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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2010

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

COMMISSION FILE NUMBER 000-51261

CALECO PHARMA CORP.(Exact name of registrant as specified in its charter)

|NEVADA                                                               | 20-1147435                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|59 East Mill Road, Building 4, Suite 201                             |                                     
|Long Valley, NJ                                                      | 07853                               
|(Address of principal executive officers)                            | (Zip Code)                          

(360) 306-1133(Registrant's telephone
number, including area code)

103 East Holly Street, #410, National Bank Building,Bellingham, WA 98225(Former name, former
address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X]Yes[   ] No

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
[   ]Yes    [   ] No

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [   ] |                                               | Accelerated
      filer                       [ 
       ]
|----------------------------- | --------------------------------------------- | ---------------------------------------------------------
|Non-accelerated filer   [   ] | (Do not check if a smaller reporting company) | Smaller reporting company[X]                             

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

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As of
June 10, 2010, the Issuer had 88,926,340 shares of common stock
outstanding.

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PART I - FINANCIAL INFORMATION

ITEM
1.             
FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three and six months ended April 30,
2010 are not necessarily indicative of the results that can be expected for the
year ending October 31, 2010.

As used in this Quarterly Report on Form 10-Q, the terms "we,
"us, "our, Caleco and the Company mean Caleco Pharma Corp. All dollar
amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

2

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CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)



CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)



April 30, 2010 
  (Unaudited)

---

CALECO PHARMA CORP.
  (formerly Blackstone Lake
  Minerals Inc.) 
  (A Development Stage Company)CONSOLIDATED BALANCE
    SHEETS
  (Expressed in U.S. Dollars) 
  (Unaudited)

|                                                                                                                                             |   | April 30,  |   |   | October 31, |  
|-------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ----------- | -
|                                                                                                                                             |   | 2010       |   |   | 2009        |  
|                                                                                                                                             |   |            |   |   |             |  
|ASSETS                                                                                                                                       |   |            |   |   |             |  
|                                                                                                                                             |   |            |   |   |             |  
|Current Assets                                                                                                                               |   |            |   |   |             |  
|Cash and cash equivalents                                                                                                                    | $ | 101,579    |   | $ | 271,106     |  
|Deferred tax asset, less valuation
      allowance of $2,030,555 (2009 -$1,806,741)                                                          |   | -          |   |   | -           |  
|Total Current Assets                                                                                                                         |   | 101,579    |   |   | 271,106     |  
|                                                                                                                                             |   |            |   |   |             |  
|Investment (Note 4)                                                                                                                          |   | 491        |   |   | -           |  
|Intangibles (Note 6)                                                                                                                         |   | 691,331    |   |   | 691,331     |  
|Total
      Assets                                                                                                                           | $ | 793,401    |   | $ | 962,437     |  
|                                                                                                                                             |   |            |   |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)                                                                                            |   |            |   |   |             |  
|                                                                                                                                             |   |            |   |   |             |  
|Current Liabilities                                                                                                                          |   |            |   |   |             |  
|Accounts payable and
      accrued liabilities                                                                                               | $ | 348,440    |   | $ | 447,488     |  
|Accounts payable and accrued
      liabilities related parties (Note 8)                                                                     |   | 123,510    |   |   | 149,987     |  
|Loans Payable (Note 7)                                                                                                                       |   | 432,045    |   |   | 326,210     |  
|                                                                                                                                             |   |            |   |   |             |  
|Total Current Liabilities                                                                                                                    |   | 903,995    |   |   | 923,685     |  
|                                                                                                                                             |   |            |   |   |             |  
|Commitments and Contractual Obligations
      (Note 10, 11, 12)                                                                              |   |            |   |   |             |  
|                                                                                                                                             |   |            |   |   |             |  
|Stockholders Equity (Deficiency)                                                                                                            |   |            |   |   |             |  
|Common stock (Note 9)                                                                                                                        |   |            |   |   |             |  
|Authorized 
                   
       975,000,000 common shares, par value $0.001                                                           |   |            |   |   |             |  
|Issued
      and outstanding 
                   
       April 30, 2010 -88,259,674 
                 
         October 31, 2009 -83,073,744 |   | 88,260     |   |   | 83,074      |  
|Additional paid-in capital                                                                                                                   |   | 6,121,483  |   |   | 5,557,076   |  
|Subscriptions received                                                                                                                       |   | 100,000    |   |   | 160,663     |  
|Accumulated other comprehensive loss:                                                                                                        |   |            |   |   |             |  
|Foreign currency cumulative translation adjustment                                                                                           |   | (174,074   | ) |   | (174,074    | )
|Deficit                                                                                                                                      |   | (718,605   | ) |   | (718,605    | )
|Deficit accumulated during the
      development stage                                                                                       |   | (5,527,658 | ) |   | (4,869,382  | )
|Total
      Stockholders Equity (Deficiency)                                                                                                |   | (110,594   | ) |   | 38,752      |  
|                                                                                                                                             |   |            |   |   |             |  
|Total
      Liabilities and Stockholders Equity (Deficiency)                                                                                | $ | 793,401    |   | $ | 962,437     |  

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

F-2

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CALECO PHARMA CORP.
  (formerly Blackstone Lake
  Minerals Inc.) 
  (A Development Stage Company)CONSOLIDATED STATEMENTS
    OF OPERATIONS AND COMPREHENSIVE LOSS
  (Expressed in U.S. Dollars) 
  (Unaudited)

|                                                                         |   | Cumulative          |   |   |            |   |   |              |   |   |            |   |   |            |  
|------------------------------------------------------------------------ | - | ------------------- | - | - | ---------- | - | - | ------------ | - | - | ---------- | - | - | ---------- | -
|                                                                         |   | Amounts             |   |   |            |   |   |              |   |   |            |   |   |            |  
|                                                                         |   | From October 19,    |   |   | Six        |   |   | Six          |   |   | Three      |   |   | Three      |  
|                                                                         |   | 2007 (start of the  |   |   | Months     |   |   | Months       |   |   | Months     |   |   | Months     |  
|                                                                         |   | development stage), |   |   | Ended      |   |   | Ended        |   |   | Ended      |   |   | Ended      |  
|                                                                         |   | to April 30,        |   |   | April 30,  |   |   | to April 30, |   |   | April 30,  |   |   | April 30,  |  
|                                                                         |   | 2010                |   |   | 2010       |   |   | 2009         |   |   | 2010       |   |   | 2009       |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|EXPENSES                                                                 |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|Management fees                                                          | $ | 102,502             |   | $ | 21,000     |   | $ | 15,000       |   | $ | 10,500     |   | $ | 7,500      |  
|Mineral exploration costs                                                |   | 13,710              |   |   | -          |   |   | -            |   |   | -          |   |   | -          |  
|Professional fees                                                        |   | 926,128             |   |   | 523,446    |   |   | 97,845       |   |   | 423,400    |   |   | 29,003     |  
|Other operating expenses                                                 |   | 403,211             |   |   | 135,846    |   |   | 179,436      |   |   | 63,790     |   |   | 2,885      |  
|Foreign currency loss (gain)                                             |   | 46,610              |   |   | (27,544    | ) |   | 11,202       |   |   | (12,893    | ) |   | 18,977     |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|LOSS BEFORE OTHER
      ITEMS 
        AND INCOME TAXES                  |   | 1,492,161           |   |   | 652,748    |   |   | 303,483      |   |   | 484,797    |   |   | 58,365     |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|Interest
      expense                                                   |   | 100,626             |   |   | 6,019      |   |   | 28,540       |   |   | 3,214      |   |   | 15,807     |  
|Write off of mineral
      property                                      |   | 200,000             |   |   | -          |   |   | -            |   |   | -          |   |   | -          |  
|Write off
      of account payable                                       |   | (45,743             | ) |   | -          |   |   | -            |   |   | -          |   |   | -          |  
|Grant of license                                                         |   | (491                | ) |   | (491       | ) |   | -            |   |   | -          |   |   | -          |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|LOSS BEFORE INCOME TAXES                                                 |   | 1,746,553           |   |   | 658,276    |   |   | 332,023      |   |   | 488,011    |   |   | 74,172     |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|Provision for income taxes                                               |   | -                   |   |   | -          |   |   | -            |   |   | -          |   |   | -          |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|LOSS FROM CONTINUING OPERATIONS                                          |   | 1,746,553           |   |   | 658,276    |   |   | 332,023      |   |   | 488,011    |   |   | 74,172     |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|Discontinued operations                                                  |   | 3,781,105           |   |   | -          |   |   | -            |   |   | -          |   |   | -          |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|NET LOSS                                                                 |   | 5,527,658           |   |   | 658,276    |   |   | 332,023      |   |   | 488,011    |   |   | 74,172     |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|OTHER COMPREHENSIVE
      LOSS                                           |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|Foreign currency translation adjustment                                  |   | 151,900             |   |   | -          |   |   | -            |   |   | -          |   |   | -          |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|COMPREHENSIVE LOSS                                                       | $ | 5,679,558           |   | $ | 658,276    |   | $ | 332,023      |   | $ | 488,011    |   | $ | 74,172     |  
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|BASIC AND DILUTED NET LOSS FROM 
        CONTINUING OPERATIONS PER SHARE |   |                     |   | $ | (0.01      | ) | $ | (0.00        | ) | $ | (0.01      | ) | $ | (0.00      | )
|                                                                         |   |                     |   |   |            |   |   |              |   |   |            |   |   |            |  
|WEIGHTED AVERAGE NUMBER OF 
         COMMON
        SHARES OUTSTANDING   |   |                     |   |   | 86,589,115 |   |   | 70,200,000   |   |   | 88,106,977 |   |   | 70,200,000 |  

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

F-3

---

CALECO PHARMA CORP.
  (formerly Blackstone Lake
  Minerals Inc.) 
  (A Development Stage Company) CONSOLIDATED STATEMENTS
    OF CASH FLOWS 
  (Expressed in U.S. Dollars) 
  (Unaudited)

|                                                                                                                    |   | Cumulative         |   |   |           |   |   |           |  
|------------------------------------------------------------------------------------------------------------------- | - | ------------------ | - | - | --------- | - | - | --------- | -
|                                                                                                                    |   | Amounts            |   |   |           |   |   |           |  
|                                                                                                                    |   | From October 19,   |   |   | Six       |   |   | Six       |  
|                                                                                                                    |   | 2007(start of the  |   |   | Months    |   |   | Months    |  
|                                                                                                                    |   | development stage) |   |   | Ended     |   |   | Ended     |  
|                                                                                                                    |   | to April 30,       |   |   | April 30, |   |   | April 30, |  
|                                                                                                                    |   | 2010               |   |   | 2010      |   |   | 2009      |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                |   |                    |   |   |           |   |   |           |  
|Net loss from continuing operations                                                                                 |   | (1,746,553         | ) | $ | (658,276  | ) | $ | (332,023  | )
|Adjustments to reconcile net loss to cash
      used in operating activities:                                       |   |                    |   |   |           |   |   |           |  
|Write off of mineral property                                                                                       |   | 200,000            |   |   | -         |   |   | -         |  
|Write off of accounts
      payable                                                                                 |   | (45,743            | ) |   | -         |   |   | -         |  
|Issuance of capital stock for services                                                                              |   | 91,800             |   |   | 81,000    |   |   | -         |  
|Grant of license                                                                                                    |   | (491               | ) |   | (491      | ) |   | -         |  
|Change in operating assets and liabilities:                                                                         |   |                    |   |   |           |   |   |           |  
|Increase (decrease) in
      accounts payable and accrued liabilities,                                              |   | 5,209              |   |   | (78,048   | ) |   | 801,805   |  
|Increase (decrease) in accounts
      payable and accrued
      liabilities
               
       related parties |   | 118,155            |   |   | (26,477   | ) |   | 13,016    |  
|Increase (decrease) in
      accrued interest payable                                                               |   | 44,542             |   |   | (29,335   | ) |   | 26,040    |  
|Net cash used in operating activities of discontinued operations                                                    |   | (103,029           | ) |   | -         |   |   | -         |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|Net cash used in (provided by) operating activities                                                                 |   | (1,436,110         | ) |   | (711,627  | ) |   | 508,838   |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                |   |                    |   |   |           |   |   |           |  
|Acquisition of mineral
      property                                                                               |   | (200,000           | ) |   | -         |   |   | -         |  
|Acquisition of intangibles                                                                                          |   | (22,500            | ) |   | -         |   |   | (697,331  | )
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|Net cash used in investing activities                                                                               |   | (222,500           | ) |   | -         |   |   | (697,331  | )
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                |   |                    |   |   |           |   |   |           |  
|Proceeds from loans
      payable, net                                                                              |   | 144,200            |   |   | 150,170   |   |   | 87,700    |  
|Issuance of capital stock for cash                                                                                  |   | 1,192,243          |   |   | 391,930   |   |   | -         |  
|Subscriptions received                                                                                              |   | 100,000            |   |   | -         |   |   | 102,000   |  
|Net cash provided by financing activities of discontinued operations                                                |   | 74,379             |   |   | -         |   |   | -         |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|Net cash provided by financing activities                                                                           |   | 1,510,822          |   |   | 542,100   |   |   | 189,700   |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|EFFECT OF FOREIGN CURRENCY TRANSLATION ON 
         CASH DURING THE PERIOD                                          |   | 3,755              |   |   | -         |   |   | -         |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|NET INCREASE
      (DECREASE) IN CASH                                                                               |   | (144,033           | ) |   | (169,527  | ) |   | 1,207     |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH, BEGINNING
      OF PERIOD                                                                                     |   | 245,612            |   |   | 271,106   |   |   | 52        |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH, END OF
      PERIOD                                                                                           | $ | 101,579            |   | $ | 101,579   |   | $ | 1,259     |  
|                                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH
      DISCONTINUED OPERATIONS                                                                                 | $ | -                  |   | $ | -         |   | $ | -         |  
|CASH CONTINUING OPERATIONS                                                                                         | $ | 101,579            |   | $ | 101,579   |   | $ | 1.259     |  

Supplemental Disclosure with Respect to Cash Flows (Note
  13)

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

F-4

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|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|1. | HISTORY AND ORGANIZATION OF THE COMPANY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Caleco Pharma Corp. (formerly Blackstone Lake Minerals
      Inc.) (the Company) was incorporated on May 18, 2004, under the laws of
      the State of Nevada and was in the business of exploring mineral
      properties. Effective April 19, 2006, the Company acquired 100% of the
      issued and outstanding shares of Skyflyer Technology GmbH (Skyflyer
      Technology), a company engaged in the development and commercialization
      of a one or two person, recreation flying device. On October 18, 2007, the
      Company acquired a 100% interest in a mineral claim (the Blackstone Lake
      Property) in Saskatchewan, Canada. The Company was focusing its resources
      on the development and exploration of the Blackstone Lake Property and on
      April 11, 2008, the Company sold its interest in Skyflyer Technology. On
      January 27, 2009, pursuant to a technology purchase agreement with NY
      Financial (International) Corp. (NY Financial), the Companys former
      wholly-owned subsidiary, Caleco Pharma Corp. (Caleco-Sub), acquired a
      proprietary technology and the intellectual property related thereto for
      the treatment of liver disease and other ailments, particularly resulting
      from viral infections such as the Hepatitis C virus infection (the
      Technology) (Note 11). The Company has also developed or is in the
      process of developing food supplements, hair and dermatological products,
      energy drinks and chewing gum that derive their formulations from the
      Technology. These products are being developed to provide enhancement to
      an individuals immune system. On March 12, 2010, the Company entered into
      an exclusive license agreement with Natac Biotech S.L. (Natac), a
      Spanish biotechnology corporation engaged in the research and development
      of health related products, whereby Natac has granted the Company the
      exclusive right to develop, commercialize, market and distribute five
      compounds (AOF, AH- FLO, JHF, HGF, NB-VAL40) derived from plant extracts
      throughout North and South America (Note 12). On November 22, 2009, the
      Company allowed the Blackstone Lake Property to lapse and as a result, the
      Company wrote down the mineral property to $Nil at October 31, 2009. The
      Company is considered to be a development stage company, as it has not
      generated significant revenues from operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The consolidated financial statements of the Company from
      up until July 31, 2009 included the accounts of the Company and its former
      wholly-owned subsidiary, Caleco-Sub. All inter-company
      balances and transactions were eliminated on consolidation. Effective
      August 31, 2009, the Company changed its name to Caleco Pharma Corp. To
      effect the name change, the Company completed a merger of Caleco-Sub, with
      and into the company, with the Company continuing as the sole surviving
    entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These unaudited financial statements have been prepared
      in conformity with generally accepted accounting principles in the United
      States of America for interim financial information. The accompanying
      unaudited financial statements do not include all information and footnote
      disclosures required for an annual set of financial statements prepared
      under United States of America generally accepted accounting principles.
      In the opinion of management, all adjustments (consisting solely of normal
      recurring accruals) considered necessary for a fair presentation of
      financial position, results of operations and cash flows as at April 30,
      2010 and for all periods presented, have been included. Interim results
      for the period ended April 30, 2010 are not necessarily indicative of the
      results that may be expected for the fiscal year as a
      whole.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-5

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|2. | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These financial statements have been prepared with the
      on-going assumption that the Company will be able to realize its assets
      and discharge its liabilities in the normal course of business. However,
      certain conditions noted below raise substantial doubt about the Companys
      ability to continue as a going concern. These financial statements do not
      include any adjustments to the amounts and classifications of assets and
      liabilities that might be necessary should the Company be unable to
      continue as a going concern.                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The operations of the Company have primarily been funded
      by the sale of common stock and loans received. Continued operations of
      the Company are dependent on the Companys ability to complete equity
      financings or generate profitable operations in the future. Managements
      plan in this regard is to secure additional funds through future equity
      financings. Such financings may not be available or may not be available
      on reasonable terms to the Company.                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The financial statements of the Company have been
      prepared in conformity with generally accepted accounting principles in
      the United States of America and are stated in U.S. dollars. The
      significant accounting policies adopted by the Company are as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (a) Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The preparation of financial statements in conformity
      with generally accepted accounting principles in the United States
      requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities and the disclosure of
      contingent assets and liabilities at the date of the financial statements
      and the reported amount of revenues and expenses during the reporting
      period. Actual results could differ from these estimates.                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (b) Foreign currency
      translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The functional currency of the Company is the U.S.
      dollar. The Companys former subsidiary, Caleco-Sub,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | used the U.S. dollar as its functional currency. The
      Companys former subsidiary, Skyflyer Technology, used the Euro as its
      functional currency. Accordingly, monetary assets and liabilities
      denominated in a foreign currency were translated at the exchange rate in
      effect at the balance sheet date while non-monetary assets and liabilities
      were translated at historical rates. Revenue and expense items denominated
      in a foreign currency were translated at exchange rates prevailing when
      such items are recognized in the statement of operations. Exchange gains
      and losses arising on translation of foreign currency items are included
      in the statement of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company followed the current rate method of
      translation to U.S. dollars with respect to its former foreign subsidiary.
      Accordingly, assets and liabilities were translated into U.S. dollars at
      the year-end exchange rates while revenue and expenses were translated at
      the average exchange rates during the year. Related exchange gains and
      losses are included in a separate component of stockholders equity as
      accumulated other comprehensive loss.                                                                                                                                                                                                                                        

F-6

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (c) Cash and cash
      equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company considers cash held at banks and all highly
      liquid investments with original maturities of three months or less to be
      cash and cash equivalents. At April 30, 2010 and October 31, 2009, the
      Company had no cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (d) Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company accounts for investments in companies subject
      to significant influence (generally those companies in which interests
      ranging from 20% to 50% are held) on the equity basis. Investments in
      companies that the Company is unable to significantly influence are
      carried at cost.                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Investments in which the Company holds a 51% or greater
      interest are consolidated, unless control does not exist due to the
      Companys inability to determine the investees strategic operating,
      financing and investing policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (e) Intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Intangibles are recorded at cost. Capitalized amounts
      relate to purchase costs and legal, consulting and advisory costs incurred
      in registration of the patents and intellectual property. Depreciation is
      calculated using the straight-line method over the useful lives of the
      assets. No depreciation is provided for as the patents have not yet been
      awarded and/or begun to generate revenues. No depreciation is provided for
      the intellectual property as they have indefinite lives.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (f) Accounting for the impairment of
      long-lived assets and long-lived assets to be disposed of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company reviews all long-lived assets for impairment
      whenever events or changes in circumstances indicate that the carrying
      amount of an asset may not be recoverable. Recoverability of assets to be
      held and used is measured by a comparison of the carrying amount of an
      asset to future net cash flows expected to be generated by the asset. If
      such assets are considered to be impaired, the impairment recognized is
      measured by the amount by which the carrying amount of the assets exceeds
      the fair value of the assets. Assets to be disposed of are reported at the
      lower of the carrying amount or fair value less costs to sell.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (g) Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | A deferred tax asset or liability is recorded for all
      temporary differences between financial and tax reporting and net
      operating loss carryforwards. Deferred tax expenses (benefit) result from
      the net change during the period of deferred tax assets and
      liabilities.                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred tax assets are reduced by a valuation allowance
      when, in the opinion of management, it is more likely than not that some
      portion or all of the deferred tax assets will not be realized. Deferred
      tax assets and liabilities are adjusted for the effects of changes in tax
      laws and rates on the date of enactment.                                                                                                                                                                                                                                                                                                                                                

F-7

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (h) Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company's financial instruments consist of cash and
      cash equivalents, investment, accounts payable and accrued liabilities,
      accounts payable and accrued liabilities related parties, and loans
      payable. Unless otherwise noted, it is management's opinion that the
      Company is not exposed to significant interest, currency or credit risks
      arising from these financial instruments. The fair value of these
      financial instruments approximates their carrying values, unless otherwise
      noted.                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (i) Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company accounts for share-based compensation under
      the provisions of ASC 718, Compensation-Stock Compensation. Under the
      fair value recognition provisions, stock-based compensation expense is
      measured at the grant date for all stock-based awards to employees and
      directors and is recognized as an expense over the requisite service
      period, which is generally the vesting period. The Black-Scholes option
      valuation model is used to calculate fair value.                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company accounts for stock compensation arrangements
      with non-employees in accordance with ASC 718 which require that such
      equity instruments are recorded at their fair value on the measurement
      date. The measurement of stock-based compensation is subject to periodic
      adjustment as the underlying equity instruments vest. Non-employee
      stock-based compensation charges are amortized over the vesting period on
      a straight-line basis. For stock options granted to non-employees, the
      fair value of the stock options is estimated using a Black-Scholes
      valuation model.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (j) Net loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Basic net loss per share is computed by dividing the net
      loss for the year by the weighted average number of shares of common stock
      outstanding during the year. Diluted earnings per share takes into
      consideration shares of common stock outstanding (computed under basic
      earnings per share) and potentially dilutive shares of common stock. As of
      April 30, 2010 and 2009, there were no potentially dilutive securities
      outstanding.                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (k) Comprehensive loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company has adopted Accounting Standards
      Codificiation (ASC) 220-10 formerly SFAS 130, Reporting of
        Comprehensive Income,which establishes guidelines for the reporting
      and display of comprehensive loss/and its components in financial
      statements. Comprehensive loss includes foreign currency translation
      adjustments.                                                                                                                                                                                                                                                                   

F-8

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (l) Development stage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is a development stage company as defined by
      ASC 205-915-20 formerly SFAS 7, Accounting and Reporting by
        Development Stage Enterprises,as it is devoting substantially all of
      its efforts to establish a new business and planned principal operations
      have not commenced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (m) Concentration of credit
      risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Cash is the only financial instrument that potentially
      subjects the Company to concentration of credit risk. The Company
      maintains cash in bank accounts that, at times, may exceed federally
      insured limits. The Company has not experienced any losses in such
      accounts and believes it is not exposed to any significant risks on its
      cash in bank accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (n) Recent accounting
      pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During the third quarter of 2009, the Company adopted the
      Financial Accounting Standards Board (FASB) Accounting Standards
      Codification and the Hierarchy of Generally Accepted Accounting Principles
      in accordance with FASB ASC Topic 105,Generally Accepted Accounting
      Principles(the Codification). The Codification has become the source of
      authoritative U.S. generally accepted accounting principles (GAAP)
      recognized by the FASB to be applied by nongovernmental entities. Rules
      and interpretive releases of the Securities and Exchange Commission (SEC)
      under authority of federal securities laws are also sources of
      authoritative GAAP for SEC registrants. Effective with the Companys
      adoption on July 1, 2009, the Codification has superseded all prior
      non-SEC accounting and reporting standards. All other non- grandfathered
      non-SEC accounting literature not included in the Codification has become
      non-authoritative. As the adoption of the Codification only affected how
      specific references to GAAP literature have been disclosed in the notes to
      the Companys financial statements, it did not result in any impact on the
      Companys results of operations, financial condition, or cash
      flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In September 2009, the FASB issued authoritative guidance
      regarding multiple-deliverable revenue arrangements. This guidance
      addresses how to separate deliverables and how to measure and allocate
      consideration to one or more units of accounting. Specifically, the
      guidance requires that consideration be allocated among multiple
      deliverables based on relative selling prices. The guidance establishes a
      selling price hierarchy of (1) vendor-specific objective evidence, (2)
      third-party evidence and (3) estimated selling price. This guidance is
      effective for annual periods beginning after June 15, 2010 but may be
      early adopted as of the beginning of an annual period. The Company is
      currently evaluating the effect that this guidance will have on its
      financial position and results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-9

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (n) Recent accounting pronouncements
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In January 2010, the FASB issued ASU 2010-06, Fair
      Value Measurements and Disclosures (Topic 820), Improving Disclosures
      about Fair Value Measurements,amending ASC 820. ASU 2010-06 requires
      entities to provide new disclosures and clarify existing disclosures
      relating to fair value measurements. The new disclosures and
      clarifications of existing disclosures are effective for interim and
      annual reporting periods beginning after December 15, 2009, except for the
      disclosures about purchases, sales, issuances, and settlements in Level 3
      fair value measurements, which are effective for fiscal years beginning
      after December 15, 2010 and for interim periods within those fiscal years.
      The Company is currently evaluating the impact of ASU 2010-06, but does
      not expect its adoption to have a material impact on the Companys
      financial position or results of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855),amending ASC 855. ASU 2010-09
      removes the requirement for an SEC filer to disclose a date relating to
      its subsequent events in both issued and revised financial statements. ASU
      2010-09 also eliminates potential conflicts with the SECs literature.
      Most of ASU 2010-09 is effective upon issuance of the update. The Company
      adopted ASU 2010- 09 in February 2010, and its adoption did not have a
      material impact on the Companys financial reporting and
      disclosures.                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (o) Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Certain amounts reported in the prior period have been
      reclassified to conform to the current periods
      presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F-10

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|4. | INVESTMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On November 1, 2009 the Company acquired 334 shares,
      representing a 10% interest, in Caleco Pharma Europe S.L. (SL), a Spanish
      Corporation, pursuant to a license agreement (see Note 12) for
      consideration of Euro 334 (US $491).                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5. | MINERAL PROPERTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On October 18, 2007, the Company completed the
      acquisition of a mineral property (the Blackstone Lake Property) under
      the terms of a purchase agreement entered into by the Company on October
      3, 2007. The Blackstone Lake Property consisted of two mineral claims
      located in Saskatchewan, Canada. The mineral claims were in good standing
      until August 22, 2009 and as of November 22, 2009, the claims officially
      lapsed. Accordingly, the Company wrote off all associated costs to
      operations during the year ended October 31, 2009.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6. | INTANGIBLES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |                                 |   | January 31, |  |   | October 31, | 
| | ------------------------------- | - | ----------- |  | - | ----------- | 
| |                                 |   | 2010        |  |   | 2009        | 
| |                                 |   |             |  |   |             | 
| | Patents (Note 11)               | $ | 80,000      |  | $ | 80,000      | 
| | Intellectual property (Note 11) |   | 611,331     |  |   | 611,331     | 
| |                                 |   | 691,331     |  |   | 691,331     | 
| | Accumulated amortization        |   | -           |  |   | -           | 
| |                                 |   |             |  |   |             | 
| | Net book value                  | $ | 691,331     |  | $ | 691,331     | 

During the period ended April 30, 2010,
  the Company did not amortize $80,000 and $611,311 of its patents and
  intellectual property as the patents have not yet been awarded and/or they have
  not begun to generate revenues and the intellectual property has an indefinite
  life. Capitalized amounts relate to purchase costs and legal, consulting and
  advisory costs incurred in registration of the patents and intellectual
  property.

F-11

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|7. | LOANS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the six months ended April 30, 2010, a loan was
      granted from Natac for Euro130,000 (US $174,919) pursuant to a proposed
      lab facilities and service agreement (Note 10 -vii). The loan is
      non-interest bearing and was due March 19, 2010. The loan has been
      extended to September 10, 2010.                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2009, Euro 112,000 (US
      $150,700) in accounts payable was reclassified to loans payable. The loans
      are non-interest bearing. One loan of Euro 56,000 (US $75,350) was due
      February 1, 2010 and has not been paid. The second loan of Euro 56,000 (US
      $75,350) was due June 1, 2010 and has not been paid.                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2009, a loan was
      granted from a third party totaling $15,000. The loan is non-interest
      bearing and is due on demand. On January 15, 2010, the loan of $15,000 was
      settled for shares of the Companys common stock.                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2009, a loan was
      granted from a third party company for $1,200. The loan bore interest at
      10% per annum and was due on demand. On October 5, 2009, the loan of
      $1,200 was settled for shares of the Companys common stock. Interest
      included in the statement of operations for the six and three months ended
      April 30, 2009 totaled $0 and $0, respectively.                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2009, a loan was
      granted from NY Financial totaling $77,500 of which $74,159 was repaid in
      the same period. The loan bears interest at 10% per annum, compounded
      monthly, beginning January 31, 2009 and is due on demand (Note 11).
      Interest expense included in the statement of operations for the six
      months ended April 30, 2010 and 2009 totaled $172 and $1,858,
      respectively. Interest expense included in the statement of operations for
      the three months ended April 30, 2010 and 2009 totaled $86 and $1,858,
      respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2008, several loans
      were granted from a third party company totaling $47,000. The loans bore
      interest at 10% per annum and were due on demand. On October 5, 2009, the
      loans and accrued interest totaling $53,907 was settled for shares of the
      Companys common stock. Interest expense included in the statement of
      operations for the six and three months ended April 30, 2009 totaled
      $2,857 and $1,870, respectively.                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2008, several loans
      were granted from a third party company totaling $28,000. The loans bore
      interest at 10% per annum and were due on demand. On October 5, 2009, the
      loans and accrued interest totaling $32,339 was settled for shares of the
      Companys common stock. Interest expense included in the statement of
      operations for the six and three months ended April 30, 2009 totaled
      $1,825 and $1,261.                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended October 31, 2008, several loans
      were granted from a third party company totaling $18,100. The loans bear
      interest at 10% per annum and are due on demand. On October 5, 2009, the
      loans and accrued interest totaling $21,203 was settled for shares of the
      Companys common stock. Interest expense included in the statement of
      operations for the six and three months ended April 30, 2009 totaled $898
      and $442, respectively.                                                                                                                            

F-12

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|7. | LOANS PAYABLE (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended October 31, 2007, several loans
      were granted from a third party company totaling $290,000. Loans totaling
      $280,000 bear interest at 8% per annum, are compounded annually, and were
      due April 30, 2009. The loans were verbally extended with the same terms
      and were due on demand. A loan of $10,000 was non-interest bearing and had
      no specific terms of repayment. On October 1, 2007, the Company agreed to
      begin paying interest on this loan at 8% per annum and agreed to repay the
      loan on demand. On October 5, 2009, the loans and accrued interest
      totaling $335,114 was settled for shares of the Companys common stock.
      Interest expense included in the statement of operations for the six and
      three months ended April 30, 2009 totaled $12,426 and $6,110,
      respectively.                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended October 31, 2006, two loans were
      granted from a third party company for $50,000 and $100,000. The loans
      bear interest at 8% per annum, are compounded annually, and were due May
      16, 2008 and June 19, 2008 respectively. On each of the loans due dates,
      the loans were verbally extended with the same terms and are due on
      demand. During the year ended October 31, 2009, $41,111 of principal and
      $16,389 of accrued interest was paid. During the six months ended April
      30, 2010, $9,646 of principal and $35,354 of accrued interest was paid.
      Interest expense included in the statement of operation for the six months
      ended April 30, 2010 and 2009 totaled $5,848 and $8,676, respectively.
      Interest expense included in the statement of operations for the three
      months ended April 30, 2010 and 2009 totaled $3,128 and $4,266,
      respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | At April 30, 2010 and October 31, 2009, included in
      accounts payable and accrued liabilities related parties is $20,758 owed
      to a former director and officer of the Company for management fees and
      reimbursement of expenses. Amounts due to and from officers and directors
    are unsecured, non-interest bearing and due on demand. Management fees included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $0 and $0.  Management fees included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $0 and $0.                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | At April 30, 2010 and October 31, 2009, included in
      accounts payable and accrued liabilities related parties is Euro 5,000
      (US $6,728) and Euro 5,000 (US $7,380), respectively, owed to a company
      owned by a former officer and director of the Company for management fees.
      Amounts due to and from officers and directors are unsecured, non-interest
    bearing and due on demand. Management fees included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $0 and $0.  Management fees included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $0 and $0.                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | At April 30, 2010 and October 31, 2009, included in
      accounts payable and accrued liabilities related parties is $39,024 and
      $64,849, respectively, owed to officers and/or directors of the Company
      for management fees and reimbursement of expenses. Consulting fees paid to
      officers and/or directors of the Company for the six months ended April
      30, 2010 and 2009 totaled $10,500 and $15,000, respectively. Consulting
      fees paid to officers and/or directors of the Company for the three months
      ended April 30, 2010 and 2009 totaled $10,500 and $7,500, respectively.
      Amounts due to and from officers and directors are unsecured, non-interest
      bearing and due on demand. The consulting fees are included in management
      fees on the statement of operations.                                                                                                                    

F-13

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|8. | RELATED PARTY TRANSACTIONS (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | At April 30, 2010 and October 31, 2009 included in
      accounts payable and accrued liabilities related parties is $57,000 owed
      to a company owned by a director of the Company for consulting fees. .
      Amounts due to and from officers and directors are unsecured, non-interest
      bearing and due on demand. Consulting fees included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $0 and $0.  Consulting fees included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $0 and $0.

|9. | COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Companys articles of incorporation allow it to issue
      up to 975,000,000 shares of common stock, par value $0.001. Effective
      September 30, 2005, the Company effected a stock split of its common stock
      by issuing thirteen new shares for each old share. Except as otherwise
      stated to the contrary in these financial statements, all references to
      shares and prices per shares have been adjusted to give retroactive effect
      to the stock split.                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On June 14, 2004, the Company issued 39,000,000 shares of
      its common stock at $0.001 per share in a private placement
      transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On July 4, 2004, the Company issued 16,250,000 shares of
      its common stock at $0.01 per share in a private placement
      transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On October 25, 2004, the Company issued 14,950,000 shares
      of its common stock at $0.05 per share in a private placement
      transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On April 19, 2006, the Company acquired all the issued
      and outstanding stock of Skyflyer Technology, which was accounted for as a
      recapitalization of the Company (Note 1) in exchange for 33,000,000 shares
      of common stock. The issued number of shares of common stock was that of
      the Company with adjustments made for differences in par value between the
      Company and Skyflyer Technology. On April 11, 2008, the Company completed
      a share exchange agreement with Inventa and Skyflyer Technology, whereby
      the Company sold to Inventa all of the issued and outstanding shares of
      Skyflyer Technology in exchange for the surrender of 33,000,000 shares of
      the Companys common stock for cancellation. On April 11, 2008, the
      Company cancelled the 33,000,000 shares of its common stock.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On September 21, 2009, the Company issued 5,936,500
      shares of its common stock at $0.10 per share for total proceeds of
      $593,651 in a private placement transaction. The Company also issued
      5,117,244 shares of its common stock at $0.10 per share for settlement of
      accounts payable and loans payable with an aggregate value totaling
      $511,724.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On October 5, 2009, the Company issued 750,000 shares of
      its common stock at $0.10 per share for total proceeds of $75,000 in a
      private placement transaction. The Company also issued 300,000 shares of
      its common stock at $0.10 per share for settlement of accounts payable
      with an aggregate value totaling $30,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On October 5, 2009, the Company issued 710,000 shares of
      its common stock at $0.10 per share for total proceeds of $71,000 in a
      private placement transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-14

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|9.  | COMMON STOCK (continued)                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On October 6, 2009, the Company issued 60,000 shares of
      its common stock at $0.18 per share for consulting services with an
      aggregate value of $10,800. The consulting services are included in
      professional fees on the statement of operations.                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On November 10, 2009, the Company issued 1,338,630 shares
      of its common stock at $0.10 per share for total proceeds of $133,863 in a
      private placement transaction.                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On December 22, 2009, the Company issued 1,145,000 shares
      of its common stock at $0.10 per share for total proceeds of $114,500 in a
      private placement transaction. The Company also issued 100,000 shares of
      its common stock at $0.10 per share for settlement of accounts payable
      with an aggregate value totaling $10,000.                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On January 15, 2010, the Company issued 337,300 shares of
      its common stock at $0.10 per share for total proceeds of
      $33,730.                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On January 15, 2010, the Company issued 200,000 shares of
      its common stock at $0.10 per share for total proceeds of $20,000 in a
      private placement transaction. The Company also issued 260,000 shares of
      its common stock at $0.10 per share for settlement of accounts payable
      with an aggregate value totaling $11,000 and loans payable with an
      aggregate value totaling $15,000.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On January 19, 2010, the Company issued 1,000,000 shares
      of its common stock at $0.10 per share for total proceeds of $100,000 in a
      private placement transaction.                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On February 15, 2010, the Company issued 300,000 shares
      of its common stock at $0.27 per share for consulting services with an
      aggregate value of $81,000. The consulting services are included in
      professional fees on the statement of operations.                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On February 18, 2010, the Company issued 365,000 shares
      of its common stock at $0.10 per share for total proceeds of $36,500 in a
      private placement transaction.                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On February 18, 2010, the Company issued 140,000 shares
      of its common stock at $0.10 per share for total proceeds of $14,000 in a
      private placement transaction.                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|10. | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | i)                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | iii)                                                                                                                                                                                                                                                                                                                                                                                                               

|
|

F-15

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|10. | COMMITMENTS(continued)
|--- | ----------------------
|    |                       
|    | iv)                   
|    |                       
|    | v)                    
|    |                       
|    | vi)                   
|    |                       
|    |                       
|    |                       
|    |                       
|    |                       
|    |                       
|    |                       
|    |                       
|    |                       
|    |                       

F-16

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|10. | COMMITMENTS(continued)
|--- | ----------------------

| | vii) | On February 18, 2010, the Company entered into a lab
      facilities and service agreement (the Lab Facilities and Service
      Agreement) with Natac whereby the Company will have access to Natacs
      laboratory facility and procure certain laboratory services from Natac in
      consideration of the following:
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                
| |      | (a)                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                
| |      | (b)                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                
| |      | (c)                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                
| |      | (d)                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                

The closing of the Lab Facilities and
  Service Agreement was expected to occur on or before March 19, 2010. The closing
  date has been extended to September 10, 2010.

The closing of the Lab Facilities and
  Service Agreement is subject to a number of customary conditions, including:

| | (a) | the closing of a research and licensing agreement whereby
      the Company will acquire an exclusive license to certain probiotic strains
      for the countries located in North and South America; and                              
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                         
| | (b) | the closing of an exclusive licensing agreement whereby
      the Company will acquire an exclusive license to certain health related
      products for the countries located in North and South America. (closed
      March 12, 2010)

Upon closing, the term of the Lab
  Facilities and Service Agreement will be until September 30, 2013 and either
  party may terminate the Lab Facilities and Service Agreement if there is a
  material breach of the Lab Facilities and Service Agreement by the other
  party.

F-17

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|11. | TECHNOLOGY PURCHASE AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|    | On January 27, 2009, pursuant to a technology purchase
      agreement, the Companys former subsidiary, Caleco- Sub, acquired a
      proprietary technology and the intellectual property related thereto for
      the treatment of liver disease and other ailments, particularly resulting
      from viral infections such as the Hepatitis C virus infection (the
      Technology) from NY Financial.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|    | As consideration for the Technology, the Company and
      Caleco-Sub agreed to:                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (1)                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (2)                                                                                                                                                                                                                                                                                                                                                                                                            

|    | As further consideration, an officer and director of the
      Company transferred 32,000,000 shares of the Companys common stock to NY
      Financial on closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Caleco-Sub has also agreed to reimburse the documented
      costs related to the Technology totaling Euro 432,000 (US $581,270) and
      $66,500. As at April 30, 2010, the Company has paid Euro 265,311 (US
      $356,985) and $18,250 in cash, has issued promissory notes for accounts
      payable totaling Euro 112,000 (US $150,700) and has issued 300,000 shares
      of its common stock at $0.10 per share for settlement of accounts payable
      with an aggregate value totaling $30,000. One loan of Euro 56,000 (US
      $75,350) was due February 1, 2010 and has not been paid. The second loan
      of Euro 56,000 (US $75,350) was due June 1, 2010 and has not been
      paid.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|12. | LICENSE AGREEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Europe License Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | On November 1, 2009, the Company entered into a license
      agreement (the Europe License Agreement) with Caleco Pharma Europe S.L.
      (SL), a Spanish Corporation, whereby the Company granted SL an exclusive
      license in the European Continent to market and exploit certain products
      the Company has developed or is developing.                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In consideration of the grant of the exclusive license,
      SL has agreed to pay and issue the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| | (a) | issue to the Company such number of shares of SL that
      equals 10% of SLs outstanding share capital (the SL Shares). The
      Companys 10% interest in the share capital of SL is non-dilutive as long
      as SLs outstanding share capital is 1,000,000 Euros or less. If SLs
      share capital is above 1,000,000 Euros and it offers to issue additional
      shares, the Company will have a right to purchase 10% of the offered
      shares.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-18

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|12. | LICENSE AGREEMENTS (continued)
|--- | ------------------------------
|    |                               
|    | (b)                           

The term of the exclusive license is
  for a period of twenty years. The Company may terminate the Europe License
  Agreement if SL does not achieve the following annual gross revenues: (i)
  $3,000,000 from the sale of the Products during the period of July 31, 2012 to
  July 30, 2013; (ii) $5,000,000 from the sale of the Products during the period
  of July 31, 2013 to July 30, 2014; and (iii) $12,000,000 from the sale of the
  Products during the period of July 31, 2014 to July 30, 2015.

Natac License Agreement

On March 12, 2010, the Company entered
  into an exclusive license agreement (the License Agreement) with Natac whereby
  Natac has granted the Company the exclusive right to develop, commercialize,
  market and distribute five compounds (AOF, AH-FLO, JHF, HGF, NBVAL40) derived
  from plant extracts throughout North and South America.

In consideration of the exclusive
  license, the Company has agreed to pay a royalty of five percent (5%) of the net
  sales of the compounds in North and South America. Under the terms of the
  License Agreement, the Company is also required to:

| | (a) | purchase the products from Natac in accordance with the
      terms of the License Agreement;                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                  
| | (b) | complete its first commercial sale of the products by
      March 31, 2011;                                                                                      
| |     |                                                                                                                                                                  
| | (c) | purchase a minimum of 300,000 units, each unit being 10
      grams, of the products from Natac by December 31, 2011; and                                        
| |     |                                                                                                                                                                  
| | (d) | within one year of entering into the License Agreement,
      complete a clinical trial(s) for the purpose of supporting the
      effectiveness of the products.

The Company has the right to
  sub-license the five compounds in North and South America and the right to
  assign the entire interest in the License Agreement subject to the following:

| | (a) | if the assignment is for cash consideration only, the
      Company will be entitled to retain 90% of the cash payment and Natac will
      be entitled to 10% of the cash payment; and                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                   
| | (b) | if the assignment is for a combination of a cash payment
      and royalties, the Company will be entitled to retain 90% of the cash
      payment and royalty with 10% of the cash payment and royalty being paid to
      Natac.

The term of the License Agreement is
  for a period of twenty years.

F-19

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(formerly Blackstone Lake Minerals Inc.)      
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2010                                
|(Unaudited)                                   
|                                              

|13. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH
      FLOWS
|--- | --------------------------------------------------------

| |                    |   | Cumulative         |  |   |           |  |   |           | 
| | ------------------ | - | ------------------ |  | - | --------- |  | - | --------- | 
| |                    |   | Amounts from       |  |   |           |  |   |           | 
| |                    |   | October 19, 2007   |  |   | Six       |  |   | Six       | 
| |                    |   | (start of the      |  |   | Months    |  |   | Months    | 
| |                    |   | development stage) |  |   | Ended     |  |   | Ended     | 
| |                    |   | to April 30,       |  |   | April 30, |  |   | April 30, | 
| |                    |   | 2010               |  |   | 2010      |  |   | 2009      | 
| |                    |   |                    |  |   |           |  |   |           | 
| | Cash paid for:     |   |                    |  |   |           |  |   |           | 
| | Interest           | $ | 59,064             |  | $ | 35,354    |  | $ | -         | 
| | Income
      taxes | $ | -                  |  | $ | -         |  | $ | -         | 
| |                    |   |                    |  |   |           |  |   |           | 

|    | Non-cash Transactions                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                
|    | Investing and financing activities that do not have an
      impact on current cash flows are excluded from the statement of cash
      flows.                                                                 
|    |                                                                                                                                                                                                                
|    | During the six months ended April 30, 2010, $21,000 in
      accounts payable was settled by the issuance of 210,000 shares of the
      Companys common stock.                                               
|    |                                                                                                                                                                                                                
|    | During the six months ended April 30, 2010, $15,000 in
      loans payable was settled by the issuance of 150,000 shares of the
      Companys common stock.                                                  
|    |                                                                                                                                                                                                                
|14. | SUBSEQUENT EVENTS                                                                                                                                                                                              
|    |                                                                                                                                                                                                                
|    | On May 4, 2010, the Company issued 666,666 shares of its
      common stock at $0.15 per share for total proceeds of $100,000 in a
      private placement transaction.                                        
|    |                                                                                                                                                                                                                
|    | On June 11, 2010, the Company entered into a management
      consulting agreement with an officer of the Company whereby the Company
      agreed to issue 300,000 shares of the Companys common
      stock.

F-20

---

|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS
      OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
|------- | --------------------------------------------------------------------------------------------

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report
constitute "forward-looking statements. These statements, identified by words
such as plan, anticipate, believe, estimate, should, expect and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Part II  Item 1A. Risk
Factors" and elsewhere in this Quarterly Report. We advise you to carefully
review the reports and documents, particularly our Annual Reports, Quarterly
Reports and Current Reports, that we file from time to time with the United
States Securities and Exchange Commission (the SEC).

CORPORATE OVERVIEW

We were incorporated on May 18, 2004 under the laws of the
State of Nevada.

We are a company engaged in the acquisition and development of
over-the-counter medication and Food and Drug Administration (FDA) approved
pharmaceuticals. We currently own a proprietary technology designed to benefit
people suffering from moderate to severe liver maladies, such as elevated liver
enzymes and Hepatitis C viral infection, by lowering liver enzymes and reducing
viral loads (the Liver Health Formula). We have developed or are in the
process of developing food supplements, hair and dermatological products, energy
drinks and chewing gum that derive their formulations from our Liver Health
Formula. These products are being developed to provide enhancement to an
individual's immune system. The details of our Liver Health Formula and our
products are set out below under the heading Principal Products."

On March 12, 2010, we entered into an exclusive license
agreement with Natac Biotech S.L. (Natac), a Spanish biotechnology corporation
engaged in the research and development of health related products, whereby
Natac has granted us the exclusive right to develop, commercialize, market and
distribute five compounds (AOF, AH-FLO, JHF, HGF, NB-VAL40) derived from plant
extracts throughout North and South America. The details of the License
Agreement are set out below under the heading Principal Products  Natac and
Health Related Products.

RECENT CORPORATE DEVELOPMENTS

We experienced the following corporate developments since the
filing of our Form 10-Q for the fiscal quarter ended January 31, 2010 on March
17, 2010:

|1. | On March 19, 2010, we entered into an amendment agreement
      with Natac (the Share Purchase Amendment Agreement) to amend Share
      Purchase Agreement dated Feb 10, 2010 between the Company and Natac  (the Share Purchase Agreement). Under
      the terms of the Share Purchase Amendment Agreement, the closing date of
      the Share Purchase Agreement was extended from March 19, 2010 to April 19,
  2010.                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | On March 19, 2010, we entered into an amendment agreement
      (the Lab Facilities and Services Amendment Agreement) to amend the terms
      of the Lab Facilities and Services Agreement dated February 18, 2010 (the
      Lab Facilities and Services Agreement) between Caleco and Natac. Under
      the terms of the Lab Facilities and Services Amendment Agreement, the
      parties agreed to extend the closing date to April 19, 2010 and extend all
      payment dates.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | On April 26, 2010, we entered into a second amendment
      agreement with Natac (the Second Amendment to the Share Purchase
      Agreement) to amend Share Purchase Agreement. Under the terms of the
      Second Amendment to the Share Purchase Agreement, the closing date of the
      Share Purchase Agreement was further extended from April 19, 2010 to July
      19, 2010.                                                                                                  

3

---

|4. | On April 26, 2010, we entered into a second amendment
      agreement (the Second Amendment Agreement to the Lab Facilities and
      Services Agreement) to amend the terms of the Lab Facilities and Services
      Agreement. Under the terms of the Second Amendment Agreement to the Lab
      Facilities and Services Agreement, the parties agreed to extend the
      closing date to May 19, 2010 and extend all payment dates.                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5. | On May 4, 2010, we completed a private placement offering
      of 666,666 shares of our common stock at a price of $0.15 per share
      pursuant to Rule 506 of Regulation D of the Securities Act. The investor
      represented that it is an accredited investor in accordance with
      Regulation D of the Securities Act.                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6. | On June 11, 2010, we entered into a third amendment
      agreement (the Third Amendment to the Lab Facilities and Services
      Agreement) to amend the terms of the Lab Facilities and Services
      Agreement. Under the terms of the Third Amendment Agreement to the Lab
      Facilities and Services Agreement, the parties agreement to extend the
      closing date to September 10, 2010 and to extend all payment dates.                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|7. | On June 11, 2010, John Boschert resigned as our Chief
      Financial Officer. There were no disagreements between Mr. Boschert and us
      regarding any matters relating to our operations, policies or
      practices.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|8. | Also on June 11, 2010, we appointed Luc Vanhal as our
      Chief Financial Officer in place of Mr. Boschert and entered into a
      management consulting agreement dated June 11, 2010 (the Management
      Consultant Agreement) with Mr. Vanhal. Under the terms Management
      Consulting Agreement, Mr. Vanhal agreed to act as our Chief Financial
      Officer in consideration of which we agreed to issue to Mr. Vanhal 300,000
      shares of our common stock. The issuance of shares was completed pursuant
      to Rule 506 of Regulation D and Mr. Vanhal represented that he is an
      accredited investor as defined in Regulation D.

PRINCIPAL PRODUCTS

Liver Heath Formula

We acquired the Liver Health Formula pursuant to the terms and
conditions of a technology purchase agreement dated December 19, 2008 (the
Technology Purchase Agreement) among NY Financial (International) Corp. (NY
Financial), the Company, Caleco Pharma Corp., formerly our wholly owned
subsidiary, and John Boschert, our sole executive officer and a director. Under
the terms of the Technology Purchase Agreement, NY Financial assigned and
transferred the Liver Health Formula to us in consideration of which we:

|(a) | paid $22,500 in cash to NY Financial; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(b) | issued a non-interest bearing promissory note in the
      amount of $77,500 to NY Financial at closing. This amount was payable on
      January 31, 2009. On January 31, 2009, we became in default of the
      promissory note as we was unable to pay the $77,500. Under the terms of
      the promissory note, the unpaid portion of the promissory note, being
      $71,500, would bear interest at 10% per annum commencing on January 31,
      2009. During the year ended October 31, 2009, an additional $68,159 was
      repaid.

As further consideration, Mr. Boschert transferred 32,000,000
shares of our common stock held by him to NY Financial, which resulted in a
change in control. We also appointed F. Javier Benedi Garcia, the sole director
of NY Financial, to our Board of Directors.

Following closing, we agreed to reimburse the documented costs
related to the recording of the patent applications and the filing of the
European Drug Master File applications, which amount is not to exceed 590,000
EUR. Subsequent to the entry into the Technology Purchase Agreement, we
determined that the reimbursable expenses amounted to Euro 432,000 (US $581,270)
and $66,500. As at April 30, 2010, the Company has paid Euro 265,311 (US
$356,985) and $18,250 in cash, has issued promissory notes for accounts payable
totaling Euro 112,000 (US $150,700) and has issued 300,000 shares of its common
stock at $0.10 per share for settlement of accounts payable with an aggregate
value totaling $30,000. One loan of Euro 56,000 (US $75,350) was due February 1,
2010 and has not been paid. The second loan of Euro 56,000 (US $75,350) was due
June 1, 2010 and has not been paid. In addition, the parties also agreed
that:

4

---

|(a) | we will use our best efforts to raise financing of
      $2,500,000. In connection with this financing, we have agreed that we will
      not issue more than 20,000,000 shares of our common stock unless we obtain
      NY Financials consent; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                       
|(b) | we are restricted from assigning or transferring the
      Liver Health Formula until January 1, 2011. Notwithstanding this
      restriction, we will have the right to license the Liver Health
      Formula.                                      

Our Liver Health Formula is designed to benefit people suffering
  from moderate to severe liver maladies, such as elevated liver enzymes and Hepatitis
  C viral infection, by lowering liver enzymes and reducing viral loads (which
  are a measure of the severity of a viral infection). To date, we have filed
  patent applications in the United States, Canada and Europe and obtained four
  European Drug Master File applications which will allow us to market our Liver
  Health Formula in Europe, while protecting the confidential material of our
  intellectual property. Our ability to further develop, market and manufacture
  our Liver Health Formula as an over-the-counter product or an FDA approved pharmaceutical
  is subject to our obtaining substantial financing, of which there is no assurance.

Using the formulations of our Liver Health Formula, we have developed
  or are in the process of developing food supplements, hair and dermatological
  products, energy drinks and chewing gum. These products are being designed to
  provide enhancement to an individual's immune system. A description of the products
  are set out below.

|Product Group              | Name of Products                                                       | Description of Products                                                                                                                 
|-------------------------- | ---------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Food Supplements           | Lamiridosin                                                            | A dietary supplement that we
          are in the process of developing and designed to enhance an individual's
          immune system.
|Natural Hair Care Products | Lamiri Shampoo, LamiriHair Conditioner
          and Lamiri Hair Tonic | Hair care products that promote
          healthy scalp and hair.                                                                       
|Natural Skin Care Products | LamiriGel and LamiriCreme                                              | Skincare products that promote
          healthy skin.                                                                                  
|Energy Drinks              | KTKin                                                                  | An energy drink designed to
          enhance an individual's immune system.                                                            
|Chewing Gum                | KTK Chewing Gum and KTKids Children
          Chewing Gum              | Chewing gum designed to enhance
          an individual's immune system.                                                                

Engagement of Cosmetic Project Management

In connection with the development of our products, we engaged
Cosmetic Project Management, a Spanish corporation engaged in the business of
the formulating, developing and commercializing cosmetic products, to assist us
in formulating, developing and commercializing our Natural Hair Care Products
and Natural Skin Care Products. In particular, Cosmetic Project Management has
agreed to do the following:

|(a) | produce samples for each of our Natural Hair Care
      Products and Natural Skin Care Products;                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                         
|(b) | provide us with a feasibility study on our Natural Hair
      Care Products and Natural Skin Care Products;                             
|    |                                                                                                                                         
|(c) | design product packaging and develop an advertising plan
      for our Natural Hair Care Products and Natural Skin Care
  Products;     
|    |                                                                                                                                         
|(d) | assist us in selecting a manufacturer in order to ensure
      good manufacturing practice guidelines are met; and                      
|    |                                                                                                                                         
|(e) | assist us in preparing and filing a product dossier for
      each of our Natural Hair Care Products and Natural Skin Care
    Products.

5

---

In consideration for these services, we agreed to pay EUR
20,100 (approximately $27,050) to Cosmetic Project Management (which amount has
been paid).

We anticipate that we will use the samples of our Natural Hair
Care Products and Natural Skin Care Products for clinical studies purposes.
These clinical studies will assist us in determining whether there are any
dermatological health benefits for hair and skin through the use of our Natural
Hair Care Products and Natural Skin Care Products.

Grant of European License to Caleco Pharma Europe S.L.

On November 1, 2009, we entered into a license agreement (the
Europe License Agreement) with Caleco Pharma Europe S.L. (SL), a Spanish
corporation, whereby we granted SL an exclusive license to market and exploit in
the European continent certain products we have developed or are developing.
These products include Lamiridosin, LamiriShampoo, LamiriHair Conditioner,
LarimiHair Tonic, LamiriGel, LamiriCreme, KTKin, KTK Chewing Gum and KTKids
Children Chewing Gum (collectively, the Licensed Products). In consideration
of the grant of the exclusive license, SL issued and granted to us:

|(a) | such number of shares of SL that equals 10% of SLs
      outstanding share capital (the SL Shares). Our 10% interest in the share
      capital of SL is non-dilutive as long as SLs outstanding share capital is
      1,000,000 Euros or less. If SLs share capital is above 1,000,000 Euros
      and it offers to issue additional shares, we will have a right to purchase
      10% of the offered shares; and
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b) | a royalty of five percent (5%) of its gross sales of the
      Licensed Products.                                                                                                                                                                                                                                                                                                                                        

In addition to SLs exclusive license, SL will have the right
to sub-license the Licensed Products in the European continent. Each party will
also have the right to assign its entire interest in the Europe License
Agreement subject to the mutual agreement of the parties. Any refusal by the
parties will not be considered reasonable if the transaction that is the subject
of the refusal is in accordance with internationally accepted standards for the
licensing of products.

Under the Europe License Agreement, we have the right to select
the manufacturer to manufacture the Licensed Products in the European continent.
Once a manufacturer has been selected by us, SL will be responsible for all
payments to the manufacturer.

The term of the exclusive license is for a period of twenty
(20) years. We may terminate the Europe License Agreement if SL does not achieve
the following annual gross revenues from the sale of the Licensed Products:

|(a) | $3,000,000 during the period of July 31, 2012 to July 30,
      2013;    
|--- | -------------------------------------------------------------------------
|(b) | $5,000,000 during the period of July 31, 2013 to July 30,
      2014; and
|(c) | $12,000,000 during the period of July 31, 2014 to July
      30, 2015.   

Under the Europe License Agreement, SL was required to provide
a development plan for the development of the Licensed Products. As of the date
of this Quarterly Report, we have yet to receive an acceptable development plan
and are currently in discussions with SL to resolve this matter.

Natac and Health Related Products

License Agreement  Health Related Compounds

On March 12, 2010, we entered into an exclusive license
agreement (the License Agreement) with Natac whereby Natac has granted us the
exclusive right to develop, commercialize, market and distribute five compounds
(AOF, AH-FLO, JHF, HGF, NBVAL40) derived from plant extracts throughout North
and South America.

In consideration of the exclusive license, we have agreed to
pay a royalty of five percent (5%) of the net sales of the compounds in North
and South America. Under the terms of the License Agreement, we are also
required to:

6

---

|(a) | purchase the products from Natac in accordance with the
      terms of the License Agreement;                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                  
|(b) | complete our first commercial sale of the products by
      March 31, 2011;                                                                                      
|    |                                                                                                                                                                  
|(c) | purchase a minimum of 300,000 units, each unit being 10
      grams, of the products from Natac by December 31, 2011; and                                        
|    |                                                                                                                                                                  
|(d) | within one year of entering into the License Agreement,
      complete a clinical trial(s) for the purpose of supporting the
      effectiveness of the products.

The License Agreement also provides that we will have the right
to sub-license the five compounds in North and South America. We will also have
the right to assign our entire interest in the License Agreement subject to the
following:

|(a) | if the assignment is for cash consideration only, we will
      be entitled to retain 90% of the cash payment and Natac will be entitled
      to 10% of the cash payment; and                                         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                        
|(b) | if the assignment is for a combination of a cash payment
      and royalties, we will be entitled to retain 90% of the cash payment and
      royalty with 10% of the cash payment and royalty being paid to
    Natac.

The term of the License Agreement is for a period of twenty
years.

Share Purchase Agreement

On February 10, 2010, we entered into a share purchase
agreement, as amended on March 19, 2010 and April 26, 2010, (the Share Purchase
Agreement) with Natac and the Principal Stockholders. Under the terms of the
Share Purchase Agreement, we agreed to acquire eighteen percent (18%) of the
share capital of Natac from the Principal Stockholders (the Natac Shares). In
consideration of the Natac Shares, we agreed to issue an aggregate of 4,300,000
shares of our common stock to the Principal Stockholders.

The closing of the Share Purchase Agreement was expected to
occur on or before July 19, 2010 and is subject to a number of customary
conditions, including:

|(a) | the closing of a research and licensing agreement whereby
      we will acquire an exclusive license to certain probiotic strains for the
      countries located in North and South America;        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                      
|(b) | the closing of an exclusive licensing agreement whereby
      we will acquire an exclusive license to certain health related products
      for the countries located in North and South America; and
|    |                                                                                                                                                                                                      
|(c) | the closing of a lab facilities and services agreement
      whereby Natac shall provide certain services and laboratory access to
      us.                                                         

Following closing of the Share Purchase Agreement, Natac has
agreed to appoint a nominee of the Company to the Board of Directors of Natac.
In addition, we have also agreed to appoint a nominee of Natac to our Board of
Directors.

There is no assurance that we will complete our acquisition of
the Natac Shares.

Lab Facilities and Service Agreement

On February 18, 2010, we entered into a lab facilities and
service agreement, as amended on March 19, 2010, April 26, 2010 and June 11,
2010 (the Lab Facilities and Service Agreement) with Natac whereby we will
have access to Natacs laboratory facility and procure certain laboratory
services from Natac in consideration of the following:

|(a) | 20,000 Euros (approximately $27,716) (which amount has
      been paid on February 10, 2010);                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                    
|(b) | issuance of a promissory note in the amount of 130,000
      Euros (approximately $174,919) which is payable on or before September 30,
      2010.

7

---

|(c) | 100,000 Euros (approximately $134,553) on or before each
      of September 30, 2010, December 31, 2010, March 31, 2011 and June 30,
      2011; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                     
|(d) | 125,000 Euros (approximately $168,192) on or before each
      of:                                                                                  
|    | (i)                                                                                                                                                 
|    | (ii)                                                                                                                                                

The closing of the Lab Facilities and Service Agreement is
expected to occur on or before September 10, 2010 and is subject to a number of
customary conditions, including:

|(a) | the closing of a research and licensing agreement whereby
      we will acquire an exclusive license to certain probiotic strains for the
      countries located in North and South America; and                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                       
|(b) | the closing of an exclusive licensing agreement whereby
      we will acquire an exclusive license to certain health related products
      for the countries located in North and South America (which exclusive
      license agreement has closed).

The term of the Lab Facilities and Service agreement is until
September 30, 2013.

PLAN OF OPERATION

Over the next twelve months, our plan is to continue to develop
our over-the-counter pipeline of products and, if warranted, develop our Liver
Health Formula as an FDA approved pharmaceutical. We also plan to continue to
acquire and license additional products and technology to add to our current
product pipeline. In order to complete our plan of operation we will require
substantial financing of which there is no assurance.

|a) | Over-the-Counter Medication Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Oral Supplement: We plan to develop, market and
      manufacture a formulation of our Liver Health Formula as an
      over-the-counter oral supplement. In developing the formulation of our
      Liver Health Formula, we plan to conduct a clinical trial in the second
      half of 2010. We anticipate that this formulation will be derived from our
      proprietary compound called HP-201. The HP-201 compound is designed to
      support liver health and provide general immune status benefits. We
      anticipate that the costs related to the development and marketing of the
      oral supplement will be $700,000 in 2010.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Dermatologic Application: We also plan to initiate
      research, development and pre-commercial activities related to the HP-201
      over-the-counter franchise line extension formulations, including
      dermatologic applications. We anticipate that the costs related to the
      dermatological line will be $450,000 in 2010.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|b) | Pharmaceutical Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | HP-201 Compound: We plan to continue pre-clinical
      work related to the HP-201 prescription pharmaceutical pathway.
      Pre-clinical work will include the identification and synthetic structural
      modification of compounds derived from HP-201. We anticipate that the
      costs related to the HP-201 New Drug Application pathway will be $300,000
      in 2010.                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | HP-202 Compound: We also plan to initiate
      pre-clinical work related to discover a second antiviral New Drug
      Application pipeline product referred to as HP-202. This pre-clinical work
      will include anti-viral and cytotoxicity assays. We anticipate that the
      costs related to the HP-202 New Drug Application pathway will be $200,000
      in 2010.                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|c) | Product Pipeline                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | We plan to accelerate our in-licensing activities
      targeted at identifying new, over-the-counter and prescription product
      development candidates that are synergistic with our current product
      pipelines as well as our research, development and commercialization skill
      sets and overall business model. There is no assurance that we will identify and secure rights to
license additional products in 2010. We anticipate that the costs related to
identifying new product development opportunities will be $250,000 in 2010.                                                                                         

8

---

In addition to the amounts described above, we anticipate that
we will require an additional $800,000 for general and administrative purposes,
including consulting fees in connection with the operation of our business and
legal and accounting fees in connection with meeting our ongoing reporting
obligations under the Exchange Act. As a result, we anticipate that the costs of
implementing our plan of operation and meeting our ongoing operating costs will
be $2,700,000. Accordingly, we will require substantial financing in order to
carry out our plan of operation and to meet our operating costs over the next
twelve months. There is no assurance that we will be able to obtain financing in
the amounts required to implement our plan of operation or to meet our ongoing
operating costs. If we are not successful in raising sufficient financing, our
business may fail and our shareholders may lose all or part of their investment

RESULTS OF OPERATIONS

Three and Six Months Summary

|               |   | Six
        Months Ended April 30, |   |   | Three Months Ended April 30, |  
|-------------- | - | ---------------------------------- | - | - | ---------------------------- | -
|               |   |                                    |   |   |                              |  
|               |   |                                    |   |   |                              |  
|               |   | 2010                               |   |   | 2009                         |  
|Revenue        | $ | -                                  |   | $ | -                            |  
|Expenses       |   | (652,748                           | ) |   | (303,483                     | )
|Other Expenses |   | (5,528                             | ) |   | (28,540                      | )
|Net Loss       | $ | (658,276                           | ) | $ | (332,023                     | )

Revenues

We have not earned any revenues since our inception and we do
not anticipate earning revenues in the foreseeable future. Our ability to earn
revenues in the future is dependent upon: (i) the development and manufacturing
of our Liver Health Formula as an over-the-counter medication; and (ii) the
development and manufacture of our naturally sourced products. There is no
assurance that we will be able to develop and manufacture our Liver Health
Formula as an over-the-counter medication, that we will be able to manufacture
and develop our naturally sourced products.

|Expenses                     |   |                                    |   |   |                                      |  |  |            |  |   |         |   |   |        |  |  |            | 
|---------------------------- | - | ---------------------------------- | - | - | ------------------------------------ |  |  | ---------- |  | - | ------- | - | - | ------ |  |  | ---------- | 
|                             |   | Six
        Months Ended April 30, |   |   | Three
        Months Ended April 30, | 
|                             |   |                                    |   |   |                                      |  |  | Percentage |  |   |         |   |   |        |  |  | Percentage | 
|                             |   |                                    |   |   |                                      |  |  | Increase / |  |   |         |   |   |        |  |  | Increase / | 
|                             |   | 2010                               |   |   | 2009                                 |  |  | (Decrease) |  |   | 2010    |   |   | 2009   |  |  | (Decrease) | 
|Management fees              | $ | 21,000                             |   | $ | 15,000                               |  |  | 40.0%      |  | $ | 10,500  |   | $ | 7,500  |  |  | 40.0%      | 
|Professional fees            |   | 523,446                            |   |   | 97,845                               |  |  | 435.0%     |  |   | 423,400 |   |   | 29,003 |  |  | 1359.8%    | 
|Other operating expenses     |   | 135,846                            |   |   | 179,436                              |  |  | (24.3)%    |  |   | 63,790  |   |   | 2,885  |  |  | 2111.1%    | 
|Foreign currency loss (gain) |   | (27,544                            | ) |   | 11,202                               |  |  | (345.9)%   |  |   | (12,893 | ) |   | 18,977 |  |  | (167.9)%   | 
|Total Expenses               | $ | 652,748                            |   | $ | 303,483                              |  |  | 115.1%     |  | $ | 484,797 |   | $ | 58,365 |  |  | 730.6%     | 

Our expenses increased from $58,365, during the three months
ended April 30, 2009, to $484,797, during the three months ended April 30, 2010.
The increase in our expenses is primarily attributable to substantial increases
in professional fees and other operating expenses. These amounts were partially
offset by an increase in a foreign currency gain.

9

---



Our expenses increased from $303,483, during the six months ended April 30, 2010, to $652,748, during the six months ended April 30, 2009.  The increase in our expenses during the first half of 2010 is primarily attributable to an increase in management fees and professional fees.  These amounts were partially offset by a decrease in other operating expenses and an increase in foreign currency gain.

Management fees include amounts paid as compensation to our officers and directors.  During the three and six months ended April 30, 2010, we incurred management fees of $2,500 per month to our sole executive officer and $1,000 to a member of our Board of Directors.

Professional fees consisted of: (i) legal fees related to our
proposed transactions with Natac and meeting our reporting requirements under
the Exchange Act; (ii) accounting and audit fees related to meeting our
reporting requirements under the Exchange Act; and (iii) consulting fees related
to payments to consultants regarding product development and investor relations
activities. The additional professional fees during three and six months ended April 30,
2010 are primarily a result of our proposed transactions with Natac and
consulting fees related to product development.

Other operating expenses primarily consisted of travel, office
and website development expenses.

The increase in foreign currency gain primarily relates to
favorable exchange rates in connection with our outstanding accounts payable and
loans payable.

If we are able to obtain sufficient financing to undertake our
proposed business plan for our over-the-counter and pharmaceutical business, our
expenses are anticipated to increase significantly.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital         |   |                         |   |   |                           |   |  |                       | 
|----------------------- | - | ----------------------- | - | - | ------------------------- | - |  | --------------------- | 
|                        |   |                         |   |   |                           |   |  | Percentage            | 
|                        |   | At
      April 30, 2010 |   |   | At
      October 31, 2009 |   |  | Increase / (Decrease) | 
|Current Assets          | $ | 101,579                 |   | $ | 271,106                   |   |  | (62.5)%               | 
|Current Liabilities     |   | (903,995                | ) |   | (923,685                  | ) |  | (2.1)%                | 
|Working Capital Deficit | $ | (802,376                | ) | $ | (652,579                  | ) |  | 23.0%                 | 

|Cash Flows                                                  |   |                      |   |   |                      |  
|----------------------------------------------------------- | - | -------------------- | - | - | -------------------- | -
|                                                            |   | Six Months Ended     |   |   | Six Months Ended     |  
|                                                            |   | April
      30, 2010 |   |   | April
      30, 2009 |  
|Cash Flows used in (provided by) Operating
      Activities | $ | (711,627             | ) | $ | 508,838              |  
|Cash Flows used in Investing Activities                     |   | -                    |   |   | (697,331             | )
|Cash Flows from Financing Activities                        |   | 542,100              |   |   | 189,700              |  
|Effect of Foreign Currency Translations                     |   | -                    |   |   | -                    |  
|Net Increase (Decrease) in Cash During
      Period         | $ | (169,527             | ) | $ | 1,207                |  

Our working capital deficit increased from $652,579, as at
October 31, 2009, to $802,416, as at April 30, 2010. The increase in our working
capital deficit is due to: (i) a decrease in cash as a result of repayments of a
portion of our accounts payable; and (ii) the fact that we recorded a payable of
EUR 130,000 to Natac pursuant to the Lab Facilities and Services Agreement.

During the six months ended April 30, 2010, we completed the
following equity financings:

| | (a) | we issued 4,235,930 shares of our common stock for cash
      proceeds of $413,593 and to settle outstanding indebtedness of $10,000
      under our Foreign Private Placement;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                
| | (b) | we issued 650,000 shares of our common stock for cash
      proceeds of $39,000 and to settle outstanding indebtedness of $26,000
      under our U.S. Private Placement; and  
| |     |                                                                                                                                                                                
| | (c) | we issued 300,000 shares of our common stock at a deemed price of $81,000 in exchange for consulting services.                                                                 

10

---

Subsequent to our quarter ended April 30, 2010, we issued
666,666 shares of our common stock for cash proceeds of $100,000 pursuant to
Rule 506 of Regulation D of the Securities Act. The subscriber represented that
it was an accredited investor as defined in Regulation D.

Future Financings

As at April 30, 2010, we had cash on hand of $101,579.
Currently, we do not have sufficient financial resources to complete our plan of
operation for the next twelve months. We have not earned any revenues to date
and we do not anticipate earning revenues in the near future. As such, our
ability to complete our plan of operation is dependent upon our ability to
obtain substantial financing in the near term. Any future financing that we
obtain is expected to be in the form of sales of our equity securities. If we
are successful in completing any equity financings, of which there is no
assurance, our existing shareholders will experience a dilution of their
interest in our company. There is a substantial doubt that we will be able to
obtain financing in an amount that is sufficient to enable us to complete our
proposed plan of operation. If we are not successful in raising sufficient
financing, we will not be able to complete our plan of operation. We do not have
any specific alternatives to our current plan of operation and have not planned
for any such contingency. If we are not successful in raising sufficient
financing, our business may fail and our shareholders may lose all or part of
their investment.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with
generally accepted accounting principles requires our management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

Our significant accounting policies are described in Note 3 to
our interim financial statements for the period ended April 30, 2010 included in
this Quarterly Report on Form 10-Q.

ITEM
3.             
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM
4T.            CONTROLS
AND PROCEDURES.

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of April 30, 2010 (the Evaluation Date). This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed in our Annual Report on Form 10-K for our year ended October
31, 2009 (the 2009 Annual Report).

Disclosure controls and procedures are those controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported within the time periods specified in the
SECs rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

11

---

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in our 2009 Annual Report, we believe that our financial statements
contained in our Quarterly Report on Form 10-Q for the quarter ended April 30,
2010 fairly present our financial condition, results of operations and cash
flows in all material respects.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during the quarter ended April 30, 2010 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.

12

---

PART II  OTHER INFORMATION

ITEM
1.             
LEGAL PROCEEDINGS.

None.

ITEM
1A.            RISK
FACTORS.

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

We require additional financing.

To date our operations have not been profitable. We have not
earned any revenues to date and there is no assurance that we will be able to do
so in the near future. In addition, there is no assurance that our ongoing
expenditures will exceed our estimates over the next twelve months. We may never
be able to achieve profitability.

We do not currently have the financial resources to complete
our plan of operation for the next twelve months. We anticipate that we will
require substantial financing over the next twelve months in order to complete
our business plan. However, there is no assurance that we will be able to obtain
additional financing. If further financing is not available or obtainable, our
ability to meet our financial obligations and pursue our plan of operation will
be substantially limited and investors may lose a substantial portion or all of
their investment.

Our inability to complete our product development activities
successfully may severely limit our ability to operate and finance
operations.

The development of our technology as an over-the-counter
medication and a FDA approved pharmaceutical will require significant financing
and additional research and development as well as substantial clinical trials.
We believe that the United States, Europe and Canada will be the principal
markets for our technology, as will any country in the world where the need for
the treatment of liver diseases, including the Hepatitis C virus, exists. We may
not be able to successfully complete development of our technology, or
successfully market our technology. We, and any of our potential collaborators,
may encounter problems and delays relating to research and development,
regulatory approval and intellectual property rights of our technology. Our
research and development programs may not be successful. Our technology may not
prove to be safe and efficacious in clinical trials, and we may not obtain the
intended regulatory approvals for our technology. Whether or not any of these
events occur, we may not have adequate resources to continue operations for the
period required to resolve the issue delaying development and we may not be able
to raise capital to finance our operation during the period required for
resolution of that issue.

We may lose our competitiveness if we are not able to
protect our proprietary technology and intellectual property rights against
infringement, and any related litigation may be time-consuming and costly.

Our success and ability to compete depends to a significant
degree on our proprietary technology. If any of our competitors copy or
otherwise gain access to our proprietary technology or develop similar
technologies independently, we may not be able to compete as effectively. The
measures we have implemented to protect our proprietary technology and other
intellectual property rights are currently based upon patent applications filed
in the United States, Europe and Canada and European Drug Master File
applications. This, however, may not be adequate to prevent the unauthorized use
of our proprietary technology and our other intellectual property rights.
Further, the laws of foreign countries may provide inadequate protection of such
intellectual property rights. We may need to bring legal claims to enforce or
protect such intellectual property rights. Any litigation, whether successful or
unsuccessful, may result in substantial costs and a diversion of our company's
resources. In addition, notwithstanding our rights to our intellectual property,
other persons may bring claims against us alleging that we have infringed on
their intellectual property rights or claims that our intellectual property
rights are not valid. Any claims against us, with or without merit,
could be time consuming and costly to defend or litigate, divert our attention
and resources, result in the loss of goodwill associated with our business or
require us to make changes to our technology.

13

---

We may become subject to intellectual property litigation
which may harm our business.

Our success depends in part on our ability to develop
commercially viable products without infringing the proprietary rights of
others. Although we have not been subject to any filed infringement claims,
other patents or patent applications could exist or could be filed which may
prohibit or limit our ability to market our products or maintain a competitive
position. In the event of an intellectual property dispute, we may be forced to
litigate. Intellectual property litigation may divert management's attention
from developing our technology and may force us to incur substantial costs
regardless of whether we are successful. An adverse outcome could subject us to
significant liabilities to third parties, and force us to curtail or cease the
development and commercialization of our technology.

If we commercialize or test our technology, we will be
subject to potential product liability claims which may affect our financial
condition.

We face an inherent business risk of exposure to product
liability claims in the event that the use of our technology during research and
development efforts, including clinical trials, or after commercialization,
results in adverse affects. As a result, we may incur significant product
liability exposure, which may exceed any insurance coverage that we obtain in
the future. Even if we elect to purchase such issuance in the future, we may not
be able to maintain adequate levels of insurance at reasonable cost and/or
reasonable terms. Excessive insurance costs or uninsured claims may increase our
operating loss and affect our financial condition.

If we fail to effectively manage the growth of our company
and the commercialization or licensing of our technology, our future business
results could be harmed and our managerial and operational resources may be
strained.

As we proceed with the development of our technology and the
expansion of our marketing and commercialization efforts, we expect to
experience significant growth in the scope and complexity of our business. We
will need to add staff to manage operations, handle business development efforts
and perform finance and accounting functions. We anticipate that we will be
required to hire a broad range of additional personnel in order to successfully
advance our operations. This growth is likely to place a strain on our
management and operational resources. The failure to develop and implement
effective systems, or to hire and retain sufficient personnel for the
performance of all of the functions necessary to effectively service and manage
our potential business, or the failure to manage growth effectively, could have
a material adverse effect on our business and financial condition.

Failure to obtain and maintain required regulatory approvals
will severely limit our ability to commercialize our technology.

We will need to obtain the approval of the FDA before we
commence commercialization of our technology as a pharmaceutical in the United
States. We may also be required to obtain additional approvals from foreign
regulatory authorities to apply for any sales activities we may carry out in
those jurisdictions. If we cannot demonstrate the safety, reliability and
efficacy of our technology, the FDA or other regulatory authorities could delay
or withhold regulatory approval of our technology.

Even if we obtain regulatory approval of our technology, that
approval may be subject to limitations on the indicated uses for which it may be
marketed. Even after granting regulatory approval, the FDA and other regulatory
agencies and governments in other countries will continue to review and inspect
any future marketed products as well as any manufacturing facilities that we may
establish in the future. Later discovery of previously unknown problems with a
product or facility may result in restrictions on the product, including a
withdrawal of the product from the market. Further, governmental regulatory
agencies may establish additional regulations which could prevent or delay
regulatory approval of our technology.

14

---

Even if we obtain regulatory approval to commercialize our
products, lack of commercial acceptance may impair our business.

Our product development efforts are primarily directed toward
obtaining regulatory approval for our liver disease product treatments. Our
products may not be employed in all potential applications being investigated,
and any reduction in applications may limit the market acceptance of our
products and our potential revenues. As a result, even if our products are
developed into marketable products and we obtain all required regulatory
approvals, we cannot be certain that our products will be adopted at a level
that would allow us to operate profitably.

If we do not keep pace with our competitors, technological
advancements and market changes, our technology may become obsolete and our
business may suffer.

The market for our technology is very competitive, is subject
to rapid technological changes and varies for different individual products. We
believe that there are potentially many competitive approaches being pursued
that compete with our technology, including some by private companies for which
information is difficult to obtain.

Many of our competitors have significantly greater resources
and have developed products and processes that directly compete with our
technology. Our competitors may develop, or may in the future develop, new
technologies that directly compete with our technology or even render our
technology obsolete. Our technology is designed to benefit people suffering from
moderate to severe liver maladies, such as elevated liver enzymes and the
Hepatitis C viral infection. Even if we are able to demonstrate improved or
equivalent results from our technology, researchers and practitioners may not
use our technology and we may suffer a competitive disadvantage. Finally, to the
extent that others develop new technologies that address the targeted
application for our current technology, our business will suffer.

If we are unable to hire and retain key personnel, then we
may not be able to implement our business plan.

We depend on the services of our senior management and key
technical personnel. In particular, our future success will depend on the
continued efforts of John Boschert, an executive officer and a member of our
Board of Directors, Luc Vanhal, our Chief Financial Officer, James Sandino, a
member of our Board of Directors, and F. Javier Benedi Garcia, a member of our
Board of Directors. We also rely on consulting from Professor Harry H.S. Fong
and Jim Metropoulos. The loss of the services of any of the gentlemen mentioned
above and the further erosion of staff could have an adverse effect on our
business, financial condition and results of operations.

The quotation price of our common stock may be volatile,
with the result that an investor may not be able to sell any shares acquired at
a price equal to or greater than the price paid by the investor.

Our common shares are quoted on the OTC Bulletin Board.
Companies quoted on the OTC Bulletin Board have traditionally experienced
extreme price and volume fluctuations. In addition, our stock price may be
adversely affected by factors that are unrelated or disproportionate to our
operating performance. Market fluctuations, as well as general economic,
political and market conditions such as recessions, interest rates or
international currency fluctuations may adversely affect the market price of our
common stock. In addition, to date, the trading volume for our shares on the OTC
Bulletin Board has been limited. As a result of this potential volatility and
potential lack of a trading market, an investor may not be able to sell any of
our common stock that they acquire that a price equal or greater than the price
paid by the investor.

We may conduct further offerings of our equity securities in
the future, in which case your shareholdings will be diluted.

Since our inception, we have been reliant upon sales of our
common stock to fund our operations. We may conduct further equity offerings in
the future to finance our current projects or to finance subsequent projects
that we decide to undertake. If common stock is issued in return for additional
funds, the price per share could be lower than that paid by our current
stockholders. We anticipate continuing to rely on equity sales of our common
stock in order to fund our business operations. If we issue additional stock,
investors' percentage interest in us will be diluted.

15

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ITEM
2.             
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM
3.             
DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM
5.             
OTHER INFORMATION.

None.

ITEM
6.             
EXHIBITS.

|Exhibit |                                                                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                                                 
|2.1     | Agreement and Plan of Merger dated July 24, 2009 between
      the Company (as parent surviving company) and Caleco Pharma Corp. (as
      subsidiary merging entity).(20)              
|3.1     | Articles of Incorporation.(1)                                                                                                                                                           
|3.2     | Certificate of Change  13-for-1 Stock Split effective
      September 30, 2005.(7)                                                                                                     
|3.3     | Certificate of Amendment to Articles  Name Change from
      Triton Resources, Inc. to Skyflyer Inc. effective October 17,
      2006.(7)                                              
|3.4     | Certificate of Amendment to Articles of Incorporation 
      Name Change from Skyflyer Inc. to Blackstone Lake Minerals Inc. effective
      January 23, 2008.(10)                     
|3.5     | Certificate of Merger.(20)                                                                                                                                                              
|3.6     | Articles of Merger between the Company (as surviving
      entity) and Caleco Pharma Corp. (as merging entity), with surviving entity
      changing its name to Caleco Pharma Corp.(20)
|3.7     | Bylaws.(1)                                                                                                                                                                              
|10.1    | Share Purchase Agreement among the Company, Inventa
      Holding GmbH, Skyflyer Technology GmbH and Perry Augustson, dated for
      reference the 31stday of March, 2006.(3)          
|10.2    | Agreement and Deed of Transfer between Inventa Holding
      GmbH and the Company dated for reference as of the 19thday of
      April, 2006.(4)                                        
|10.3    | Patent Transfer Agreement between Dieter Wagels and
      Skyflyer Technology GmbH, dated effective as of April 17,
      2006.(4)                                                      
|10.4    | Loan Agreement between Dast GmbH and Skyflyer Technology
      GmbH dated December 8, 2006.(5)                                                                                          
|10.5    | Employment contract between Skyflyer Technology GmbH and
      Dr. Manfred Sappok, dated for reference as of June 1, 2005 (translated
      from German to English).(6)                 
|10.6    | Employment contract between Skyflyer Technology GmbH and
      Dieter Wagels, dated for reference as of January 1, 2006 (translated from
      German to English).(6)                   
|10.7    | Purchase Agreement dated October 3, 2007 between American
      Yellowcake Resources Inc. and Skyflyer Inc.(8)                                                                          
|10.8    | Loan Agreement dated October 17, 2007 between the Company
      and Black Pointe Holdings Inc.(9)                                                                                       
|10.9    | Extension to Loan Agreement between Dast GmbH and
      Skyflyer Technology GmbH, dated July 30, 2007 (translated from German to
      English).(12)                                    
|10.10   | Second Extension to Loan Agreement between Dast GmbH and
      Skyflyer Technology GmbH, dated December 31, 2007 (translated from German
      to English).(12)                         
|10.11   | Loan Agreement between Dast GmbH and Skyflyer Technology
      GmbH dated November 28, 2007 (translated from German to
      English).(12)                                              

16

---

|Exhibit |                                                                                                                                                                                                                                     
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                                                                                             
|10.12   | Loan Agreement between Dast GmbH and Skyflyer Technology
      GmbH dated December 6, 2007 (translated from German to
      English).(12)                                                                                           
|10.13   | Loan Agreement between Dast GmbH and Skyflyer Technology
      GmbH dated December 7, 2007 (translated from German to
      English).(12)                                                                                           
|10.14   | Management Consultant Agreement dated March 1, 2008
      between the Company and Dr. Rudolf Mauer.(11)                                                                                                                             
|10.15   | Share Exchange Agreement dated for reference as of March
      31, 2008 among Blackstone Lake Minerals Inc., Inventa Holding GmbH and
      Skyflyer Technology GmbH.(13)                                                           
|10.16   | Management Consultant Agreement dated October 1, 2008
      between the Company and John Boschert.(14)                                                                                                                              
|10.17   | Technology Purchase Agreement dated October 16, 2008
      among the Company, NY Financial (International) Corp., Caleco Pharma Corp.
      (our former wholly owned subsidiary) and John Boschert.(15)                             
|10.18   | Amendment Agreement to Technology Purchase Agreement
      dated October 16, 2008 among the Company, NY Financial (International)
      Corp., Caleco Pharma Corp. (our former wholly owned subsidiary) and John
      Boschert.(16)
|10.19   | Technology Purchase Agreement dated December 19, 2008
      among the Company, NY Financial (International) Corp., Caleco Pharma Corp.
      (our former wholly owned subsidiary) and John Boschert.(17)                            
|10.20   | Promissory Note between Caleco Pharma Corp. (our former
      wholly owned subsidiary) and NY Financial (International)
      Inc.(18)                                                                                              
|10.21   | Investor Relations Service Agreement between the Company
      and Evergreen Marketing, Inc. dated October 6, 2009.(21)                                                                                                             
|10.22   | Consulting Agreement dated October 27, 2009 between the
      Company and Professor Harry H.S. Fong.(22)                                                                                                                            
|10.23   | License Agreement dated November 1, 2009 between the
      Company and Caleco Pharma S.L.(23)                                                                                                                                       
|10.24   | Consulting Agreement dated December 17, 2009 between the
      Company and Peter Kitzinski.(24)                                                                                                                                     
|10.25   | Consulting Agreement dated for reference February 1, 2010
      between the Company and BlueWater Advisory Group, LLC.(25)                                                                                                          
|10.26   | Designated Sponsor Agreement dated February 9, 2010
      between the Company and ICF Kursmackler AG.(25)                                                                                                                           
|10.27   | Share Purchase Agreement dated February 10, 2010 among
      the Company, Natac Biotech S.L., and the principal shareholders of Natac
      Biotech S.L.(25)                                                                        
|10.28   | Letter Agreement dated February 10, 2010 between the
      Company and Natac Biotech S.L.(25)                                                                                                                                       
|10.29   | Promissory Note dated February 10, 2010 between the
      Company and Natac Biotech S.L.(25)                                                                                                                                        
|10.30   | Lab Facilities and Service Agreement dated for reference
      February 18, 2010 between the Company and Natac Biotech
      S.L.(26)                                                                                               
|10.31   | License Agreement dated March 12, 2010 between the
      Company and Natac Biotech S.L.(27)                                                                                                                                         
|10.32   | Amendment Agreement to Share Purchase Agreement dated
      March 19, 2010 among the Company, Natac Biotech, S.L. and the principal
      shareholders of Natac Biotech S.L.(28)                                                    
|10.33   | Amendment Agreement to Lab Facilities and Services
      Agreement dated March 19, 2010 between the Company and Natac Biotech, S.L.
      (28)                                                                                      
|10.34   | Second Amendment Agreement to Share Purchase Agreement
      dated for reference April 19, 2010 among the Company, Natac Biotech, S.L.
      and the principal shareholders of Natac Biotech S.L. (29)                              
|10.35   | Second Amendment Agreement to Lab Facilities and Services
      Agreement dated for reference April 19, 2010 between the Company and Natac
      Biotech, S.L. (29)                                                                 
|10.36   | Management Consulting Agreement dated June 11, 2010
      between the Company and Luc Vanhal(30)                                                                                                                                    
|10.37   | Third Amendment Agreement to Lab Facilities and Services
      Agreement dated for reference May 19, 2010 between the Company and Natac
      Biotech, S.L.(30)                                                                     

17

---

|Exhibit |                                                                                                                                
|------- | -------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                        
|14.1    | Code of Ethics.(2)                                                                                                             
|31.1    | Certification
        of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-
        Oxley Act of 2002.
|31.2    | Certification
        of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-
        Oxley Act of 2002.
|32.1    | Certification
        of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002.
|32.2    | Certification
        of Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002.

|Notes: |                                                                                                                       
|------ | ----------------------------------------------------------------------------------------------------------------------
|(1)    | Filed as an exhibit to our Registration Statement on Form
      SB-2 originally filed on January 14, 2005, as amended.
|(2)    | Filed as an exhibit to our Annual Report on Form 10-KSB
      filed on January 30, 2006.                              
|(3)    | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 10, 2006.                                  
|(4)    | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 26, 2006.                                  
|(5)    | Filed as an exhibit to our Current Report on Form 8-K
      filed on December 15, 2006.                               
|(6)    | Filed as an exhibit to our Annual Report on Form 10-KSB
      filed on January 30, 2007.                              
|(7)    | Filed as an exhibit to our Quarterly Report on Form
      10-QSB filed on September 19, 2007.                         
|(8)    | Filed as an exhibit to our Current Report on Form 8-K
      filed on October 11, 2007.                                
|(9)    | Filed as an exhibit to our Current Report on Form 8-K
      filed on October 23, 2007.                                
|(10)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on January 25, 2008.                                
|(11)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on March 13, 2008.                                  
|(12)   | Filed as an exhibit to our Quarterly Report on Form
      10-QSB filed on March 21, 2008.                             
|(13)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 8, 2008.                                   
|(14)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on October 7, 2008.                                 
|(15)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on October 22, 2008.                                
|(16)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on December 2, 2008.                                
|(17)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on December 29, 2008.                               
|(18)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on January 27, 2009.                                
|(19)   | Filed as an exhibit to our Annual Report on Form 10-K
      filed on February 13, 2009.                               
|(20)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on September 4, 2009.                               
|(21)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on October 9, 2009.                                 
|(22)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on November 2, 2009.                                
|(23)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on November 5, 2009.                                
|(24)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on December 23, 2009.                               
|(25)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on February 16, 2010.                               
|(26)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on February 22, 2010.                               
|(27)   | Filed as an exhibit to our Quarterly Report on Form 10-Q
      filed on March 17, 2010.                               
|(28)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on February 22, 2010.                               
|(29)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 27, 2010                                   
|(30)   | Filed as an exhibit to our Current Report on Form 8-K
      filed on June 11, 2010                                    

18

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |                     |  |     | CALECO PHARMA CORP.                                            
|----- | ------------------- |  | --- | ---------------------------------------------------------------
|      |                     |  |     |                                                                
|      |                     |  |     |                                                                
|Date: | June
      14, 2010 |  | By: |                                                                
|      |                     |  |     | /s/
      John Boschert                                        
|      |                     |  |     | JOHN BOSCHERT                                                  
|      |                     |  |     | Chief Executive Officer, President, Secretary
      & Treasurer
|      |                     |  |     | (Principal Executive Officer)                                  
|      |                     |  |     |                                                                
|      |                     |  |     |                                                                
|Date: | June
      14, 2010 |  | By: |                                                                
|      |                     |  |     | /s/
      Luc Vanhal                                           
|      |                     |  |     | LUC VANHAL                                                     
|      |                     |  |     | Chief Financial Officer                                        
|      |                     |  |     | (Principal Financial Officer)                                  

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