.

RESEARCH AND DEVELOPMENT COSTS

      Research and development costs for the three months ended March 31, 2004
were approximately $287,000 or approximately 6% of net revenues. In comparison,
we did not incur research and development costs for the combined three months
ended March 31, 2003.

      As part of our strategy to evolve into a specialty pharmaceutical company
with its own proprietary products, we have started to incur research and
development costs as part of our cost of sales. These costs include intellectual
property development costs, salaries for required technical staff, fees to
consultants, and costs associated with the use of external laboratory facilities
as may be required. We believe that even though product research and development
costs may increase our cost of sales in the short term, in the long term, these
costs would be offset by the higher profit margins due to pricing parameters
associated with the direct distribution of pharmaceutical products, as compared
to the selling prices derived from contract manufacturing services.

      We are focusing our research and development efforts on oral and pulmonary
drug delivery devices and methods, and generic prescription and over-the-counter
aerosol pharmaceutical products for respiratory, dermatological and topical, and
cardiovascular applications. These products are expected to consist of non-CFC
respiratory inhalants; non-CFC propelled oral sprays for cardiovascular
ailments, wound irrigation and cleansing sprays, and anti-inflammatory nasal
pumps.

      We believe that we can also enhance our competitive position through the
acquisition of regulatory-approved pharmaceutical products and drug delivery
devices for respiratory, dermatological, topical and cardiovascular drug
delivery applications or such products in development, including those through
the acquisition of other pharmaceutical companies. We plan to distribute our
proprietary products through our own customers' distribution channels or in
collaboration with strategic partners.

      At this time, we have not commercialized any of our own proprietary
products and we do not have any distribution agreements for our products
finalized.

                                       26
<PAGE>

GENERAL AND ADMINISTRATIVE EXPENSES

      For the three months ended March 31, 2004, general and administrative
expenses were $2.1 million or 47% of net revenues as compared to general and
administrative expenses of $593,000 or 25% of net revenues for the combined
three months ended March 31, 2003.

      Our General and Administrative expenses include salaries at the corporate
and subsidiary levels, consulting fees including legal and accounting costs,
insurance, business and corporate development costs including directors' fees,
investor relations, travel and communication expenses, and other business costs
such as rent and maintenance.

      The increase in our general and administrative expenses for the respective
comparative periods is primarily attributable to an increase in costs related to
a larger enhanced business operation with higher infrastructure and insurance
costs, an expanded management team and new corporate development costs.
Additionally, for the three months ended March 31, 2004, we incurred expenses
relating to the start-up of our manufacturing consulting business. Such expenses
were primarily related to traveling expenses, and fees and costs associated with
the use of outside consultants and facilities.

      For the three months ended March 31, 2004, salaries and associated benefit
costs amounted to approximately $860,000 or approximately 19% of our net
revenues as compared to $260,000 or approximately 11% of net revenues for the
combined three months ended March 31, 2003. With a corporate infrastructure and
two operating subsidiaries, our Company now has 130 personnel and is evolving
into an integrated pharmaceutical company. During the comparative period in
2003, our predecessor company was only operating as a pharmaceutical
manufacturing plant with associated laboratory facilities and, therefore, had
lower staff costs as a percentage of net revenues.

      Other expenses contributing to an increase in our general and
administrative expenses for the three months ended March 31, 2004 amounted to
approximately $1.26 million or approximately 28% of net revenues and were
comprised of insurance costs of approximately $215,000, consulting fees
including legal and accounting costs of approximately $325,000, corporate and
business development costs of approximately $515,000, and other business
overhead costs including rent of approximately $200,000. In comparison, for the
combined three months ended March 31, 2003, general and administrative costs,
exclusive of salaries and associated benefit costs, amounted to approximately
$310,000 or approximately 13% of net revenues.

      As we continue to implement our corporate development and growth strategy,
we expect to incur some additional administrative costs due to the addition of
senior sales and marketing executives to our management team. We believe that as
we grow our business and begin to introduce our own proprietary products, which
we believe will have higher profit margins than the contract development and
manufacturing fees that we presently receive from our customers, we can offset
these administrative incremental costs on a longer term basis.

SELLING EXPENSES

      For the three months ended March 31, 2004, selling expenses were
approximately $84,000 or approximately 2% of net revenues as compared to selling
expenses of approximately $51,000 or also approximately 2% of net revenues for
the combined three months ended March 31, 2003.

      Selling expenses consist primarily of salaries, commissions and marketing
costs associated with the commercial, and sales and marketing arm of our
business. Although we perform some sales and marketing functions, presently such
activities are primarily focused on expanding our pharmaceutical aerosol
manufacturing business with existing or potential clients.

      Although we continue to expand our own proprietary product development
programs, we have not yet commercialized or marketed our own products or drug
delivery applications. Therefore, our selling expenses have remained relatively
consistent over the comparative periods. As we continue to ramp-up our business
development and commercial activities, we expect our selling expenses to
increase concomitantly with expected revenue expansion. Our selling expenses as
a percentage of our revenues will also increase as we are planning to add senior
sales and marketing executives to assist in our business expansion, including
intensifying our marketing activities to both existing and potential customers.


                                       27
<PAGE>

      Once we commence marketing of our own proprietary products, we may also
need to build or contract our own sales force. We believe that we will incur
substantial additional selling expenses once we undertake these types of
commercial activities. Initially, however, until we can adequately afford the
cost of building or contracting our own sales force, we will depend on our
customers' distribution channels or strategic partners to market and sell the
pharmaceutical products that we are presently developing or planning to develop.

DEPRECIATION AND AMORTIZATION EXPENSES

      For the three months ended March 31, 2004, depreciation and amortization
expenses were approximately $152,000 or approximately 3% of net revenues as
compared to depreciation and amortization expenses of approximately $75,000 or
approximately 3% of net revenues for the combined three months ended March 31,
2003.

      The value of our property and equipment is stated at cost. Depreciation is
computed using the straight-line method based on the estimated useful lives of
the assets, which range from 25 years for buildings and 3-10 years for
equipment.

AMORTIZATION OF INTANGIBLE ASSETS

      The fair values assigned to the intangible assets acquired are based on
estimates and assumptions provided and other information compiled by management,
including independent valuations, that utilize established valuation techniques
appropriate for the industry the Company operates in.

      Amortization of intangible assets relates to the Company's purchased
intangible assets related to the Inyx Pharma transaction. The amortization of
intangible assets for the three months ended March 31, 2004 was $42,000 compared
to no amortization expense for combined period ended March 31, 2003.

      Our amortization expenses for intangible assets relate to the Company's
purchased intangible assets related to the Inyx Pharma acquisition of Miza UK's
assets; the intangible assets include Miza UK's customer list and know-how. The
customer list is amortized over a period of 12 years and know-how is amortized
over 10 years.

      These intangible assets are amortized on a straight line method basis over
their estimated remaining useful lives in proportion to the underlying cash
flows that were used in determining the acquired value.

OPERATING LOSS BEFORE INTEREST AND FINANCING COSTS, REORGANIZATION ITEMS, INCOME
TAX BENEFIT AND DISCONTINUED OPERATIONS

      For the three months ended March 31, 2004, losses from operations amounted
to approximately $2.1 million compared to a loss from operations of
approximately $375,000 for the combined three months ended March 31, 2003.

      For the comparative periods, the combined loss from operations increased
primarily due to the increased amount of expenditures required to grow our
company and evolve into an integrated pharmaceutical company.

      We believe that we can offset these additional costs and expenses and
achieve profitability as more customer contracts and purchase orders are
initiated or renewed, through the increase of our manufacturing capacity
utilization, the increased business that we expect to be derived from our
expertise in non-CFC aerosol pharmaceuticals, and the marketing of our
proprietary pharmaceutical products, which we expect will improve our gross
margins.

INTEREST AND FINANCING COSTS

      Interest and financing costs consist of interest expense related to the
long term debt as well as the amortization of the financing charges and the
amortization of the debt discount associated with the fair value of the warrants
issued and the beneficial conversion feature related to the financings with
Laurus Master Fund, Ltd. ("Laurus Funds").


                                       28
<PAGE>

      For the three months ended March 31, 2004, interest and financing costs
were approximately $1.0 million or approximately 22% of net revenues of
approximately $4.5 million. The interest and financing costs included
approximately $589,000 for the beneficial conversion feature on the additional
debt issued during the three month period, $142,000 in amortization of debt
discount related to the convertible debt to Laurus Funds, approximately $77,000
in amortization of deferred financing charges, approximately $218,000 in
interest expense for the notes payable to Laurus Funds, and a convertible
promissory note payable to Stiefel. In March of 2004, we received a waiver from
Stiefel on the annual interest payment due to them amounting to approximately
$240,000 in consideration for future product development services.

      In comparison for the combined three month period ended March 31, 2003,
interest expenses amounted to approximately $176,000. These interest expenses
were primarily related to term loans and revolving credit facilities with Miza
UK, the predecessor company lenders.

      Interest expenses have increased between the comparative periods as a
result of our increasing business operations and working capital requirements
after our reverse merger with Inyx Pharma. We believe that as we continue to
improve our revenue and profitability opportunities, we will be in a position to
commence reducing our outstanding debt thereby reducing the associated interest
payments.

INCOME TAX BENEFIT

      For the three months ended March 31, 2004, the tax benefit net of
valuation allowance is approximately $390,000. As of March 31, 2004, our
deferred tax asset amounts to approximately $1.7 million.

      We have not made any provisions for United States federal or foreign taxes
that may result from future remittances of undistributed earnings of foreign
subsidiaries, because it is expected that such earnings will be permanently
reinvested in our foreign operations.

DISCONTINUED OPERATIONS

      The Biopharma Division was historically part of the Miza UK business but
was an operation not acquired by Inyx Pharma on March 7, 2003. Therefore, its
results of operations are presented as discontinued operations in the
predecessor company's financial statements.

NET LOSS

      Net loss for the three months ended March 31, 2004 was approximately $2.7
million as compared with a net loss of approximately $908,000 for the combined
three months ended March 31, 2003.

      The increase on our net loss for the comparative periods resulted
primarily from low gross profit margins as we continue our efforts to increase
the use of our manufacturing capacity, and new research and development costs as
we have now commenced to develop our own proprietary pharmaceutical products, as
well as an increased amount of business and corporate development expenditures
required to grow our company and evolve into an integrated pharmaceutical
company.

      We believe that we are close to achieving profitability as we are
continuing to obtain new contracts and purchase orders from existing and new
customers, as well as to commencing our first consulting contract in 2004.

      We also believe that we can improve gross profit margins through the
addition of our own pharmaceutical product lines, which may offer greater profit
margins than those provided by contract manufacturing services. Although we do
not currently derive any revenues from the sale of our own products, it is
anticipated that our first proprietary product should be ready for commercial
marketing by the end of 2004 or early 2005.

      We believe that our strategic new business initiatives will allow us to
earn greater revenues, improve our gross margins and offset a number of our
expenditures, thereby significantly improving our profitability potential.


                                       29
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

      We are financing our operations primarily through revenues from contract
manufacturing and product development contracts, stockholders' equity
contributions, credit facilities, and capital lease financing.

      At March 31, 2004 we had approximately $15 million in contractual
obligations that are due from 2004 to 2013, although approximately $1.6 million
of these contractual obligations are for rental payments under a ten-year lease
that was subsequently acquired by a related entity. The remaining obligations
now amounting to approximately $13.4 million over the period 2004 to 2013
include both short-term and long-term debt interest and principal repayments,
and amounts owed for operating leases.

      Additionally, we continue to incur operating losses since our reverse
acquisition of Inyx Pharma on April 28, 2003. For the three months ended March
31, 2004, such losses amounted to approximately $2.3 million and resulted from
low gross profit margins as a result of the lower than required use of our
manufacturing capacity, research and development costs as we continue the
development of our own proprietary pharmaceutical products, and costs associated
with our efforts to grow our Company and evolve into an integrated
pharmaceutical company.

      In time, we believe that we can achieve profitability once we fully
integrate and develop our Company in accordance with our noted business
strategies. These strategies include enhancing our sales and marketing efforts
to increase the number of customer purchase orders and contracts for our
contract development and manufacturing services, establishing new sources of
revenue by providing pharmaceutical manufacturing consulting services to the
industry, and the commercialization and marketing of our own proprietary
pharmaceutical products. We expect that the successful launch of our own
products will provide greater operating margins and improve our performance and
overall profitability.

      Until that time, we will continue to depend on our credit facilities, and
placements of equity and debt securities to assist us with our working capital
requirements, capital expenditure plans and proprietary product development
initiatives.

CAPITAL RESOURCES

      In the three months ended March 31, 2004, we completed new financings
totaling approximately $3.0 million through the issuance of convertible debt
securities.

      On February 27, 2004, we closed a transaction with our primary lender,
Laurus Master Fund, Ltd. ("Laurus Funds"), to obtain an additional financing of
$2.0 million as an amendment to the $3.5 million credit facility that we
previously entered with them on December 30, 2003. That Laurus $3.5 million
credit facility consists of two promissory notes, a $1.0 million Secured
Convertible Minimum Borrowing Note, and a $2.5 million Secured Revolving Note.
As a result of the additional Laurus financing, the $1.0 million Secured
Convertible Minimum Borrowing was increased by $1.0 million and the $2.5 million
principal amount Secured Revolving Note of the credit facility was increased by
$1.0 million. Both Notes were further amended to decrease the applicable
conversion rate from $1.47 to $1.00. As additional consideration for the loan,
we issued to Laurus a five-year Common Stock Purchase Warrant to purchase
330,000 shares of common stock at exercise prices of $1.25 for 110,000 shares,
$1.50 for 110,000 shares and $1.75 for 110,000 shares.

      On March 30, 2004, we also obtained an additional $1.0 million advance
from Laurus Funds under the Secured Revolving Credit Note, and issued additional
warrants to purchase 165,000 shares of common stock at exercise prices of $1.25
for 55,000 shares, $1.50 for 55,000 shares and $1.75 for 55,000 shares.

      Subject to certain limitations, these Laurus Funds credit facilities
permit payments to be made in our common stock. We therefore expect to amend a
registration statement that is not yet effective, to register an additional
3,000,000 shares issued upon conversion of the Notes or in lieu of Note
payments, and the 495,000 warrants that we have issued to Laurus in association
with these financings.

      The credit facilities and convertible debt security placements and cash
generated from operations during the three months ended March 31, 2004 were
sufficient to fund our working capital requirements for that period. However, on


                                       30
<PAGE>

both a short-term and long-term basis, we will be required to raise capital
through a combination of additional borrowings, and the issuance of additional
debt and equity securities to implement our business and growth strategies as a
specialty pharmaceutical company.

      On a short-term basis, in 2004, we believe that we will require
approximately $12.5 million in total additional funding consisting of $2.5
million to meet our debt and interest repayment obligations, and approximately
$10 million to fund our working capital, capital expenditure and product
development spending requirements. On a longer term basis, over 2005 and 2006
and 2007, we believe that in each respective year we will require further
funding in order to continue to meet our contractual obligations and implement
our capital expenditure and product development and commercialization plans.

      Additionally, we believe that we can enhance our competitive position
through the acquisition of regulatory-approved pharmaceutical products and drug
delivery devices for respiratory, dermatological and topical drug delivery
applications or such products in development, including those through the
acquisition of other pharmaceutical companies although no definitive agreements
are currently in effect to make any such acquisition. We are actively pursuing
acquisitions that may require substantial capital resources. In the event that
we make a significant future acquisition or change our capital structure, we may
be required to raise funds through additional borrowings or the issuance of
additional debt or equity securities.

ANALYSIS OF CASH FLOWS

      At March 31, 2004, we had cash of approximately $750,000.

      The net cash used in operating activities for the three months ended March
31, 2004 amounted to approximately $3.2 million. Our net cash used in operations
was primarily the result of a $2.7 million net loss from continuing operations
of the business, adjusted by non-cash charges including depreciation and
amortization of approximately $1.1 million, a reserve for bad debts and obsolete
inventory amounting to approximately $450,000, and net securities issuance costs
of approximately $430,000. These non-cash charges were offset by a deferred
income tax asset of approximately $390,000, consisting of a net operating loss
carried forward. Working capital changes reducing cash flow from operations were
due to increases in our inventory amounting to approximately $210,000, and an
increase to our prepaid deposits and other current assets amounting to
approximately $1.3 million, resulting from increasing new sales and business
development activities. Working capital changes increasing cash flow from
operations were due primarily to a decrease of accounts receivable of
approximately $200,000, an increase in accounts payable and accrued liabilities
of approximately $135,000 and a decrease in deferred revenue totaling
approximately $190,000.

      Investing activities for the three months ended March 31, 2004 reduced
cash flow by approximately $60,000 primarily due to the acquisition of office
equipment and computers.

      Financing activities, due to net advances from the issuance of additional
debt securities to Laurus Funds, contributed approximately $3.2 million to our
cash flow.

      As an emerging specialty pharmaceutical company, we are involved in a
number of business development projects including research and development
activities that require the use of capital resources over extended periods of
time. From time to time, these activities may also include the use of external
resources that require prepayment or cash deposits for supplies, products or
services that we require. As we intensify the development of our own proprietary
products, our capital requirements may increase accordingly. The profit margins
on our proprietary products and consulting services are expected to be higher
than our contract manufacturing services, although the time line for the
commencement of revenues and earnings from these additional business activities
may be longer than that of our contract manufacturing operation.

      For the three months ended March 31, 2004, our existing credit facilities
and capital resources were sufficient to fund the cash required to operate our
business. However, on both a short-term and long-term basis, we will be required
to continually raise capital through additional borrowings or the issuance of
additional debt or equity securities in order to implement our business and
growth strategies, which may also include significant business or corporate
acquisitions or changes to our capital structure.


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<PAGE>

SUBSEQUENT EVENTS AND EXPECTATIONS

      On April 14, 2004, Inyx Realty, Inc., which we established solely to
operate a corporate office lease in Miami Florida, was acquired by First Jemini
Trust, a discretionary family trust in which our Chairman/CEO and his spouse are
beneficiaries, thus terminating all of our Company's obligations under that
lease.

      On April 26, 2004, we announced that we acquired a group of parenteral
pharmaceutical products enabling the Company to enter the hospital supply market
in the United Kingdom. These product licenses give us the exclusive production
and distribution rights in the UK for a group of hospital products used in
infusion, irrigation and injection applications. The products were acquired from
a pharmaceutical company that was placed in UK Administration in 2002.

      On May 7, 2004, we terminated our investment banking relationship with
Duncan Capital, LLC ("Duncan"). As a termination fee, we agreed to pay Duncan
$120,000, plus eight percent interest on the outstanding principal, over twelve
months commencing May 15, 2004.

      On May 7, 2004, we entered into an Offset Agreement with Stiefel
Laboratories, Inc. ("Stiefel"), where we received from Stiefel a waiver on our
annual interest payment to them under their four-year 6% unsecured promissory
note. An interest payment amounting to approximately $275,000 for the period
March 6, 2003 to March 5, 2004, due to Stiefel, was waived in consideration of
future contract product development services required by Stiefel.

      On May 11, 2004, we announced that a new outside director and chair of our
Audit Committee, Mr. Joe Rotmil, would succeed Mr. Orestes Lugo, who resigned
from those capacities in order to pursue other business activities. Mr. Rotmil
was issued 200,000 Company Stock Options at an exercise price of $1.10. Mr. Lugo
had 350,000 stock options that were cancelled and in exchange we issued Mr. Lugo
a three-year Common Purchase Warrant to purchase 100,000 shares of our common
stock at an exercise price of $1.20.

      In 2004, we will continue to focus on strengthening and growing our
pharmaceutical aerosol contract manufacturing business in order to reach
profitability. Additionally, we plan to continue the development of our own
proprietary pharmaceutical products for respiratory, dermatological, topical and
cardiovascular drug delivery applications, to be marketed and sold through our
customers' distribution channels or with strategic partners. Planned products
include metered dose inhalers, nasal pumps, topical aerosols, wound care sprays
and oral sprays for cardiovascular disease. We are primarily focusing our
efforts on generic pharmaceutical products and innovative drug delivery systems
that allow line extensions of established products, or those delivery systems
that overcome present product and propellant incompatibility and consumer use
issues in the pharmaceutical aerosol sector.

      During this year, subject to receiving all necessary regulatory approvals,
we will fully implement our manufacturing consulting agreement with a developing
nation under the United Nations Development Programme - Montreal Protocol for
the UNDP, and to continue to explore pharmaceutical business acquisitions or the
acquisition of pharmaceutical products, intellectual properties or drug delivery
devices.


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