----

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| KYTO BIOPHARMA INC.                                    |
|--------------------------------------------------------|
| (Exact name of registrant as specified in its charter) |

| FLORIDA                                                   |   | 65-1086538                              |
|----------------------------------------------------------------|--------|-----------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S. Employer Identification Number) |

| B1-114 BELMONT STREET, TORONTO ONTARIO CANADA  |   | M5R 1P8    |
|-----------------------------------------------------|--------|------------|
| (Address of Principal Executive Offices)            |   | (Zip Code) |

| Large accelerated filer | o | Accelerated filer         | o      |
|-------------------------|---|---------------------------|--------|
| Non-accelerated filer   | o | Smaller reporting company | þ |

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|          |                                                                                                            | Page   |   |
|---------------|-----------------------------------------------------------------------------------------------------------------|--------|--------|
| PART I        |                                                                                                            |   |   |
|          |                                                                                                            |   |   |
| ITEM 1        | Business                                                                                                        |   |   | 3 |   |
| ITEM 2.       | Properties                                                                                                      |   |   | 8 |   |
| ITEM 3.       | Legal Proceedings                                                                                               |   |   | 8 |   |
| ITEM 4.       | (Removed and Reserved)                                                                                          |   |   | 8 |   |
|          |                                                                                                            |   |   |   |
| PART II       |                                                                                                            |   |   |   |
|          |                                                                                                            |   |   |   |
| ITEM 5.  | Market for Registrants Common Equity and Related Stockholders Matters                                           |   |   | 9 |   |
| ITEM 6        | Selected Financial Data                                                                                         |   |   | 10 |   |
| ITEM 7.       | Management’s Discussion and Analysis of Financial Condition and Results of Operation                      |   |   | 11 |   |
| ITEM 8 .      | Financial Statements and Supplementary Data                                                                     |   |   | 16 |   |
| ITEM 9.       | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure                            |   |   | 16 |   |
| ITEM 9A.      | Controls and Procedures                                                                                         |   |   | 16 |   |
| ITEM 9B  | Other Information                                                                                               |   |   | 18 |   |
|          |                                                                                                            |   |   |   |
| PART III      |                                                                                                            |   |   |   |
|          |                                                                                                            |   |   |   |
| ITEM 10.      | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act |   |   | 19 |   |
| ITEM 11.      | Executive Compensation                                                                                          |   |   | 21 |   |
| ITEM 12.      | Security Ownership of Certain Beneficial Owners and Management                                                  |   |   | 23 |   |
| ITEM 13.      | Certain Relationships and Related Transactions                                                                  |   |   | 24 |   |
| ITEM 14.      | Principal Accountants Fee and Services                                                                          |   |   | 25 |   |
|          |                                                                                                            |   |   |   |
| PART IV       |                                                                                                            |   |   |   |
|          |                                                                                                            |   |   |   |
| ITEM 15.      | Exhibits and Financial Statement Schedules Signatures                                                           |   |   | 26 |   |

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| Monoclonal AntibodiesDevelopment | Transport proteinReceptor | OncologyOncology | Development      |
|----------------------------------|---------------------------|------------------|------------------|
| Growth Blockers                  | Receptor modulators       | Oncology         | Proof of concept |

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| Vitamin B12 DepletionMonoclonal Antibodies  |                               |                         |                                                                     |
|--------------------------------------------------|------------------------------------|------------------------------|--------------------------------------------------------------------------|
| Transport protein Receptor                  | Oncology  Oncology  | Development Development | Medarex Inc.The Research Foundation of StateUniversity of New York  |
| Receptor Modulators                              |                               |                         |                                                                     |
| Growth blockers                                  | Oncology                           | Proof of concept             | The Research Foundation of StateUniversity of New York              |

----

| PATENT NO.   | TITLE                                                                                                                                            | ISSUED         |   | EXPIRATION     |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|----------------|
| NZ252,559         | Anti-receptor agents to the vitamin B12/transcobalamin II receptor                                                                          | 02/14/97       |   |  05/07/13 |
| US5,688,504       | Anti-receptor and growth blocking agents to the vitamin B12/transcobalamin II receptor and binding sites                                         | 11/18/97       |   |  11/18/14 |
| US5,739,287       | Biotinylated cobalamins                                                                                                                     | 04/14/98       |   |  04/14/15 |
| US5,840,712       | Water soluble vitamin B12 receptor modulating agents and methods relating thereto                                                                | 11/24/98       |   |  04/08/14 |
| US5,840,880  | Vitamin B12 receptor modulating agents                                                                                                           | 11/24/98       |   |  11/24/15 |
| US5,869,465       | Methods for receptor modulation and uses thereto                                                                                                 | 02/09/99       |   |  02/09/16 |
| US6,083,926       | Water soluble vitamin B12 receptor modulating agents and methods relating thereto                                                                | 07/04/00       |   |  04/08/14 |
| CA2,135,277       | Anti-receptor and growth blocking agents to the vitamin B12/transcobalamin II receptor and use in preventing cellular uptake of vitamin B12      |  04/24/01 |   |  05/07/13 |
| NZ323,127         | Vitamin B12 receptor modulating agents and methods related and methods related thereto                                                           | 07/12/01       |   |  10/18/16 |
| KR297,310         | Anti-receptor and growth blocking agents to the vitamin B12/transcobalamin II receptor and use in preventing cellular uptake of vitamin B12 | 05/21/01       |   |  05/07/13 |
| CH0754189         | Receptor modulating agents and methods relating thereto                                                                                          | 10/09/02       |   |  04/07/15 |
| DE0754189         | Receptor modulating agents and methods relating thereto                                                                                          | 10/09/02       |   |  04/07/15 |
| FR0754189         | Receptor modulating agents and methods relating thereto                                                                                     | 10/09/02       |   |  04/07/15 |
| GB0754189         | Receptor modulating agents and methods relating thereto                                                                                          | 10/09/02       |   |  04/07/15 |
| US7416728         | Growth Blocking Agents                                                                                                                           | 08/26/08       |   |  05/08/12 |
| CA2199940         | Anti-receptor and growth blocking agents to Vitamin B12/transcobalmin II Receptor and binding sites                                              | 02/11/11       |   |  09/13/15 |

----

| Phase I                                            | These studies usually take one year to complete and are conducted  on a small number of healthy human subjects to evaluate the  drug's pharmacological actions, toxicity, metabolism and pharmacokinetics.                                                                                                                                                                               |
|----------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                               |                                                                                                                                                                                                                                                                                                                                                                                               |
| Phase II        | These studies take an average of two years to complete and are carried out on a relatively small number of patients suffering from the targeted condition or disease, to determine the drug's effectiveness and dose response relationship. This phase provides additional safety data and the first substitutive evidence of the drug's efficacy in humans.                                       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                               |
| Phase III                                     | These studies take an average of two years to three years to complete and involve tests on a much larger population of patients suffering from the targeted condition or disease, typically several hundred to several thousand patients. Such studies measure the drug's efficacy and its side effects on a large scale and typically involve numerous hospitals and clinics.                     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                               |
| Phase IV                                      | This final phase involves monitoring the long-term benefits and risks of a drug after it has entered the market. These studies also involve examining the efficacy and safety of different dosage forms or focusing on specific sub-populations of patients for evaluation of the drug's efficacy and safety. Such studies  can be carried out on thousands to tens of thousands of patients. |

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|                             |   | Common Stock |   |
|----------------------------------|--------|--------------|--------|
|                             |   | High         |   |   | Low |   |
| Fiscal Year Ended March 31, 2011 |   |         |   |   |   |   |
| First quarter                    |   | $            | 0.70   |   |   | $ | 0.55 |   |
| Second quarter                   |   |         | 0.55   |   |   |   | 0.47 |   |
| Third quarter                    |   |         | 0.55   |   |   |   | 0.33 |   |
| Fourth quarter                   |   |         | 0.55   |   |   |   | 0.35 |   |
|                             |   |         |   |   |   |   |   |   |
| Fiscal Year Ended March 31, 2010 |   |         |   |   |   |   |   |   |
| First quarter                    |   | $            | 1.70   |   |   | $ | 0.55 |   |
| Second quarter                   |   |         | 1.50   |   |   |   | 1.50 |   |
| Third quarter                    |   |         | 1.50   |   |   |   | 0.45 |   |
| Fourth quarter                   |   |         | 1.01   |   |   |   | 0.30 |   |

----

|              |   | Years ended March 31, |      |
|-------------------|--------|-----------------------|-----------|
|              |   | 2011                  |      |   | 2010 |   |
|              |   |                  |      |   |   |   |   |   |
| Net Loss          |   | $                     | (518,258  | ) |   | $ | (591,293 | ) |
|              |   |                  |      |   |   |   |   |   |
| Loss Per Share    |   | $                     | (0.04     | ) |   | $ | (0.05 | ) |
|              |   |                  |      |   |   |   |   |   |
| Total assets      |   | $                     | 863       |   |   | $ | 170,014 |   |
|              |   |                  |      |   |   |   |   |   |
| Total liabilities |   | $                     | 1,382,799 |   |   | $ | 1,122,797 |   |

----

----

----

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| NAME                         |   | AGE    |   | POSITION                                          |
|------------------------------|--------|--------|--------|---------------------------------------------------|
| Georges Benarroch            |   | 64     |   | President & Chief Executive Officer, Director |
|                         |   |   |   |                                              |
| Jean-Luc Berger, Ph.D.  |   | 47     |   | Director                                          |
|                         |   |   |   |                                              |
| Uri Sagman, M.D. FRCPC       |   | 57     |   | Director                                          |
|                         |   |   |   |                                              |
| Don MacAdam                  |   | 64     |   | Director                                          |

----

----

|                                                          |   |       |   |  Annual Compensation  |   |  Long-Term Compensation |
|---------------------------------------------------------------|--------|------------|--------|---------------------------------|--------|------------------------------|
|                                                          |   |       |   |                            |   |                         |   |   |   | Awards |   | Payouts  |
| All Other Name and Payouts Principal  Position |   |  Year |   | Salary  ($)                |   | Bonus ($)               |   | Other AnnualCompensation ($) |   |  Securities Under Options/SARsGranted(#) |   | Restricted Sharesor  RestrictedShare Units ($) |   |  LTIP($) |
|                                                          |   |       |   |                            |   |                         |   |   |   |   |   |   |   |   |
| Jean-Luc Berger, Director                                     |   | 2011       |   | None                            |   |                         |   |   |   |   |   | None |   |   |
|                                                          |   | 2010       |   | None                            |   |                         |   |   |   |   |   | None |   |   |
|                                                          |   |       |   |                            |   |                         |   |   |   |   |   |   |   |   |
| Georges Benarroch, Director                                   |   | 2011       |   | None                            |   |                         |   |   |   |   |   | None |   |   |
|                                                          |   | 2010       |   | None                            |   |                         |   |   |   |   |   | None |   |   |
|                                                          |   |       |   |                            |   |                         |   |   |   |   |   |   |   |   |
| Donald MacAdam, Director                                 |   | 2011       |   | None                            |   |                         |   |   |   |   |   | None |   |   |
|                                                          |   | 2010       |   | None                            |   |                         |   |   |   |   |   | None |   |   |

----

----

| TITLE OF CLASS | NAME AND ADDRESS OF BENEFICIAL OWNER         |   | COMMONSHARES |      |   | PERCENTAGE OF CLASS |   |
|----------------|----------------------------------------------|--------|--------------|-----------|--------|---------------------|--------|
|           |                                         |   |         |      |   |                |   |
|           |                                         |   |         |      |   |                |   |   |   |
|           |                                         |   |         |      |   |                |   |   |   |
| Common    | Medarex Inc. New Jersey, United States  |   |         | 1,300,000 |   |                |   | 10.0 | % |
|           |                                         |   |         |      |   |                |   |   |   |
| Common         | Dr. Uri Sagman Toronto, Ontario, Canada |   |         | 1,402,025 |   |                |   | 10.7 | % |

| TITLE OF CLASS         | NAME AND ADDRESS  OF  BENEFICIAL OWNER     |   | PREFERREDSHARES |    |   | PERCENTAGE OF CLASS |   |
|-----------------------------|--------------------------------------------------------------------------|--------|-----------------|---------|--------|---------------------|--------|
|                        |                                                                     |   |            |    |   |                |   |
| Convertible  Preferred | Credifinance Capital Corp. (1)                                      |   |            | 473,624 |   |                |   | 100.0 | % |

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| TITLE OF CLASS     | NAME AND ADDRESS  OF BENEFICIAL OWNER                                  |   | COMMONSHARES |      |   | PERCENTAGEOF CLASS |   |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------------|--------|
|               |                                                                                                                                                                                                                                             |   |         |      |   |               |   |
|  Common  | Georges Benarroch (1)                                                                                                                                                                                                                  |   |         | 177,412   |   |               |   | 1.4 | % |
|  Common  | Dr. Jean-Luc Berger                                                                                                                                                                                                                         |   |         | 527,025   |   |               |   | 4.054 | % |
|  Common  | Uri Sagman                                                                                                                                                                                                                                  |   |         | 1,402,025 |   |               |   | 10.7 | % |

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| EXHIBIT NUMBER |   | DESCRIPTION                                                                                                                                                                                                       |
|----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                              |
| 3(i)(a)        |   | Articles of Incorporation of Kyto Biopharma, Inc.*                                                                                                                                                                |
| 3(i)(b)   |   | Articles of Amendment changing name to Kyto Biopharma, Inc.*                                                                                                                                                      |
| 3(ii)     |   | Bylaws of Kyto Biopharma, Inc.*                                                                                                                                                                                   |
| A              |   | Medarex Agreement                                                                                                                                                                                                 |
| B              |   | Patent Family Summary                                                                                                                                                                                             |
| C              |   | Research Foundation of The State University of New York agreement                                                                                                                                                 |
| 31.1      |   | Section 302 Certification of the principal executive officer and the principal financial and accounting officer**                                                                                                 |
| 32.1      |   | Certification pursuant to 18 U.S.C. Section 1350 as  adopted pursuant to Section 906 of the Sarbanes-Oxley Act  of 2002 of the principal executive officer and principal financial accounting officer** |

----

----

|                   | KYTO BIOPHARMA, INC. |                                     |
|------------------------|----------------------|------------------------------------------|
|                   |                 |                                     |   |
| DATE: November 8, 2011 | By:                  | /s/ Georges Benarroch               |   |
|                   |                 | Name: Georges Benarroch             |   |
|                   |                 | Title:  President & C.E.O. |   |
|                   |                 |                                     |   |

| Signature             |   | Title                                                           |   | Date             |
|-----------------------|--------|-----------------------------------------------------------------|--------|------------------|
|                  |   |                                                            |   |             |
| /s/ Georges Benarroch |   | President, Chief Executive Officer, principal executive officer |   | November 8, 2011 |
| Georges Benarroch     |   | and principal financial and accounting officer                  |   |             |
|                  |   |                                                            |   |             |
| /s/ Jean-Luc Berger   |   | Director                                                        |   | November 8, 2011 |
| Jean-Luc Berger       |   |                                                            |   |             |
|                  |   |                                                            |   |             |
| /s/ Uri Sagman        |   | Director                                                        |   | November 8, 2011 |
| Uri Sagman            |   |                                                            |   |             |

----

| Report of Independent Registered Public Accounting Firms                                                                                                           |   |   | F-2 / F-3               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------|--------|
|                                                                                                                                                               |   |   |                    |   |
| Consolidated Balance Sheets  as of March 31, 2011 and 2010                                                                                               |   |   | F-4                     |   |
|                                                                                                                                                               |   |   |                    |   |
| Consolidated Statements of Operations for the years ended March 31, 2011 and 2010 and for the period from March 5, 1999 (Date of Inception) through March 31, 2011 |   |   | F-5                     |   |
|                                                                                                                                                               |   |   |                    |   |
| Consolidated Statements of Stockholders' Deficit for the period from March 5, 1999 (Date of Inception) through March 31, 2011.                                     |   |   | F-6 / F-8               |   |
|                                                                                                                                                               |   |   |                    |   |
| Consolidated Statements of Cash Flows for the years ended March 31, 2011 and 2010 and for the period from March 5, 1999 (Date of Inception) through March 31, 2011 |   |   | F-9                     |   |
|                                                                                                                                                               |   |   |                    |   |
| Notes to Consolidated Financial Statements                                                                                                                         |   |   | F-10  /  F-22 |   |

----

----

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| Kyto Biopharma, Inc. and Subsidiary                               |   |
|-------------------------------------------------------------------|--------|
| (A Development Stage Company)                                     |   |
| Consolidated Balance Sheets                                       |   |
|                                                              |   |
|                                                              |   | March 31, |   |   | March 31, |   |
|                                                              |   | 2011 |   |   | 2010 |   |
|                                                              |   |   |   |   | (Restated) |   |
| ASSETS                                                            |   |
| Current Assets                                                    |   |   |   |   |   |   |
| Cash                                                              |   | $ | 863 |   |   | $ | 4,444 |   |
|                                                              |   |   |   |   |   |   |   |   |
| Total Current Assets                                              |   |   | 863 |   |   |   | 4,444 |   |
|                                                              |   |   |   |   |   |   |   |   |
| Other Assets                                                      |   |   |   |   |   |   |   |   |
| Patent Rights                                                     |   |   | - |   |   |   | 165,570 |   |
|                                                              |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| Total Assets                                                      |   | $ | 863 |   |   | $ | 170,014 |   |
|                                                              |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                   |   |
|                                                              |   |   |   |   |   |   |   |   |
| Current Liabilities                                               |   |   |   |   |   |   |   |   |
| Accounts payable                                                  |   | $ | 12,760 |   |   | $ | 6,518 |   |
| Accrued liabilities                                               |   |   | 32,667 |   |   |   | 21,667 |   |
| Accrued liabilities - related party                               |   |   | 29,000 |   |   |   | 62,501 |   |
| Accrued interest payable - related party                          |   |   | 66,139 |   |   |   | 59,329 |   |
| Accrued interest payable - preferred convertible stock            |   |   | 76,137 |   |   |   | 49,486 |   |
| Loan payable-related party                                        |   |   | 1,066,096 |   |   |   | 823,296 |   |
| Note payable-related party                                        |   |   | 100,000 |   |   |   | 100,000 |   |
| Total Current Liabilities                                         |   |   | 1,382,799 |   |   |   | 1,122,797 |   |
|                                                              |   |   |   |   |   |   |   |   |
| Commitments and Contingencies                                     |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
|  Stockholders'  Deficit                            |   |   |   |   |   |   |   |   |
| Preferred convertible stock, $1.00 par value, 1,000,000 shares    |   |   |   |   |   |   |   |   |
| authorized, 473,624 issued and outstanding as of                  |   |   |   |   |   |   |   |   |
|  March 31, 2011 and 2010 respectively                        |   |   | 473,624 |   |   |   | 473,624 |   |
| Common stock, $0.0001 par value, 25,000,000 shares                |   |   |   |   |   |   |   |   |
| authorized, 12,998,482  issued and outstanding as of    |   |   |   |   |   |   |   |   |
| March 31, 2011 and 2010 respectively                              |   |   | 1,300 |   |   |   | 1,300 |   |
| Additional paid-in capital                                        |   |   | 15,904,542 |   |   |   | 15,815,489 |   |
| Deficit accumulated during development stage                      |   |   | (17,584,219 | ) |   |   | (17,065,962 | ) |
| Accumulated other comprehensive loss                              |   |   | (177,183 | ) |   |   | (177,234 | ) |
|                                                              |   |   |   |   |   |   |   |   |
| Total  Stockholders'  Deficit                 |   |   | (1,381,936 | ) |   |   | (952,783 | ) |
|                                                              |   |   |   |   |   |   |   |   |
| Total Liabilities and  Stockholders'  Deficit |   | $ | 863 |   |   | $ | 170,014 |   |

----

| Kyto Biopharma, Inc. and Subsidiary           |   |
|-----------------------------------------------|--------|
| (A Development Stage Company)                 |   |
| Consolidated Statements of Operations         |   |
|                                          |   |
|                                          |   |   |   |   |   |   |   | For the period from |   |
|                                          |   |   |   |   |   |   |   | March 5, 1999 |   |
|                                          |   | For The Year Ended |   |   | (inception) to |   |
|                                          |   | March 31 |   |   | March 31, |   |
|                                          |   | 2011 |   |   | 2010 |   |   | 2011 |   |
|                                          |   |   |   |   | (Restated) |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |
| Operating Expenses                            |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                 |   | $ | - |   |   | $ | - |   |   | $ | 814,183 |   |
| General and administrative                    |   |   | 352,050 |   |   |   | 293,369 |   |   |   | 16,543,447 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                      |   | $ | 352,050 |   |   | $ | 293,369 |   |   | $ | 17,357,630 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from Operation                           |   | $ | 352,050 |   |   | $ | 293,369 |   |   | $ | 17,357,630 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expenses)                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                               |   |   | - |   |   |   | - |   |   |   | 4,922 |   |
| Interest expense                              |   |   | (122,514 | ) |   |   | (31,903 | ) |   |   | (249,026 | ) |
| Loss on debt forgiveness                      |   |   | (43,690 | ) |   |   | (265,931 | ) |   |   | (230,956 | ) |
| Loss on disposal of equipment                 |   |   | - |   |   |   | - |   |   |   | (567 | ) |
| Foreign currency transaction gain             |   |   | (4 | ) |   |   | (90 | ) |   |   | 249,038 |   |
| Total Other Income (Expense), net             |   |   | (166,208 | ) |   |   | (297,924 | ) |   |   | (226,589 | ) |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss before taxes                         |   | $ | (518,258 | ) |   | $ | (591,293 | ) |   | $ | (17,584,220 | ) |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Tax) Benefit                      |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                      |   | $ | (518,258 | ) |   | $ | (591,293 | ) |   | $ | (17,584,220 | ) |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive Income (Loss)                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation gain (loss)      |   |   | 51 |   |   |   | 10 |   |   |   | (177,183 | ) |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Comprehensive Loss                      |   | $ | (518,207 | ) |   | $ | (591,283 | ) |   | $ | (17,761,403 | ) |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of shares outstanding |   |   |   |   |   |   |   |   |   |   |   |   |
| during the year - basic and diluted           |   |   | 12,998,482 |   |   |   | 12,743,610 |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per share - basic and diluted        |   | $ | (0.04 | ) |   | $ | (0.05 | ) |   |   |   |   |

----

| Kyto Biopharma, Inc. and Subsidiary                                     |   |
|-------------------------------------------------------------------------|--------|
| (A Development Stage Company)                                           |   |
| Consolidated Statement of Stockholders' Deficit                    |   |
| For the period from March 5, 1999 (Date of Inception) to March 31, 2011 |   |
|                                                                    |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Deficit |   |   | Accumulated |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   | Other |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   | Preferred Stock |   |   | Common Stock |   |   | Additional |   |   | During |   |   | Comprehensive |   |   |   |   |   |   |   |   | Deferred |   |   |   |   |   |   |   |
|                                                                    |   | $1.00 par value |   |   | $0.0001 par value |   |   | Paid - in |   |   | Development |   |   | Income |   |   | Deferred |   |   | Subscription |   |   | Loan |   |   | Deferred |   |   |   |   |
|                                                                    |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Capital |   |   | Stage |   |   | (Loss) |   |   | Consulting |   |   | Receivable |   |   | Fee |   |   | Expenses |   |   | Total |   |
| Common stock issued for services to officer                             |   |   | - |   |   | $ | - |   |   |   | 300,000 |   |   | $ | 30 |   |   | $ | 299,970 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 300,000 |   |
| Common stock issued for services to consultant                          |   |   | - |   |   |   | - |   |   |   | 255,000 |   |   |   | 25 |   |   |   | 254,975 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 255,000 |   |
| Warrants issued to consultant                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 345,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 345,000 |   |
| Net loss, 1999                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (900,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (900,000 | ) |
| Balance, March 31, 1999                                                 |   |   | - |   |   | $ | - |   |   |   | 555,000 |   |   | $ | 55 |   |   | $ | 899,945 |   |   | $ | (900,000 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Preferred stock issued for cash                                         |   |   | 250,000 |   |   |   | 250,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 250,000 |   |
| Offering cost                                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (17,005 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (17,005 | ) |
| Common stock issued for intangible assets                               |   |   | - |   |   |   | - |   |   |   | 2,000,000 |   |   |   | 200 |   |   |   | 1,999,800 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,000,000 |   |
| Common stock issued for cash upon exercise                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of warrants                                                             |   |   | - |   |   |   | - |   |   |   | 100,000 |   |   |   | 10 |   |   |   | 99,990 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 100,000 |   |
| Foreign currency translation loss                                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,745 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,745 | ) |
| Net loss, 2000                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (650,366 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (650,366 | ) |
| Balance, March 31, 2000                                                 |   |   | 250,000 |   |   | $ | 250,000 |   |   |   | 2,655,000 |   |   | $ | 265 |   |   | $ | 2,982,730 |   |   | $ | (1,550,366 | ) |   | $ | (5,745 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,676,884 |   |
| Common stock issued as director fees                                    |   |   | - |   |   |   | - |   |   |   | 58,100 |   |   |   | 6 |   |   |   | 58,094 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 58,100 |   |
| Common stock issued for cash upon exercise                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of warrants                                                             |   |   | - |   |   |   | - |   |   |   | 150,000 |   |   |   | 15 |   |   |   | 149,985 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 150,000 |   |
| Common stock issued for cash upon exercise                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of warrants                                                             |   |   | - |   |   |   | - |   |   |   | 345,000 |   |   |   | 35 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 35 |   |
| Common stock issued to officer as                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                                                            |   |   | - |   |   |   | - |   |   |   | 100,000 |   |   |   | 10 |   |   |   | 99,990 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 100,000 |   |
| Common stock issued for cash                                            |   |   | - |   |   |   | - |   |   |   | 100,000 |   |   |   | 10 |   |   |   | 99,990 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 100,000 |   |
| Common stock issued to consultant for services not yet rendered         |   |   | - |   |   |   | - |   |   |   | 400,000 |   |   |   | 40 |   |   |   | 1,199,960 |   |   |   | - |   |   |   | - |   |   |   | (1,200,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Foreign currency translation gain                                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 60,054 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 60,054 |   |
| Net loss, 2001                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (966,789 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (966,789 | ) |
| Balance, March 31, 2001                                                 |   |   | 250,000 |   |   | $ | 250,000 |   |   |   | 3,808,100 |   |   | $ | 381 |   |   | $ | 4,590,749 |   |   | $ | (2,517,155 | ) |   | $ | 54,309 |   |   | $ | (1,200,000 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,178,284 |   |

----

| Preferred stock converted to common stock                       |   |   | (250,000 | )      |   |   | (250,000 | )      |   |   | 250,000   |   |   |   | 25     |   |   |   | 249,975   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | -          |   |
|-----------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|--------|----------|--------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|------------|--------|
| Common stock warrants issued for consulting                     |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| services                                                        |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | 254,346   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 254,346    |   |
| Common stock issued for cash upon exercise                      |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| of warrants                                                     |   |   | -        |   |   |   | -        |   |   |   | 125,000   |   |   |   | 13     |   |   |   | 124,987   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 125,000    |   |
| Common stock warrants issued for services                       |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | 849,915   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 849,915    |   |
| Common stock issued for cash upon exercise                      |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| of warrants                                                     |   |   | -        |   |   |   | -        |   |   |   | 850,000   |   |   |   | 85     |   |   |   | -         |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 85         |   |
| Common stock issued to directors as                             |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| compensation                                                    |   |   | -        |   |   |   | -        |   |   |   | 6,000     |   |   |   | -      |   |   |   | 6,000     |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 6,000      |   |
| Common stock issued to employees as                             |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| compensation                                                    |   |   | -        |   |   |   | -        |   |   |   | 3,000     |   |   |   | -      |   |   |   | 3,000     |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 3,000      |   |
| Common stock issued as loan fee                                 |   |   | -        |   |   |   | -        |   |   |   | 25,000    |   |   |   | 3      |   |   |   | 24,997    |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | (25,000 | )      |   |   | -       |   |   |   | -          |   |
| Foreign currency translation gain                               |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | -          |   |   |   | 13,397   |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 13,397     |   |
| Net loss, 2002                                                  |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | (2,959,415 | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (2,959,415 | )      |
| Balance, March 31, 2002                                         |   |   | -        |   |   | $      | -        |   |   |   | 5,067,100 |   |   | $      | 507    |   |   | $      | 6,103,969 |   |   | $      | (5,476,570 | )      |   | $      | 67,706   |   |   | $      | (1,200,000 | )      |   | $      | -      |   |   | $      | (25,000 | )      |   | $      | -       |   |   | $      | (529,388   | )      |
| Stock issued for cash and services                              |   |   | -        |   |   |   | -        |   |   |   | 225,000   |   |   |   | 22     |   |   |   | 224,978   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 225,000    |   |
| Stock issued in settlement of accounts payable,                 |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| net of redeemable shares                                        |   |   | -        |   |   |   | -        |   |   |   | 100,000   |   |   |   | 10     |   |   |   | 99,990    |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 100,000    |   |
| Stock issued to settle loans payable, related party             |   |   | -        |   |   |   | -        |   |   |   | 102,658   |   |   |   | 10     |   |   |   | 102,648   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | 25,000  |   |   |   | -       |   |   |   | 127,658    |   |
| Common stock issued for services to                             |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| consultant not yet rendered                                     |   |   | -        |   |   |   | -        |   |   |   | 800,000   |   |   |   | 80     |   |   |   | 799,920   |   |   |   | -          |   |   |   | -        |   |   |   | (800,000   | )      |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | -          |   |
| Stock issued for past and future rent and                       |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| administrative services                                         |   |   | -        |   |   |   | -        |   |   |   | 65,000    |   |   |   | 7      |   |   |   | 64,993    |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | (30,000 | )      |   |   | 35,000     |   |
| Common stock warrants issued as financing fee                   |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | 3,783     |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 3,783      |   |
| Foreign currency translation loss                               |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | -          |   |   |   | (80,354  | )      |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (80,354    | )      |
| Net loss, 2003                                                  |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | (319,141   | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (319,141   | )      |
| Balance, March 31, 2003                                         |   |   | -        |   |   | $      | -        |   |   |   | 6,359,758 |   |   | $      | 636    |   |   | $      | 7,400,281 |   |   | $      | (5,795,711 | )      |   | $      | (12,648  | )      |   | $      | (2,000,000 | )      |   | $      | -      |   |   | $      | -       |   |   | $      | (30,000 | )      |   | $      | (437,442   | )      |
|                                                            |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| Foreign currency translation loss                               |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | -          |   |   |   | (117,341 | )      |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (117,341   | )      |
| Amortization of deferred expenses                               |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | 30,000  |   |   |   | 30,000     |   |
| Net Loss, 2004                                                  |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | (34,846    | )      |   |   |     |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (34,846    | )      |
| Balance, March 31, 2004                                    |   |   | -        |   |   | $      | -        |   |   |   | 6,359,758 |   |   | $      | 636    |   |   | $      | 7,400,281 |   |   | $      | (5,830,557 | )      |   | $      | (129,989 | )      |   | $      | (2,000,000 | )      |   | $      | -      |   |   | $      | -       |   |   | $      | -       |   |   | $      | (559,629   | )      |
| Stock issued for cash and services                              |   |   | -        |   |   |   | -        |   |   |   | 500,000   |   |   |   | 50     |   |   |   | 249,950   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 250,000    |   |
| Common stock issued for services to consultant not yet rendered |   |   | -        |   |   |   | -        |   |   |   | 4,500,000 |   |   |   | 450    |   |   |   | 6,749,550 |   |   |   | -          |   |   |   | -        |   |   |   | (5,343,750 | )      |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 1,406,250  |   |
| Stock issued to settle loans payable, related party             |   |   | -        |   |   |   | -        |   |   |   | 320,000   |   |   |   | 32     |   |   |   | 479,968   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | 480,000    |   |
| Stock issued for past and future rent and                       |   |   |     |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |       |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |    |   |   |   |    |   |   |   |       |   |
| administrative services                                         |   |   | -        |   |   |   | -        |   |   |   | 133,333   |   |   |   | 13     |   |   |   | 199,986   |   |   |   | -          |   |   |   | -        |   |   |   | -          |   |   |   | (13    | )      |   |   | -       |   |   |   | -       |   |   |   | 199,986    |   |
| Foreign currency translation loss                               |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | -          |   |   |   | (87,495  | )      |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (87,495    | )      |
| Net Loss, 2005                                                  |   |   | -        |   |   |   | -        |   |   |   | -         |   |   |   | -      |   |   |   | -         |   |   |   | (1,963,666 | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | -       |   |   |   | (1,963,666 | )      |

----

| Balance, March 31, 2005                                                  |   |   | -       |   |   | $      | -       |   |   |   | 11,813,091 |   |   | $      | 1,181  |   |   | $      | 15,079,735 |   |   | $      | (7,794,223  | )      |   | $      | (217,484 | )      |   | $      | (7,343,750 | )      |   | $      | (13    | )      |   | $      | -      |   |   | $      | -      |   |   | $      | (274,554   | )      |
|--------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|--------|----------|--------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|
| Stock issued for cash and services                                       |   |   | -       |   |   |   | -       |   |   |   | 173,058    |   |   |   | 18     |   |   |   | 173,040    |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 173,058    |   |
| Recognition of services rendered by consultant                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | -        |   |   |   | 3,374,950  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 3,374,950  |   |
| Stock issued to settle loans payable, related party                      |   |   | -       |   |   |   | -       |   |   |   | 14,054     |   |   |   | 1      |   |   |   | 10,540     |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 10,541     |   |
| Stock issued for past and future rent and                                |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |   |       |   |   |   |        |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |
| administrative services                                                  |   |   | -       |   |   |   | -       |   |   |   | 80,000     |   |   |   | 8      |   |   |   | 59,992     |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 60,000     |   |
| Foreign currency translation loss                                        |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | (40,435  | )      |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (40,435    | )      |
| Net Loss, 2006                                                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | (3,534,787  | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (3,534,787 | )      |
| Balance, March 31, 2006                                                  |   |   | -       |   |   | $      | -       |   |   |   | 12,080,203 |   |   | $      | 1,208  |   |   | $      | 15,323,307 |   |   | $      | (11,329,010 | )      |   | $      | (257,919 | )      |   | $      | (3,968,800 | )      |   | $      | (13    | )      |   | $      | -      |   |   | $      | -      |   |   | $      | (231,227   | )      |
| Stock issued for cash and services                                       |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -          |   |
| Recognition of services rendered by consultants                          |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | -        |   |   |   | 3,968,800  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 3,968,800  |   |
| Stock issued for past and future rent and                                |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |   |       |   |   |   |        |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |
| administrative services                                                  |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | 13     |   |   |   | -      |   |   |   | -      |   |   |   | 13         |   |
| Foreign currency translation loss                                        |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | (13,866  | )      |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (13,866    | )      |
| Net Loss, 2007                                                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | (4,148,725  | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (4,148,725 | )      |
| Balance, March 31, 2007                                                  |   |   | -       |   |   | $      | -       |   |   |   | 12,080,203 |   |   | $      | 1,208  |   |   | $      | 15,323,307 |   |   | $      | (15,477,735 | )      |   | $      | (271,785 | )      |   | $      | -          |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | (425,005   | )      |
| Preferred convertible stock issued to settle loan payable, related party |   |   | 459,734 |   |   |   | 459,734 |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 459,734    |   |
| Preferred convertible stock issued to settle 5% interest on              |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |   |       |   |   |   |        |   |   |   |     |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |
| convertible preferred stock                                              |   |   | 13,890  |   |   |   | 13,890  |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 13,890     |   |
| Common stock issued to settle loan payable, related party                |   |   | -       |   |   |   | -       |   |   |   | 3,408      |   |   |   | 1      |   |   |   | 1,703      |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 1,704      |   |
| Stock issued for rent and administrative services                        |   |   | -       |   |   |   | -       |   |   |   | 159,999    |   |   |   | 16     |   |   |   | 79,984     |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 80,000     |   |
| Common stock issued for director fees                                    |   |   | -       |   |   |   | -       |   |   |   | 500,000    |   |   |   | 50     |   |   |   | 249,950    |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 250,000    |   |
| Foreign currency translation loss                                        |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | (146,222 | )      |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (146,222   | )      |
| Net Loss, 2008                                                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | (353,838    | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (353,838   | )      |
| Balance, March 31, 2008                                                  |   |   | 473,624 |   |   | $      | 473,624 |   |   |   | 12,743,610 |   |   | $      | 1,275  |   |   | $      | 15,654,944 |   |   | $      | (15,831,573 | )      |   | $      | (418,007 | )      |   | $      | -          |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | (119,737   | )      |
| Foreign currency translation gain                                        |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | 240,763  |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 240,763    |   |
| Net Loss, 2009                                                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | (643,096    | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (643,096   | )      |
| Balance, March 31, 2009                                                  |   |   | 473,624 |   |   | $      | 473,624 |   |   |   | 12,743,610 |   |   | $      | 1,275  |   |   | $      | 15,654,944 |   |   | $      | (16,474,669 | )      |   | $      | (177,244 | )      |   | $      | -          |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | (522,070   | )      |
| Common stock issued for patent rights                                    |   |   | -       |   |   |   | -       |   |   |   | 254,872    |   |   |   | 25     |   |   |   | 160,545    |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 160,570    |   |
| Foreign currency translation gain                                        |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | 10       |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 10         |   |
| Net Loss, 2010                                                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | (591,293    | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (591,293   | )      |
| Balance, March 31, 2010                                                  |   |   | 473,624 |   |   | $      | 473,624 |   |   |   | 12,998,482 |   |   | $      | 1,300  |   |   | $      | 15,815,489 |   |   | $      | (17,065,962 | )      |   | $      | (177,234 | )      |   | $      | -          |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | (952,783   | )      |
| Imputed Interest                                                         |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | 89,053     |   |   |   | -           |   |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 89,053     |   |
| Net Loss, 2011                                                           |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | (518,257    | )      |   |   | -        |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (518,257   | )      |
| Foreign currency translation gain                                        |   |   | -       |   |   |   | -       |   |   |   | -          |   |   |   | -      |   |   |   | -          |   |   |   | -           |   |   |   | 51       |   |   |   | -          |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 51         |   |
| Balance, March 31, 2011                                                  |   |   | 473,624 |   |   | $      | 473,624 |   |   |   | 12,998,482 |   |   | $      | 1,300  |   |   | $      | 15,904,542 |   |   | $      | (17,584,219 | )      |   | $      | (177,183 | )      |   | $      | -          |   |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | (1,381,936 | )      |

----

| Kyto Biopharma, Inc. and Subsidiary   |   |
|---------------------------------------|--------|
| (A Development Stage Company)         |   |
| Consolidated Statements of Cash Flows |   |

|                                                                                                                               |   |   |                     |   |       |   |     |   | For the period fromMarch 5, 1999(Inception) toMarch 31, 2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------|--------|------------|--------|----------|--------|--------------------------------------------------------------|--------|
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |
|                                                                                                                               |   |   | For the Year Ended March |   |       |   |
|                                                                                                                               |   |   | 2011                     |   |       | 2010   |     |   |                                                         |
|                                                                                                                               |   |   |                     |   | (Restated) |   |     |   |                                                         |
| Cash Flows from Operating Activities:                                                                                              |   |   |                     |   |       |   |     |   |                                                         |
| Net loss                                                                                                                           |   | $      | (518,258                 | )      |       | $      | (591,293 | )      |                                                         | $      | (17,584,219 | ) |
| Adjustment to reconcile net loss to net cash provided by (used in)                                                                 |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
|      operating activities:                                                                                |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
|       Depreciation and amortization                                                                  |   |   | -                        |   |       |   | -        |   |                                                         |   | 814,183 |   |
|       Recognition of services rendered by consultant                                                 |   |   | -                        |   |       |   | -        |   |                                                         |   | 10,227,893 |   |
|       Stock based consulting expense                                                                 |   |   | -                        |   |       |   | -        |   |                                                         |   | 854,345 |   |
|       Stock based director fees                                                                      |   |   | -                        |   |       |   | -        |   |                                                         |   | 314,100 |   |
|       Stock based rent and administrative fees                                                       |   |   | -                        |   |       |   | -        |   |                                                         |   | 167,028 |   |
|       Interest Expense                                                                               |   |   | 89,053                   |   |       |   | -        |   |                                                         |   | 89,053 |   |
|       Preferred convertible stock issued for interest due on outstanding preferred convertible stock |   |   | -                        |   |       |   | -        |   |                                                         |   | 13,890 |   |
|       Common stock warrants issued as financing fee                                                  |   |   | -                        |   |       |   | -        |   |                                                         |   | 3,783 |   |
|       Loss on disposal of equipment                                                                  |   |   | -                        |   |       |   | -        |   |                                                         |   | 567 |   |
|       Impairment loss                                                                                |   |   | 165,570                  |   |       |   | -        |   |                                                         |   | 1,357,416 |   |
|       Loans receivable from related party-written off                                                |   |   | 43,689                   |   |       |   | -        |   |                                                         |   | 299,783 |   |
|       Gain on settlement of accounts payable                                                         |   |   | -                        |   |       |   | -        |   |                                                         |   | (59,654 | ) |
|       Loss on settlement of accounts payable                                                         |   |   | -                        |   |       |   | -        |   |                                                         |   | 519,795 |   |
|       Amortization of stock based financing fee                                                      |   |   | -                        |   |       |   | -        |   |                                                         |   | 25,010 |   |
| Changes in operating assets and liabilities:                                                                                       |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
|       Loan receivable                                                                                |   |   | (43,689                  | )      |       |   | -        |   |                                                         |   | (309,620 | ) |
|       Prepaids and other assets                                                                      |   |   | -                        |   |       |   | 42,562   |   |                                                         |   | (5,000 | ) |
|       Accounts payable and accrued expenses                                                          |   |   | 17,242                   |   |       |   | (8,465   | )      |                                                         |   | 546,299 |   |
|       Related party accounts payable, accrued interest, and accrued liabilities                      |   |   | (40                      | )      |       |   | 31,904   |   |                                                         |   | 81,456 |   |
| Net Cash Used in Operating Activities                                                                                              |   |   | (246,432                 | )      |       |   | (525,292 | )      |                                                         |   | (2,640,892 | ) |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Cash Flows from Investing Activities:                                                                                              |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
| Purchase of property and equipment                                                                                                 |   |   | -                        |   |       |   | -        |   |                                                         |   | (4,463 | ) |
| Net Cash Used in Investing Activities                                                                                              |   |   | -                        |   |       |   | -        |   |                                                         |   | (4,463 | ) |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Cash Flows from Financing Activities:                                                                                              |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
| Proceeds from common stock issuance, net of                                                                                        |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
|       offering cost                                                                                  |   |   | -                        |   |       |   | -        |   |                                                         |   | 958,222 |   |
| Loan proceeds from related parties, net                                                                                            |   |   | 275,800                  |   |       |   | 516,972  |   |                                                         |   | 1,924,971 |   |
| Repayment of loan to related parties                                                                                               |   |   | (33,000                  | )      |       |   | -        |   |                                                         |   | (59,792 | ) |
| Net Cash Provided by Financing Activities                                                                                          |   |   | 242,800                  |   |       |   | 516,972  |   |                                                         |   | 2,823,401 |   |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Effect of Exchange Rate on Cash                                                                                                    |   |   | 51                       |   |       |   | 10       |   |                                                         |   | (177,183 | ) |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Net Increase (decrease) in Cash and Cash Equivalents                                                                               |   |   | (3,581                   | )      |       |   | (8,310   | )      |                                                         |   | 863 |   |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Cash and Cash Equivalents at Beginning of Period                                                                                   |   |   | 4,444                    |   |       |   | 12,754   |   |                                                         |   | - |   |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Cash and Cash Equivalents at End of Period                                                                                         |   | $      | 863                      |   |       | $      | 4,444    |   |                                                         | $      | 863 |   |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information:                                                                                  |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
| Cash paid for:                                                                                                                     |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
| Interest                                                                                                                           |   |   | $                        | -      |       |   | $        | -      |                                                         |   | $ | - |   |
| Taxes                                                                                                                              |   |   | $                        | -      |       |   | $        | -      |                                                         |   | $ | - |   |
|                                                                                                                               |   |   |                     |   |       |   |     |   |                                                         |   |   |   |   |
| Supplemental Disclosure of Non-Cash                                                                                                |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
| Investing and Financing Activities:                                                                                                |   |   |                     |   |       |   |     |   |                                                         |   |   |   |
| Conversion of debt to equity                                                                                                       |   | $      | -                        |   |       | $      | -        |   |                                                         | $      | 1,102,154 |   |
| Stock issued for deferred consulting services                                                                                      |   | $      | -                        |   |       | $      | -        |   |                                                         | $      | 6,750,000 |   |
| Conversion of liabilities to note payable                                                                                          |   | $      | -                        |   |       | $      | -        |   |                                                         | $      | 102,023 |   |
| Stock issued for debt restructuring anti-dilusion provision                                                                        |   | $      | -                        |   |       | $      | -        |   |                                                         | $      | 800,000 |   |
| Conversion of preferred shares to common shares                                                                                    |   | $      | -                        |   |       | $      | -        |   |                                                         | $      | 250,000 |   |
| Stock issued for future services                                                                                                   |   | $      | -                        |   |       | $      | -        |   |                                                         | $      | 1,200,000 |   |
| Issued common shares for intangible assets                                                                                         |   | $      | -                        |   |       | $      | 160,570  |   |                                                         | $      | 2,160,570 |   |

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|                    |   |  2011 |   | 2010   |   |   | 2009   |   |   | 2008 |   |   | 2007   |   |   | 2006   |           |   | 2005   |   |   | 2004   |   |   | 2003   |   |   | 2002   |   |   | 2001   |   |    | 2000   |   |   | 1999   |   |
|-------------------------|--------|------------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|--------|--------|--------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| Expected Dividend Yield |   |       | --     |   |   | --     |   |   |   | --   |   |   |   | --     |   |   | ­­-- |   |   |   | --     |   |   |   | --     |   |   |   | --     |   |   |   | --      |   |   |   | --     |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Risk Free Interest Rate |   |       | --     |   |   | --     |   |   |   | --   |   |   |   | --     |   |   |           | --     |   |   |   | --     |   |   |   | --     |   |   |   | --     |   |   |    | 4.15   | %      |   |   | 3.57   | % |   |   | -- |   |   |   | -- |   |   |   | 4.53 | % |
| Expected Volatility     |   |       | --     |   |   | --     |   |   |   | --   |   |   |   | --     |   |   |           | --     |   |   |   | --     |   |   |   | --     |   |   |   | --     |   |   |    | 0.00   | %      |   |   | 0.00   | % |   |   | -- |   |   |   | -- |   |   |   | 0.00 | % |
| Expected Term           |   |       | --     |   |   | --     |   |   |   | --   |   |   |   | --     |   |   |           | --     |   |   |   | --     |   |   |   | --     |   |   |   | --     |   |   | 4 Years |   |   | 1 Year |   |   |   | -- |   |   |   | -- |   |   | 2 Years |   |

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|  Stock Options                                                     |   | WARRANTS |     |          | EXERCISE PRICE |   |
|-------------------------------------------------------------------------|--------|----------|----------|---------------|----------------|--------|
|                                                                    |   |     |     |          |           |   |
|  Balance at March 31, 2002                                         |   |     | 500,000  |          |           | $      | 1.00 |   |
|  Granted                                                 |   |     | 25,000   |          |           |   | 1.00 |   |
|  Exercised                                                    |   |     | -        |          |           |   | - |   |
|  Forfeited                                               |   |     | -        |          |           |   | - |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2003                                    |   |     | 525,000  |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Granted                                  |   |     | -        |          |           |   | - |   |
|  Exercised                                               |   |     | -        |          |           |   | - |   |
|  Forfeited                                          |   |     | (250,000 | )        |           |   | 1.00 |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2004                               |   |     | 275,000  |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Granted                                                 |   |     | -        |          |           |   | - |   |
|  Exercised                                                    |   |     | -        |          |           |   | - |   |
|  Forfeited                                               |   |     | -        |          |           |   | - |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2005                               |   |     | 275,000  |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Granted                                                 |   |     | -        |          |           |   | - |   |
|  Exercised                                               |   |     | -        |          |           |   | - |   |
|  Forfeited                                                    |   |     | -        |          |           |   | - |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2006                                    |   |     | 275,000  |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Grant                                                             |   |     | -        |          |           |   | - |   |
|  Exercised                                          |   |     | -        |          |           |   | - |   |
|  Forfeited                                                    |   |     | (250,000 | )             |           | $      | 1.00 |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2007                                         |   |     | 25,000   |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Grant                                                             |   |     | -        |          |           |   | - |   |
|  Exercised                                               |   |     | -        |          |           |   | - |   |
|  Forfeited                                                    |   |     | (25,000  | )   |           | $      | 1.00 |   |
|  Terminated                                                        |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2008                               |   |     | -        |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Grant                                                             |   |     | -        |          |           |   | - |   |
|  Exercised                                                    |   |     | -        |          |           |   | - |   |
|  Forfeited                                                    |   |     | -        |          |           |   | - |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2009                                         |   |     | -        |          |           | $      | 1.00 |   |
|                                                                    |   |     |     |          |           |   |   |   |
|  Exercised                                                    |   |     | -        |          |           |   | - |   |
|  Forfeited                                          |   |     | -        |          |           |   | - |   |
|  Terminated                                                   |   |     | -        |          |           |   | - |   |
|  Balance at March 31, 2010                               |   |     | -        |          |           | $      | 1.00 |   |
| Weighted average fair value of options granted for services during 2010 |   |     |     |          |           | $      | - |   |

|  Exercised                                                                            |   |   | -      |   |   |   | -    |   |
|-------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|------|--------|
|  Forfeited                                                                  |   |   | -      |   |   |   | -    |   |
|  Terminated                                                                           |   |   | -      |   |   |   | -    |   |
|  Balance at March 31, 2011                                                            |   |   | -      |   |   | $      | 1.00 |   |
|  Weighted average fair value of options granted for services during 2011    |   |   |   |   |   | $      | -    |   |

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|                                               |   | 2011   |       |   | 2010   |   |
|----------------------------------------------------|--------|--------|------------|--------|--------|--------|
|  Loss available to common stockholders.       |   | $      | (518,257   | )      |   | $      | (591,293 | )  |
|                                               |   |   |       |   |   |   |   |   |
|                                               |   |   |       |   |   |   |   |   |
|  Weighted average common shares outstanding   |   |   | 12,998,482 |   |   |   | 12,743,610 |   |
|  Basic and diluted loss per share   |   | $      | (0.04      | )      |   | $      | (0.05 | ) |

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|                                                                                                  |   | 2011   |     |          | 2010   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|----------|---------------|--------|--------|
|                                                                                                  |   |   |     |          |   |   |   |   |
| Computed "expected" tax benefit                                                             |   | $      | (176,207 | )   |   | $      | (201,040 | ) |
| Foreign income tax rate differences                                                                   |   |   | 16,583   |          |   |   | 18,921 |   |
| Change in deferred tax asset valuation allowance                                                 |   |   | 159,623  |          |   |   | 182,119 |   |
|                                                                                                  |   | $      | -        |          |   | $      | - |   |
| The above benefit was calculated using a combined federal and state tax estimated rate as noted below |   |   |     |          |   |   |   |   |
| Statutory federal income tax rate                                                                     |   |   | 34.00    | %             |   |   |   |   |
| State income taxes                                                                               |   |   | --       | %             |   |   |   |   |
| Foreign income tax rate difference                                                               |   |   | (3.2     | )%            |   |   |   |   |
| Valuation allowance                                                                         |   |   | (30.8    | )%            |   |   |   |   |
| Effective tax rate                                                                                    |   |   | (0.0     | )%            |   |   |   |   |

| Deferred tax assets:                                |   |   |       |
|-----------------------------------------------------|--------|--------|------------|
| United States net operating loss carryforward  |   | $      | 5,054,480  |   |
| Canadian net operating loss carryforward       |   |   | -          |   |
| Total gross deferred tax assets           |   |   | 5,054,480  |   |
| Less valuation allowance                            |   |   | (5,054,480 | ) |
| Net deferred tax assets                        |   | $      | -          |   |

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