================================================================================

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

                                   FORM 10-KSB

                                   (Mark One)

  [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
                                      1934

                    For the fiscal year ended March 31, 2008

     TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934

          For the transition period from _____________ to ____________

             Commission file number _______________________________

                              KYTO BIOPHARMA, INC.
           -----------------------------------------------------------
           (Name of small business issuer as specified in its charter)

              FLORIDA                                       65-1086538
   -------------------------------                        -------------
   (State or other jurisdiction of                        (IRS Employer
    Incorporation or organization)                     Identification No.)

                    B1-114 BELMONT, TORONTO, ONTARIO, CANADA
                                     M5R 1P8
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                    Issuer's telephone number: (416) 960-8790

           Securities registered under Section 12(b) of the Act: NONE

              Securities registered under Section 12(g) of the Act:
                 COMMON STOCK, $.0001 PAR VALUE ("COMMON STOCK")

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.) Yes [ ] No[x]

State issuer's revenues for its most recent fiscal year: $0.00

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. NONE AS OF MARCH 31ST, 2008

                     APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of:
common equity, as of the latest practicable date: 12,743,610 COMMON SHARES -
$0.0001 PAR VALUE - AS OF MARCH 31, 2008.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE) YES [X] NO[ ]


<PAGE>

                                TABLE OF CONTENTS

PART I .....................................................................   3
     ITEM 1. DESCRIPTION OF BUSINESS........................................   3
     ITEM 2. DESCRIPTION OF PROPERTY........................................   8
     ITEM 3. LEGAL PROCEEDINGS..............................................   8
     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............   8

PART II ....................................................................   9
     ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.......   9
     ITEM 6. MANAGEMENT`S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....   10
     ITEM 7. FINANCIAL STATEMENTS...........................................  15
     ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE............................  15
     ITEM 8A. CONTROLS AND PROCEDURES.......................................  15

PART III....................................................................  15
     ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND CONTROL
             PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.....  16
     ITEM 10. EXECUTIVE COMPENSATION........................................  17
     ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT....................................................
     ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................  21
     ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..............................  21
     ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES........................  22

   SIGNATURES ..............................................................  24

   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.................. F-1
   CONSOLIDATED FINANCIAL STATEMENTS........................................ F-2


<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

(A) BUSINESS DEVELOPMENT

Kyto Biopharma, Inc. was originally formed under the name of B. Twelve, Inc., a
Florida corporation, filed with the Department of State on March 5,
1999. Also, on March 5, 1999, the Company acquired B Twelve Limited as a
wholly-owned subsidiary Canadian corporation.

On April 27, 1999, the Company filed an amendment to its Articles of
Incorporation, increasing its authorized capital stock from 1,000 shares of
common stock with a Par Value of $1.00 per share, to 25,000,000 shares of common
stock with a Par Value of $1.00 per share and 1,000,000 shares of preferred
stock, also with a Par Value of $1.00 per share.

In August, 2001, the Company filed an amendment to its Articles of
Incorporation, changing the Par Value of its common stock from $1.00 per share
to $0.0001 Par Value per share.

On August 14, 2002, the Company filed an amendment to its Articles of
Incorporation, changing the name to KYTO BIOPHARMA, INC.

The Company filed a Uniform Business Report (UBR) with the Department of State,
State of Florida, for the year 2007 and paid all required fees. Its status is
active.

(B) BUSINESS OF ISSUER

         (1)      Principal Products and Markets

Kyto Biopharma, Inc. (Kyto) was formed to acquire a patent portfolio and the
rights to early-stage compounds which have potential use as therapeutic agents
for the treatment of cancer and diseases of the immune system. The Company has
subsequently built itself into a development stage biopharmaceutical company
that develops receptor-mediated technologies to control the uptake of vitamin
B12 by non-controlled proliferative cells. Vitamin B12 regulates one of two
major cellular pathways for the production of folates, the cell's primary source
of carbon and the progenitor for the synthesis of DNA.

Kyto is currently engaged in the development of a portfolio of potential
targeted biologic treatments based on:

         i)       the delivery of cytotoxic drugs to cancer cells using the
                  vitamin B12 as a Trojan Horse,
         ii)      the therapeutic effect of vitamin B12 depletion by receptor
                  modulators, and
         iii)     the use of monoclonal antibodies to block the vitamin B12
                  uptake by cancer cells.

Kyto's portfolio consists of molecules at the research and development stage
which may ultimately prove useful in the treatment of certain types of cancer
and inflammatory diseases. Kyto believes that there are several human
therapeutics applications for its drug candidates. Specifically, a number of
properties of the Company's drug delivery and vitamin B12 depletion technologies
suggest a potential role for its drug candidates in the therapy of solid tumors
such as colorectal and breast cancer in addition to treatment of leukemias. The
following table summarizes the Company's research and product development
programs:

<TABLE>
<CAPTION>
         ----------------------------------------------------------------------------------------------------------
         TECHNOLOGIES                    DRUG CANDIDATES            TARGET INDICATION         STATUS
         ----------------------------------------------------------------------------------------------------------
         <S>                             <C>                        <C>                       <C>
         Bioconjugates                   Paclitaxel                 Oncology                  Development
         (Drug Delivery)                 Doxorubicin                Oncology                  Proof of concept
                                         Carboplatinum              Oncology
         ----------------------------------------------------------------------------------------------------------
         Monoclonal Antibodies           Transport protein          Oncology                  Development
                                         Receptor                   Oncology                  Development
         ----------------------------------------------------------------------------------------------------------
         Growth Blockers                 Receptor modulators        Oncology                  Proof of concept
         ----------------------------------------------------------------------------------------------------------
</TABLE>


                                       3
<PAGE>

Kyto is currently using vitamin B12 as a vehicle to deliver cytotoxic drugs
selectively to tumors. The process can be achieved by taking advantage of a
proprietary technology and expertise based on known biological transport
mechanisms. The technology, known as bioconjugation, creates a molecular complex
or "bioconjugate" through the non-covalent binding of a transportable state of
the drug with the vitamin B12. The technology is designed to protect drugs from
degradation whilst allowing absorption through specific binding to a receptor. A
number of different types of bioconjugates were produced, including those with
marketed chemotherapeutic agents such as: paclitaxel (Taxol(R)), doxorubicin,
and carboplatinum.

Kyto has developed a core drug delivery technology that permits to generate:

         1)       Vitamin B12 bioconjugates that are used as a vehicle to
                  deliver cytotoxic drugs selectively to tumors via a
                  receptor-mediated pathway.
         2)       Growth blockers that are used to deplete the same tumors of
                  the vitamin B12, an essential co-factor for the biosynthesis
                  of methionine and nucleic acids.

Kyto's bioconjugate and growth blocker technologies are applicable to a very
broad range of therapeutic areas. Each specific technology has the potential to
target a large number of therapeutic targets for creation of drug candidates.
New drug candidates can be synthesis from:

         (a)      Existing drugs;
         (b)      Generic drugs;
         (c)      Molecules in development, and;
         (d)      Molecules with attractive biological activity and potency that
                  were never developed because of too short half-life of
                  activity for commercial utility or inadequate safety profile.

The Company believes that its core drug delivery technology exhibits a number of
properties that would make it attractive to potential partners and be
commercially viable:

         (a)      Core component (vitamin B12) and linker are safe and non
                  toxic;
         (b)      Core technology is protected by issued patents;
         (c)      Versatility of the technology;
         (d)      Diverse drug payloads;
         (e)      Permit rapid drug creation;
         (f)      New bioconjugate constructs are patentable;
         (g)      Availability and low cost of raw material, and;
         (h)      Easy to scale-up and technology transfer.

As mentioned above, Kyto has created a class of agents known as receptor
modulators, with the selectivity of the natural ligand (vitamin B12) for its
receptor, that cause a reduction in the number of receptors through alterations
in receptor movement on the surface of and within the cell. Treatment with such
drugs eventually results in cells devoid of receptors triggering the death of
the cancer cells, biological response known as apoptosis.

The second aspect of Kyto's business is the development of human antibodies. The
Company is developing monoclonal antibodies as vitamin B12 receptor control
agents for certain pharmaceutical applications including treatment of cancer and
autoimmune diseases. Many of the product development issues for antibodies have
been addressed over the last ten years including immunogenicity and scale-up
manufacturing for therapeutic applications resulting in the approval or pending
approval of a number of products in the United States (U.S.) and Europe.

         (2)      Competitive Business Conditions and Adverse Factors

The Company has identified the following companies as competitors and/or
comparable to the activities of Kyto:

         (3)      Research and Development Programs


                                        4

<PAGE>

Kyto believes that there are several applications for its drug candidates. A
number of properties of our drug delivery and vitamin B12 depletion technologies
suggest a potential role for its drug candidates in the therapy of solid tumors
such as colorectal and breast cancer in addition to treatment of leukemias.
Specifically, Kyto's research and product development programs include the
following projects:

<TABLE>
<CAPTION>
        -------------------------------------------------------------------------------------------------------------
        TECHNOLOGIES /                   CLINICAL      STATUS                   COLLABORATORS
        DRUG CANDIDATES                  MARKET
        -------------------------------------------------------------------------------------------------------------
        DRUG DELIVERY
        BIOCONJUGATES
        -------------------------------------------------------------------------------------------------------------
        <S>                              <C>           <C>                      <C>
             Paclitaxel                  Oncology      Development              New York University
             Doxorubicin                 Oncology      Proof of concept
             Carboplatinum               Oncology      Proof of concept
        -------------------------------------------------------------------------------------------------------------
        VITAMIN B12 DEPLETION
        MONOCLONAL ANTIBODIES
        -------------------------------------------------------------------------------------------------------------
             Transport protein           Oncology      Development              Medarex Inc.
                                                                                The Research Foundation of State
             Receptor                    Oncology      Development              University of New York

        -------------------------------------------------------------------------------------------------------------
        RECEPTOR MODULATORS
        -------------------------------------------------------------------------------------------------------------
             Growth blockers             Oncology      Proof of concept         The Research Foundation of
                                                                                State University of New York
        -------------------------------------------------------------------------------------------------------------
</TABLE>


On October 2006, the Company signed an Extension Modification of Research
Collaboration Agreement with the Research Foundation of State University of New
York (RFSUNY) regarding the research and development of the use of monoclonal
antibodies to block the vitamin B12 uptake by cancer cells for funding
consideration of $119,647 to be appropriated for the initial 12 months of the
conduct of the research plan from November 2007 through October 2007. The
Company shall amend patent No. 5,688,504 to legally establish joint ownership
with RFSUNY. The initial payment for the first six months was made in November
2006 and the second payment was made in May 2007.

In May 2007, the company extended the agreement with RFSUNY regarding the
research and development of the use of monoclonal antibodies to block the
vitamin B12 cancer cells for additional $125,406. A payment of $62,703 was made
in January 2008

         (4)      Distribution of Products

Because of capital constraints, the Company has decided to focus its financial
resources for i) the development of its monoclonal antibodies and ii) the
pre-clinical development of its first lead drug candidate based on paclitaxel
conjugated to vitamin B12 for out-licensing.

As the first drug candidate paclitaxel conjugated to vitamin B12 enters the
formal preclinical program the Company plans to outsource specific study
components to a Chemical Contract Manufacturer (CCM) and an integrated Contract
Research Organizations (CRO) to permit the conduct of concurrent studies in
order to meet time-limiting project milestones.

During the preclinical development of a new drug candidate, a diverse number of
studies relating chemistry, formulation, animal pharmacology, toxicology,
manufacturing and clinical supplies are required to meet the regulatory
requirements of an Investigational New Drug (IND) submission. Kyto is also
reviewing the possibility to have a CRO as a strategic partner as opposed to a
service provider. Due to the limited internal project management staff, Kyto may
prefer to outsource the entire pre-clinical program to a vertically integrated
CRO capable of handling studies from discovery screening to IND filing.

The Company has no specific marketing plans beyond those mentioned above. Future
marketing will depend upon the amount of capital realized by the Company.


                                       5
<PAGE>

         (5)      Patents

Kyto's patent strategy has been to develop an "umbrella" of patents protecting
its core technology and their therapeutic uses and the underlying technologies
used to create them. The Company has filed a number of patent applications in
the United States, the PCT Member Countries, Japan, and in most other
jurisdictions to protect its proprietary rights in the development of its
technologies and products. To date, 18 patents have been issued. Kyto is
co-assignee on the issued and pending patents along with different universities.
The following is a list of the issued patents:

<TABLE>
<CAPTION>
     -------------------------------------------------------------------------------------------------------------------------
            PATENT NO.                                           TITLE                                          ISSUED
     -------------------------------------------------------------------------------------------------------------------------
          <S>                  <C>                                                                             <C>
             NZ252,559         Anti-receptor agents to the vitamin B12/transcobalamin II receptor              14/02/97
     -------------------------------------------------------------------------------------------------------------------------
           US5,688,504         Anti-receptor and growth blocking agents to the vitamin                         18/11/97
                               B12/transcobalamin II receptor and binding sites
     -------------------------------------------------------------------------------------------------------------------------
           US5,739,287         Biotinylated cobalamins                                                         14/04/98
     -------------------------------------------------------------------------------------------------------------------------
           US5,840,712         Water soluble vitamin B12 receptor modulating agents and methods                24/11/98
                               relating thereto
     -------------------------------------------------------------------------------------------------------------------------
           US5,840,880         Vitamin B12 receptor modulating agents                                          24/11/98
     -------------------------------------------------------------------------------------------------------------------------
           US5,869,465         Methods for receptor modulation and uses thereto                                09/02/99
     -------------------------------------------------------------------------------------------------------------------------
           US6,083,926         Water soluble vitamin B12 receptor modulating agents and methods                04/07/00
                               relating thereto
     -------------------------------------------------------------------------------------------------------------------------
           CA2,135,277         Anti-receptor and growth blocking agents to the vitamin                         24/04/01
                               B12/transcobalamin II receptor and use in preventing cellular uptake of
                               vitamin B12
     -------------------------------------------------------------------------------------------------------------------------
             NZ323,127         Vitamin B12 receptor modulating agents and methods related and methods          12/07/01
                               related thereto
     -------------------------------------------------------------------------------------------------------------------------
             KR297,310         Anti-receptor and growth blocking agents to the vitamin                         21/05/01
                               B12/transcobalamin II receptor and use in preventing cellular uptake of
                               vitamin B12
     -------------------------------------------------------------------------------------------------------------------------
             CH0754189         Receptor modulating agents and methods relating thereto                         09/10/2002
     -------------------------------------------------------------------------------------------------------------------------
             DE0754189         Receptor modulating agents and methods relating thereto                         09/10/2002
     -------------------------------------------------------------------------------------------------------------------------
             EP0754189         Receptor modulating agents and methods relating thereto                         09/10/2002
     -------------------------------------------------------------------------------------------------------------------------
             FR0754189         Receptor modulating agents and methods relating thereto                         09/10/2002
     -------------------------------------------------------------------------------------------------------------------------
             GB0754189         Receptor modulating agents and methods relating thereto                         09/10/2002
     -------------------------------------------------------------------------------------------------------------------------
          US10/656,735         Growth Blocking Agents                                                          01/10/2004
     -------------------------------------------------------------------------------------------------------------------------
             CA2199940         Anti-receptor and growth blocking agents to Vitamin B12/transcobalmin II        13/09/2005
                               Receptor and binding sites
     -------------------------------------------------------------------------------------------------------------------------
</TABLE>

         (6)      Regulatory Environment

Kyto's pre-clinical and clinical trials, as well as the manufacturing and
marketing of its potential products, are subject to extensive regulation for
safety and efficacy by various governmental authorities around the world. The
United States Food and Drug Administration ("FDA") plays a key role since it
regulates drug approval for the world's largest market.

The process of studying drugs intended for use in humans usually begins with
pre-clinical studies involving only animals. These pre-clinical studies are
followed by studies that involve humans on a scale to assess safety and which
are then expanded to a larger group to assess safety and efficacy. These various
studies are usually broken into four phases with multiple studies generally
conducted within each phase. Throughout these pre-clinical and clinical studies
drug concentrations are measured in biological fluid samples as part of the
assessment of drug safety and efficacy.


                                       6
<PAGE>

PRECLINICAL STUDIES

Preclinical drug studies involve the evaluation of drug testing in animals in a
preliminary effort to determine toxicity, correct doses, side effects and
efficacy in animals to provide evidence of the safety of the drug prior to its
administration to humans. Bioanalytical research involves the use of instruments
that can detect and measure trace quantities of drugs, metabolites, genetic
material and other products in biological samples.

CLINICAL STUDIES

Upon successful completion of pre-clinical studies the drug undergoes a series
of evaluations in humans including healthy volunteers. The pharmaceutical
Company sponsoring the new drug must file an Investigational New Drug
application (IND), which includes results from the pre-clinical
evaluations and provides comprehensive descriptions of the proposed human
clinical studies. There are four generally accepted Phases in clinical studies,
but the Phase may overlap:

                         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.

Upon completion of Phase III clinical studies, the pharmaceutical company
sponsoring the new drug assembles all the preclinical and clinical data in the
form of a New Drug Application (NDA), for submission to the FDA, or a New Drug
Submission (NDS) for the TPP. The review process generally takes 12 to 18 years
before the drug receives approval for marketing.

In Canada, these activities are regulated by the Food and Drug Act. The approval
procedure is substantially similar to that of the FDA, but the rules and
regulations promulgated there under are enforced by the Therapeutic Products and
Programs ("TPP") of Health Canada. Outside the United States and Canada, and
whether or not the FDA or TPP approval has been obtained, approval of a product
by local regulatory authorities must be obtained prior to the commencement of
commercial sales of the product in a given country. The requirements governing
the conduct of clinical trials and product approvals vary widely from country to
country, and the time required for approval may be longer or shorter than that
required for FDA or TPP approval. Although there are some procedures for unified
regulatory filings for certain European countries, in general, each country at
this time has its own procedures and requirements.

Drug manufacturing is also regulated, thus companies are required to ensure
compliance with GMPs quality standards that require the control of production
activities, raw-material procurement, complaint management, product recalls,
labeling and promotional material. In addition to these standards, which are
common to all drugs, manufacturers of biopharmaceutical products must
demonstrate that their products are homogeneous from one lot to the next,
failing which the applicable regulatory authority may prohibit the sale of a lot
and possibly require that a product be recalled.


                                       7
<PAGE>

         (7)      Research and Development Costs

Others conduct research and development on behalf of the Company under
contractual agreements and such costs are charged to expense as incurred.
Research and development expense was$115,045, $83,117, and $1,301,678 for the
years ended March 31, 2008, 2007, and for the period from March 5, 1999
(inception) to March 31,2008, respectively.

         (8)      Employees

The Company has no employees, full-time or part-time. The President of Kyto
Biopharma, Inc. is acting as consultant to the Company and does not receive
compensation.

C) REPORTS TO SECURITY HOLDERS

The Bylaws of Kyto Biopharma, Inc. are silent regarding an annual report to
shareholders. Kyto Biopharma, Inc. is a reporting company and files reports with
the U.S. Securities and Exchange Commission (SEC). The Company is required to
file quarterly reports (Form 10-QSB) and an annual report (Form 10-KSB) with the
SEC. The annual report includes an audited financial statement.

Any materials that the Company filed with the Securities and Exchange Commission
may be read and copied at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Further, you may obtain information on the
operation of the Public Reference Room by calling the Commission at
1-800-SECD-0330. The Company is an electronic filer and the SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Commission. That
site is http://www.sec.gov.

ITEM 2.  DESCRIPTION OF PROPERTY

The Company occupies office space on a month-to-month basis and therefore has no
leasehold interest. The Company pays a fee to Credifinance Capital Corp., a
related party, at the rate of $3,333.33 monthly, which includes rent of $1,666.6
and certain administrative services, such as bookkeeping, copying and printing,
courier services, and telephone.

The Company owns no investments.

ITEM 3.  LEGAL PROCEEDINGS

There is no litigation of any type whatsoever pending or threatened by or
against the Company, its officers and directors.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no shareholders meetings during the period covered by this report.


                                       8
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The following discussions should be read in conjunction with the financial
statements and related notes which are included in this Form 10-KSB for the year
ending March 31, 2008. Statements made below which are not historical facts are
forward-looking statements. Forward-looking statements involve a number of risks
and uncertainties including, but not limited to, general economic conditions and
our ability to develop our products. For further information regarding our
business, competition and risk factors, refer to this Company's Form 10-KSB
filed with the U.S. Securities Exchange Commission.

(A) MARKET INFORMATION

Our common stock has traded on the OTC Bulletin Board(R), or OTCBB, since August
04, 2005. The Company's common stock is quoted on the Electronic Bulletin Board
of the OTC market, under the trading symbol KBPH. The following table sets
forth, for the calendar quarters indicated, the high and low closing prices for
our common stock as reported by OTCBB for fiscal years ended March 31, 2006 and
2005. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not represent actual transactions. The market
for the common stock has been sporadic and there have been long periods during
which there were few, if any, transactions in the common stock and no reported
quotations. Accordingly, reliance should not be placed on the quotes listed
below, as the trades and depth of the market may be limited, and therefore, such
quotes may not be a true indication of the current market value of the Company's
common stock.

                                                    Common Stock
                                             --------------------------
                                             High                   Low
                                             ----                   ---

Fiscal Year Ended March 31, 2008
            ------------------------------------------------------------
            First quarter                      $    0.40       $    0.40
            Second quarter                          0.45            0.40
            Third quarter                           1.55            0.40
            Fourth quarter                          1.35            1.35



Fiscal Year Ended March 31, 2007
            ------------------------------------------------------------
            First quarter                      $    1.10       $    0.75
            Second quarter                          1.10            1.00
            Third quarter                           1.00            0.51
            Fourth quarter                          0.75            0.51

There were 12,743,610 shares of common stock outstanding as of the end of the
fiscal year ended March 31, 2008.

(B) HOLDERS

According to information provided to us by the transfer agent for our shares of
Common Stock, as of March 31, 2008, there were 16 holders of record of the
shares of Common Stock, including depositories. Based upon information we have
received from some of these record owners, we believe there are more than 150
beneficial holders of our shares of Common Stock.

(C) DIVIDENDS

The Company has not paid any dividends to date and has no plans to do so in the
foreseeable future.

(D) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

None


                                       9
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

(A) PLAN OF OPERATION

The Company had not been profitable and had no revenues from operations
since its inception in March 1999. As reflected in the accompanying audited
consolidated financial statements, in 2008 the company had, a net loss of
$353,838, cash used in operations of $422,196, a working capital deficiency
of $119,737, a stockholders' deficiency of $119,737, and a deficit
accumulated during development stage of $15,831,573 at March 31, 2008.
These factors raise substantial doubt about its ability to continue as a
going concern. The ability of the Company to continue as a going concern is
dependent on the Company's ability to further implement its business plan,
raise capital, and generate revenues. The consolidated financial statements
do not include any adjustments that might be necessary if the Company is
unable to continue as a going concern.Research and development expense was
$115,045, $83,117, and $1,301,678 for the years ended March 31, 2008, 2007,
and for the period from March 5, 1999 (inception) to March 31, 2008,
respectively.

In October 2006, the Company signed an Extension Modification of Research
Collaboration Agreement with the Research Foundation of State University of New
York (RFSUNY) regarding the research and development of the use of monoclonal
antibodies to block the vitamin B12 uptake by cancer cells for funding
consideration of $119,647 to be appropriated for the initial 12 months of the
conduct of the research plan from November 2006 through October 2007. The
Company shall amend patent No. 5,688,504 to legally establish joint ownership
with RFSUNY. The initial payment for the first six months was made in November
2006 and the second payment was made in May of 2007. The third payment was made
in January 2008.

On April 6, 2007 the Company filed a new U.S. Provisional Utility Patent
Application with the United States Patent Office, related to the development of
the Company's Vitamin B12 technology. In addition to this filing the Company has
incurred expenses of $17,146.46 for the three months ended June 30, 2007 related
to the continued development and maintenance of its intellectual property
portfolio.

On May 4, 2007, the Company signed a formal consultancy agreement with Dr.
Michael Rosenblum, Head, Immunopharmacology and Targeted Therapy Laboratory,
Department of Experimental Therapeutics at M.D. Anderson Medical Center at the
University of Texas to assist the Company with determining the scientific and
commercial viability of its scientific technology. Dr. Rosenblum will provide
assistance to the Company on an as-needed basis for a term of one year and
receive $3000 per month as remuneration. The Company has also held discussions
with other potential strategic partners in order to determine if those
relationships will provide the Company with benefits related to its corporate
development. As of the date of this filing none of those discussions have
resulted in formal collaborative relationships.

On May 24, 2007 the Company entered into a agreement with a related party
(Credifinance Capital Corp) to issue 500,000 Convertible Preferred Shares at
$1.00 per share. This agreement is on an installment basis. Preferred Shares may
be converted into Common Shares at a price of $0.45 per Common Share for a
period of two years. The Convertible Preferred Shares are cumulative and will
bear interest at an interest rate of 5% per annum. As of March 31, 2008 473,624
preferred shares were issued.

In November, 2007 the company signed a non binding Letter of Intent to Helios
Petroleum Holding, AG ("Helios") a private company incorporated in Switzerland.
The transaction is subject to Helios raising successfully US$5MM through
Credifinance Securities Limited. Upon closing, Kyto will issue Common Shares of
Kyto to Helios shareholders and will transfer all its Intellectual Property to
its wholly owned Canadian subsidiary, B.Twelve Limited. For disclosure purposes,
Credifinance Capital Corp, the parent of the Agent, is the controlling
shareholder of Kyto and Georges Benarroch, President/CEO of Credifinance
Securities Limited, Credifinance Capital Corp. and Kyto Biopharma Inc. will be
on the board of directors of Helios.

The efforts of the Company's R&D have produced notable accomplishments with
respect to the development of a novel cancer therapy through the regulation of
Vitamin B12 uptake, an essential nutrient for cells. For the first time, the
Company has conclusively identified the protein and the gene encoding the


                                       10
<PAGE>

Vitamin B12 receptor. The work on utilizing the Vitamin B12 pathway provides for
several strategies aimed at preventing the proliferation of cancer cells.

During the period ending March 31,2008, the Company conducted a comprehensive
review of its existing Intellectual Property portfolio with the assistance
various IP legal firms and consultants. As a result of this review, the Company
has elected to drop some of its patents while funding the remaining patents in
full.

The Company is currently a development stage company and its continued existence
is dependent upon the Company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. The
Company has yet to generate an internal cash flow, and until the sales of its
product begins, the Company is very dependent upon debt and equity funding. The
Company must successfully complete its research and development resulting in a
saleable product. However, there is no assurance that once the development of
the product is completed and finally gains Federal Drug and Administration
clearance, that the Company will achieve a profitable level of operations.

The Company has, as of the end of its fiscal year (March 31, 2008), $172,752 in
liabilities. The Company estimates that it will require up to $75,000 to meet
operating costs for this fiscal year, excluding research and development costs.
In addition, with the help of its scientific partners, the Company is reviewing
its technology and assessing the best way of pursuing its development.The report
of our Independent Registered Public Accounting Firm on our March 31, 2008
financial statements includes an explanatory paragraph indicating that there is
substantial doubt about our ability to continue as a going concern due to
substantial recurring losses from operations, cash used in operations,
stockholders' deficit and significant accumulated deficit and working capital
deficit. Our ability to continue as a going concern will be determined by our
ability to obtain additional funding and maintain operations. We do not
currently have sufficient financial resources to fund our operations. Therefore,
we need additional funds to continue these operations. Should the financing we
require to sustain our working capital needs be unavailable or prohibitively
expensive when we require it, we would be forced to curtail our business
operations.

(B) LIQUIDITY AND CAPITAL RESOURCES

To meet the projected cash requirements as stated above, the Company intends to
obtain cash loans from one or more of its stockholders. As the date of filing of
this Form 10-KSB with the U.S. Securities and Exchange Commission, the Company
did not receive any commitments of any of its stockholders to provide operating
loan funds for the Company. We are also looking at merger opportunities or to
acquire companies and products to raise capital. We expect to form strategic
alliances for product development and to out-license the commercial rights to
development partners. By forming strategic alliances with third parties, we
believe that our technologies and related products can be more rapidly developed
and successfully introduced into the marketplace.

The Company's plan of operation for the next twelve months is to continue to
focus its efforts on finding new sources of capital and on research activities
and the development of its drug candidates which maximize the utility and
application of its platform technologies. Management expects the Company to
incur additional operating losses over the next several years as research and
development efforts, preclinical and clinical testing activities and
manufacturing scale-up efforts expand. To date, we have not had any material
product sales and do not anticipate receiving any revenue from the sale of
products in the upcoming year. Our sources of working capital have been equity
financings and interest earned on investments.


                                       11
<PAGE>

The Company operates in a rapidly changing environment that involves a number of
factors, some of which are beyond management's control, such as financial market
trends and investors' appetite for new financings. It should also be emphasized
that, should the Company not be successful in completing its own financing
(either by debt or by the issuance of securities from treasury), the Company may
be unable to continue to operate as a going concern.

(C) OFF-BALANCE SHEET ARRANGEMENT

None.

Endocyte, Inc. is a private U.S. based biotechnology company
focused on vitamin based drug targeting and delivery systems. Similarly to Kyto,
Endocyte's mission is to use vitamins as "trojan horses" to target and deliver
diagnostic and therapeutic agents into cells for treatment of diseases.
Endocyte's lead project is the use of the vitamin folate to target and deliver
anticancer agents.

Protarga, Inc. is a private U.S. based pharmaceutical company that has developed
a technology involving the chemical attachment of natural fatty acids to
therapeutic agents that are accumulated by the cells. The Company's first
product candidate, Taxoprexin(R) Injection for cancer chemotherapy, is currently
being evaluated in eight Phase II clinical studies in the U.S. and Europe.

Manticore Pharmaceuticals Inc. is a private U.S. based biotechnology company
that has developed a method to target the delivery of cytotoxic anticancer drugs
to tumor cells by using vitamin B12 as delivery vehicle similarly to Kyto's
approach, except that their bioconjugates are synthesized by attaching cytotoxic
drugs to the cobalt atom of cobalamin. The bioconjugates need to be activated by
ultrasound to cleave the C-Co bond, thereby allowing release of the drug. They
also developed fluorescent cobalamin conjugates ("CobalaFluors") that may be
useful as diagnostic imaging agents in breast cancer surgery and other
diagnostic procedures where it is desirable to visualize cancer cells.

Access Pharmaceuticals, Inc. is a public U.S. based pharmaceutical company that
has proprietary patents or rights to seven drug delivery technology platforms:
synthetic polymer targeted delivery, vitamin mediated targeted delivery
(including oral), bioerodible hydrogel technology, nanoparticles, Residerm
topical delivery, carbohydrate targeting technology and agents for the
prevention and treatment of viral diseases, including HIV.

Other companies that are involved in the development and/or production, improved
method of delivery or analogs of paclitaxel include but are not limited to
Bristol-Myers Squibb Company, Cell Therapeutics Inc., Ivax Corporation, Bioxell
Pharma Inc., Supratek Pharma Inc., Enzon Inc., Napro Biotherapeutics Inc., F.H.
Faulding & Co. Limited, Phytogen Inc., Aphios Corporation, Taxolog Inc.,
Cytoclonal Pharmaceutics Inc., Protarga Inc., and Mylan Laboratories Inc.

In addition to the competition, as noted above, the Company faces certain
adverse conditions/and/or risks factors as outlined below:

         o        KYTO'S BUSINESS STRATEGY REQUIRES THAT IT ESTABLISH AND
                  MAINTAIN GOOD STRATEGIC ALLIANCES. Currently, Kyto is seeking
                  strategic alliances. We have limited experience in
                  establishing and maintaining such strategic alliances and
                  cannot give any assurance that we will be successful in
                  establishing one or more relationships. Our strategy for the
                  research, development and commercialization of our potential
                  biopharmaceutical products may require us to enter into
                  various arrangements with corporate and academic
                  collaborators, licensors, licensees and others, in addition to
                  our existing relationships with other parties. Specifically,
                  we may seek to joint venture, sublicense or enter other
                  marketing arrangements with parties that have an established
                  marketing capability or we may choose to pursue the
                  commercialization of such products on our own. We may,
                  however, be unable to establish such additional collaborative
                  arrangements, license agreements, or marketing agreements as
                  we may deem necessary to develop, commercialize and market our
                  potential pharmaceutical products on acceptable terms.
                  Furthermore, if we maintain and establish arrangements or
                  relationships with third parties, our business may depend upon
                  the successful performance by these third parties of their
                  responsibilities under those arrangements and relationships.


                                       12
<PAGE>

         o        KYTO HAS NO EXPERIENCE IN MANUFACTURING, PROCURING PRODUCTS IN
                  COMMERCIAL QUANTITIES OR MARKETING, CONDUCTING CLINICAL
                  TRIALS, REGULATORY APPROVAL PROCESS AND ONLY LIMITED
                  EXPERIENCE IN NEGOTIATING, SETTING-UP OR MAINTAINING RESEARCH
                  COLLABORATION AND THERE IS NO ASSURANCE THAT IT WILL
                  SUCCESSFULLY ENGAGE OR CONTINUE TO ENGAGE IN ANY OF THESE
                  ACTIVITIES. If we are unable to obtain or retain third party
                  manufacturing on commercially acceptable terms, we may not be
                  able to commercialize our products as planned. Our potential
                  dependence upon third parties for the manufacture of our
                  products may adversely affect our ability to generate profits
                  or acceptable profit margins and our ability to develop and
                  deliver such products on a timely and competitive basis. Kyto
                  may be unable to obtain the raw materials used in the
                  production of some of its bioconjugates in sufficient quantity
                  to meet demand when and if such product is approved. By
                  example, paclitaxel is derived from certain varieties of yew
                  trees and is also used in one of the Company's drug
                  candidates. To date, Kyto has not entered into an agreement
                  with a supplier to provide sufficient quantity or quality of
                  any drugs used in the construction of its bioconjugates. Kyto
                  does not have internal facilities for the manufacture of any
                  of its products for clinical or commercial production.

         o        MANY OF KYTO'S DRUG CANDIDATES ARE STILL IN RESEARCH AND
                  PRECLINICAL DEVELOPMENT, WHICH MEANS THAT THEY HAVE NOT YET
                  BEEN TESTED ON HUMANS. The Company will need to commit
                  significant time and resources to develop these and additional
                  product candidates. Kyto is dependent on the successful
                  completion of clinical trials and obtaining regulatory
                  approval in order to generate revenues. Specifically, its drug
                  candidates that appear to be promising at early stages of
                  development may not reach the market for a number of reasons.
                  Potential products may: i) be found ineffective or cause
                  harmful side effects during preclinical testing or clinical
                  trials, ii) fail to receive necessary regulatory approvals,
                  iii) be difficult to manufacture on a large scale, iv) be
                  uneconomical to produce, v) fail to achieve market acceptance,
                  vi) be precluded from commercialization by proprietary rights
                  of third parties, or vii) third parties may market superior or
                  equivalent drugs.

         o        KYTO HAS BASED MANY OF ITS DRUG CANDIDATES ON UNPROVEN NOVEL
                  TECHNOLOGIES, AND IT MAY NEVER DEVELOP THEM INTO COMMERCIAL
                  PRODUCTS. Our primary focus is on our research and development
                  activities of drug candidates covered by proprietary
                  biopharmaceutical patents and patent applications. Research
                  and development activities, by their nature, preclude
                  definitive statements as to the time required and costs
                  involved in reaching certain objectives. Actual research and
                  development costs, therefore, could exceed budgeted amounts
                  and estimated time frames may require extension. Cost
                  overruns, unanticipated regulatory delays or demands,
                  unexpected adverse side effects or insufficient therapeutic
                  efficacy will prevent or substantially slow our research and
                  development effort and our business could ultimately suffer.
                  We anticipate that we will remain principally engaged in
                  research and development activities for an indeterminate, but
                  substantial, period of time. Furthermore, preclinical results
                  in animal studies may not predict outcome in human clinical
                  trials.

         o        KYTO MAY NOT BE SUCCESSFUL IN PROTECTING ITS INTELLECTUAL
                  PROPERTY AND PROPRIETARY RIGHTS. Our success depends, in part,
                  on our ability to obtain U.S. and foreign patent protection
                  for our drug candidates and processes, preserve our trade
                  secrets and operate our business without infringing the
                  proprietary rights of third parties. Legal standards relating
                  to the validity of patents covering pharmaceutical and
                  biotechnological inventions and the scope of claims made under
                  such patents are still developing and there is no consistent
                  policy regarding the breadth of claims allowed in
                  biotechnology patents. The patent position of a biotechnology
                  firm is highly uncertain and involves complex legal and
                  factual questions. The Company cannot assure you that any
                  existing or future patents issued to, or licensed by, us will
                  not subsequently be challenged, infringed upon, invalidated or
                  circumvented by others. Kyto cannot assure investors that any
                  additional patents will issue from any of the patent
                  applications owned by, or licensed to, us. Furthermore, any
                  rights that we may have under issued patents may not provide
                  us with significant protection against competitive products or
                  otherwise be commercially viable.

In addition, patents may have been granted to third parties or may be granted
covering products or processes that are necessary or useful to the development
of our drug candidates. If our drug candidates or processes are found to
infringe upon the patents or otherwise impermissibly utilize the intellectual
property of others, our development, manufacture and sale of such drug
candidates could be severely restricted or


                                       13
<PAGE>

prohibited. In such event, we may be required to obtain licenses from third
parties to utilize the patents or proprietary rights of others. Kyto cannot
assure investors that it will be able to obtain such licenses on acceptable
terms, if at all. If we become involved in litigation regarding our intellectual
property rights or the intellectual property rights of others, the potential
cost of such litigation, regardless of the strength of our legal position, and
the potential damages that we could be required to pay could be substantial.

         o        OWNERSHIP OF OUR SHARES IS CONCENTRATED, TO SOME EXTENT, IN
                  THE HANDS OF A FEW INVESTORS, WHICH COULD LIMIT THE ABILITY OF
                  OUR OTHER STOCKHOLDERS TO INFLUENCE THE DIRECTION OF THE
                  COMPANY: Credifinance Capital Corp. owned approximately 67.20
                  % of our common stock as of March 31, 2008. Accordingly, they
                  collectively may have the ability to significantly influence
                  or determine the election of all of our directors or the
                  outcome of most corporate actions requiring stockholder
                  approval. They may exercise this ability in a manner that
                  advances their best interests and not necessarily those of our
                  other stockholders.

         o        OUR SECURITIES ARE QUOTED ON THE OVER-THE-COUNTER BULLETIN
                  BOARD. The Over-the-Counter Bulletin Board is an inter-dealer,
                  over-the-counter market that provides significantly less
                  liquidity than the NASDAQ Stock Market or national or regional
                  exchanges. Securities traded on the Over-the-Counter Bulletin
                  Board are usually thinly traded, highly volatile, have fewer
                  market makers and are not followed by analysts. The Securities
                  and Exchange Commission's order handling rules, which apply to
                  NASDAQ-listed securities, do not apply to securities quoted on
                  the Over-the-Counter Bulletin Board. Quotes for stocks
                  included on the Over-the-Counter Bulletin Board are not listed
                  in newspapers. Therefore, prices for securities traded solely
                  on the Over-the-Counter Bulletin Board may be difficult to
                  obtain and holders of our securities may be unable to resell
                  their securities at or near their original acquisition price,
                  or at any price.

         o        WE WILL REQUIRE ADDITIONAL FINANCING TO SUSTAIN OUR OPERATIONS
                  AND WITHOUT IT WE WILL NOT BE ABLE TO CONTINUE OPERATIONS. We
                  do not currently have sufficient financial resources to fund
                  our operations. Therefore, we need additional funds to
                  continue these operations. The ability of the Company to
                  secure sources of funding will depend on a number of factors
                  including, the prevailing market price of our common stock the
                  results of our research and development programs, the timing
                  and results of preclinical and clinical trials, our ability to
                  maintain existing and establish new collaborative agreements
                  with other companies to provide funding to us, technological
                  advances, and activities of competitors and other factors and
                  the extent to which we are able to secure working capital from
                  other sources, such as through the sale of debt or sale of
                  stock. If sufficient financing is not available or if we are
                  unable to license and sell our technologies and related
                  products, we will need to secure another source of funding in
                  order to satisfy our working capital needs.

If we do raise additional funds by issuing equity securities, further dilution
to existing stockholders would result and future investors may be granted rights
superior to those of our existing stockholders. If adequate funds are not are
not available to us through additional equity offerings, we may be required to
delay, reduce the scope of or eliminate one or more of our research and
development programs or to obtain funds by entering into arrangements with
collaborative partners or others that require us to issue additional equity
securities or to relinquish rights to certain technologies or drug candidates
that we would not otherwise issue or relinquish in order to in order to continue
independent operations. Should the financing we require to sustain our working
capital needs be unavailable or prohibitively expensive when we require it, we
would be forced to curtail our business operations.

         o        THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
                  GOING CONCERN DUE TO SIGNIFICANT RECURRING LOSSES FROM
                  OPERATIONS, CASH USED IN OPERATIONS, STOCKHOLDERS' DEFICIT,
                  ACCUMULATED DEFICIT AND WORKING CAPITAL DEFICIT ALL OF WHICH
                  MEANS THAT WE MAY NOT BE ABLE TO CONTINUE OPERATIONS UNLESS WE
                  OBTAIN ADDITIONAL FUNDING. The report of our Independent
                  Registered Public Accounting Firm on our March 31, 2007
                  financial statements includes an explanatory paragraph
                  indicating that there is substantial doubt about our ability
                  to continue as a going concern due to substantial recurring
                  losses from operations, cash used in operations, stockholders'
                  deficit and significant accumulated deficit and working
                  capital deficit. Our ability to continue as a going concern
                  will be determined by our ability to obtain additional funding
                  and maintain successful operations. Our financial statements
                  do not include any adjustments that might result from the
                  outcome of this uncertainty.


                                       14
<PAGE>

ITEM 7.  FINANCIAL STATEMENT

Attached audited consolidated financial statements for KYTO BIOPHARMA, INC. AND
SUBSIDIARY for the fiscal years ended March 31, 2008, 2007 and Cumulative from
March 5, 1999 (Inception) to March 31, 2008 can be found beginning on page F-1.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

The Company did not change accountant during the year and to the date of this
registration statement and there are no disagreements with the findings of said
accountants.

ITEM 8A. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, we have
evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15(b) as of the end of the period covered by
this report. Based on that evaluation, we have concluded that these disclosure
controls and procedures are effective.

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company. Internal control over
financial reporting is a process to provide reasonable assurance regarding the
reliability of our financial reporting for external purposes in accordance with
accounting principles generally accepted in the United States
of America. Internal control over financial reporting includes maintaining
records that in reasonable detail accurately and fairly reflect our
transactions; providing reasonable assurance that transactions are recorded as
necessary for preparation of our financial statements; providing reasonable
assurance that receipts and expenditures of company assets are made in
accordance with management authorization; and providing reasonable assurance
that unauthorized acquisition, use or disposition of company assets that could
have a material effect on our financial statements would be prevented or
detected on a timely basis. Because of its inherent limitations, internal
control over financial reporting is not intended to provide absolute assurance
that a misstatement of our financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in Internal Control --
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management concluded that the
company's internal control over financial reporting was effective as of December
31, 2008. the company's internal control over financial reporting is effective
based on those criteria.


                                       15
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

(A) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS

--------------------------------------------------------------------------------
NAME                        AGE    POSITION
--------------------------------------------------------------------------------
Georges Benarroch           61     President & Chief Executive Officer, Director

Don MacAdam                 61     Director

Jean-Luc Berger, Ph.D.      44     Director

Michael G. Rosenblum, Ph.D  57     Director

Uri Sagman, M.D. FRCPC      54     Directot

The business experience of the persons listed above during the past five years
are as follows:

MR. GEORGES BENARROCH, PRESIDENT & CHIEF EXECUTIVE OFFICER; DIRECTOR.

Director of the Company since May 5, 2000. Mr Benarroch was elected as President
and Chief Executive Officer effective February 27, 2006. Mr. Benarroch is the
President and Chief Executive Officer of Credifinance Capital Corp. and
Credifinance Securities Limited. Mr. Benarroch is a President & CEO of Gilla
Inc., a public company.

MR. DONALD MACADAM, DIRECTOR.

Director of the Company since November 17, 1999. Since January 2000, Mr. MacAdam
is a consultant to technology companies. He is currently President and Chief
Executive Officet of MBVax Bioscience, a private Canadian biotechnology company.
From 1997 to 1999, he was President and Chief Executive Officer of Tm Bioscience
Corporation. Prior to Tm Bioscience Corporation, Mr. MacAdam was President of
CRS Robotics Corporation from 1993 to 1996. Both Tm Bioscience Corporation and
CRS Robotics Corporation are public companies.

DR. JEAN-LUC BERGER, PH.D., DIRECTOR.

Director of the Company since inception on March 5, 1999, Dr. Berger was
President and Chief Executive Officer of the Company from May 15, 2001 to
February 27, 2006. Co-founder of Kyto, he joined the Company as Chief Operating
Officer in September 2000. Dr Berger resigned as President and Chief Executive
Officer effective February 27, 2006. Prior to joining the Company, Dr. Berger
was a Pharmaceutical/Biotechnology analyst with Credifinance Securities Limited,
a Toronto-based, institutional investment and research firm, since 1996. Dr.
Berger obtained his M. Sc. from Universite de Montreal, his Ph.D. from
Universite LAVAL and completed his post-doctoral studies at McGill
University and has over thirty publications and scientific
communications to his credit.


                                       16
<PAGE>

DR. URI SAGMAN, M.D ., DIRECTOR

Director of the Company since inception on July 27, 2007, Dr. Sagman ,studied
medicine at McGill University, The University of Calgary, The University of
Toronto and Oxford University. Dr. Sagman is a well-respected researcher who has
received numerous awards and citations including the Young Investigator awards
of the American Society of Clinical Oncology (ASCO) and the American Association
for Cancer Research (AACR). He is trained as a medical oncologist, is a fellow
of the Royal College of Physicians and Surgeons of Canada and is a fellowship
recipient of the Medical Research Council of Canada. He co-founded several
companies including C Sixty, Inc., a Canadian nanomedicine company focused on
the development of fullerene antioxidants for the treatment of Parkinson's
disease, Alzheimer's disease as well certain skin conditions related to aging
and UV exposure. Dr. Sagman is also founder and chairman of GRN Capital Inc., a
financial services corporation with merchant banking and investment banking
operations based in Toronto. Separately, Dr. Sagman serves as Chairman of GRN
Health International Inc., a globally-based academic research organization
dedicated to medical research.

DR. MICHAEL G. ROSENBLUM PH.D., DIRECTOR

Director of the Company since inception on July 27, 2007, Dr. Michael G.
Rosenblum is a Professor of Medicine and heads M. D. Anderson Cancer Center's
Section of Immunopharmacology and Targeted Therapy (ITT) 10 member-laboratory
with expertise in the pre-clinical and clinical development of numerous agents,
some of which have been approved utilizing the laboratory's own clinical trial
data. ITT's training and expertise in the area of Pharmacology/Toxicology ranges
from pre-clinical developmental stages (cellular pharmacology, animal
pharmacology and toxicology studies) through Phase I and II clinical trial
design, clinical pharmacology design, pharmacokinetic analysis and data
interpretation. He has over 20 years of experience in the field of antibodies
and targeted therapeutics and is a published author of over 300 scientific
publications. Dr. Rosenblum also has extensive experience as an industry
consultant and has significant experience in drug development and FDA submission
and presentation.

(B) IDENTIFY SIGNIFICANT EMPLOYEES

The Company does not expect to receive a significant contribution from employees
that are not executive officers.

(C) FAMILY RELATIONSHIPS

There are no directors, executive officers or persons nominated or persons
chosen by the Company to become a director or executive officer of the Company
who are directly related to an individual who currently holds the position of
director or executive officer or is nominated to one of the said positions.


                                       17
<PAGE>

(D) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

There are no material events that have occurred in the last five years that
would affect the evaluation of the ability or integrity of any director, person
nominated to become a director, executive officer, promoter or control person of
the Company.

(E) AUDIT COMMITTEE

The Company has currently no audit committee. The Board of Directors approved
the financial statements for the previous year.

ITEM 10. EXECUTIVE COMPENSATION

(A) SUMMARY COMPENSATION TABLE

The following table sets forth all annual and long term compensation for
services in all capacities rendered to Kyto by its executive officers and
directors for each of the last four most recently completed fiscal years.

<TABLE>
<CAPTION>
 -----------------------------------------------------------------------------------------------------------------------------------
                                          ANNUAL COMPENSATION                        LONG-TERM COMPENSATION
                                   -----------------------------------     --------------------------------------
                                                                                    AWARDS               PAYOUTS
                                                                           --------------------------------------
                                                                          SECURITIES
                                                                            UNDER         RESTRICTED
                                                             OTHER         OPTIONS/       SHARES OR
                                                             ANNUAL          SARS         RESTRICTED       LTIP         ALL OTHER
 NAME AND                          SALARY       BONUS     COMPENSATION     GRANTED        SHARE UNITS      PAYOUTS     COMPENSATION
 PRINCIPAL POSITION      YEAR        ($)         ($)         ($)             (#)             ($)            ($)             ($)
 -----------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>      <C>           <C>          <C>           <C>              <C>              <C>         <C>
 Jean-Luc Berger,        2008     None                                                      None

                         2007     None                                                      None

                         2006     $55,000 (1)                                               None
 Director
                         2005     $52,250 (1)                                               None

                         2004     $40,000 (1)                                               None
 -----------------------------------------------------------------------------------------------------------------------------------

 Georges Benarroch,      2008     None                                                      None
 Director

 President and Chief
 Executive Officer       2007     None                                                      None

                         2006     None                                                      None

                         2005     None                                                      None

                         2004     None                                                      None
 -----------------------------------------------------------------------------------------------------------------------------------

 Donald MacAdam,         2008     None                                                      None
 Director
                         2007     None                                                      None

                         2006     None                                                      None

                         2005     None                                                      None

                         2004     None                                                      None
 -----------------------------------------------------------------------------------------------------------------------------------

 Michael G. Rosenblum,   2008     None                                                      None                         36,000(3)
 Director
 -----------------------------------------------------------------------------------------------------------------------------------

 Uri Sagman,             2008    None                                                      250,000 (2)
 Director
 -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
----------
(1)      This was paid by B Twelve Limited, a subsidiary of Kyto Biopharma, Inc.

(2)      On February 26, 2008 Kyto Biopharma Inc issued to Dr. Uri Sagman
         500,000 common shares ($0.5 per share) for consulting service.

(3)      This was paid to Dr.Michael G.Rosenblum for consulting service.


                                       18
<PAGE>

(B) OPTION/SAR GRANTS TABLE

The following table (presented in accordance with the Regulation) sets forth
stock options granted under the Share Incentive Plan during fiscal year 2002 to
the name key employees. There were no grants to key employees in fiscal years
2008, 2007, 2006, 2005 and 2004.

<TABLE>
<CAPTION>

     ------------------------------------------------------------------------------------------------------------------
                              NUMBER OF             % OF TOTAL
                              SECURITIES            OPTIONS/SARS GRANTED
                              UNDERLYING            P[TOPMS/SARS GRANTED   EXERCISE OR
                              OPTIONS/SARS          TO EMPLOYEES IN        BASE
     NAME                     GRANTED (#)           FISCAL YEAR            PRICE ($SH)           EXPIRATION DATE
     ------------------------------------------------------------------------------------------------------------------
     <S>                      <C>                   <C>                    <C>                   <C>
     Jean-Luc Berger          262,500               31                     $0.0001               Exercised in
                                                                                                 November 2001
     ------------------------------------------------------------------------------------------------------------------
     Uri Sagman               587,500               69                     $0.0001               Exercised in
                                                                                                 February 2002
     ------------------------------------------------------------------------------------------------------------------
</TABLE>

(C) AGGREGATED OPTION/SAR EXERCISE IN LATEST FISCAL YEAR AND FISCAL YEAR END
    OPTION/SAR VALUE TABLE

The following table (presented in accordance with the Regulation) sets forth
details of all exercises of stock options/SARs during the fiscal year end March
31, 2002 (none in fiscal years 2005, 2004 and 2003) by the named executive
officer and employees and the fiscal year-end value of unexercised options/SARs
on an aggregated basis:

<TABLE>
<CAPTION>

     -------------------------------------------------------------------------------------------------------------------------
                         SHARES
                       ACQUIRED ON    VALUE          NUMBER OF SECURITIES UNDERLYING        VALUE OF UNEXERCISED IN-THE-MONEY
                        EXERCISE      REALIZED       OPTIONS/SARS GRANTED AT FY-END (#)     OPTIONS/SARS AT FY-END ($)
     NAME                 (#)         ($)            EXERCISABLE/UNEXERCISABLE              EXERCISABLE/UNEXERCISABLE
     -------------------------------------------------------------------------------------------------------------------------
     <S>               <C>            <C>            <C>                                    <C>         <C>
     Jean-Luc Berger   262,500        262,474        --                                     --          --
     -------------------------------------------------------------------------------------------------------------------------
     Uri Sagman        587,500        587,441        --                                     --          --
     -------------------------------------------------------------------------------------------------------------------------
</TABLE>

(E) LONG-TERM INCENTIVE ("LTIP") AWARDS TABLE

None

(D) COMPENSATION OF DIRECTORS

All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. There are no
agreements with respect to the election and compensation of directors. The Board
of Directors appoints officers annually and each executive officer serves at the
discretion of the Board of Directors. The Company does not have any standing
committees at this time.

The Company does not currently maintain insurance for the benefit of the
directors and officers of Kyto against liabilities incurred by them in their
capacity as directors or officers of Kyto. Kyto does not maintain a pension plan
for its employees, officers or directors.

Four directors received 14,525 and 3,000 common shares each for services during
fiscal years 2001 and 2002, respectively. No director shares were granted in
fiscal years 2008 and 2007

Dr.Uri Sagman, a new director of company received 500,000 restricted common
shares for consulting service during fiscal year 2008

Dr. Michael G.Rosenblum received $36,000 for consulting service during fiscal
year 2008

None of the directors or senior officers of Kyto and no associate of any of the
directors or senior officers of Kyto was indebted to the Company during the
financial period ended March 31, 2008 of Kyto other than for routine
indebtedness.


                                       19
<PAGE>

(F) EMPLOYMENT CONTRACTS

None

(G) REPORT ON REPRICING OF OPTIONS/SARS

None

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following persons (including any group as defined in Regulation S-B, Section
228.403) are known to the Company, as the issuer, to be beneficial owner of more
than five percent (5%) of any class of the said issuer's voting securities.

<TABLE>
<CAPTION>

      ---------------------------------------------------------------------------------------------------------------
                            NAME AND ADDRESS OF
      TITLE OF CLASS        BENEFICIAL OWNER                       COMMON SHARES            PERCENTAGE OF CLASS
      ---------------------------------------------------------------------------------------------------------------
      <S>                   <C>                                      <C>                           <C>
      Common                Credifinance Capital Corp. (1)         8,564,398                       67.2%

                            Delaware, United States
      Common                Medarex Inc.                           1,300,000                       10.2%

                            New Jersey, United States
      Common                Dr. Uri Sagman                         1,402,025                       11.0%
                            Toronto, Ontario, Canada
      ---------------------------------------------------------------------------------------------------------------
</TABLE>
----------

(1)      Credifinance Capital Corp. is a privately held Delaware corporation. A
         director and officer of Kyto, Georges Benarroch is the President &
         C.E.O. of Credifinance Capital Corp.

(B) On May 24, 2008, Kyto and the Company entered into an agreement to receive
up to 500,000 convertible preferred shares at $1.00 per share of Kyto in
satisfaction of amounts due to the Company. The preferred share stock has no
readily available fair values. For financial accounting purposes, these
investments are presented at cost basis.

<TABLE>
<CAPTION>
      ---------------------------------------------------------------------------------------------------------------
                            NAME AND ADDRESS OF
      TITLE OF CLASS        BENEFICIAL OWNER                       PREFERRED SHARES            PERCENTAGE OF CLASS
      ---------------------------------------------------------------------------------------------------------------
      <S>                   <C>                                      <C>                          <C>
      Convertible           Credifinance Capital Corp. (1)           473,624                      100.0%
      Preferred

       --------------------------------------------------------------------------------------------------------------
</TABLE>

(C) SECURITY OWNERSHIP OF MANAGEMENT

<TABLE>
<CAPTION>

      ---------------------------------------------------------------------------------------------------------------
                            NAME AND ADDRESS OF
      TITLE OF CLASS        BENEFICIAL OWNER                       COMMON SHARES            PERCENTAGE OF CLASS
      ---------------------------------------------------------------------------------------------------------------
      <S>                   <C>                                      <C>                          <C>
      Common                Georges Benarroch (1)                     44,079                        0.3%
      Common                Dr. Jean-Luc Berger                      527,025                        4.1%
      Common                Don MacAdam (2)                           30,025                        0.2%
      Common                Uri Sagman                             1,402,025                       11.0%
      ---------------------------------------------------------------------------------------------------------------
</TABLE>
----------
(1)      Georges Benarroch is the President and Chief Executive Officer of
         Credifinance Capital Corp which owns 8,564,398 common shares
         representing 67.2% of issued shares and 473,624 convertible preferred
         shares represented 100% of issued shares.
(2)      Don MacAdam owns 27,025 common shares directly and 3,000 common shares
         through A360 Inc., a private holding company.

(D) CHANGES IN CONTROL

There is no such arrangement which may result in a change in control of the
Company.


                                       20
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(A) CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Detail of related party transactions are described in note 5 of the consolidated
Financial Statements.

(B) TRANSACTIONS WITH PROMOTORS

Georges Benarroch would be considered as a promoter of the Company. Georges
Benarroch, is the President & CEO of Credifinance Capital Corp which owns
8,564,398 common shares representing 67.2% of issued shares and 473,624
convertible preferred shares represented 100% of issued shares.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(A) LISTING OF EXHIBITS

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.*

  31.1              Section 302 Certification**

  32.1              Certification pursuant to 18 U.S.C. Section 1350 as
                    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002 **
----------
*        Filed as Exhibit to Company's Form 10-SB on September 12th, 2003, with
         the Securities and Exchange Commission
**       Filed as Exhibit with this Form 10-KSB.

(B) Code of  Ethics

Kyto Biopharma Inc. will conduct its business honestly and ethically wherever we
operate in the world. We will constantly improve the quality of our services,
products and operations and will create a reputation for honesty, fairness,
respect, responsibility, and integrity, trust and sound business judgment. No
illegal or unethical conduct on the part of officers, directors, employees or
affiliates is in the company's best interest. Kyto Biopharma Inc. will not
compromise its principles for short-term advantage. The ethical performance of
this company is the sum of the ethics of the men and women who work here. Thus,
we are all expected to adhere to high standards of personal integrity.

Officers, directors, and employees of the company must never permit their
personal interests to conflict, or appear to conflict, with the interests of the
company, its clients or affiliates. Officers, directors and employees must be
particularly careful to avoid representing Kyto Biopharma Inc. in any
transaction with others with whom there is any outside business affiliation or
relationship. Officers, directors, and employees shall avoid using their company
contacts to advance their private business or personal interests at the expense
of the company, its clients or affiliates.

No bribes, kickbacks or other similar remuneration or consideration shall be
given to any person or organization in order to attract or influence business
activity. Officers, directors and employees shall avoid gifts, gratuities, fees,
bonuses or excessive entertainment, in order to attract or influence business
activity.

Officers, directors and employees of Kyto Biopharma Inc. will often come into
contact with, or have possession of, proprietary, confidential or
business-sensitive information and must take appropriate steps to assure that
such information is strictly safeguarded. This information - whether it is on
behalf of our company or any of our clients or affiliates - could include
strategic business plans, operating results, marketing strategies, customer
lists, personnel records, upcoming acquisitions and divestitures, new
investments, and manufacturing costs, processes and methods. Proprietary,
confidential and sensitive



                                       21
<PAGE>

business information about this company, other companies, individuals and
entities should be treated with sensitivity and discretion and only be
disseminated on a need-to-know basis.

Misuse of material inside information in connection with trading in the
company's securities can expose an individual to civil liability and penalties.
Directors, officers, and employees in possession of material information not
available to the public are "insiders". Spouses, friends, suppliers, brokers,
and others outside the company who may have acquired the information directly or
indirectly from a director, officer or employee are also "insiders." The Act
prohibits insiders from trading in, or recommending the sale or purchase of, the
company's securities, while such inside information is regarded as "material",
or if it is important enough to influence you or any other person in the
purchase or sale of securities of any company with which we do business, which
could be affected by the inside information.


The following guidelines should be followed in dealing with inside information:

Until the company has publicly released the material information, an employee
must not disclose it to anyone except those within the company whose positions
require use of the information.

Employees must not buy or sell the company's securities when they have knowledge
of material information concerning the company until it has been disclosed to
the public and the public has had sufficient time to absorb the information.

Employees shall not buy or sell securities of another corporation, the value of
which is likely to be affected by an action by the company of which the employee
is aware and which has not been publicly disclosed.

Officers, directors and employees will seek to report all information accurately
and honestly, and as otherwise required by applicable reporting requirements.

Officers, directors and employees will refrain from gathering competitor
intelligence by illegitimate means and refrain from acting on knowledge, which
has been gathered in such a manner. The officers, directors and employees of
Kyto Biopharma Inc. will seek to avoid exaggerating or disparaging comparisons
of the services and competence of their competitors.

Officers, directors and employees will obey all Equal Employment Opportunity
laws and act with respect and responsibility towards others in all of their
dealings. Officers, directors and employees will remain personally balanced so
that their personal life will not interfere with their ability to deliver
quality products or services to the company and its clients.

Officers, directors and employees agree to disclose unethical, dishonest,
fraudulent and illegal behavior, or the violation of company policies and
procedures, directly to management.

Violation of this Code of Ethics can result in discipline, including possible
termination. The degree of discipline relates in part to whether there was a
voluntary disclosure of any ethical violation and whether or not the violator
cooperated in any subsequent investigation.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Board of Directors appointed Jewett, Schwartz, Wolfe, and Associates.
("Jewett") as our independent auditors for the fiscal years ending March 31,
2008.

(1) Audit Fees

Jewett our Independent Registered Public Accounting firm billed an aggregate of
$25,500 for the following professional services: audit of our annual
consolidated financial statements for the fiscal year ended March 31, 2008
included in our annual report on Form 10-KSB and review of our interim financial
statements included in our quarterly reports on Form 10-QSB.


                                       22
<PAGE>

(2) Tax Fees

No professional services were rendered by Jewett, Schwartz, Wolfe and Associates
for tax compliance, tax advice, and tax planning the fiscal years ended March
31, 2008.

(3) All Other Fees

Not applicable.


                                       23
<PAGE>

                                   SIGNATURES

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

         DATE: June 30, 2008                 KYTO BIOPHARMA, INC.


                                              By: /s/ Georges Benarroch
                                                  ---------------------
                                                  Georges Benarroch
                                                  President & C.E.O.


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

         DATE: June 30, 2008                 KYTO BIOPHARMA, INC.


                                             By: /s/ Georges Benarroch
                                                 ---------------------
                                                 Georges Benarrcoh
                                                 President & C.E.O.,
                                                 Acting C.F.O., Director

         DATE: June 30, 2008                 KYTO BIOPHARMA, INC.


                                             By: /s/ Jean-Luc Berger
                                                 -------------------
                                                 Jean-Luc Berger
                                                 Director


                                       24
<PAGE>

                       Kyto Biopharma, Inc. and Subsidiary
                          (A Development Stage Company)

                              Financial Statements

                                 March 31, 2008

                                Table of Contents


Report of Independent Registered Public Accounting Firm.............. F-2

Consolidated Balance Sheet .......................................... F-3

Consolidated Statements of Operations ............................... F-4

Consolidated Statements of Changes in Shareholders' Deficit.......... F-5-6

Consolidated Statements of Cash Flows ............................... F-7

Notes to the Consolidated Financial Statements....................... F-8 - F-22


<PAGE>

             Report of Independent Registered Public Accounting Firm

To the board of directors and shareholders of Kyto Biopharma, Inc.

We have audited the accompanying consolidated balance sheet of Kyto Biopharma,
Inc. (A Development Stage Company) as of March 31, 2008 and the related
statements of operations, changes in shareholders' deficit and cash flows for
the years ended March 31, 2008 and 2007 and for the period from March 5, 1999
(inception) through March 31, 2008. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provided a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kyto Biopharma, Inc. (A
Development Stage Company) as of March 31, 2008 and the results of its
operations and its cash flows for the years then ended March 31, 2008 and 2007,
and from March 5, 1999 (inception) through March 31, 2008 in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As more fully
described in Note 1, the Company's need to seek new sources or methods of
financing or revenue to pursue its business strategy, raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
as to these matters are also described in Note 1. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


/s/ Jewett, Schwartz, Wolfe & Associates

Hollywood, Florida
June 30, 2008


                                      F-2
<PAGE>

                       KYTO BIOPHARMA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                       MARCH 31,       MARCH 31,
                                                                         2008            2007
                                                                     ------------    ------------
<S>                                                                  <C>                    <C>
ASSETS

CURRENT ASSETS
    Cash                                                             $      7,328           3,848
    Prepaid expenses                                                       45,686          14,956
                                                                     ------------    ------------
TOTAL ASSETS                                                         $     53,014          18,804
                                                                     ============    ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
    Accounts payable                                                 $     17,552          26,399
    Accrued liabilities - related party                                    10,000          50,000
    Accrued interest payable - related party                               45,199          33,980
    Loan payable-related party                                                 --         233,430
    Note payable, related party                                           100,000         100,000
                                                                     ------------    ------------
TOTAL CURRENT LIABILITIES                                                 172,751         443,809
                                                                     ------------    ------------

TOTAL LIABILITIES                                                         172,751         443,809
                                                                     ------------    ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
    Preferred convertible stock, $1.00 par value, 1,000,000 shares
       authorized, 473,634 issued and outstanding                         473,624
    Common stock, $0.0001 par value, 25,000,000 shares
       authorized, 12,743,610 issued and outstanding                        1,275           1,208
    Additional paid-in capital                                         15,654,944      15,323,307
    Deficit accumulated during development stage                      (15,831,573)    (15,477,735)
    Accumulated other comprehensive loss                                 (418,007)       (271,785)
                                                                     ------------    ------------

TOTAL STOCKHOLDERS' DEFICIT                                              (119,737)       (425,005)
                                                                     ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                          $     53,014    $     18,804
                                                                     ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       F-3


<PAGE>

                       KYTO BIOPHARMA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                             For the period from
                                                                                March 5, 1999
                                                     For the Years Ended       (inception) to
                                                          March 31,               March 31,
                                                    2008            2007            2008
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>
OPERATING EXPENSES
     Compensation                               $         --    $     10,250    $  1,750,636
     Depreciation and amortization                        --             228         814,183
     Consulting                                       45,430       3,976,300       9,746,329
     Bad debt                                             --              --          12,819
     Director fees                                   250,000              --         314,100
     Financing fees                                       --              --          28,781
     Professional fees                                27,408          34,550         154,366
     General and administrative                       46,559          46,597         505,873
     Research and development                        115,045          83,117       1,301,678
     Loss on debt conversion                              --              --         519,795
     Impairment loss                                      --              --       1,191,846
                                                ------------    ------------    ------------
TOTAL OPERATING EXPENSES                             484,442       4,151,042      16,340,406
                                                ------------    ------------    ------------
OTHER INCOME (EXPENSES)
     Interest income                                      --              --           4,922
     Interest expense                                (25,110)        (11,708)        (62,896)
     Gain on debt forgiveness                          9,837              48          78,665
     Loss on disposal of equipment                        --              --            (567)
     Foreign currency transaction gain               145,877          13,977         488,709
                                                ------------    ------------    ------------
TOTAL OTHER INCOME, NET                              130,604           2,317         508,833
                                                ------------    ------------    ------------


NET LOSS                                            (353,838)     (4,148,725)    (15,831,573)
                                                ------------    ------------    ------------


COMPREHENSIVE LOSS
     Foreign currency translation loss              (146,222)        (13,866)       (418,007)
                                                ------------    ------------    ------------

TOTAL COMPREHENSIVE LOSS                        $   (500,060)   $ (4,162,591)   $(16,249,580)
                                                ============    ============    ============

Weighted average number of shares outstanding
     during the year - basic and diluted          12,169,263      12,080,203       7,352,183
                                                ============    ============    ============

Net loss per share - basic and diluted          $      (0.03)   $      (0.34)   $      (2.15)
                                                ============    ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                       KYTO BIOPHARMA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
          YEARS ENDED MARCH 31, 2006 AND 2005, AND FOR THE PERIOD FROM
                   MARCH 5, 1999 (INCEPTION) TO MARCH 31, 2008

<TABLE>
<CAPTION>


                                                            Preferred Stock               Common Stock
                                                            $1.00 par value            $0.0001 par value        Additional
                                                     --------------------------    -------------------------    Paid - in
                                                       Shares          Amount         Shares        Amount       Capital
                                                     -----------    -----------    -----------   -----------   -----------
<S>                                                  <C>            <C>                <C>       <C>           <C>
Common stock issued for services to officer                   --    $        --        300,000   $        30   $   299,970
Common stock issued for services to consultant                --             --        255,000            25       254,975
Warrants issued to consultant                                 --             --             --            --       345,000
Net loss, 1999                                                --             --             --            --            --
                                                     -----------    -----------    -----------   -----------   -----------
Balance, March 31, 1999                                       --             --        555,000            55       899,945
Preferred stock issued for cash                          250,000        250,000             --            --            --
Offering cost                                                 --             --             --            --       (17,005)
Common stock issued for intangible assets                     --             --      2,000,000           200     1,999,800
Common stock issued for cash upon exercise
     of warrants                                              --             --        100,000            10        99,990
Foreign currency translation loss                             --             --             --            --            --
Net loss, 2000                                                --             --             --            --            --
                                                     -----------    -----------    -----------   -----------   -----------
Balance, March 31, 2000                                  250,000        250,000      2,655,000           265     2,982,730
Common stock issued as director fees                          --             --         58,100             6        58,094
Common stock issued for cash upon exercise
     of warrants                                              --             --        150,000            15       149,985
Common stock issued for cash upon exercise
     of warrants                                              --             --        345,000            35            --
Common stock issued to officer as
     compensation                                             --             --        100,000            10        99,990
Common stock issued for cash                                  --             --        100,000            10        99,990
Common stock issued to consultant for services
     not yet rendered                                         --             --        400,000            40     1,199,960
Foreign currency translation gain                             --             --             --            --            --
Net loss, 2001                                                --             --             --            --            --
                                                     -----------    -----------    -----------   -----------   -----------
Balance, March 31, 2001                                  250,000        250,000      3,808,100           381     4,590,749
Preferred stock converted to common stock               (250,000)      (250,000)       250,000            25       249,975
Common stock warrants issued for consulting
     services                                                 --             --             --            --       254,346
Common stock issued for cash upon exercise
     of warrants                                              --             --        125,000            13       124,987
Common stock warrants issued for services                     --             --             --            --       849,915
Common stock issued for cash upon exercise
     of warrants                                              --             --        850,000            85            --
Common stock issued to directors as
     compensation                                             --             --          6,000            --         6,000
Common stock issued to employees as
     compensation                                             --             --          3,000            --         3,000
Common stock issued as loan fee                               --             --         25,000             3        24,997
Foreign currency translation gain                             --             --             --            --            --
Net loss, 2002                                                --             --             --            --            --
                                                     -----------    -----------    -----------   -----------   -----------
Balance, March 31, 2002                                       --             --      5,067,100           507     6,103,969
Stock issued for cash and services                            --             --        225,000            22       224,978
Stock issued in settlement of accounts payable,
     net of redeemable shares                                 --             --        100,000            10        99,990
Stock issued to settle loans payable, related party           --             --        102,658            10       102,648
Common stock issued for services to
     consultant not yet rendered                              --             --        800,000            80       799,920
Stock issued for past and future rent and
     administrative services                                  --             --         65,000             7        64,993
Common stock warrants issued as financing fee                 --             --             --            --         3,783
Foreign currency translation loss                             --             --             --            --            --
Net loss, 2003                                                --             --             --            --            --
                                                     -----------    -----------    -----------   -----------   -----------
Balance, March 31, 2003                                       --             --      6,359,758           636     7,400,281

[restubbed table]

<CAPTION>

                                                       Deficit      Accumulated
                                                     Accumulated      Other
                                                       During      Comprehensive                                        Deferred
                                                     Development      Income        Deferred         Subscription         Loan
                                                        Stage         (Loss)       Consulting         Receivable           Fee
                                                     -----------    -----------    -----------    -------------------   -----------
<S>                                                  <C>            <C>            <C>            <C>                   <C>
Common stock issued for services to officer          $        --    $        --    $        --    $                --   $        --
Common stock issued for services to consultant                --             --             --                     --            --
Warrants issued to consultant                                 --             --             --                     --            --
Net loss, 1999                                          (900,000)            --             --                     --            --
                                                     -----------    -----------    -----------    -------------------   -----------
Balance, March 31, 1999                                 (900,000)            --             --                     --            --
Preferred stock issued for cash                               --             --             --                     --            --
Offering cost                                                 --             --             --                     --            --
Common stock issued for intangible assets                     --             --             --                     --            --
Common stock issued for cash upon exercise
     of warrants                                              --             --             --                     --            --
Foreign currency translation loss                             --         (5,745)            --                     --            --
Net loss, 2000                                          (650,366)            --             --                     --            --
                                                     -----------    -----------    -----------    -------------------   -----------
Balance, March 31, 2000                               (1,550,366)        (5,745)            --                     --            --
Common stock issued as director fees                          --             --             --                     --            --
Common stock issued for cash upon exercise
     of warrants                                              --             --             --                     --            --
Common stock issued for cash upon exercise
     of warrants                                              --             --             --                     --            --
Common stock issued to officer as
     compensation                                             --             --             --                     --            --
Common stock issued for cash                                  --             --             --                     --            --
Common stock issued to consultant for services
     not yet rendered                                         --             --     (1,200,000)                    --            --
Foreign currency translation gain                             --         60,054             --                     --            --
Net loss, 2001                                          (966,789)            --             --                     --            --
                                                     -----------    -----------    -----------    -------------------   -----------
Balance, March 31, 2001                               (2,517,155)        54,309     (1,200,000)                    --            --
Preferred stock converted to common stock                     --             --             --                     --            --
Common stock warrants issued for consulting
     services                                                 --             --             --                     --            --
Common stock issued for cash upon exercise
     of warrants                                              --             --             --                     --            --
Common stock warrants issued for services                     --             --             --                     --            --
Common stock issued for cash upon exercise
     of warrants                                              --             --             --                     --            --
Common stock issued to directors as
     compensation                                             --             --             --                     --            --
Common stock issued to employees as
     compensation                                             --             --             --                     --            --
Common stock issued as loan fee                               --             --             --                     --       (25,000)
Foreign currency translation gain                             --         13,397             --                     --            --
Net loss, 2002                                        (2,959,415)            --             --                     --            --
                                                     -----------    -----------    -----------    -------------------   -----------
Balance, March 31, 2002                               (5,476,570)        67,706     (1,200,000)                    --       (25,000)
Stock issued for cash and services                            --             --             --                     --            --
Stock issued in settlement of accounts payable,
     net of redeemable shares                                 --             --             --                     --            --
Stock issued to settle loans payable, related party           --             --             --                     --        25,000
Common stock issued for services to
     consultant not yet rendered                              --             --       (800,000)                    --            --
Stock issued for past and future rent and
     administrative services                                  --             --             --                     --            --
Common stock warrants issued as financing fee                 --             --             --                     --            --
Foreign currency translation loss                             --        (80,354)            --                     --            --
Net loss, 2003                                          (319,141)            --             --                     --            --
                                                     -----------    -----------    -----------    -------------------   -----------
Balance, March 31, 2003                               (5,795,711)       (12,648)    (2,000,000)                    --            --


[restubbed table]

<CAPTION>




                                                      Deferred
                                                      Expenses         Total
                                                     -----------    -----------
<S>                                                  <C>            <C>
Common stock issued for services to officer          $        --    $   300,000
Common stock issued for services to consultant                --        255,000
Warrants issued to consultant                                 --        345,000
Net loss, 1999                                                --       (900,000)
                                                     -----------    -----------
Balance, March 31, 1999                                       --             --
Preferred stock issued for cash                               --        250,000
Offering cost                                                 --        (17,005)
Common stock issued for intangible assets                     --      2,000,000
Common stock issued for cash upon exercise
     of warrants                                              --        100,000
Foreign currency translation loss                             --         (5,745)
Net loss, 2000                                                --       (650,366)
                                                     -----------    -----------
Balance, March 31, 2000                                       --      1,676,884
Common stock issued as director fees                          --         58,100
Common stock issued for cash upon exercise
     of warrants                                              --        150,000
Common stock issued for cash upon exercise
     of warrants                                              --             35
Common stock issued to officer as
     compensation                                             --        100,000
Common stock issued for cash                                  --        100,000
Common stock issued to consultant for services
     not yet rendered                                         --             --
Foreign currency translation gain                             --         60,054
Net loss, 2001                                                --       (966,789)
                                                     -----------    -----------
Balance, March 31, 2001                                       --      1,178,284
Preferred stock converted to common stock                     --             --
Common stock warrants issued for consulting
     services                                                 --        254,346
Common stock issued for cash upon exercise
     of warrants                                              --        125,000
Common stock warrants issued for services                     --        849,915
Common stock issued for cash upon exercise
     of warrants                                              --             85
Common stock issued to directors as
     compensation                                             --          6,000
Common stock issued to employees as
     compensation                                             --          3,000
Common stock issued as loan fee                               --             --
Foreign currency translation gain                             --         13,397
Net loss, 2002                                                --     (2,959,415)
                                                     -----------    -----------
Balance, March 31, 2002                                       --       (529,388)
Stock issued for cash and services                            --        225,000
Stock issued in settlement of accounts payable,
     net of redeemable shares                                 --        100,000
Stock issued to settle loans payable, related party           --        127,658
Common stock issued for services to
     consultant not yet rendered                              --             --
Stock issued for past and future rent and
     administrative services                             (30,000)        35,000
Common stock warrants issued as financing fee                 --          3,783
Foreign currency translation loss                             --        (80,354)
Net loss, 2003                                                --       (319,141)
                                                     -----------    -----------
Balance, March 31, 2003                                  (30,000)      (437,442)
</TABLE>

      See the accompanying notes to the consolidated financial statements.

                                      F-5
<PAGE>

<TABLE>
<CAPTION>

                                                             Preferred Stock                 Common Stock
                                                             $1.00 par value              $0.0001 par value          Additional
                                                        ---------------------------   ---------------------------    Paid - in
                                                          Shares          Amount         Shares         Amount        Capital
                                                        ------------   ------------   ------------   ------------   ------------
<S>                                                     <C>            <C>               <C>         <C>            <C>
Foreign currency translation loss                                 --             --             --             --             --
Amortization of deferred expenses                                 --             --             --             --             --
Net Loss, 2004                                                    --             --             --             --             --
                                                        ------------   ------------   ------------   ------------   ------------
Balance, March  31, 2004                                          --   $         --      6,359,758   $        636   $  7,400,281
Stock issued for cash and services                                --             --        500,000             50        249,950
Common stock issued for services to consultant not
     yet rendered                                                 --             --      4,500,000            450      6,749,550
Stock issued to settle loans payable, related party               --             --        320,000             32        479,968
Stock issued for past and future rent and
     administrative services                                      --             --        133,333             13        199,986
Foreign currency translation loss                                 --             --             --             --             --
Net Loss, 2005                                                    --             --             --             --             --
                                                        ------------   ------------   ------------   ------------   ------------
Balance, March 31, 2005                                           --   $         --     11,813,091   $      1,181   $ 15,079,735
Stock issued for cash and services                                --             --        173,058             18        173,040
Recognition of services rendered by consultant                    --             --             --             --             --
Stock issued to settle loans payable, related party               --             --         14,054              1         10,540
Stock issued for past and future rent and
     administrative services                                      --             --         80,000              8         59,992
Foreign currency translation loss                                 --             --             --             --             --
Net Loss, 2006                                                    --             --             --             --             --
                                                        ------------   ------------   ------------   ------------   ------------
Balance, March 31, 2006                                           --   $         --     12,080,203   $      1,208   $ 15,323,307
Stock issued for cash and services                                --             --             --             --             --
Recognition of services rendered by consultants                   --             --             --             --             --
Stock issued for past and future rent and
     administrative services                                      --             --             --             --             --
Foreign currency translation loss                                 --             --             --             --             --
Net Loss, 2007                                                    --             --             --             --             --
                                                        ------------   ------------   ------------   ------------   ------------
Balance, March 31, 2007                                           --   $         --     12,080,203   $      1,208   $ 15,323,307
Preferred convertible stock issued to settle
     loan payable, related party                             459,734        459,734             --             --             --
Preferred convertible stock issued to settle 5%
     interest on convertible preferred stock                  13,890         13,890             --             --             --
Common stock issued to settle loan payable,
     related party                                                --             --          3,408              1          1,703
Stock issued for rent and administrative services                 --             --        159,999             16         79,984
Common stock issued for director fees                             --             --        500,000             50        249,950
Foreign currency translation loss                                 --             --             --             --             --
Net Loss, 2008                                                    --             --             --             --             --
                                                        ------------   ------------   ------------   ------------   ------------
Balance, March 31, 2008                                      473,624   $    473,624     12,743,610   $      1,275   $ 15,654,944
                                                        ============   ============   ============   ============   ============

[restubbed Table]

<CAPTION>
                                                           Deficit      Accumulated
                                                         Accumulated       Other
                                                           During      Comprehensive                                      Deferred
                                                         Development       Income         Deferred      Subscription        Loan
                                                           Stage           (Loss)        Consulting      Receivable         Fee
                                                        ------------    ------------    ------------    ------------    ------------
<S>                                                     <C>             <C>             <C>             <C>             <C>
Foreign currency translation loss                                 --        (117,341)             --              --              --
Amortization of deferred expenses                                 --              --              --              --              --
Net Loss, 2004                                               (34,846)             --              --              --
                                                        ------------    ------------    ------------    ------------    ------------
Balance, March  31, 2004                                $ (5,830,557)   $   (129,989)   $ (2,000,000)   $         --    $         --
Stock issued for cash and services                                --              --              --              --              --
Common stock issued for services to consultant not
     yet rendered                                                 --              --      (5,343,750)             --              --
Stock issued to settle loans payable, related party               --              --              --              --              --
Stock issued for past and future rent and
     administrative services                                      --              --              --             (13)             --
Foreign currency translation loss                                 --         (87,495)             --              --              --
Net Loss, 2005                                            (1,963,666)             --              --              --              --
                                                        ------------    ------------    ------------    ------------    ------------
Balance, March 31, 2005                                 $ (7,794,223)   $   (217,484)   $ (7,343,750)   $        (13)   $         --
Stock issued for cash and services                                --              --              --              --              --
Recognition of services rendered by consultant                    --              --       3,374,950              --              --
Stock issued to settle loans payable, related party               --              --              --              --              --
Stock issued for past and future rent and
     administrative services                                      --              --              --              --              --
Foreign currency translation loss                                 --         (40,435)             --              --              --
Net Loss, 2006                                            (3,534,787)             --              --              --              --
                                                        ------------    ------------    ------------    ------------    ------------
Balance, March 31, 2006                                 $(11,329,010)   $   (257,919)   $ (3,968,800)   $        (13)   $         --
Stock issued for cash and services                                --              --              --              --              --
Recognition of services rendered by consultants                   --              --       3,968,800              --              --
Stock issued for past and future rent and
     administrative services                                      --              --              --              13              --
Foreign currency translation loss                                 --         (13,866)             --              --              --
Net Loss, 2007                                            (4,148,725)             --              --              --              --
                                                        ------------    ------------    ------------    ------------    ------------
Balance, March 31, 2007                                 $(15,477,735)   $   (271,785)   $         --    $         --    $         --
Preferred convertible stock issued to settle
     loan payable, related party                                  --              --              --              --              --
Preferred convertible stock issued to settle 5%
     interest on convertible preferred stock                      --              --              --              --              --
Common stock issued to settle loan payable,
     related party                                                --              --              --              --              --
Stock issued for rent and administrative services                 --              --              --              --              --
Common stock issued for director fees                             --              --              --              --              --
Foreign currency translation loss                                 --        (146,222)             --              --              --
Net Loss, 2008                                              (353,838)             --              --              --              --
                                                        ------------    ------------    ------------    ------------    ------------
Balance, March 31, 2008                                 $(15,831,573)   $   (418,007)   $         --    $         --    $         --
                                                        ============    ============    ============    ============    ============

[restubbed table]

<CAPTION>
                                                           Deferred
                                                           Expenses          Total
                                                         ------------    ------------
<S>                                                      <C>                 <C>
Foreign currency translation loss                                  --        (117,341)
Amortization of deferred expenses                              30,000          30,000
Net Loss, 2004                                                     --         (34,846)
                                                         ------------    ------------
Balance, March  31, 2004                                 $         --        (559,629)
Stock issued for cash and services                                 --         250,000
Common stock issued for services to consultant not
     yet rendered                                                  --       1,406,250
Stock issued to settle loans payable, related party                --         480,000
Stock issued for past and future rent and
     administrative services                                       --         199,986
Foreign currency translation loss                                  --         (87,495)
Net Loss, 2005                                                     --      (1,963,666)
                                                         ------------    ------------
Balance, March 31, 2005                                  $         --        (274,554)
Stock issued for cash and services                                 --         173,058
Recognition of services rendered by consultant                     --       3,374,950
Stock issued to settle loans payable, related party                --          10,541
Stock issued for past and future rent and
     administrative services                                       --          60,000
Foreign currency translation loss                                  --         (40,435)
Net Loss, 2006                                                     --      (3,534,787)
                                                         ------------    ------------
Balance, March 31, 2006                                  $         --        (231,227)
Stock issued for cash and services                                 --              --
Recognition of services rendered by consultants                    --       3,968,800
Stock issued for past and future rent and
     administrative services                                       --              13
Foreign currency translation loss                                  --         (13,866)
Net Loss, 2007                                                     --      (4,148,725)
                                                         ------------    ------------
Balance, March 31, 2007                                  $         --    $   (425,005)
Preferred convertible stock issued to settle
     loan payable, related party                                   --         459,734
Preferred convertible stock issued to settle 5%
     interest on convertible preferred stock                       --          13,890
Common stock issued to settle loan payable,
     related party                                                 --           1,704
Stock issued for rent and administrative services                  --          80,000
Common stock issued for director fees                              --         250,000
Foreign currency translation loss                                  --        (146,222)
Net Loss, 2008                                                     --        (353,838)
                                                         ------------    ------------
Balance, March 31, 2008                                  $         --    $   (119,737)
                                                         ============    ============
</TABLE>


      See the accompanying notes to the consolidated financial statements.


                                      F-6
<PAGE>

                       KYTO BIOPHARMA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                          MARCH 5, 1999
                                                                               FOR THE YEAR ENDED        (INCEPTION) TO
                                                                                    MARCH 31,               MARCH 31,
                                                                              2008            2007            2008
                                                                          -------------   -------------   -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                       <C>             <C>             <C>
     Net loss                                                             $   (353,838)   $ (4,148,725)   $(15,831,573)
     Adjustment to reconcile net loss to net cash provided by (used in)
        operating activities:
        Depreciation and amortization                                               --             228         814,183
        Recognition of services rendered by consultant                              --       3,968,800      10,227,893
        Stock based consulting expense                                              --              --         854,345
        Stock based director fees                                              250,000              --         314,100
        Stock based rent and administrative fees                                80,000              --         167,028
        Preferred convertible stock issued for interest due on
            outstanding preferred convertible stock                             13,890              --          13,890
        Common stock warrants issued as financing fee                               --              --           3,783
        Loss on disposal of equipment                                               --              --             567
        Impairment loss                                                             --              --       1,191,846
        Gain on debt forgiveness                                                (9,837)            (48)         (9,837)
        Gain on settlement of accounts payable                                      --              --         (59,654)
        Loss on settlement of accounts payable                                      --              --         519,795
        Amortization of stock based financing fee                                   --              13          25,010
     Changes in operating assets and liabilities:
        (Increase) decrease in:
            Other receivables                                                       --             691              --
            Prepaids and other assets                                          (30,730)        (14,956)        (45,686)
        Increase in:
            Accounts payable and accrued expenses                              (27,791)         24,370         513,424
            Accounts payable-related parties                                        --              --          20,879
                                                                          -------------   -------------   -------------
NET CASH USED IN OPERATING ACTIVITIES                                          (78,306)       (169,627)     (1,280,007)
                                                                          -------------   -------------   -------------
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                                   228,008         146,830         778,375
     Repayment of loan to related parties                                           --              --         (26,792)
                                                                          -------------   -------------   -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                      228,008         146,830       1,709,805
                                                                          -------------   -------------   -------------

Effect of Exchange Rate on Cash                                               (146,222)        (13,866)       (418,007)
                                                                          -------------   -------------   -------------
Net Increase (decrease) in Cash and Cash Equivalents                             3,480         (36,567)          7,328
Cash and Cash Equivalents At Beginning of Period                                 3,848          40,415              --
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                $      7,328    $      3,848           7,328
                                                                          ============    ============    ============
Supplemental Disclosure of Cash Flow Information:
     Cash paid for:
        Interest                                                          $         --    $         --    $         --
                                                                          ============    ============    ============
        Taxes                                                             $         --    $         --    $         --
                                                                          ============    ============    ============

Supplemental Disclosure of Non-Cash Investing and Financing
        Conversion of debt to equity                                      $    461,438    $         --    $  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                        $         --    $         --    $  2,000,000
                                                                          ============    ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

                       KYTO BIOPHARMA, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2008

NOTE 1   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)      NATURE OF BUSINESS

Kyto Biopharma, Inc. was formed as a Florida corporation on March 5, 1999.
B Twelve, Limited, Kyto Biopharma, Inc.'s wholly-owned Canadian subsidiary
(collectively referred to as the "Company"), was also formed on March 5, 1999.
On August 14, 2002, the Company changed its name from B Twelve, Inc. to Kyto
Biopharma, Inc.

The Company is a biopharmaceutical company, formed to acquire and develop
innovative minimally toxic and non-immunosuppressive proprietary drugs for the
treatment of cancer, arthritis, and other proliferate and autoimmune diseases.
The Company has subsequently built itself into a development stage
biopharmaceutical company that develops receptor-mediated technologies to
control the uptake of vitamin B12 by non-controlled proliferative cells.

Activities during the development stage include acquisition of financing and
intellectual properties and research and development activities conducted by
others under contracts.

(B)      PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiary. All material intercompany balances and transactions
have been eliminated in consolidation.

(C)      GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company
has no revenues, a net loss of $353,838 and net cash used in operations of
$78,306 in 2008 and a working capital deficiency of $119,737, a stockholders'
deficiency of $119,737 and a deficit accumulated during the development stage of
$15,831,573 at March 31, 2008. The ability of the Company to continue as a going
concern is dependent on the Company's ability to further implement its business
plan, raise capital, and generate revenues. The consolidated financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.

The Company is currently a development stage company and its continued existence
is dependent upon the Company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. During
the year ended March 31, 2008, the Company received $228,008 in related party
debt financing.

The Company has yet to generate an internal cash flow, and until the sales of
its product begins, the Company is very dependent upon debt and equity funding.
The Company must successfully complete its research and development resulting in
a saleable product. However, there is no assurance that once the development of
the product is completed and finally gains Federal Drug and Administration
clearance, and that the Company will achieve a profitable level of operations.

(D)      USE OF ESTIMATES

In preparing consolidated financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
consolidated financial statements, and revenues and expenses during the period
presented. Actual results may differ from these estimates.

Significant estimates during 2008 and 2007 and for the period for March 5, 1999
(inception) to March 31, 2008 include depreciable lives on equipment, valuation
of intangible assets, the valuation allowance of deferred tax assets, and the
valuation of non-cash stock based transactions.



                                      F-8
<PAGE>

NOTE 1   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

(E)      CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities of
three months or less at the time of purchase to be cash equivalents.

(F)      BASIS OF PRESENTATION AND FOREIGN CURRENCY

The accompanying consolidated financial statements are presented under
accounting principles generally accepted in the United States of America
and in United States dollars.

The Company's Canadian subsidiary transacts business in the Canadian dollar. The
accounts of the Canadian subsidiary are translated to United States dollars
using the current rate method. Under the current rate method, all assets and
liabilities are translated using exchange rates at the balance sheet date.
Revenue and expense items are translated using the average rate of exchange
prevailing during the period. Capital transactions are translated at their
historical rates. Exchange gains and losses resulting from translation of
foreign currencies are recorded in stockholders' deficiency as a cumulative
translation adjustment and reflected as a component of other accumulated
comprehensive income or loss.

Gains and losses resulting from foreign currency transactions are recognized in
operations of the period incurred.

(G)      CONCENTRATIONS

The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. As of March 31, 2008, the Company did not have
any deposits in excess of federally insured limits. The Company has not
experienced any losses in such accounts through March 31, 2008.

The Company has obtained and continues to obtain a large amount of its funding
from loans and equity funding from a principal stockholder related to a director
of the Company.

(H)      EQUIPMENT

Equipment is stated at cost, less accumulated depreciation. Expenditures for
maintenance and repairs are charged to expense as incurred. Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets of five years.

(I)      LONG-LIVED ASSETS

The Company reviews long-lived assets and certain identifiable assets related to
those assets for impairment whenever circumstances and situations change such
that there is an indication that the carrying amounts may not be recoverable. If
the undiscounted future cash flows of the long-lived assets are less that the
carrying amount, their carrying amount is reduced to fair value and an
impairment loss is recognized.

(J)      STOCK-BASED COMPENSATION

In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") 123R, "Share-Based Payment", ("SFAS 123R)
a revision to SFAS 123. SFAS 123R requires all share-based payments to be
recognized in the financial statements based on their values using either a
modified-prospective of modified-retrospective transition method.


                                      F-9
<PAGE>

NOTE 1   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

Prior to March 31, 2006, the Company's stock-based compensation plans were
accounted for under the recognition and measurement provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees ("APB 25") and related interpretations, as permitted by FASB Statement
No. 123, "Accounting for Stock -Based Compensation ("SFAS 123").

The Company adopted the disclosure provisions of SFAS No. 123R, "Accounting for
Stock-Based Compensation," and SFAS No. 148, "Accounting for Stock Based
Compensation-Transaction and Disclosure," which has entities provide pro forma
net income (loss) and pro forma earnings (loss) per share disclosures for
employee stock option grants as if the fair-valued based method defined in SFAS
No. 123R had been applied.

Under this method, the Company records an expense equal to the fair value of the
options or warrants issued. The fair value is computed using the Black Scholes
options pricing model.

(K)      RESEARCH AND DEVELOPMENT COSTS

Others conduct research and development on behalf of the Company under
contractual agreements and such costs are charged to expense as incurred.
Research and development expense was $115,045, $83,117, and $1,301,678 for the
years ended March 31, 2008, 2007, and for the period from March 5, 1999
(inception) to March 31, 2008, respectively.

(L)      INCOME TAXES

The Company accounts for income taxes under the Financial Accounting Standards
No. 109 "Accounting for Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period, which includes the enactment
date.

(M)      COMPREHENSIVE INCOME

The Company accounts for Comprehensive Income under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("Statement No. 130"). Statement No. 130 establishes
standards for reporting and display of comprehensive income and its components.
Comprehensive income is the total of net income (loss) and other comprehensive
income (loss).

The foreign currency translation gains and losses resulting from the translation
of the financial statements of B Twelve, Ltd. expressed in Canadian dollars to
United States dollars are reported as Accumulated Other Comprehensive Income or
Loss in the Statement of Operations.


                                      F-10
<PAGE>

NOTE 1   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

(N)      NET LOSS PER COMMON SHARE

In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings per Share", basic earnings per share is computed by dividing the net
income less preferred dividends for the period by the weighted average number of
common shares outstanding. Diluted earnings per share is computed by dividing
net income less preferred dividends by the weighted average number of common
shares outstanding including the effect of common stock equivalents. Common
stock equivalents, consisting of stock options and warrants, have not been
included in the calculation, as their effect is antidilutive for the periods
presented. At March 31, 2008, there were convertible preferred shares which
could have been potentially been converted into 471,816 shares of common stock,
but would be antidilutive.

(O)      FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosures of information about the
fair value of certain financial instruments for which it is practicable to
estimate that value. For purposes of this disclosure, the fair value of a
financial instrument is the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced sale or
liquidation.

The carrying amounts of the Company's short-term financial instruments,
including other receivables, accounts payable, and loans payable-related
parties, approximate fair value due to the relatively short period to maturity
for these instruments.


                                      F-11
<PAGE>

NOTE 1    NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

(P)      RECENT ACCOUNTING PRONOUNCEMENTS

Accounting for Financial Guarantee Insurance Contracts, an interpretation of
FASB Statement No. 60 In May 2008, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 163,
"Accounting for Financial Guarantee Insurance Contracts, an interpretation of
FASB Statement No. 60" (SFAS No. 163). SFAS No.163 interprets SFAS No. 60 and
amends existing accounting pronouncements to clarify their application to the
financial guarantee insurance contracts included within the scope of this
Statement. Specifically, this Statement: Amends Statement 60 to clarify that
financial guarantee insurance contracts issued by insurance enterprises are
included within the scope of that Statement as interpreted by this Statement;
Amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments
(paragraph 8(c)), to clarify that the requirements of that Statement apply to
financial guarantee insurance contracts included within the scope of this
Statement; Amends Statement 133 (paragraph 10(c)) to clarify that its scope
exception for some insurance contracts does not apply to financial guarantee
insurance contracts included within the scope of this Statement; Amends FASB
Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others (paragraph
6(d)), to clarify that it does not apply to financial guarantee insurance
contracts included within the scope of this Statement; Nullifies EITF Issue No.
85-20, "Recognition of Fees for Guaranteeing a Loan," for financial guarantee
insurance contracts included within the scope of this Statement. This Statement
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and all interim periods within those fiscal years, except for
some disclosures about the insurance enterprise's risk-management activities.
This Statement requires that disclosures about the risk-management activities of
the insurance enterprise be effective for the first period (including interim
periods) beginning after issuance of this Statement. Except for those
disclosures, earlier application is not permitted. The scope of this Statement
is limited to financial guarantee insurance (and reinsurance) contracts, as
described in this Statement, issued by enterprises included within the scope of
Statement 60. Accordingly, this Statement does not apply to financial guarantee
contracts issued by enterprises excluded from the scope of Statement 60 or to
some insurance contracts that seem similar to financial guarantee insurance
contracts issued by insurance enterprises (such as mortgage guaranty insurance
or credit insurance on trade receivables). This Statement also does not apply to
financial guarantee insurance contracts that are derivative instruments included
within the scope of SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. The adoption of SFAS No. 163 is not expected to have a
material effect on its financial position, results of operations or cash flow. .

Disclosure about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, "Disclosure about Derivative
Instruments and Hedging Activities," an amendment of FASB Statement No. 133,
(SFAS 161). This statement requires that objectives for using derivative
instruments be disclosed in terms of underlying risk and accounting designation.
The Company is required to adopt SFAS 161 on January 1, 2009. The Company is
currently evaluating the potential impact of SFAS No. 161 on the Company's
consolidated financial statements.


                                      F-12
<PAGE>

NOTE 1   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

Determination of the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP FAS 142-3, "Determination of the Useful Life
of Intangible Assets,", which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under FASB 142 "Goodwill and Other Intangible Assets". The
intent of this FSP is to improve the consistency between the useful life of a
recognized intangible asset under SFAS 142 and the period of the expected cash
flows used to measure the fair value of the asset under FASB 141 (revised 2007)
"Business Combinations" and other U.S. generally accepted accounting principles.
The Company is currently evaluating the potential impact of FSP FAS 142-3 on its
consolidated financial statements.

Business Combinations

In December 2007, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 141(R) "Business Combinations" (SFAS 141(R)). This Statement replaces
the original FASB Statement No. 141. This Statement retains the fundamental
requirements in Statement 141 that the acquisition method of accounting (which
Statement 141 called the purchase method) be used for all business combinations
and for an acquirer to be identified for each business combination. The
objective of this SFAS 141(R) is to improve the relevance, and comparability of
the information that a reporting entity provides in its financial reports about
a business combination and its effects. To accomplish that, SFAS 141(R)
establishes principles and requirements for how the acquirer:

         a.       Recognizes and measures in its financial statements the
                  identifiable assets acquired, the liabilities assumed, and any
                  noncontrolling interest in the acquiree.
         b.       Recognizes and measures the goodwill acquired in the business
                  combination or a gain from a bargain purchase.
         c.       Determines what information to disclose to enable users of the
                  financial statements to evaluate the nature and financial
                  effects of the business combination.

This Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 and may not be applied before
that date. The Company is unable at this time to determine the effect that its
adoption of SFAS 141(R) will have on its consolidated results of operations and
financial condition.

Noncontrolling Interests in Consolidated Financial Statements--an amendment of
ARB No. 51

In December 2007, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 160 "Noncontrolling Interests in Consolidated Financial Statements -
an amendment of ARB No. 51" (SFAS 160). This Statement amends the original
Accounting Review Board (ARB) No. 51 "Consolidated Financial Statements" to
establish accounting and reporting standards for the noncontrolling interest in
a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. This Statement is effective for fiscal years and interim
periods within those fiscal years, beginning on or after December 15, 2008 and
may not be applied before that date. The Company is unable at this time to
determine the effect that its adoption of SFAS 160 will have on its consolidated
results of operations and financial condition.


                                      F-13
<PAGE>

NOTE 1   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)

Fair Value Option for Financial Assets and Financial Liabilities

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an amendment of FASB
Statement No. 115" (SFAS 159), which becomes effective for the Company on
February 1, 2008, permits companies to choose to measure many financial
instruments and certain other items at fair value and report unrealized gains
and losses in earnings. Such accounting is optional and is generally to be
applied instrument by instrument. The Company does not anticipate that the
election, of this fair-value option will have a material effect on its
consolidated financial condition, results of operations, cash flows or
disclosures.

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. SFAS 157 addresses the requests from investors for expanded
disclosure about the extent to which companies' measure assets and liabilities
at fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value, and does
not expand the use of fair value in any new circumstances. SFAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007 and will be adopted by the Company in the first quarter of fiscal year
2009. The impact of adoption was not material to the Company's consolidated
financial condition or results of operations.

In February 2008, the FASB issued Staff Position (FSP) 157-2, "Effective Date of
FASB Statement No. 157". This FSP delays the effective date of FAS 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods within
those fiscal years. The impact of adoption was not material to the Company's
consolidated financial condition or results of operations.

(Q)      RECLASSIFICATIONS

Certain amounts in the March 31, 2007 consolidated financial statements have
been reclassified to conform to the March 31, 2008 presentation.

NOTE 2   PREPAID EXPENSES

Prepaid expenses are related to prepaid research and development. Prepaid
research and development costs are amortized as services are performed. For the
year ended March 31, 2008 the total prepaid expense was $45,686.

NOTE 3   INTANGIBLE ASSETS IMPAIRMENT

On June 2, 1999, the Company purchased a portfolio of patents, patents pending,
and related intellectual property (collectively the "Intellectual Property")
from a third party in exchange for 2,000,000 shares of the Company's common
stock. The shares were valued at $1.00 per share based on contemporaneous cash
purchases of convertible preferred stock and common stock warrants resulting in
a value of $2,000,000. The Company also capitalized certain legal costs.

As of March 31, 2002, management performed an impairment analysis of the
Intellectual Property. Due to the then current status of the Company as a
development stage company and the inherent difficulties in projecting future
revenues recognized an impairment loss for the full remaining book value of the
asset totaling $1,191,846 in 2002.


                                      F-14
<PAGE>

NOTE 4   COMMITMENTS AND CONTINGENCIES

(A)      LEASES

The Company leases office space on a month-to-month basis. The premise is leased
from a principal stockholder. Rent expense in 2008, 2007, and for the period
from March 5, 1999 (inception) to March 31, 2008 were $20,000, $20,000, and
$148,377, respectively and is included in general and administrative expense in
the accompanying consolidated statements of operations.

(B)      REDEEMABLE COMMON STOCK PURSUANT TO PUT OPTION

In November 2002 and February 2003, the Company issued an aggregate 273,058
shares of its common stock having a fair value of $273,058 to settle certain
accounts payable under a debt settlement agreement ("agreement") with three
unrelated parties. Of the total stock issued in connection with the agreement,
two of these parties received an aggregate 173,058 shares of common stock. In
addition, these two creditors received a written put option for the aggregate
173,058 shares of common stock previously issued. Three years from the date of
the initial settlement, the put option holders have a thirty-day period in which
to notify the Company of their intent to put the options back to the Company at
a redemption price of $1.00 per share. The Company had 90 days from the
notification date to make the required payment. These shares expired without
redemption during the year ended March 31, 2006.

(C)      REGULATION

The business of the Company is subject to various governmental regulations in
the United States of America, Canada, and other countries, which must approve
any Company products before commencement of commercial sales and which regulate
the manufacturing of pharmaceuticals.

(D)      LITIGATION

A claim against the Company has been commenced by SHI Consulting in the amount
of $32,416 plus GST for damages resulting from a breach of contract and
prejudgment and post judgment interest and costs. The Company counterclaimed for
$300,000 for breach of contract plus interest and costs. The action is in
preliminary stages. The Company has not recorded a liability for this claim as
management believes they will prevail.

NOTE 5   LOANS AND NOTES PAYABLE AND ACCRUED LIABILITIES, RELATED PARTIES

(A)      LOANS PAYABLE, RELATED PARTIES

In November 2002, the Company received working capital funds from a principal
stockholder totaling $50,000 as part of a $100,000 agreement to provide debt
financing.

During the year ended March 31, 2004, the Company received the remaining $50,000
portion of the debt financing transaction plus an additional $25,000. All
activity with this principal stockholder represents a 100% concentration of all
debt financing for the year ended March 31, 2004. All loans are non-interest
bearing, unsecured and due on demand. In the first quarter of fiscal 2004, an
additional $35,000 loan was received from the same principal stockholder. In
October 2004, the $160,000 was exchanged for 320,000 common shares. The Company
recognized a loss of $320,000 on this transaction.

At March 31, 2005, the Company owed $4,616 to a related party director of the
Company. The loan was non-interest bearing, unsecured and due on demand and
included in the loans payable, related party balance. The amount was paid in
February 2006, through issuance of stock.


                                      F-15
<PAGE>

NOTE 5   LOANS AND NOTES PAYABLE AND ACCRUED LIABILITIES, RELATED PARTIES
         (CONTINUED)

At March 31, 2007, the Company owed $233,430 to a related party director of the
Company. The loan is non-interest bearing, unsecured and due on demand and
included in the loans payable, related party balance. During the year ended
March 31, 2008, the company was advanced an additional $228,008. The loan was
paid through issuance of 459,734 shares of preferred convertible stock valued at
$1 per share and 3,408 shares of common stock valued at $0.50 per share for a
total of $461,438. The balance of the related party loan payable as of March 31,
2008 was $0.

(B)      ACCRUED LIABILITIES, RELATED PARTY

The Company leases office space and administrative services from a related party
principal stockholder. Rent and administrative expense in 2008, 2007, and for
the period from March 5, 1999 (inception) to March 31, 2008 was $40,000,
$40,000, and $336,754, respectively and is included in general and
administrative expense in the accompanying consolidated statements of
operations. The Company allocates 50% of these amounts to rent expense. During
the year ended March 31, 2008, the Company issued 159,999 shares of common stock
valued at $0.50 per share for a total of $80,000 to satisfy accrued rent and
administrative expense. As of March 31, 2008 and 2007, the remaining balance in
the accrued liabilities-related party account for the above services was $10,000
and $50,000, respectively.

(C)      NOTE PAYABLE, RELATED PARTY

During the year ended March 31, 2001, the Company entered into an agreement with
a vendor, who is also a principal stockholder, for services totaling $200,000.
On November 11, 2002, the Company and vendor mutually agreed that in lieu of the
$200,000 payment, the vendor would accept 100,000 shares of the Company's common
stock valued at $1.00 totaling $100,000. In addition, the Company also executed
a $100,000 unsecured promissory note with the vendor. Under the terms of the
promissory note, the obligation bears interest at prime plus 1% (5.25% at March
31, 2008). Interest is accrued and payable quarterly. At March 31, 2008, accrued
interest totaled $45,199. In connection with the promissory note, all principal
and accrued interest is payable in full upon the earliest of the following:

         (i)      The date on which the Company raises at least $1,000,000 in
                  funding within a twelve-month period;

         (ii)     The date on which the agreement between the Company, vendor
                  and other unrelated party terminates; or

         (iii)    Three years from the date of the promissory note.

Since the note was due in November 2005, the note payable was re-classified to
current liabilities at March 31, 2005.


                                      F-16
<PAGE>

NOTE 6   STOCKHOLDERS' DEFICIENCY

(A)      CONVERTIBLE PREFERRED STOCK

In June 1999, an investor purchased 250,000 units at $1.00 per unit or $250,000
consisting of 250,000 shares of convertible preferred stock and receives
warrants to purchase up to 750,000 common shares as follows: 250,000 common
stock warrants exercisable at $1.00 per share issued with the preferred stock
and another potential 500,000 as discussed below. The preferred stock was
convertible to common stock on a one-for-one basis upon the earlier of:

         (i)      An initial public offering by the Company, as defined,

         (ii)     The completion of a reverse take-over transaction,

         (iii)    A minimum $3,000,000 private equity financing based on a
                  $10,000,000 valuation or,

         (iv)     The merger of the Company with another corporation or the sale
                  of substantively all the assets of the Corporation.

There was no beneficial conversion feature upon the sale as the value of the
common shares into which the preferred shares are convertible are also $1.00
based on contemporaneous transactions.

Upon exercise of the first 250,000 warrants, the investor received another
warrant for 250,000 common shares at $1.00 exercise price per share. Upon
conversion of the preferred stock, each share of common stock issued shall be
coupled with an additional common stock purchase warrant at an exercise price of
$1.00 per share with a three-month term. In December 1999 and May 2000, 100,000
and 150,000, respectively, of the first warrant were exercised and therefore in
May 2000 the additional 250,000 warrant were granted with an exercise price of
$1.00 expiring June 2003. In June 2001, pursuant to a letter of intent, which
was ratified by the shareholders, the preferred shares were converted and the
additional 250,000 warrants were granted at an exercise price of $1.00 with an
amended term not to exceed five years. There was no beneficial conversion
feature to the warrants as the value of the common stock was still considered to
be $1.00 based on contemporaneous transactions at that time. There was no effect
of the warrant issuances on operations as all warrants are considered to be
purchased as part of the preferred stock unit. The second and third warrants
totaling 500,000 common shares remained outstanding at March 31, 2003. In June
2003, 250,000 expired and in June 2006 the remaining 250,000 expired.

In May 2007, Kyto entered into an agreement with Credifinance Capital Corp. to
issue up to 500,000 convertible preferred shares at $1.00 per share in
satisfaction of amounts due to Credifinance Capital Corp. .During the year ended
March 31, 2008 the Company issued 459,734 shares of convertible preferred stock
to a Credifinance Capital Corp. to satisfy the related party loan payable. As
there is no readily available fair value for the Company's convertible preferred
stock, the issuance has been recorded at par value of $1 per share for a total
of $459,734. The preferred convertible stock issued to satisfy the related party
loan may be converted into common shares at the rate of $0.45 per share for up
to two years and bear interest at the rate of 5% per annum. Preferred
convertible stock has the same voting rights as common stock.

The Company issued 13,890 shares of preferred stock valued at $1 per share for a
total of $13,890 to Credifinance Capital Corp. for the accrued interest due on
outstanding convertible preferred stock during the year ended March 31, 2008.
These shares may be converted into common shares at the rate of $0.45 per share
for up to two years and bear interest at the rate of 5% per annum.

As of March 31, 2008, 473,624 convertible preferred shares were outstanding.


                                      F-17
<PAGE>

NOTE 6   STOCKHOLDERS' DEFICIENCY (CONTINUED)

(B)      COMMON STOCK AND OPTIONS

In January 2006, the Company issued 94,054 shares valued at $0.75 per share
based on the quoted trade price in payment of various expenses totaling $47,027
to a finance company controlled by a director of the company and to a director.
The Company recorded a loss on debt conversion of $23,513.

In February 2008, the company issued 500,000 shares valued at $0.50 per share in
payment of consulting service to Dr. Uri Sagman, 159,999 shares valued at $0.50
per share to Credifinance Capital Corp. for rent and administration fees, and
3,408 shares valued at $0.50 per share to Credifinance Capital Corp. for
satisfaction of the balance of the related party loan payable..

(C)      STOCK OPTIONS AND WARRANTS

The Company issues stock options and warrants to employees, service providers,
and investors in the course of business.

For stock options and warrants issued to non-employees, the Company applies SFAS
No. 123. Accordingly, consulting expense of $3,783 and $254,345 were recognized
in 2003 and 2002, respectively, upon granting of 25,000 and 125,000 common stock
options, respectively. $345,000 was charged to operations in 1999 as reflected
in the accompanying consolidated statements of operations from March 5, 1999
(inception) to March 31, 2008.

For consolidated financial statement disclosure purposes and for purposes of
valuing stock options and warrants issued to consultants, the fair market value
of each stock granted was estimated on the grant date using the Black-Scholes
Option-Pricing Model in accordance with SFAS 123. The following weighted-average
assumptions were used for the year ended March 31:

<TABLE>
<CAPTION>

                                2008       2007      2006      2005      2004      2003      2002      2001      2000      1999

<S>                       <C>              <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
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
</TABLE>


                                      F-18
<PAGE>

A summary of the options outstanding, which were granted for cash or services
are presented below:


 AVERAGE                     # OF OPTIONS AND           WEIGHTED

 PRICE                           WARRANTS               EXERCISE
                             ----------------           --------
 Stock Options
 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
 Granted                             --                       --
 Exercised                           --                       --
 Forfeited                     (250,000)                $   1.00
 Terminated                          --                       --
                                -------                 --------
 Balance at March 31, 2007       25,000                 $   1.00
 Granted                             --                       --
 Exercised                           --                       --
 Forfeited                      (25,000)                $   1.00
 Terminated                          --                       --
                                -------                 --------
 Balance at March 31, 2007           --                 $   1.00
                                =======                 ========

 Weighted average fair value
  of options granted for
  services during 2008                                  $     --
                                                        ========


                                      F-19
<PAGE>

NOTE 6   STOCKHOLDERS' DEFICIENCY (CONTINUED)

(D)      PAR VALUE

In August 2001, the par value of common stock was changed to $0.0001 from $1.00.
The change is reflected retroactively for all periods presented in the
accompanying consolidated financial statements.

(E)      EARNINGS PER SHARE

Basic earnings per share are computed by dividing earnings available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted earnings per share reflect per share amounts that would have
resulted if dilutive potential common stock had per share reflect per share
amounts that would have resulted if dilutive potential common stock had been
converted to common stock. The following reconciles amounts reported in the
financial statements for the year ended March 31, 2008:

<TABLE>
<CAPTION>

                                               INCOME         SHARES       PER-SHARE
                                            (NUMERATOR)    (DENOMINATOR)     AMOUNT
<S>                                           <C>           <C>           <C>
Income from continuing operations           $ (353,858)
Less preferred stock dividends                      --


Income available to common stockholders -
Basic and diluted earnings per share          (353,858)     12,169,263    $  (0.03)
                                            ==========      ==========    =========
</TABLE>

Effect of dilutive securities

The following convertible securities were not included in the computation of
diluted earnings per share because the effect of conversion would be
antidilutive:

                                                 SHARES OF POTENTIAL
                                                     COMMON STOCK

Preferred convertible shares                             471,816


                                      F-20
<PAGE>


NOTE 7   INCOME TAXES

The Company files separate tax returns for the parent and its Canadian
subsidiary. There was no income tax expense or utilization of net operating loss
carryforwards for the years ended March 31, 2008 and 2007, due to the Company's
net losses.

The blended Canadian Federal and Provincial Corporate tax rate of 41.5% applies
to loss before taxes of the Canadian subsidiary. The Company's tax expense
differs from the "expected" tax expense for Federal income tax purposes for the
years ended March 31, 2008 and 2007, (computed by applying the United States
Federal Corporate tax rate of 34% to consolidated loss before taxes), as
follows:


                                          2008           2007
                                      -----------    -----------
Computed "expected" tax benefit       $  (120,305)   $(1,410,567)
Foreign income tax rate differences        11,079          1,660
Change in deferred tax asset
  valuation allowance                     109,226      1,408,907
                                      -----------    -----------
                                      $        --    $        --
                                      ===========    ===========

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)%
                                       ======


The effects of temporary differences that gave rise to significant portions of
deferred tax assets and liabilities at March 31, 2008 are as follows:

Deferred tax assets:
United States net operating loss carryforward   $ 4,787,370
Canadian net operating loss carryforward            308,387
                                                -----------
Total gross deferred tax assets                   5,095,757
Less valuation allowance                         (5,095,757)
                                                -----------
Net deferred tax assets                         $        --
                                                ===========


                                      F-21
<PAGE>

NOTE 7   INCOME TAXES (CONTINUED)

The net change in valuation allowance during the year ended March 31, 2008 was
an increase of approximately $109,226. The Company's subsidiary has net
operating losses of approximately $743,100 at March 31, 2008 available to offset
the subsidiaries' net income through 2011 under Canadian Federal and Provincial
tax laws and the parent United States entity has a net operating loss
carryforward of approximately $14,080,500 available to offset the parent's net
income through 2026.

For the purpose of these estimates, certain stock based expenses aggregating
approximately $1,008,000 since inception were considered non-deductible. Actual
amounts ultimately deductible may differ from these estimates.

The utilization of the net operating loss carryforwards is dependent upon the
ability to generate sufficient taxable income during the carryforward period. In
addition, utilization of these carryforwards may be limited due to ownership
changes as defined in the Internal Revenue Code.


                                      F-22