----

----

**Endovasc,      Inc.**

|   | Nevada                                                                                      |   | 76-0512500                                                           |   |
|--------|---------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
|   | (State                or Other Jurisdiction ofIncorporation                or Organization) |   | (I.R.S.                EmployerIdentification                Number) |   |

|   | 550                Club Drive Suite 440, Montgomery, Texas 77316   |   |
|--------|--------------------------------------------------------------------|--------|
|   | (Address                of principal executive offices) (Zip Code) |   |

|                                                                           | (936)                582-5920 |   |
|--------------------------------------------------------------------------------|-------------------------------|--------|
| (Issuer's                Telephone Number, Including Area                Code) |

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**Table      of Contents**

| ***Part                I***   |                                                                                                                                                                               |   |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                          |                                                                                                                                                                               |   |
| Item                1         | Business                                                                                                                                                                           | 3      |
|                          |                                                                                                                                                                               |   |
| Item                2         | Properties                                                                                                                                                                         | 7      |
|                          |                                                                                                                                                                               |   |
| Item                3         | Legal                Proceedings                                                                                                                                                   | 7      |
|                          |                                                                                                                                                                               |   |
| Item                4         | Submission                of Matters to a Vote of Security Holders                                                                                                                 | 8      |
|                          |                                                                                                                                                                               |   |
| ***Part                II***  |                                                                                                                                                                               |   |
|                          |                                                                                                                                                                               |   |
| Item                5         | Market                for Registrant's Common Equity and Related Stockholder                Matters                                                                                | 9      |
|                          |                                                                                                                                                                               |   |
| Item                6         | Management's                Discussion and Analysis or Plan of Operation                                                                                                           | 10     |
|                          |                                                                                                                                                                               |   |
| Item                7         | Financial                Statements                                                                                                                                                | 13     |
|                          |                                                                                                                                                                               |   |
| Item                8         | Changes                in and Disagreements With Accountants on Accounting and Financial                Disclosure                                                                 | 13     |
|                          |                                                                                                                                                                               |   |
| Item                8A        | Controls                and Procedures                                                                                                                                             | 13     |
|                          |                                                                                                                                                                               |   |
| Item                8B        | Other                Information                                                                                                                                                   | 13     |
|                          |                                                                                                                                                                               |   |
|                          |                                                                                                                                                                               |   |
| ***Part                III*** |                                                                                                                                                                               |   |
|                          |                                                                                                                                                                               |   |
| Item                9         | Directors,                Executive Officers; Promoters and Control Persons;Compliance                with Section 16(a) of The Exchange Act and the Code of                Ethics | 14     |
|                          |                                                                                                                                                                               |   |
| Item                10        | Executive                Compensation                                                                                                                                              | 16     |
|                          |                                                                                                                                                                               |   |
| Item                11        | Security                Ownership of Certain Beneficial Owners and Management and Related                Stockholder Matters                                                       | 16     |
|                          |                                                                                                                                                                               |   |
| Item                12        | Certain                Relationships and Related Transactions                                                                                                                      | 19     |
|                          |                                                                                                                                                                               |   |
| Item                13        | Exhibits                                                                                                                                                                           | 19     |
|                          |                                                                                                                                                                               |   |
| Item                14        | Principal                Accountant Fees and Services                                                                                                                              | 19     |

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*Table          of Contents*

**PART      I**

| Item                1. | BUSINESS. |
|------------------------|-----------|

**General**

**Corporate      History**

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*Table          of Contents*

**Eligible      Portfolio Investments**

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*Table          of Contents*

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*Table          of Contents*

**Patents      and Proprietary Rights**

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*Table          of Contents*

**Research      and Development **

**Employees**

| Item                2. | PROPERTY. |
|------------------------|-----------|

| Item                3. | LEGAL                PROCEEDINGS |
|------------------------|----------------------------------|

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*Table          of Contents*

| Item                4. | SUBMISSION                OF MATTERS TO A VOTE OF SECURITY                HOLDERS. |
|------------------------|------------------------------------------------------------------------------------|

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*Table          of Contents*

**PART      II**

| Item                5. | MARKET                FOR REGISTRANT'S COMMON EQUITY AND RELATED                STOCKHOLDER MATTERS. |
|------------------------|------------------------------------------------------------------------------------------------------|

| Fiscal                Quarter Ending | Common                Stock Price (rounded                to the nearest penny) |
|--------------------------------------|---------------------------------------------------------------------------------|
|                                 | High                                                                            | Low |
| June                30, 2005         | .11                                                                             | .03 |
| March                31, 2005        | .11                                                                             | .05 |
| December                31, 2004     | .10                                                                             | .03 |
| September                30, 2004    | .16                                                                             | .09 |
| June                30, 2004         | .33                                                                             | .14 |
| March                31, 2004        | .39                                                                             | .19 |
| December                31, 2003     | .33                                                                             | .25 |
| September                30, 2003    | .54                                                                             | .25 |
| June                30, 2003         | .75                                                                             | .32 |
| March                31, 2003        | 1.28                                                                            | .65 |

| Fiscal                Quarter Ending | Common                Stock Price (rounded                to the nearest penny) |
|--------------------------------------|---------------------------------------------------------------------------------|
|                                 | High                                                                            | Low |
| June                30, 2005         | .09                                                                             | .02 |
| March                31, 2005        | .07                                                                             | .02 |
| December                31, 2004     | .07                                                                             | .00 |
| September                30, 2004    | .10                                                                             | .00 |
| June                30, 2004         | .04                                                                             | .01 |
| March                31, 2004        | .12                                                                             | .00 |
| December                31, 2003     | .08                                                                             | .01 |
| September                30, 2003    | N/A                                                                             | N/A |

**Dividend      Policy**

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*Table          of Contents*

**Recent      Sales of Unregistered Securities**

| Item                6. | MANAGEMENT'S                DISCUSSION AND ANALYSIS OR PLAN OF                OPERATION |
|------------------------|-----------------------------------------------------------------------------------------|

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*Table          of Contents*

**Critical      Accounting Policies**

**Significant      Estimates**

**Research      and Development**

**Stock-Based      Compensation**

*Accounting      for Stock Issued to Employees*
*Accounting      for Stock-Based Compensation-Transition and Disclosure*

**Concentration      of Credit Risk**

**Results      of Operations**

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*Table          of Contents*

**Liquidity      and Capital Resources**

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*Table          of Contents*

**Off      Balance Sheet Arrangements**

| Item                7. | FINANCIAL                STATEMENTS |
|------------------------|-------------------------------------|

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

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

| Item                8B. | OTHER                INFORMATION |
|-------------------------|----------------------------------|

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*Table          of Contents*

**PART      III**

| Item                9. | DIRECTORS,                EXECUTIVE OFFICERS, PROMOTERS AND                CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                AND THE                CODE OF ETHICS |
|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                 | Age    | Position                                                                             | Period                Officer/Director/Key Employee |
|--------------------------------------|--------|--------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                 |   |                                                                                 |                                                |
| Diane                Dottavio, Ph.D. | 58     | President/Chief                Executive OfficerChairman                of the Board | March                2000 - present                 |
|                                 |   |                                                                                 |                                                |
| M.                Dwight Cantrell    | 59     | Chief                Operating Officer, Treasurer                and Director        | January                1997 - present               |
|                                 |   |                                                                                 |                                                |
| Robert                Johnson        | 34     | Vice                President of Business Development                                | February                2003 - present              |
|                                 |   |                                                                                 |                                                |
| Clarice                Motter        | 53     | Chief                Financial Officer                                               | September                2005-present               |
|                                 |   |                                                                                 |                                                |
| Donald                Leonard        | 48     | Director                                                                             | September                2004-present               |
|                                 |   |                                                                                 |                                                |
| Barbara                J. Richardson | 58     | Director                                                                             | September                2004-present               |

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*Table          of Contents*

*Section      16(a) Beneficial Ownership Reporting Compliance*

**Code      of Ethics**

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*Table          of Contents*

| Item                10. | EXECUTIVE                COMPENSATION. |
|-------------------------|----------------------------------------|

**Summary      Compensation Table**

|                                                                 |                                               | ** Annual                  Compensation**           | **Long                  Term Compensation**  |                                               |
|----------------------------------------------------------------------|----------------------------------------------------|----------------------------------------------------------|---------------------------------------------------|----------------------------------------------------|
|                                                                 |                                               |                                                     |  **Awards**                                  |  **Payouts**                                  |   |
| **Name                  and Principal Position**                     | **Year**                                           | **Salary****$**                                          | **Bonus****$**                                    | **Other****Annual****Comp-****ensation****$**      | **Restricted****Stock****Awards****$** | **Securities****Under-****lying****Options                  SARs****#** | **LTIP****Payouts****$** | **All****Other****Comp-****ensation****$** |
| Dottavio,                  Diane President/CEO Chairman of the Board | 2005                  2004                    2003 | 82,400                  72,399                    72,000 | -0-                  -0-                    -0-   | -0-                  -0-                    65,100 | 81,154                  -0-                    -0- |                      -0--0- |  -0--0- |  -0--0- |

**Stock      Option Plans**

**Option/SAR      Grant**

| Item                11. | SECURITY                OWNERSHIP OF CERTAIN BENEFICIAL                OWNERS |
|-------------------------|-------------------------------------------------------------------------------|

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*Table          of Contents*

| **Equity                  Compensation Plan Information**                   |
|-----------------------------------------------------------------------------|
| **Plan                  category**                                          | **Number                  of securities to****be                  issued upon exercise****of                  outstanding options,****warrants                  and rights**  **(a)** | **Weighted-average****exercise                  price of****outstanding                  options,****warrants                  and rights**  **(b)** | **Number                  of securities****remaining                  available for****future                  issuance under****equity                  compensation****plans                  (excluding****securities                  reflected in****column                  (a) (c)** |
| Equity                  compensation plans approved by security holders     | 331,752 | $1.30 | 9,660,748 |
| Equity                  compensation plans not approved by security holders | -0- | -0- | -0- |
|  **Total**                                                             | 331,752 | $1.30 | 9,660,748 |

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*Table          of Contents*

| **Name                of****Individual                or Group (1)**                                                                                                                                    |   | **Series****Endovasc****Common****Stock** |   | **Percent****of****Class(2)** |   | **Series                NDC****Common****Stock** |   | **Percent****of****Class(3)** |   | **Total****Voting****Interests** |   | **Percent****of****Class(4)** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------|--------|--------------------------------------------------|--------|-------------------------------|--------|----------------------------------|--------|-------------------------------|
| **INDIVIDUAL                DIRECTORS,****OFFICERS                AND NOMINEES**                                                                                                                        |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
|                                                                                                                                                                                                    |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
| Diane                Dottavio, Ph.D.Chief                Executive Officer, Director550                Club Drive Suite 345Montgomery,                TX 77316                                          |   | 2,079,643                                 |   | 1.85%                         |   | 234,786                                          |   | 1.66%                         |   | 2,314,429                        |   | 1.83%                         |
|                                                                                                                                                                                                    |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
| M.                Dwight CantrellChief                Operating Officer, Treasurer and                Secretary, Director550                Club Drive Suite 345Montgomery,                TX 77316 (5) |   | 3,543,697                                 |   | 3.15%                         |   | 953,171                                          |   | 6.73%                         |   | 4,496,868                        |   | 3.55%                         |
|                                                                                                                                                                                                    |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
| Robert                G. JohnsonVice                President, Business Development550                Club Drive Suite 345Montgomery,                TX 77316                                           |   | 846,819                                   |   | .75%                          |   | 18,458                                           |   | .13%                          |   | 865,277                          |   | .68%                          |
|                                                                                                                                                                                                    |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
| Clarice                Motter Chief                Financial Officer550                Club Drive Suite 345Montgomery,                TX 77316                                                          |   | -                                         |   | -                             |   | -                                                |   | -                             |   | -                                |   | -                             |
|                                                                                                                                                                                                    |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
| Barbara                J. RichardsonDirector550                Club Drive Suite 345Montgomery,                TX 77316                                                                                  |   | 615,000                                   |   | .55%                          |   | 323,000                                          |   | 2.28%                         |   | 938,000                          |   | .74%                          |
|                                                                                                                                                                                                    |   |                                      |   |                          |   |                                             |   |                          |   |                             |   |                          |
| Donald                LeonardDirector550                Club Drive Suite 345Montgomery,                TX 77316                                                                                         |   | 10,000                                    |   | <.01%                      |   | -                                                |   | -                             |   | 10,000                           |   | <.01%                      |
| **ALL                OFFICERS AND DIRECTORS AS A GROUP**                                                                                                                                                |   | 7,095,159                                 |   | 6.31%                         |   | 1,529,415                                        |   | 10.80%                        |   | 8,624,574                        |   | 6.82%                         |

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*Table          of Contents*

(5)      Dwight Cantrell’s beneficially owned shares include approximately 211,656 shares      beneficially owned by his wife Janie Cantrell. Dwight Cantrell exercises no      investment or voting power over any of the shares owned by his wife, and      disclaims beneficial ownership of those shares. 

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

| Item                13. | EXHIBITS |
|-------------------------|----------|

|   | (a) | INDEX                TO EXHIBITS |
|--------|-----|----------------------------------|

| Exhibit                No. |   | Exhibit                                                                                                                              |
|----------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                 |
| 16.1                       |   | Letter                on change certifying. Incorporated by reference to Form 8K filed                June                17th, 2005 |
|                       |   |                                                                                                                                 |
| 31.1                       |   | Certifications                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002    |
|                       |   |                                                                                                                                 |
| 31.2                       |   | Certifications                of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002    |
|                       |   |                                                                                                                                 |
| 32.1                       |   | Certifications                of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002    |
|                       |   |                                                                                                                                 |
| 32.2                       |   | Certifications                of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002    |

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

**Audit      Fees**

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*Table          of Contents*

**Audit      Related Fees**

**Financial      Information Systems Design and Implementation Fees**

**Tax      Fees**

**All      Other Fees**

**Auditor      Independence**

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*Table          of Contents*

|                                  |   | ENDOVASC,                INC.                     |
|---------------------------------------|--------|---------------------------------------------------|
|                                  |   |                                              |
|                                  |   |                                              |
| Date:                October 10, 2005 |   | By:/s/                Diane Dottavio              |
|                                  |   | Diane                Dottavio, Ph.D.              |
|                                  |   |                                              |
|                                  |   | Chief                Executive Officer,           |
|                                  |   | Chairman                of the Board and Director |

| Date:                October 10, 2005 |   | /s/                Diane Dottavio              |
|---------------------------------------|--------|------------------------------------------------|
|                                  |   | Diane                Dottavio, Ph.D.           |
|                                  |   | Chief                Executive Officer and     |
|                                  |   | Chairman                of the Board           |
|                                  |   |                                           |
|                                  |   |                                           |
| Date:                October 10, 2005 |   | /s/                M. Dwight Cantrell          |
|                                  |   | M.                Dwight Cantrell              |
|                                  |   | Chief                Operating Officer and     |
|                                  |   | Director                                       |
|                                  |   |                                           |
|                                  |   |                                           |
| Date:                October 10, 2005 |   | /s/                Donald Leonard              |
|                                  |   | Donald                Leonard                  |
|                                  |   | Director                                       |
|                                  |   |                                           |
|                                  |   |                                           |
| Date:                October 13, 2005 |   | /s/                Barbara J. Richardson  |
|                                  |   | Barbara                J. Richardson           |
|                                  |   | Director                                       |

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**ENDOVASC,      INC.**

**FINANCIAL      STATEMENTS**

**WITH      REPORT OF INDEPENDENT ACCOUNTANTS**

**as      of June 30, 2005 and June 30, 2004**

**and      for the periods ended June 30, 2005 and**

**September      30, 2004, and for the year ended June 30, 2004,**

**and      **
**for      the period from inception, June 10, 1996, to September 30,      2004**

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ENDOVASC,      INC.

|                                                                                                                                                                                                                                                                                    | Page(s) |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                    |    |
| Report                of Independent Accountants                                                                                                                                                                                                                                        | F-3     |
|                                                                                                                                                                                                                                                                                    |    |
| **Financial                Statements:**                                                                                                                                                                                                                                                |    |
|                                                                                                                                                                                                                                                                                    |    |
| Balance                Sheet as of June 30, 2005                                                                                                                                                                                                                                        | F-5     |
|                                                                                                                                                                                                                                                                                    |    |
| Balance                Sheet as of June 30, 2004                                                                                                                                                                                                                                        | F-6     |
|                                                                                                                                                                                                                                                                                    |    |
| Statements                of Operations for the periods ended June 30,                2005, September 30, 2004, and the year ended June 30, 2004, and for                the                period from inception, June 10, 1996, to September 30,                2005                  | F-7     |
|                                                                                                                                                                                                                                                                                    |    |
| Statements                of Stockholders’ Deficit for the periods                ended June 30, 2005, September 30, 2004, and the year ended June                30, 2004,                and for the period from inception, June 10, 1996, to September 30,                2005 | F-8     |
|                                                                                                                                                                                                                                                                                    |    |
| Statements                of Cash Flows for the periods ended June 30,                2005, September 30, 2004, and the year ended June 30, 2004, and for                the                period from inception, June 10, 1996, to September 30,                2005                  | F-15    |
|                                                                                                                                                                                                                                                                                    |    |
| Schedule                of Investments as of June 30,                2005                                                                                                                                                                                                               | F-16    |
|                                                                                                                                                                                                                                                                                    |    |
| Notes                to Financial                Statements                                                                                                                                                                                                                             | F-17    |

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*Table          of Contents*

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*Table          of Contents*

REPORT      OF INDEPENDENT ACCOUNTANTS

|   | /s/                Ham, Langston & Brezina, L.L.P. |
|--------|--------------------------------------------------------|

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*Table          of Contents*

**Endovasc,      Inc.**

**Balance      Sheet**

**June      30, 2005**

**__________**

**(In      thousands, except share data)**

| **Assets**                                                                                                                                                                                                                                                                     |   |   |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|
|                                                                                                                                                                                                                                                                           |   |   |    |
| Investments:                                                                                                                                                                                                                                                                   |   |   |    |
| Investment                in controlled companies, at fair value                                                                                                                                                                                                               |   | $      | 605     |   |
| (cost                of $668)                                                                                                                                                                                                                                                  |   |   |    |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                       |   |   | 116     |   |
| Other                assets                                                                                                                                                                                                                                                    |   |   | 14      |   |
| Property                and equipment, net                                                                                                                                                                                                                                     |   |   | 37      |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                                                                                                                                                                                                                                                                          |   | $      | 772     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| **Liabilities                and stockholders' equity**                                                                                                                                                                                                                        |   |   |    |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Current                maturities of long-term debt                                                                                                                                                                                                                            |   | $      | 42      |   |
| Capital                leases                                                                                                                                                                                                                                                  |   |   | 28      |   |
| Notes                payable                                                                                                                                                                                                                                                   |   |   | 115     |   |
| Accounts                payable and accrued liabilities                                                                                                                                                                                                                        |   |   | 230     |   |
| Convertible                debentures                                                                                                                                                                                                                                          |   |   | 1       |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                liabilities                                                                                                                                                                                                                                               |   |   | 416     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Commitments                and contingencies                                                                                                                                                                                                                                   |   |   | -       |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Stockholders'                equity:                                                                                                                                                                                                                                           |   |   |    |   |
| Common                stock, $.001 par value, 200,000,000 shares authorized                                                                                                                                                                                                    |   |   |    |   |
| Common                stock-Endovasc Series, 104,432,179 shares outstanding at June 30,                2005                                                                                                                                                                    |   |   | 104     |   |
| Common                stock NDC Series, $.001 par value, 14,158,593 share issued and outstanding                at June 30, 2005                                                                                                                                               |   |   | 14      |   |
| Preferred                stock, $.001par value, 20,000,000 shares authorized, 208 shares of                Series                A 8% cumulative convertible preferred stock issued and outstanding                at June                30, 2005 stated value $100 per share |   |   | -       |   |
| Additional                paid-in capital                                                                                                                                                                                                                                      |   |   | 26,630  |   |
| Accumulated                deficit                                                                                                                                                                                                                                             |   |   | (26,329 | ) |
| Unrealized                depreciation on investments                                                                                                                                                                                                                          |   |   | (63     | ) |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                stockholders' equity                                                                                                                                                                                                                                      |   |   | 356     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                liabilities and stockholders' equity                                                                                                                                                                                                                      |   | $      | 772     |   |

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*Table          of Contents*

**Endovasc,      Inc.**

**Balance      Sheet**

**June      30, 2004**

**__________**

**(In      thousands, except share data)**

| **Assets**                                                                                                                                                                                                                                                                     |   |   |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|
|                                                                                                                                                                                                                                                                           |   |   |    |
| Current                assets:                                                                                                                                                                                                                                                 |   |   |    |
| Cash                and cash equivalents                                                                                                                                                                                                                                       |   | $      | 116     |   |
| Accounts                receivable                                                                                                                                                                                                                                             |   |   | 22      |   |
| Other                current assets                                                                                                                                                                                                                                            |   |   | 375     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                current assets                                                                                                                                                                                                                                            |   |   | 513     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Property                and equipment, net                                                                                                                                                                                                                                     |   |   | 114     |   |
| Other                assets, net                                                                                                                                                                                                                                               |   |   | 102     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                assets                                                                                                                                                                                                                                                    |   | $      | 729     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| **Liabilities                and stockholders' deficit**                                                                                                                                                                                                                       |   |   |    |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Current                liabilities:                                                                                                                                                                                                                                            |   |   |    |   |
| Current                maturities of long-term debt                                                                                                                                                                                                                            |   | $      | 52      |   |
| Current                portion of obligations under capital leases                                                                                                                                                                                                             |   |   | 30      |   |
| Notes                payable to shareholders                                                                                                                                                                                                                                   |   |   | 290     |   |
| Accounts                payable                                                                                                                                                                                                                                                |   |   | 539     |   |
| Accrued                liabilities                                                                                                                                                                                                                                             |   |   | 27      |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                current liabilities                                                                                                                                                                                                                                       |   |   | 938     |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Long-term                debt, net of current maturities                                                                                                                                                                                                                       |   |   | -       |   |
| Long-term                obligations under capital leases                                                                                                                                                                                                                      |   |   | 28      |   |
| Convertible                debentures                                                                                                                                                                                                                                          |   |   | 1       |   |
| Deferred                liabilities                                                                                                                                                                                                                                            |   |   | 53      |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                liabilities                                                                                                                                                                                                                                               |   |   | 1,020   |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Commitments                and contingencies                                                                                                                                                                                                                                   |   |   |    |   |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Stockholders'                deficit:                                                                                                                                                                                                                                          |   |   |    |   |
| Common                stock, $.001 par value, 200,000,000 shares authorized                                                                                                                                                                                                    |   |   |    |   |
| Common                stock-Endovasc Series, 70,203,634 shares outstanding at June 30,                2004                                                                                                                                                                     |   |   | 70      |   |
| Common                stock NDC Series, $.001 par value, 14,158,593 share issued and outstanding                at June 30, 2004                                                                                                                                               |   |   | 14      |   |
| Preferred                stock, $.001par value, 20,000,000 shares authorized, 208 shares of                Series                A 8% cumulative convertible preferred stock issued and outstanding                at June                30, 2004 stated value $100 per share |   |   | -       |   |
| Additional                paid-in capital                                                                                                                                                                                                                                      |   |   | 25,218  |   |
| Accumulated                deficit                                                                                                                                                                                                                                             |   |   | (25,593 | ) |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                stockholders' deficit                                                                                                                                                                                                                                     |   |   | (291    | ) |
|                                                                                                                                                                                                                                                                           |   |   |    |   |
| Total                liabilities and stockholders' deficit                                                                                                                                                                                                                     |   | $      | 729     |   |

----

*Table          of Contents*

**Endovasc,      Inc.**

**Statements      of Operations**

**__________**

**(In      thousands, except share data)**

|                                                                                                               |   |                                                          |       | Prior                to becoming a Business Development Company                          |   |
|--------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|------------|------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   | Nine                months ended June                30, 2005 |       |  Three                months ended                September                30, 2004 |   | Year                ended June                30, 2004 |   | Inception                to September                30, 2004 |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |
| Income:                                                                                                            |   |                                                          |       |                                                                                     |   |   |   |   |   |
| Revenue                                                                                                            |   | $                                                             | 81         |                                                                                     | $      | - |   | $ | 71 |   | $ | 1,127 |   |
| Interest                income                                                                                     |   |                                                          | -          |                                                                                     |   | - |   |   | 1 |   |   | 30 |   |
| Other                income                                                                                        |   |                                                          | 9          |                                                                                     |   | - |   |   | - |   |   | 47 |   |
| Total                income                                                                                        |   |                                                          | 90         |                                                                                     |   | - |   |   | 72 |   |   | 1,204 |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Costs                and expenses:                                                                                 |   |                                                          |       |                                                                                     |   |   |   |   | - |   |   |   |   |
| Operating,                general and administrative expenses                                                      |   |                                                          | 737        |                                                                                     |   | 501 |   |   | 3,115 |   |   | 16,632 |   |
| Research                and development costs                                                                      |   |                                                          | -          |                                                                                     |   | 86 |   |   | 1,647 |   |   | 9,543 |   |
| Interest                expense                                                                                    |   |                                                          | 4          |                                                                                     |   | 7 |   |   | 17 |   |   | 651 |   |
| Settlement                with former employee                                                                     |   |                                                          | -          |                                                                                     |   | - |   |   | - |   |   | 408 |   |
| Total                costs and expenses                                                                            |   |                                                          | 741        |                                                                                     |   | 594 |   |   | 4,779 |   |   | 27,234 |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Operating                loss before investment losses                                                             |   |                                                          | (651       | )                                                                                        |   | (594 | ) |   | (4,707 | ) |   | (26,030 | ) |
| Unrealized                depreciation of portfolio investments                                                    |   |                                                          | (228       | )                                                                                        |   | - |   |   | - |   |   | - |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
|                                                                                                               |   |                                                          | (879       | )                                                                                        |   | (594 | ) |   | (4,707 | ) |   | (26,030 | ) |
| Loss                attributed to minority interest                                                                |   |                                                          | -          |                                                                                     |   | - |   |   | 28 |   |   | 28 |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Loss                before extraordinary item and cumulative effect of accounting                change            |   |                                                          | (879       | )                                                                                        |   | (594 | ) |   | (4,679 | ) |   | (26,002 | ) |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Extraordinary                loss on extinguishment of convertible debentures                                      |   |                                                          | -          |                                                                                     |   | - |   |   | - |   |   | (127 | ) |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Loss                before cumulative effect of accounting change                                                  |   |                                                          | (879       | )                                                                                        |   | (594 | ) |   | (4,679 | ) |   | (26,129 | ) |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Cumulative                effect of conversion to business development company                                     |   |                                                          | 674        |                                                                                     |   | - |   |   | - |   |   | - |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                                            |   | $                                                             | (205       | )                                                                                        | $      | (594 | ) | $ | (4,679 | ) | $ | (26,129 | ) |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Net                profit (loss) available to common stockholders                                                  |   | $                                                             | (205       | )                                                                                        | $      | (594 | ) | $ | (4,679 | ) |   |   |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding                                                                 |   |                                                          | 99,893,211 |                                                                                     |   | 71,697,112 |   |   | 76,721,885 |   |   |   |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Basic                and diluted loss per comon share before cumulative effect of accounting                change |   | $                                                             | 0.00       |                                                                                     | $      | (0.01 | ) | $ | (0.06 | ) |   |   |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Cumulative                effect of conversion to business development company                                     |   |                                                          | 0.00       |                                                                                     |   | - |   |   | - |   |   |   |   |
|                                                                                                               |   |                                                          |       |                                                                                     |   |   |   |   |   |   |   |   |   |
| Basic                and diluted net loss per common share                                                         |   | $                                                             | 0.00       |                                                                                     | $      | (0.01 | ) | $ | (0.06 | ) |   |   |   |

----

*Table          of Contents*

**ENDOVASC,      INC**

**STATEMENT      OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to June 30, 2005**

**(In      thousands, except share data)**

|                                                                                                                            |   | Common                Stock Endovasc                Series |   | Common                Stock NDC                Series |   | Series                A Preferred                Stock |   | Series                B Preferred                Stock |   | Series                C Preferred                Stock |   | Additional                Paid-In |   | Treasury |   | Losses                accumulated during the development |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|-------------------------------------------------------|--------|--------------------------------------------------------|--------|--------------------------------------------------------|--------|--------------------------------------------------------|--------|-----------------------------------|--------|----------|--------|----------------------------------------------------------|--------|--------|--------|
|                                                                                                                            |   | Amount                                                     |   | Shares                                                |   | Amount                                                 |   | Shares                                                 |   | Amount                                                 |   | Shares                            |   | Amount   |   | Shares                                                   |   | Amount |   | Shares |   | Capital |   | Stock |   | stage |   | Total |   |
| Balance                at inception, June 10, 1996                                                                              |   | $                                                          | -      |                                                  |   | -                                                      |   | $                                                      | -      |                                                   |   | -                                 |   | $        | -      |                                                     |   | -      |   | $ | - |   |   | - |   | $ | - |   |   | - |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for equity securities in 1996                                                                       |   |                                                       | 2      |                                                  |   | 2,332,000                                              |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 300 |   |   | - |   |   | - |   |   | 302 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for purchase of patent rights in 1996                                                               |   |                                                       | 2      |                                                  |   | 2,188,000                                              |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 282 |   |   | - |   |   | - |   |   | 284 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for services in 1997                                                                                |   |                                                       | 2      |                                                  |   | 1,702,000                                              |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 354 |   |   | - |   |   | - |   |   | 356 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for cash in 1997                                                                                    |   |                                                       | 1      |                                                  |   | 304,571                                                |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 205 |   |   | - |   |   | - |   |   | 206 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for purchase of patent rights in 1997                                                               |   |                                                       | -      |                                                  |   | 200,000                                                |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 200 |   |   | - |   |   | - |   |   | 200 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for services in 1998                                                                                |   |                                                       | -      |                                                  |   | 77,380                                                 |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 56 |   |   | - |   |   | - |   |   | 56 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                subject to rescission                                                                                      |   |                                                       | -      |                                                  |   | -                                                      |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (17 | ) |   | - |   |   | (17 | ) |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of debentures to common stock                                                                         |   |                                                       | 1      |                                                  |   | 1,208,077                                              |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 444 |   |   | - |   |   | - |   |   | 445 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for services                                                                                        |   |                                                       | -      |                                                  |   | 362,462                                                |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 285 |   |   | - |   |   | - |   |   | 285 |   |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Losses                accumulated during the period from inception, June 10 1996 to June                30,                1999 |   |                                                       | -      |                                                  |   | -                                                      |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (2,777 | ) |   | (2,777 | ) |
|                                                                                                                            |   |                                                       |   |                                                  |   |                                                   |   |                                                   |   |                                                   |   |                              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30 1999                                                                                          |   |                                                       | 8      |                                                  |   | 8,374,490                                              |   |                                                   | -      |                                                   |   | -                                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,126 |   |   | (17 | ) |   | (2,777 | ) |   | (660 | ) |

----

*Table          of Contents*

**ENDOVASC,      INC.**

**STATEMENT      OF STOCKHOLDERS'EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to September 30,      2004**

**(In      thousands, except share data)**

|                                                                      |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Losses                accumulated during the development |   |   |   |
|---------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|----------------------------------------------------------|--------|--------|--------|
|                                                                      |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares                                                   |   | Amount |   | Shares |   | Capital |   | Stock |   | stage |   | Total |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of debentures to common stock                   |   |                                                      | 3      |                                                 |   | 2,569,546                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 841 |   |   | - |   |   | - |   |   | 844 |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                issued for services                                  |   |                                                      | 2      |                                                 |   | 1,869,334                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,388 |   |   | - |   |   | - |   |   | 1,390 |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of note payable to shareholder to common stock  |   |                                                      | 1      |                                                 |   | 1,250,000                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 147 |   |   | - |   |   | - |   |   | 148 |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock in connection with license agreement |   |                                                      | -      |                                                 |   | 190,000                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 63 |   |   | - |   |   | - |   |   | 63 |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock in settlement of lawsuit             |   |                                                      | 1      |                                                 |   | 300,000                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 192 |   |   | - |   |   | - |   |   | 193 |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of preferred stock                                |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 15,000 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,040 |   |   | - |   |   | - |   |   | 1,040 |   |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                   |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (2,975 | ) |   | (2,975 | ) |
|                                                                      |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2000                                   |   |                                                      | 15     |                                                 |   | 14,553,370                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 15,000 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5,797 |   |   | (17 | ) |   | (5,752 | ) |   | 43 |   |

----

*Table          of Contents*

**ENDOVASC,      INC.**

**STATEMENTS      OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to September 30,      2004**

**(In      thousands, except share data)**

|                                                                            |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Losses                accumulated during the development |   |    |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|----------------------------------------------------------|--------|---------|--------|
|                                                                            |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares                                                   |   | Amount  |   | Shares |   | Capital |   | Stock |   | stage |   | Total |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock upon exercise of warrants                  |   |                                                      | 1      |                                                 |   | 1,250,000                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 34 |   |   | - |   |   | - |   |   | 35 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock upon exercise of options                   |   |                                                      | 1      |                                                 |   | 1,100,000                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 274 |   |   | - |   |   | - |   |   | 275 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for services                               |   |                                                      | 2      |                                                 |   | 1,770,301                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 300 |   |   | - |   |   | - |   |   | 302 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of warrants for services                                   |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 162 |   |   | - |   |   | (2,777 | ) |   | 162 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of preferred stock                                         |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 15,000  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,061 |   |   | - |   |   | - |   |   | 1,061 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of preferred stock to common stock                    |   |                                                      | 16     |                                                 |   | 16,501,251                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | (14,240 | )      |   | - |   |   | - |   |   | - |   |   | - |   |   | (16 | ) |   | - |   |   | - |   |   | - |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                declared on preferred stock                            |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (135 | ) |   | (135 | ) |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock as payment of dividends on preferred stock |   |                                                      | 1      |                                                 |   | 840,383                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 64 |   |   | - |   |   | - |   |   | 65 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of note payable to shareholder to common stock        |   |                                                      | 4      |                                                 |   | 4,210,526                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 439 |   |   | - |   |   | - |   |   | 443 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                  of common stock for cash                                 |   |                                                      | -      |                                                 |   | 27,500                                                |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 6 |   |   | - |   |   | - |   |   | 6 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                         |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -       |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (2,842 | ) |   | (2,842 | ) |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2001                                         |   |                                                      | 40     |                                                 |   | 40,253,331                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 15,760  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 8,121 |   |   | (17 | ) |   | (8,729 | ) |   | (585 | ) |

----

*Table          of Contents*

**ENDOVASC,      INC.**

**STATEMENTS      OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to September 30,      2004**

**(In      thousands, except share data)**

|                                                                                                    |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Losses                accumulated during the development |   |   |   |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|----------------------------------------------------------|--------|--------|--------|
|                                                                                                    |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares                                                   |   | Amount |   | Shares |   | Capital |   | Stock |   | stage |   | Total |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exchange                of common and treasury stock for Series B preferred stock                       |   |                                                      | (24    | )                                                    |   | (24,008,545                                           | )      |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | 2 |   |   | 2,400,855 |   |   | - |   |   | - |   |   | 17 |   |   | 5 |   |   | - |   |   | - |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of Series C preferred stock for services                                           |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | 350,000 |   |   | 210 |   |   | - |   |   | - |   |   | 210 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for services and financing costs                                   |   |                                                      | 14     |                                                 |   | 14,012,130                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 875 |   |   | - |   |   | - |   |   | 889 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for lawsuit settlement                                             |   |                                                      | 8      |                                                 |   | 8,000,000                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 400 |   |   | - |   |   | - |   |   | 408 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase                of treasury stock                                                               |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (5 | ) |   |   |   |   | (5 | ) |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase                of treasury stock for note payable to stockholders                              |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (560 | ) |   | - |   |   | (560 | ) |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of treasury stock for conversion of preferred stock to common                stock |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | (240   | )      |   | - |   |   | - |   |   | - |   |   | - |   |   | (182 | ) |   | 182 |   |   | - |   |   | - |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of preferred stock to common stock                                            |   |                                                      | 27     |                                                 |   | 26,546,674                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | (7,651 | )      |   | - |   |   | - |   |   | - |   |   | - |   |   | (27 | ) |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                declared on preferred stock                                                    |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (103 | ) |   | (103 | ) |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock as payment of dividends on preferred stock                         |   |                                                      | 2      |                                                 |   | 2,379,913                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 64 |   |   | - |   |   | - |   |   | 66 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of debentures to common stock                                                 |   |                                                      | 6      |                                                 |   | 5,945,870                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 166 |   |   | - |   |   | - |   |   | 172 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of treasury stock for conversion of debentures to common                stock      |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (324 | ) |   | 378 |   |   | - |   |   | 54 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of note payable to stockholder to common stock                                |   |                                                      | 13     |                                                 |   | 12,650,000                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 913 |   |   | - |   |   | - |   |   | 926 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock as payment of interest on debentures                               |   |                                                      | -      |                                                 |   | 317,433                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 9 |   |   | - |   |   | - |   |   | 9 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for cash                                                           |   |                                                      | 1      |                                                 |   | 1,245,800                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 68 |   |   | - |   |   | - |   |   | 69 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of the beneficial conversion feature of the convertible                debentures |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 171 |   |   | - |   |   | - |   |   | 171 |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of 40 to 1 reverse common stock split                                             |   |                                                      | (85    | )                                                    |   | (85,159,031                                           | )      |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 85 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                                 |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (2,398 | ) |   | (2,398 | ) |
|                                                                                                    |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2002                                                                 |   |                                                      | 2      |                                                 |   | 2,183,575                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 7,869  |   |   | 2 |   |   | 2,400,855 |   |   | - |   |   | 350,000 |   |   | 10,566 |   |   | (17 | ) |   | (11,230 | ) |   | (677 | ) |

----

*Table          of Contents*

**ENDOVASC,      INC.**

**STATEMENTS      OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to September 30,      2004**

**(In      thousands, except share data)**

|                                                                            |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Losses                accumulated during the development |   |   |   |
|---------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|----------------------------------------------------------|--------|--------|--------|
|                                                                            |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares                                                   |   | Amount |   | Shares |   | Capital |   | Stock |   | stage |   | Total |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for services and financing costs           |   |                                                      | 5      |                                                 |   | 3,888,186                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 4,131 |   |   | - |   |   | - |   |   | 4,136 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for assets                                 |   |                                                      | -      |                                                 |   | 185,000                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 197 |   |   | - |   |   | - |   |   | 197 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of preferred stock to treasury stock                  |   |                                                      | -      |                                                 |   | 121,000                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | (12,100 | ) |   | - |   |   | - |   |   | 5 |   |   | (5 | ) |   | - |   |   | - |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of preferred stock to common stock                    |   |                                                      | 31     |                                                 |   | 31,320,592                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | (7,594 | )      |   | (2 | ) |   | (2,388,755 | ) |   | - |   |   | (350,000 | ) |   | (29 | ) |   | - |   |   | - |   |   | - |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                declared on preferred stock                            |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (40 | ) |   | (40 | ) |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock as payment of dividends on preferred stock |   |                                                      | -      |                                                 |   | 100,753                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 47 |   |   | - |   |   | - |   |   | 47 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of convertible debentures to common stock             |   |                                                      | -      |                                                 |   | 363,900                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 170 |   |   | - |   |   | - |   |   | 170 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of liabilities to common stock                        |   |                                                      | 1      |                                                 |   | 873,530                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 726 |   |   | - |   |   | - |   |   | 727 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of warrants for servces                                    |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 3,682 |   |   | - |   |   | - |   |   | 3,682 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for exercise of warrants                   |   |                                                      | 3      |                                                 |   | 2,579,562                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 610 |   |   | - |   |   | - |   |   | 613 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issue                of common stock for cash                                   |   |                                                      | 1      |                                                 |   | 1,236,335                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 446 |   |   | - |   |   | - |   |   | 447 |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement                of treasury stock                                     |   |                                                      | -      |                                                 |   | (52,125                                               | )      |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (22 | ) |   | 22 |   |   | - |   |   | - |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of a 6 to 5 forward stock split                           |   |                                                      | 8      |                                                 |   | 8,132,830                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 55     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (8 | ) |   | - |   |   | - |   |   | - |   |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                         |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (9,644 | ) |   | (9,644 | ) |
|                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2003                                         |   |                                                      | 51     |                                                 |   | 50,933,138                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | 330    |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 20,521 |   |   | - |   |   | (20,914 | ) |   | (342 | ) |

----

*Table          of Contents*

**ENDOVASC,      INC.**

**STATEMENTS      OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to September 30,      2004**

**(In      thousands, except share data)**

|                                                                                            |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Losses                accumulated during the development |   |   |   |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|----------------------------------------------------------|--------|--------|--------|
|                                                                                            |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares                                                   |   | Amount |   | Shares |   | Capital |   | Stock |   | stage |   | Total |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for services                                            |   |                                                      | 6      |                                                 |   | 5,774,322                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,614 |   |   | - |   |   | - |   |   | 1,620 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for lawsuit settlement                                  |   |                                                      | -      |                                                 |   | 500,000                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 125 |   |   | - |   |   | - |   |   | 125 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of liabilities to common stock                                        |   |                                                      | -      |                                                 |   | 674,161                                               |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 163 |   |   | - |   |   | - |   |   | 163 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of note payable to stockholder to common stock                        |   |                                                      | 2      |                                                 |   | 1,800,000                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 685 |   |   | - |   |   | - |   |   | 687 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for cash                                                |   |                                                      | 8      |                                                 |   | 7,615,737                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,215 |   |   | - |   |   | - |   |   | 1,223 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for exercise of warrants and options                    |   |                                                      | 3      |                                                 |   | 2,850,758                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 556 |   |   | - |   |   | - |   |   | 559 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of preferred stock to common stock                                    |   |                                                      | -      |                                                 |   | 55,518                                                |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | (122   | )      |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 4                to 1 stock dividend through issuance of common stock NDC                series |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | 14     |                                                  |   | 14,158,593        |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (14 | ) |   | - |   |   | - |   |   | - |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of stock options/warrants for services                                  |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 353 |   |   | - |   |   | - |   |   | 353 |   |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                         |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |                                                     |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (4,679 | ) |   | (4,679 | ) |
|                                                                                            |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2004                                                         |   |                                                      | 70     |                                                 |   | 70,203,634                                            |   |                                                  | 14     |                                                  |   | 14,158,593        |   |     | -      |                                                     |   | 208    |   |   | - |   |   |   |   |   | - |   |   |   |   |   | 25,218 |   |   | - |   |   | (25,593 | ) |   | (291 | ) |

----

*Table          of Contents*

**ENDOVASC,      INC.**

**STATEMENTS      OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**for      the years ended June 30, 2005 and 2004, and**

**for      the period from inception, June 10, 1996 to September 30,      2004**

**(In      thousands, except share data)**

|                                                           |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Losses                accumulated during the development |   | Unrealized                Appreciation |   |   |   |
|----------------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|----------------------------------------------------------|--------|----------------------------------------|--------|--------|--------|
|                                                           |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares                                                   |   | Amount                                 |   | Shares |   | Capital |   | Stock |   | stage |   | (depreciation) |   | Total |   |
|                                                           |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for services           |   |                                                      | 2      |                                                 |   | 1,790,000                                             |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 232 |   |   |   |   |   |   |   |   |   |   |   | 234 |   |
|                                                           |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for lawsuit settlement |   |                                                      |   |                                                 |   | 315,000                                               |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 33 |   |   |   |   |   |   |   |   |   |   |   | 33 |   |
|                                                           |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of liabilities to common stock       |   |                                                      | 1      |                                                 |   | 425,000                                               |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 42 |   |   |   |   |   |   |   |   |   |   |   | 43 |   |
|                                                           |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                        |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (594 | ) |   |   |   |   | (594 | ) |
|                                                           |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2004                   |   |                                                      | 73     |                                                 |   | 72,733,634                                            |   |                                                  | 14     |                                                  |   | 14,158,593        |   |     |   |                                                     |   | 208                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 25,525 |   |   |   |   |   | (26,187 | ) |   |   |   |   | (575 | ) |

|                                                   |   | Common                StockEndovasc                Series |   | Common                StockNDC                Series |   | Series                APreferred                Stock |   | Series                BPreferred                Stock |   | Series                CPreferred                Stock |   | AdditionalPaid-In |   | Treasury |   | Accumulated |   | Unrealized |   |   |   |
|--------------------------------------------------------|--------|-----------------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------|--------|----------|--------|-------------|--------|------------|--------|--------|--------|
|                                                   |   | Amount                                                    |   | Shares                                               |   | Amount                                                |   | Shares                                                |   | Amount                                                |   | Shares            |   | Amount   |   | Shares      |   | Amount     |   | Shares |   | Capital |   | Stock |   | Deficit |   | Appreciation |   | Total |   |
|                                                   |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |        |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock for services   |   |                                                      | 2      |                                                 |   | 2,241,060                                             |   |                                                  | -      |                                                  |   | -                 |   |     | -      |        |   | -          |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | 135 |   |   | - |   |   | - |   |   | - |   |   | 137 |   |
|                                                   |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |        |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stick for cash       |   |                                                      | 29     |                                                 |   | 29,457,485                                            |   |                                                  | -      |                                                  |   | -                 |   |     | -      |        |   | -          |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | 970 |   |   | - |   |   | - |   |   | - |   |   | 999 |   |
|                                                   |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |        |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                depreciation on investmensts |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |        |   | -          |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   |   |   |   | (63 | ) |   | (63 | ) |
|                                                   |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |        |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                |   |                                                      | -      |                                                 |   | -                                                     |   |                                                  | -      |                                                  |   | -                 |   |     | -      |        |   | -          |   |   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (142 | ) |   | - |   |   | (142 | ) |
|                                                   |   |                                                      |   |                                                 |   |                                                  |   |                                                  |   |                                                  |   |              |   |     |   |        |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2005                |   | $                                                         | 104    |                                                 |   | 104,432,179                                           |   | $                                                     | 14     |                                                  |   | 14,158,593        |   | $        | -      |        |   | 208        |   | $      | -      |   |   | - |   | $ | - |   |   | - |   | $ | 26,630 |   | $ | - |   | $ | (26,329 | ) | $ | (63 | ) | $ | 356 |   |

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*Table          of Contents*

Endovasc,      Inc.

|                                                                                                                                    |   |                                        |   | Prior                to becoming a Business Development Company  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                                                                                                                    |   | Ninemonthsended                June 30,2005 |   | Three                monthsEndedSeptember30,                2004 |   | Year                endedJune                30,2004 |   | Inception                toSeptember30,                2004 |   |
| Cash                flows from operating activities:                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |
| Net                loss                                                                                                                 |   | $                                           | (205   | )                                                                | $      | (594 | ) | $ | (4,679 | ) | $ | (26,129 | ) |
| Adjustments                to reconcile net loss to net cash used in operating                activities:                               |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Common                stock, preferred stock and warrents issued as compensation for services,                financing and settlements |   |                                        | -105   |                                                             |   | 313 |   |   | 2,098 |   |   | 14,146 |   |
| Extraordinary                loss                                                                                                       |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 127 |   |
| Write                down of long-lived assets to fair value                                                                            |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 285 |   |
| Depreciation                and amortization                                                                                            |   |                                        | 14     |                                                             |   | 16 |   |   | 77 |   |   | 310 |   |
| Deferred                income taxes                                                                                                    |   |                                        | -      |                                                             |   | - |   |   |   |   |   | 8 |   |
| Amortization                of discount on convertible debenturtes                                                                      |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 421 |   |
| Unrealized                appreciation on investments                                                                                   |   |                                        | 228    |                                                             |   | - |   |   | - |   |   | - |   |
| Cumulative                effect of accounting change                                                                                   |   |                                        | (674   | )                                                                |   | - |   |   | - |   |   | - |   |
| Changes                in operating assets and liabilities:                                                                             |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                                      |   |                                        | -      |                                                             |   | - |   |   | 76 |   |   | (22 | ) |
| Other                assets                                                                                                             |   |                                        | -      |                                                             |   | 62 |   |   | 15 |   |   | (158 | ) |
| Accounts                payable and accrued liabilities                                                                                 |   |                                        | 206    |                                                             |   | 74 |   |   | 373 |   |   | 1,831 |   |
| Deferred                liabilities                                                                                                     |   |                                        | (49    | )                                                                |   | (4 | ) |   | 53 |   |   | 49 |   |
| Net                cash used in operating activities                                                                                    |   |                                        | (375   | )                                                                |   | (133 | ) |   | (1,987 | ) |   | (9,132 | ) |
|                                                                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Cash                flows from investing activities:                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Capital                expenditures                                                                                                     |   |                                        | -      |                                                             |   | - |   |   | (1 | ) |   | (158 | ) |
| Investment                in subsidiaries                                                                                               |   |                                        | (276   | )                                                                |   | - |   |   | - |   |   | - |   |
| Proceeds                received from repayment of loan to stockholder                                                                  |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 72 |   |
| Net                cash used in investing activities                                                                                    |   |                                        | (276   | )                                                                |   | - |   |   | (1 | ) |   | (86 | ) |
|                                                                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Cash                flows from financing activities:                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Proceeds                from sale of equity securities                                                                                  |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 337 |   |
| Proceeds                from sale of common stock                                                                                       |   |                                        | 999    |                                                             |   | - |   |   | 1,223 |   |   | 1,916 |   |
| Proceeds                from sale of stock warrants                                                                                     |   |                                        | -      |                                                             |   | - |   |   | 529 |   |   | 1,177 |   |
| Proceeds                of sale of convertible debenture and related conversion                feature                                  |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 1,437 |   |
| Net                proceeds from issuance of preferred stock                                                                            |   |                                        | -      |                                                             |   | - |   |   | - |   |   | 2,263 |   |
| Issuance                of long-term debt and notes payable                                                                             |   |                                        | 7      |                                                             |   | 5 |   |   | 398 |   |   | 1,104 |   |
| Repayment                of long-term debt and notes payable                                                                            |   |                                        | (17    | )                                                                |   | (5 | ) |   | (416 | ) |   | (879 | ) |
| Payments                of obligations under capital leases                                                                             |   |                                        | (25    | )                                                                |   | (5 | ) |   | (47 | ) |   | (134 | ) |
| Proceeds                from advances from stockholders                                                                                 |   |                                        | 20     |                                                             |   | 77 |   |   | 495 |   |   | 2,448 |   |
| Repayments                of notes to stockholders                                                                                      |   |                                        | (217   | )                                                                |   | (55 | ) |   | (198 | ) |   | (429 | ) |
| Purchase                of treasury stock                                                                                               |   |                                        | -      |                                                             |   | - |   |   | - |   |   | (22 | ) |
| Net                cash provided by financing activities                                                                                |   |                                        | 767    |                                                             |   | 17 |   |   | 1,984 |   |   | 9,218 |   |
|                                                                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                                                     |   |                                        | 116    |                                                             |   | (116 | ) |   | (4 | ) |   | - |   |
|                                                                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Cash                and cash equivalents, beginning of year                                                                             |   |                                        | -      |                                                             |   | 116 |   |   | 120 |   |   | - |   |
|                                                                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Cash                and cash equivalents, end of year                                                                                   |   | $                                           | 116    |                                                             | $      | - |   | $ | 116 |   | $ | - |   |
|                                                                                                                                    |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Supplemental                disclosure of cash flow information:                                                                        |   |                                        |   |                                                             |   |   |   |   |   |   |   |   |   |
| Cash                paid for interest                                                                                                   |   | $                                           | 4      |                                                             | $      | 7 |   | $ | 17 |   | $ | 192 |   |

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*Table          of Contents*

**ENDOVASC,      INC.**

**Schedule      of Investments**

**June      30, 2005**

**(In      thousands)**

| **Portfolio                          Companies**                              |   | **Industry** |              | **Title                          of Security****Held                          by** |   | **Percentage                          of****C****lass                          Held** |   | **Cost** |   | **June                          30, 2005 Fair Market Value** |   |
|-------------------------------------------------------------------------------|--------|--------------|-------------------|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|----------|--------|--------------------------------------------------------------|--------|
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |
| **Investments                          in equity securities:**                |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |
| Liprostin,                          Inc                                       |   |         | Biopharmaceutical |                                                                               |   | Common                          Stock                                                 |   |     | 100%   |                                                         | $      | 328 |   | $ | 400 |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
| Angiogenix,                          Ltd Inc                                  |   |         | Biopharmaceutical |                                                                               |   | Common                          Stock                                                 |   |     | 100%   |                                                         |   | 52 |   |   | 25 |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
| Nutraceutical                          Development Corp                       |   |         | Biopharmaceutical |                                                                               |   | Common                          Stock                                                 |   |     | 100%   |                                                         |   | 14 |   |   | 175 |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
| **Investments                          in joint ventures:**                   |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
| Endovasc-TissueGen                          Research Sponsors, L.L.C          |   |         | Biopharmaceutical |                                                                               |   | Equity                                                                                |   |     | 49.90% |                                                         |   | - |   |   | 2 |   |
|                                                                          |   |         |              |                                                                               |   | Debt                                                                                  |   |     |   |                                                         |   | 56 |   |   |   |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
| Endovasc-TissueGen-Blumberg                          Research Sponsors, L.L.C |   |         | Biopharmaceutical |                                                                               |   | Equity                                                                                |   |     | 39.90% |                                                         |   | - |   |   |   |   |
|                                                                          |   |         |              |                                                                               |   | Debt                                                                                  |   |     |   |                                                         |   | 218 |   |   | 3 |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         |   |   |   |   |   |   |
|                                                                          |   |         |              |                                                                               |   |                                                                                  |   |     |   |                                                         | $      | 668 |   | $ | 605 |   |

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*Table          of Contents*

**ENDOVASC,      INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**(In      thousands, except share data)**

| **1.** | **Organization                and Summary of Significant Accounting                Policies** |
|--------|-----------------------------------------------------------------------------------------------|

|                                                                    |  **Cumulative                  Effect of****Business                  Development****Company                  Conversion** |   |
|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                    |                                                                                                                            |   |   |
| Effect                  of recording investments at fair value          |                                                                                                                            | $      | 426 |   |
| Adjustment                  for previously consolidated net liabilities |                                                                                                                            |   | 248 |   |
|                                                                    |                                                                                                                            |   |   |   |
|                                                                    |                                                                                                                            | $      | 674 |   |

**Portfolio      Investments**

----

*Table          of Contents*

----

*Table          of Contents*

***Significant      Estimates***

----

*Table          of Contents*

***Investments***

***Stock-Based      Compensation***

*Accounting      for Stock Issued to Employees*
*Accounting      for Stock-Based Compensation*
*Accounting      for Stock-Based Compensation-Transition and Disclosure.*

***Loss      per Share***

***Concentrations      Of Credit Risk***

----

*Table          of Contents*

***Revenue      Recognition***

***Cash      and Cash Equivalents***

***Property      and Equipment***

***Debt      Issuance Costs***

***Income      Taxes***

***Research      and Development***

***Fair      Value of Financial Instruments***

***Long-Lived      Assets Including Goodwill and Other Acquired Intangible      Assets***

----

*Table          of Contents*

*Goodwill      and Other Intangible Assets.*

| **2.** | **License                Agreements** |
|--------|---------------------------------------|

| **3.** | **Research                Agreement** |
|--------|---------------------------------------|

| **4.** | **Other                Assets** |
|--------|---------------------------------|

|                             |   | **2005** |   | **2004** |   |
|----------------------------------|--------|----------|--------|----------|--------|
|                             |   |     |   |     |   |
| Other                receivable  |   | $        | -      |     | $      | 30 |   |
| Prepaid                license   |   |     | -      |     |   | 58 |   |
| Prepaid                supplies  |   |     | -      |     |   | 278 |   |
| Prepaid                insurance |   |     | 14     |     |   | 9 |   |
|                             |   |     |   |     |   |   |   |
|                             |   | $        | 14     |     | $      | 375 |   |

| **5.** | **Property                and Equipment** |
|--------|-------------------------------------------|

|                                                    |   | **2005** |   | **2004** |   |
|---------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                    |   |     |   |     |   |
| Office                furniture, fixtures and equipment |   | $        | 129    |     |   | 319 |   |
|                                                    |   |     |   |     |   |   |   |
| Less                accumulated depreciation            |   |     | (92    | )        |   | (205 | ) |
|                                                    |   |     |   |     |   |   |   |
|                                                         |   | $        | 37     |     | $      | 114 |   |

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*Table          of Contents*

| **6.** | **Convertible                Debentures** |
|--------|-------------------------------------------|

| **7.** | **Notes                Payable** |
|--------|----------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **2005** |   | **2004** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |
| Note                payable to a financial institution, bearing interest at prime (4%                at June                30, 2005) with interest due monthly and principal due on demand.                Note is                uncollateralized but is guaranteed by a stockholder of the                Company.                                                                                                                                                  |   | $        | 35     |     | $      | 46 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |   |   |
| Note                payable to a financial institution, bearing interest at prime plus                1.5% or                an annual rate of 6%, whichever is higher, principal and interest                due on                demand, with monthly interest payments due until demand is made or                at                maturity on November 7, 2003. This note is collateralized by personal                property of a stockholder of the Company. |   |     | -      |     |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |   |   |
| Note                payable to a financial institution, bearing interest at rates ranging                from                16% to 18% and due in 9 monthly installments of $924.                                                                                                                                                                                                                                                                                     |   |     | 7      |     |   | 6 |   |
| Notes                are uncollateralized.                                                                                                                                                                                                                                                                                                                                                                                                                             |   |     |   |     |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |   |   |
| Notes                payable to stockholders, non-interest bearing and due on demand.                These                notes are uncollateralized.                                                                                                                                                                                                                                                                                                                  |   |     | 115    |     |   | 290 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |   |   |
| Total                notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |     | 157    |     |   | 342 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |   |   |
| Less                current maturities                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |     | (157   | )        |   | (342 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |     |   |     |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $        | -      |     | $      | - |   |

| **8.** | **Accrued                Liabilities** |
|--------|----------------------------------------|

|                                             |   | **2005** |   | **2004** |   |
|--------------------------------------------------|--------|----------|--------|----------|--------|
|                                             |   |     |   |     |   |
| Accrued                payroll and related taxes |   | $        | 16     |     |   | 20 |   |
| Interest                payable                  |   |     | 9      |     |   | 7 |   |
|                                             |   |     |   |     |   |   |   |
|                                             |   |     |   |     |   |   |   |
|                                             |   | $        | 25     |     | $      | 27 |   |

----

*Table          of Contents*

| **9.** | **Income                Taxes** |
|--------|---------------------------------|

|                                        |   | **2005** |   | **2004** |   |
|---------------------------------------------|--------|----------|--------|----------|--------|
| Taxes                currently payable      |   |     | -      |     |   | - |   |
| Deferred                income taxes        |   |     | -      |     |   | - |   |
|                                        |   |     |   |     |   |   |   |
| Income                tax expense (benefit) |   |     | -      |     |   | - |   |

|                                                                        |   | **2005** |   | **2004** |   |
|-----------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| Computed                at the statutory rate (34%)                         |   |     | (70    | )        |   | (1,591 | ) |
| Increase                (decrease) resulting from                           |   |     |   |     |   |   |   |
| Nondeductible                expenses                                       |   |     | 152    |     |   | 713 |   |
| Changes                in the deferred tax asset valuation allowance        |   |     | 143    |     |   | 878 |   |
| Adjustment                due to conversion to business development company |   |     | (225   | )        |   | - |   |
|                                                                        |   |     |   |     |   |   |   |
| Actual                tax expense (benefit)                                 |   |     | -      |     |   | - |   |

|                                                                         |   | **2005** |   | **2004** |   |
|------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| Deferred                tax assets                                           |   |     |   |     |   |   |   |
| Net                operating loss carryforwards                              |   |     | 5,013  |     |   | 4,803 |   |
|                                                                         |   |     |   |     |   |   |   |
| Deferred                tax liabilities                                      |   |     |   |     |   |   |   |
| Unrealized                gains on portfolio company investments             |   |     | (67    | )        |   | - |   |
|                                                                         |   |     |   |     |   |   |   |
|                                                                         |   |     |   |     |   |   |   |
| Net                deferred tax asset (liability) before valuation allowance |   |     | 4,946  |     |   | 4,803 |   |
|                                                                         |   |     |   |     |   |   |   |
| Valuation                allowance                                           |   |     |   |     |   |   |   |
| Beginning                balance                                             |   |     | (4,803 | )        |   | (3,925 | ) |
| (Increase)                decrease during the period                         |   |     | (143   | )        |   | (878 | ) |
|                                                                         |   |     |   |     |   |   |   |
| Ending                balance                                                |   |     | (4,946 | )        |   | (4,803 | ) |
|                                                                         |   |     |   |     |   |   |   |
| Net                deferred tax asset (liability)                            |   |     | -      |     |   | - |   |

----

*Table          of Contents*

| **10.** | **Common                Stock** |
|---------|---------------------------------|

| **11.** | **Stock                Options and Warrants** |
|---------|-----------------------------------------------|

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*Table          of Contents*

----

*Table          of Contents*

|                                                |   | **Number                of Shares** |                                                        |                 |   |                                                        |   | **Average**          |                                                        | **Weighted**          |   |
|-----------------------------------------------------|--------|-------------------------------------|-------------------------------------------------------------|----------------------|--------|-------------------------------------------------------------|--------|----------------------|-------------------------------------------------------------|-----------------------|--------|
|                                                |   | **Employee**                        |                                                        | **Non-****Employee** |   | **Total**                                                   |   | **Exercis-****able** |                                                        | **Exercise****Price** |   | **Exercise****Price** |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |
| Options                outstanding at June 30, 2002 |   |                                | 10,516                                                      |                 |   | 29,250                                                      |   |                 | 39,766                                                      |                  |   | 39,766 |   |   | $13.33-$33.33 |   | $ | 14.00 |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                expired                      |   |                                | -                                                           |                 |   | -                                                           |   |                 | -                                                           |                  |   | - |   |   |   |   |   |   |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                outstanding at June 30, 2003 |   |                                | 10,516                                                      |                 |   | 29,250                                                      |   |                 | 39,766                                                      |                  |   | 39,766 |   |   | $13.33-$33.33 |   | $ | 14.00 |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                expired                      |   |                                | (10,516                                                     | )                    |   | (29,250                                                     | )      |                 | (39,766                                                     | )                     |   | (39,766 | ) |   | $13.33-$33.00 |   | $ | 14.00 |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                issued                       |   |                                | -                                                           |                 |   | 1,850,758                                                   |   |                 | 1,850,758                                                   |                  |   | 1,850,758 |   |   | $0.17-$0.29 |   | $ | 0.22 |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                exercised                    |   |                                | -                                                           |                 |   | (1,850,758                                                  | )      |                 | (1,850,758                                                  | )                     |   | (1,850,758 | ) |   | $0.17-$0.29 |   | $ | 0.22 |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                outstanding at June 30, 2004 |   |                                | -                                                           |                 |   | -                                                           |   |                 | -                                                           |                  |   | - |   |   |   |   |   |   |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                expired                      |   |                                | (                        | )                    |   | (                             | )      |                 | (                        | )                     |   | (                        | ) |   |   |   |   |   |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                issued                       |   |                                | -                                                           |                 |   | -                                                           |   |                 | -                                                           |                  |   | - |   |   |   |   |   |   |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                exercised                    |   |                                | -                                                           |                 |   | (                        | )      |                 | (                        | )                     |   | (                        | ) |   |   |   |   |   |   |
|                                                |   |                                |                                                        |                 |   |                                                        |   |                 |                                                        |                  |   |   |   |   |   |   |   |   |   |
| Options                outstanding at June 30, 2005 |   |                                | -                                                           |                 |   | -                                                           |   |                 | -                                                           |                  |   | - |   |   |   |   |   |   |   |

|                                                   |   | **Number                  of****Shares** |       | **Exercisable** |   | **Exercise****Price** |   | **Weighted****Average****Exercise****Price** |                                       |
|--------------------------------------------------------|--------|------------------------------------------|------------|-----------------|--------|-----------------------|--------|----------------------------------------------|--------------------------------------------|
| Warrants                  outstanding at June 30, 2002 |   |                                     | 73,325     |            |   | 73,325                |   |                                         | $2.40-$75.60                               |   | $ | 16.00 |   |
|                                                   |   |                                     |       |            |   |                  |   |                                         |                                       |   |   |   |   |
| Effect                  of change in warrant agreement |   |                                     | 2,193,750  |            |   | 2,193,750             |   |                                         | $0.13-$0.50                                |   | $ | 0.23 |   |
|                                                   |   |                                     |       |            |   |                  |   |                                         |                                       |   |   |   |   |
| Warrants                  issued                       |   |                                     | 816,490    |            |   | 816,490               |   |                                         | 70%                  of market price-$1.50 |   | $ | 0.96 |   |
|                                                   |   |                                     |       |            |   |                  |   |                                         |                                       |   |   |   |   |
| Warrants                  exercised                    |   |                                     | (2,579,562 | )               |   | (2,579,562            | )      |                                         | $0.13-$0.39                                |   | $ | 0.24 |   |

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*Table            of Contents*

| **11.** | **Stock                  Options and Warrants,                  continued** |
|---------|-----------------------------------------------------------------------------|

| Warrants                expired                      |   |   | (178,763   | )      |   | (178,763   | )      |   | $0.50-$75.60 |   | $      | 3.99   |   |
|------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|--------|--------------|--------|--------|--------|--------|
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Effect                of 6:5 stock split             |   |   | 65,048     |   |   | 65,048     |   |   | $1.25-$3.33  |   | $      | 1.30   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                outstanding at June 30, 2003 |   |   | 390,288    |   |   | 390,288    |   |   | $1.25-$3.33  |   | $      | 1.30   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                issued                       |   |   | 1,000,000  |   |   | 1,000,000  |   |   | $0.15-$0.20  |   | $      | 0.17   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                exercised                    |   |   | (1,000,000 | )      |   | (1,000,000 | )      |   | $0.15-$0.20  |   | $      | 0.17   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                expired                      |   |   | (51,036    | )      |   | (51,036    | )      |   | $1.25        |   | $      | 1.25   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                outstanding at June 30, 2004 |   |   | 339,252    |   |   | 339,252    |   |   | $1.25-$3.33  |   | $      | 1.30   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                issued                       |   |   |       |   |   |       |   |   |         |   |   |   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                exercised                    |   |   |       |   |   |       |   |   |         |   |   |   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                expired                      |   |   | (7,500     | )      |   | (7,500     | )      |   | $1.25        |   | $      | 1.25   |   |
|                                                 |   |   |       |   |   |       |   |   |         |   |   |   |   |
| Warrants                outstanding at June 30, 2005 |   |   | 331,752    |   |   | 331,752    |   |   | $1.25-$3.33  |   | $      |        |   |

| **Number                of Shares** |   | **Vested** |   | **Expiration                Date** |   | **Exercise                Price** |
|-------------------------------------|--------|------------|--------|------------------------------------|--------|-----------------------------------|
|                                |   |       |   |                               |   |                              |
| 9,600                               |   | 9,600      |   | October                2005        |   | $1.25                             |
| 319,152                             |   | 319,152    |   | January                2006        |   | $1.25                             |
| 3,000                               |   | 3,000      |   | August                2006         |   | $2.00                             |
|                                |   |       |   |                               |   |                              |
| 331,752                             |   | 331,752    |   |                               |   |                              |

|                                              |   | **2005** |                    | **2004** |   |
|---------------------------------------------------|--------|----------|-------------------------|----------|--------|
|                                              |   |     |                    |     |   |
| Risk-free                interest rate            |   |     | 4.25%                   |     |   | 3.75% |   |
| Dividend                yield                     |   |     | -                       |     |   | - |   |
| Volatility                                        |   |     | 190%                    |     |   | 190% |   |
| Weighted                average and expected life |   |     | 2                months |     |   | 2                months |   |

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*Table          of Contents*

|                                                              |   | **2005** |   | **2004** |   |
|-------------------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                              |   |     |   |     |   |
| Net                loss available to common stockholders          |   | $        | (799   | )        | $      | (4,679 | ) |
|                                                              |   |     |   |     |   |   |   |
| Proforma                net loss available to common stockholders |   | $        | (799   | )        | $      | (4,679 | ) |
|                                                              |   |     |   |     |   |   |   |
| Proforma                basic and dilutive loss per share         |   | $        | (0.00  | )        | $      | (0.06 | ) |

| **12.** | ***Preferred                Stock*** |
|---------|--------------------------------------|

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*Table          of Contents*

| **13.** | ***Reincorporation*** |
|---------|-----------------------|

----

*Table          of Contents*

| **14.** | ***Loss                Per Common Share*** |
|---------|--------------------------------------------|

|                                                      |   | June                30, 2005 |   | September                30, 2004 |   | June                30, 2004 |   |
|-----------------------------------------------------------|--------|------------------------------|--------|-----------------------------------|--------|------------------------------|--------|
| Basic                and diluted loss per common share:   |   |                         |   |                              |   |                         |   |
| Net                loss before extraordinary item         |   | $                            | (205   | )                                 | $      | (594                         | )      | $ | (4,679 | ) |
| Preferred                stock dividends                  |   |                         | -      |                              |   | -                            |   |   | - |   |
|                                                      |   |                         |   |                              |   |                         |   |   |   |   |
| Net                loss available for common stockholders |   | $                            | (205   | )                                 | $      | (594                         | )      | $ | (4,679 | ) |

| **15.** | ***Commitments                and Contingencies*** |
|---------|----------------------------------------------------|

**Legal      Proceedings**

----

*Table          of Contents*

**Leases**

|                                                   |   | **Operating****Lease** |   | **Capital****Leases** |   |
|--------------------------------------------------------|--------|------------------------|--------|-----------------------|--------|
|                                                   |   |                   |   |                  |   |
| 2006                                                   |   | $                      | 48     |                  | $      | 24 |   |
| 2007                                                   |   |                   | 48     |                  |   | 7 |   |
| 2008                                                   |   |                   | 16     |                  |   | - |   |
| 2009                                                   |   |                   | -      |                  |   | - |   |
|                                                   |   |                   |   |                  |   |   |   |
| Total                payments                          |   | $                      | 112    |                  | $      | 31 |   |
|                                                   |   |                   |   |                  |   |   |   |
| Less                amount representing interest       |   |                   |   |                  |   | (3 | ) |
|                                                   |   |                   |   |                  |   |   |   |
| Present                value of minimum lease payments |   |                   |   |                  | $      | 28 |   |

| **16.** | ***Going                Concern                Considerations*** |
|---------|------------------------------------------------------------------|

|   | w | In                the near term the Company plans additional private sales of debt                and                common and preferred stock to qualified investors to fund its current                operations. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | w | The                Company originally anticipated the generation of approximately $500                in                revenue from its Nutraceutical product in the third and fourth quarters                of                the year ending June 30, 2004. The anticipated revenue to be generated                by                the launch of the Nutraceutical product line has been delayed pending                certain problems with formulation. The Company has made the required                changes and anticipates material revenues by the end of calendar                year                2005. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

|   | w | In                the long-term, the Company believes that cash flows from commercialization                of its products will provide the resources for continued                operations. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | w | The                Company’s ability to obtain adequate sources of debt or equity funding to                meet current commitments and fund the commercialization of its                products. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | w | The                ability of the Company to obtain positive test results of its products                in                clinical trials. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | w | The                ability of the Company to ultimately achieve adequate profitability                and                cash flows to sustain its                operations. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **17.** | ***Non-Cash                Investing and Financing                Activities*** |
|---------|---------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                              |   | **2005** |   | **2004** |   | **Inception                to****September                30, 2004** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |
| Common                stock issued in exchange for equity securities                                                                                                                                                                              |   | $        | -      |     | $      | -                                                                    |   | $ | 302 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Common                and treasury stock issued upon conversion of debentures and interest                on                debentures                                                                                                            |   | $        | -      |     | $      | 173                                                                  |   | $ | 1,697 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Common                and preferred stock issued for ser- vices and license and patent                rights                                                                                                                                      |   | $        | -      |     | $      | -                                                                    |   | $ | 2,634 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Common                stock issued in settlement of lawsuit and related liabilities ($33                for the                period ended September 30, 2004)                                                                                   |   | $        | 33     |     | $      | -                                                                    |   | $ | 634 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Common                stock issued for payment of accounts payable and accrued liabilities                ($277                for the period ended September 30, 2004 and $137 for the period ended                June                30, 2005) |   | $        | 414    |     | $      | 163                                                                  |   | $ | 1,164 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Common                stock issued for assets                                                                                                                                                                                                     |   | $        | -      |     | $      | -                                                                    |   | $ | 197 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Conversion                of note payable to shareholder to common stock                                                                                                                                                                          |   |     |   |     | $      |  687                                                            |   | $ | 2,190 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Conversion                of dividends payable to common stock                                                                                                                                                                                    |   | $        | -      |     | $      | -                                                                    |   | $ | 178 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Reduction                of note payable to stockholder and accrued liabilities through exercise                of                stock options                                                                                                   |   | $        | -      |     | $      | -                                                                    |   | $ | 275 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Issuance                of notes payable for insurance                                                                                                                                                                                            |   | $        | -      |     | $      | -                                                                    |   | $ | 37 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Issuance                of notes payable for the purchase of equipment                                                                                                                                                                            |   | $        | -      |     | $      | -                                                                    |   | $ | 180 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Dividends                declared on preferred stock                                                                                                                                                                                              |   | $        | -      |     | $      | -                                                                    |   | $ | 143 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Receipt                of treasury stock for note payable to stockholders                                                                                                                                                                         |   | $        | -      |     | $      | -                                                                    |   | $ | 560 |   |
|                                                                                                                                                                                                                                              |   |     |   |     |   |                                                                 |   |   |   |   |
| Issuance                of common stock for receivable                                                                                                                                                                                            |   |     |   |     | $      |  30                                                             |   | $ | 30 |   |

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*Table          of Contents*

| **18.** | ***401(k)                Plan*** |
|---------|----------------------------------|

| **19.** | ***Related                Party                Transactions*** |
|---------|----------------------------------------------------------------|

| **2****0.** | ***Subsequent                Events*** |
|-------------|----------------------------------------|

----