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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549FORM 10-Q

(Mark One)[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the quarterly
period ended April 30, 2011[ ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF
1934For the transition period from ________to ________

COMMISSION FILE NUMBER000-51261CALECO 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)                          

(908) 752-4240(Registrant's telephone number,
including area code)

Not Applicable(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 (s. 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 9, 2011, the Issuer had 96,351,340 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,
2011 are not necessarily indicative of the results that can be expected for the
year ending October 31, 2011.

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.

(A Development Stage Company)



CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)



April 30, 2011 
  (Unaudited)

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CALECO PHARMA CORP.
  (A Development Stage Company) CONSOLIDATED BALANCE SHEETS
  (Expressed in U.S.
  Dollars)
  (Unaudited)

|                                                                                                                                                                                                                                                                                                                        |   | April 30,  |   |   | October 31, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ----------- | -
|                                                                                                                                                                                                                                                                                                                        |   | 2011       |   |   | 2010        |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|ASSETS                                                                                                                                                                                                                                                                                                                  |   |            |   |   |             |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|Current Assets                                                                                                                                                                                                                                                                                                          |   |            |   |   |             |  
|Cash and cash equivalents                                                                                                                                                                                                                                                                                               | $ | 904        |   | $ | 5,080       |  
|Deferred tax asset, less valuation
      allowance of $2,236,624 (2010 -$2,152,108)                                                                                                                                                                                                                                     |   | -          |   |   | -           |  
|Total Current Assets                                                                                                                                                                                                                                                                                                    |   | 904        |   |   | 5,080       |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|Investment (Note 4)                                                                                                                                                                                                                                                                                                     |   | 491        |   |   | 491         |  
|Intangibles (Note 6)                                                                                                                                                                                                                                                                                                    |   | 100        |   |   | 100         |  
|Total
      Assets                                                                                                                                                                                                                                                                                                      | $ | 1,495      |   |   | 5,671       |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|LIABILITIES AND STOCKHOLDERS DEFICIENCY                                                                                                                                                                                                                                                                                |   |            |   |   |             |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|Current Liabilities                                                                                                                                                                                                                                                                                                     |   |            |   |   |             |  
|Accounts payable and
      accrued liabilities                                                                                                                                                                                                                                                                          | $ | 492,866    |   | $ | 369,159     |  
|Accounts payable and accrued
      liabilities related parties (Note 8)                                                                                                                                                                                                                                                |   | 146,673    |   |   | 146,861     |  
|Loans Payable (Note 7)                                                                                                                                                                                                                                                                                                  |   | 292,089    |   |   | 321,207     |  
|Total Current
      Liabilities                                                                                                                                                                                                                                                                                         |   | 931,628    |   |   | 837,227     |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|Commitments and Contractual Obligations (Note 10, 11,
      12)                                                                                                                                                                                                                                                         |   |            |   |   |             |  
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|Stockholders Deficiency                                                                                                                                                                                                                                                                                                |   |            |   |   |             |  
|Common stock
      (Note 9) 
               
      Authorized 
                    
      975,000,000 common shares, par value
      $0.001 
                Issued
      and
      outstanding 
                    
      April 30, 2011 -
      94,351,340 
                    
      October 31, 2010 - 91,351,340 |   | 94,352     |   |   | 91,352      |  
|Additional paid-in capital                                                                                                                                                                                                                                                                                              |   | 6,528,141  |   |   | 6,381,141   |  
|Accumulated other
      comprehensive loss:                                                                                                                                                                                                                                                                             |   |            |   |   |             |  
|Foreign currency
      cumulative translation adjustment                                                                                                                                                                                                                                                                |   | (174,074   | ) |   | (174,074    | )
|Deficit                                                                                                                                                                                                                                                                                                                 |   | (718,605   | ) |   | (718,605    | )
|Deficit accumulated during the development stage                                                                                                                                                                                                                                                                        |   | (6,659,947 | ) |   | (6,411,370  | )
|Total Stockholders Deficiency                                                                                                                                                                                                                                                                                          |   | (930,133   | ) |   | (831,556    | )
|                                                                                                                                                                                                                                                                                                                        |   |            |   |   |             |  
|Total Liabilities and Stockholders Deficiency                                                                                                                                                                                                                                                                          | $ | 1,495      |   | $ | 5,671       |  

Subsequent events (Note 14)

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

F-2

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CALECO PHARMA CORP.
  (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,  |   |   | April 30,  |   |   | April 30,  |   |   | April 30,  |  
|                                                                      |   | 2011                     |   |   | 2011       |   |   | 2010       |   |   | 2011       |   |   | 2010       |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|EXPENSES                                                              |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|Management fees                                                       | $ | 183,502                  |   | $ | 21,000     |   | $ | 21,000     |   | $ | 10,500     |   | $ | 10,500     |  
|Mineral exploration costs                                             |   | 13,710                   |   |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|Professional fees                                                     |   | 1,106,012                |   |   | 169,609    |   |   | 523,446    |   |   | 84,020     |   |   | 423,400    |  
|Other operating expenses                                              |   | 536,492                  |   |   | 34,920     |   |   | 135,846    |   |   | 20,844     |   |   | 63,790     |  
|Foreign currency loss (gain)                                          |   | 81,844                   |   |   | 17,529     |   |   | (27,544    | ) |   | 23,654     |   |   | (12,893    | )
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|LOSS BEFORE OTHER
      ITEMS                                         |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|AND INCOME TAXES                                                      |   | 1,921,560                |   |   | 243,058    |   |   | 652,748    |   |   | 139,018    |   |   | 484,797    |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|Interest expense                                                      |   | 112,285                  |   |   | 5,519      |   |   | 6,019      |   |   | 2,645      |   |   | 3,214      |  
|Write off
      of mineral property (Note 5)                          |   | 200,000                  |   |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|Write off of account payable                                          |   | (45,743                  | ) |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|Write off of intangibles
      (Note 6)                               |   | 691,231                  |   |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|Grant of license                                                      |   | (491                     | ) |   | -          |   |   | (491       | ) |   | -          |   |   | -          |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|LOSS BEFORE INCOME TAXES                                              |   | 2,878,842                |   |   | 248,577    |   |   | 658,276    |   |   | 141,663    |   |   | 488,011    |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|Provision for income taxes                                            |   | -                        |   |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|LOSS FROM CONTINUING OPERATIONS                                       |   | 2,878,842                |   |   | 248,577    |   |   | 658,276    |   |   | 141,663    |   |   | 488,011    |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|Discontinued operations                                               |   | 3,781,105                |   |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|NET LOSS                                                              |   | 6,659,947                |   |   | 248,577    |   |   | 658,276    |   |   | 141,663    |   |   | 488,011    |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|OTHER COMPREHENSIVE LOSS                                              |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|Foreign currency translation adjustment                               |   | 151,900                  |   |   | -          |   |   | -          |   |   | -          |   |   | -          |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|COMPREHENSIVE LOSS                                                    | $ | 6,811,847                |   | $ | 248,577    |   | $ | 658,276    |   | $ | 141,663    |   | $ | 488,011    |  
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|BASIC AND DILUTED NET LOSS FROM CONTINUING
      OPERATIONS PER SHARE |   |                          |   | $ | (0.00      | ) | $ | (0.01      | ) | $ | (0.00      | ) | $ | (0.01      | )
|                                                                      |   |                          |   |   |            |   |   |            |   |   |            |   |   |            |  
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES
      OUTSTANDING            |   |                          |   |   | 94,052,997 |   |   | 86,589,115 |   |   | 94,351,340 |   |   | 88,106,977 |  

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

F-3

---

CALECO PHARMA CORP.
  (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, |  
|                                                                                                    |   | 2011               |   |   | 2011      |   |   | 2010      |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                |   |                    |   |   |           |   |   |           |  
|Net loss from continuing operations                                                                 | $ | (2,878,842         | ) | $ | (248,577  | ) | $ | (658.276  | )
|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            | ) |   | -         |   |   | -         |  
|Write off of intangibles                                                                            |   | 691,231            |   |   | -         |   |   | -         |  
|Issuance of capital
      stock for services                                                        |   | 174,550            |   |   | -         |   |   | 81,000    |  
|Grant of license                                                                                    |   | (491               | ) |   | -         |   |   | (491      | )
|Change in operating assets and liabilities:                                                         |   |                    |   |   |           |   |   |           |  
|Increase (decrease) in accounts payable
      and accrued liabilities                               |   | 638,450            |   |   | 123,707   |   |   | (78,048   | )
|Increase
      (decrease) in accounts payable and accrued liabilities 
            related parties |   | 141,318            |   |   | (188      | ) |   | (26,477   | )
|Increase (decrease) in accrued interest
      payable                                               |   | 45,508             |   |   | (5,174    | ) |   | (29,335   | )
|Net cash used in operating activities
      of discontinued operations                              |   | (103,029           | ) |   | -         |   |   | -         |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|Net cash used in operating activities                                                               |   | (1,137,048         | ) |   | (130,232  | ) |   | (711,627  | )
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                |   |                    |   |   |           |   |   |           |  
|Acquisition of mineral property                                                                     |   | (200,000           | ) |   | -         |   |   | -         |  
|Acquisition of intangibles                                                                          |   | (476,954           | ) |   | -         |   |   | -         |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|Net cash used in investing activities                                                               |   | (676,954           | ) |   | -         |   |   | -         |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                |   |                    |   |   |           |   |   |           |  
|Proceeds from / (repayments to) loans
      payable, net                                            |   | 58,917             |   |   | (23,944   | ) |   | 150,170   |  
|Issuance of capital
      stock for cash                                                            |   | 1,432,243          |   |   | 150,000   |   |   | 391,930   |  
|Subscriptions received                                                                              |   | -                  |   |   | -         |   |   | -         |  
|Net cash provided by financing
      activities of discontinued operations                          |   | 74,379             |   |   | -         |   |   | -         |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|Net cash provided by financing
      activities                                                     |   | 1,565,539          |   |   | 126,056   |   |   | 542,100   |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|EFFECT OF FOREIGN CURRENCY TRANSLATION
      ON                                                     |   |                    |   |   |           |   |   |           |  
|CASH DURING THE
      PERIOD                                                                        |   | 3,755              |   |   | -         |   |   | -         |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|NET DECREASE IN
      CASH                                                                          |   | (244,708           | ) |   | (4,176    | ) |   | (169,527  | )
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH, BEGINNING
      OF PERIOD                                                                     |   | 245,612            |   |   | 5,080     |   |   | 271,106   |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH, END OF
      PERIOD                                                                           | $ | 904                |   | $ | 904       |   | $ | 101,579   |  
|                                                                                                    |   |                    |   |   |           |   |   |           |  
|CASH
      DISCONTINUED OPERATIONS                                                                 | $ | -                  |   | $ | -         |   | $ | -         |  
|CASH CONTINUING OPERATIONS                                                                         | $ | 904                |   | $ | 904       |   | $ | 101,579   |  

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.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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 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,
      2011 and for all periods presented, have been included. Interim results
      for the period ended April 30, 2011 are not necessarily indicative of the
      results that may be expected for the fiscal year as a
      whole.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-5

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|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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, 2011 and October 31, 2010,
  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. At October 31, 2010, the
  Company made an assessment to write down the intangibles to $100.

(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.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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, 2011
  and 2010, there were no potentially dilutive securities outstanding.

(k) Comprehensive loss

The Company has adopted Accounting
  Standards Codificiation (ASC) 220-10, 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.

(l) Development stage

The Company is a development stage
  company as defined by ASC 205-915-20, 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.

F-8

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(Unaudited)                                   
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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 December 2010, the FASB issued ASU 2010-29, which
      contains updated accounting guidance to clarify the acquisition date that
      should be used for reporting pro forma financial information when
      comparative financial statements are issued. This update requires that a
      company should disclose revenue and earnings of the combined entity as
      though the business combination(s) that occurred during the current year
      had occurred as of the beginning of the comparable prior annual reporting
      period only. This update also requires disclosure of the nature and amount
      of material, nonrecurring pro forma adjustments. The provisions of this
      update, which are to be applied prospectively, are effective for business
      combinations for which the acquisition date is on or after the beginning
      of the first annual reporting period beginning on or after December 15,
      2010, with early adoption permitted. The impact of this update on the
      Company's consolidated financial statements will depend on the size and
      nature of future business combinations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (o) Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Certain amounts reported in the prior period have been
      reclassified to conform to the current periods
      presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-9

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

April
        30,
      
      
      October 31,2011
      
      
      2010Patents (Note 12)
      $
      50
      
      $
      50Intellectual property (Note 12)
      
      50
      
      
      50100
      
      
      100Accumulated amortization
      
      -
      
      
      -Net book value
      $
      100
      
      $
      100


During the period ended April 30, 2011,
  the Company did not amortize 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. At October
  31, 2010, the Company made an assessment to write down the intangibles to
  $100.

F-10

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(Unaudited)                                   
|                                              

|7. | LOANS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the year ended October 31, 2010, $18,500 was
      reclassified from accounts payable to loans payable. The loan is
      non-interest bearing and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the year ended October 31, 2009, Euro 112,000 (US
      $166,197) in accounts payable was reclassified to loans payable. The loans
      are non-interest bearing. One loan of Euro 56,000 (US $83,098) was due
      February 1, 2010 and has not been paid. The second loan of Euro 56,000 (US
      $83,097) was due June 1, 2010 and has not been paid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 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, 2011 and 2010 totaled $190 and $172, respectively.
      Interest expense included in the statement of operations for the three
      months ended April 30, 2011 and 2010 totaled $95 and $86,
      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
      bore interest at 8% per annum, 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 loans bearing interest at 10% per
      annum and due on demand. During the year ended October 31, 2010, an
      additional $34,000 in loans was granted with the same terms. During the
      year ended October 31, 2009, $41,111 of principal and $16,389 of accrued
      interest was paid. During the year ended October 31, 2010, $9,646 of
      principal and $35,354 of accrued interest was paid. During the six months
      ended April 30, 2011, $34,000 of principal and $10,692 of accrued interest
      was paid. Interest expense included in the statement of operation for the
      six months ended April 30, 2011 and 2010 totaled $5,329 and $5,848,
      respectively. Interest expense included in the statement of operation for
      the three months ended April 30, 2011 and 2010 totaled $2,550 and $3,128,
      respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | At April 301, 2011 and October 31, 2010, 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,
      2011 and 2010 totaled $0 and $0, respectively. Management fees included in
      the statement of operations for the three months ended April 30, 2011 and
      2010 totaled $0 and $0, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | At April 30, 2011 and October 31, 2010, included in
      accounts payable and accrued liabilities related parties is Euro 5,000
      (US $7,419) and Euro 5,000 (US $6,970), 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, 2011 and 2010 totaled $0 and
      $0, respectively. Management fees included in the statement of operations
      for the three months ended April 30, 2011 and 2010 totaled $0 and $0,
      respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-11

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(Unaudited)                                   
|                                              

|8. | RELATED PARTY TRANSACTIONS (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | At April 30, 2011 and October 31, 2010, included in
      accounts payable and accrued liabilities related parties is $61,496 and
      $62,133, 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, 2011 and 2010 totaled $21,000 and $21,000, respectively. Consulting
      fees paid to officers and/or directors of the Company for the three months
      ended April 30, 2011 and 2010 totaled $10,500 and $10,500, 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.                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | At April 30, 2011 and October 31, 2010, 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, 2011 and 2010 totaled $0 and
      $0, respectively. Consulting fees included in the statement of operations
      for the three months ended April 30, 2011 and 2010 totaled $0 and $0,
      respectively.                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|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 share 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.

F-12

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(Unaudited)                                   
|                                              

|9. | COMMON STOCK (continued)                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 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.                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 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.                                                                                                                                                                                                                                       

F-13

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(Unaudited)                                   
|                                              

|9.  | COMMON STOCK (continued)                                                                                                                                                                                                                                            
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                     
|    | 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. A finders fee of $10,000 was paid on
      closing of the private placement.               
|    |                                                                                                                                                                                                                                                                     
|    | On June 11, 2010, the Company issued 300,000 shares of
      its common stock at $0.13 per share for consulting services with an
      aggregate value of $39,000. The consulting services are included in
      management fees on the statement of operations.    
|    |                                                                                                                                                                                                                                                                     
|    | On August 16, 2010, the Company issued 625,000 shares of
      its common stock at $0.07 per share for consulting services with an
      aggregate value of $43,750. The consulting services are included in
      professional fees on the statement of operations.
|    |                                                                                                                                                                                                                                                                     
|    | On September 8, 2010, the Company issued 1,500,000 shares
      of its common stock at $0.06 per share for settlement of accounts payable
      with an aggregate value totaling $90,000.                                                                           
|    |                                                                                                                                                                                                                                                                     
|    | On November 18, 2010, the Company issued 3,000,000 shares
      of its common stock at $0.05 per share for total proceeds of $150,000 in a
      private placement transaction.                                                                                     
|    |                                                                                                                                                                                                                                                                     
|10. | COMMITMENTS                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                     
|    | i)                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                     
|    | ii)                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                     
|    | iii)                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                     
|    | iv)                                                                                                                                                                                                                                                                 

F-14

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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) | pay $22,500 to NY Financial (paid); and                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                          
| | (2) | issue a non-interest bearing promissory note in the
      amount of $77,500 to NY Financial at closing ($74,139 has been paid). The
      loan bears interest at 10% per annum, compounded monthly, beginning
      January 31, 2009 and is due on demand (Note
      7).

|    | 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 $641,045) and
      $66,500. As at October 31, 2010, the Company has paid Euro 265,311 (US
      $393,695) and $18,250 in cash; has issued promissory notes for accounts
      payable totaling Euro 112,000 (US $166,197) and $18,500; 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 $83,097) was due February 1, 2010 and has not been paid.
      The second loan of Euro 56,000 (US $83,098) was due June 1, 2010 and has
      not been paid.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | At October 31, 2010, the Company made an assessment to
      write down the intangibles to $100.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-15

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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.

On December 20, 2010, the Company
  served a notice of default to SL to comply with the terms of the Europe License
  Agreement within 60 days. As the breaches were not remedied by February 20,
  2011, the Europe License Agreement has been terminated and is of no further
  effect.

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-16

---

|CALECO PHARMA CORP.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Expressed in U.S. Dollars)                   
|April 30, 2011                                
|(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, | 
| |                |   | 2011               |  |   | 2011      |  |   | 2010      | 
| |                |   |                    |  |   |           |  |   |           | 
| | Cash paid for: |   |                    |  |   |           |  |   |           | 
| | Interest       | $ | 67,016             |  | $ | 10,692    |  | $ | 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 5, 2011, a loan was granted from a third party
      company for $11,000. The loan bears interest at 10% per annum, compounded
      annually and is due on demand.          
|    |                                                                                                                                                                                     
|    | On May 10, 2011, the Company entered into an investor
      relations consulting agreement for a period of one year. As consideration
      for the services, the Company agreed to:
|    |                                                                                                                                                                                     
|    | (1)                                                                                                                                                                                 
|    |                                                                                                                                                                                     
|    | (2)                                                                                                                                                                                 

F-17

---

|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."

We also have 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 pursuant to an exclusive
license agreement with Natac Biotech S.L. (Natac), a Spanish biotechnology
corporation engaged in the research and development of health related products.
The details of the license agreement are set out below under the heading
Principal Products  Natac and Health Related Products.

PRINCIPAL PRODUCTS

Liver Heath Formula

Technology Purchase Agreement

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 (which has been
      paid); 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. During the year ended October 31, 2009, $74,139 was
      repaid. As at April 30, 2011, $3,361 is still outstanding on the
    note.

As further consideration, Mr. Boschert, our executive officer
and director, transferred 32,000,000 shares of our common stock to NY Financial,
which resulted in a change in control.

3

---

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 (approximately $875,501). Subsequent to the entry into the Technology
Purchase agreement, we determined that the reimbursable expenses amounted to
432,000 Euros (approximately $641,045) and $66,500. As at October 31, 2010, of
the 432,000 EUR to be reimbursed, we have paid 265,311 EUR (approximately
$393,695) and $18,250 in cash; and issued promissory notes of 112,000 EUR
(approximately $166,197) and $18,500. Of the $66,500 to be reimbursed, we have
settled $30,000 indebtedness through the issuance of our common stock. One loan
of Euro 56,000 (US $83,097) was due February 1, 2010 and has not been paid. The
second loan of Euro 56,000 (US $83,098) was due June 1, 2010 and has not been
paid.

Products

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 is set out below.

Product Group
    Name of Products
    Description of ProductsFood 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.


Of the products listed above, we plan to focus our resources on
the development of Lamiridosin. See Plan of Operation.

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. SL
failed to comply with the provisions of the Europe License Agreement. We sent SL
a notice of default on December 20, 2010. Under the notice of default, SL had 60
days to remedy the breaches of the Europe License Agreement. The breaches were
not remedied by February 20, 2011. As a result, the Europe License Agreement was
terminated and is of no further effect.

4

---

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:

|(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.

As of the date of this Quarterly Report, we have not completed
our first commercial sale of the products or commenced clinical trial(s)
required by the License Agreement. We are in discussions with Natac to extend
the deadlines. Our ability to meet these obligations is subject to our obtaining
substantial financing, of which there is no assurance.

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 2011. We anticipate that this formulation will be derived from our
      first generation Lamiridosin 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
  2011.

5

---

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 2011.

|b) | Pharmaceutical Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | First Generation Lamiridosin 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 2011.                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Second Generation Lamiridosin 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 2011.                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|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 2011. We
      anticipate that the costs related to identifying new product development
      opportunities will be $250,000 in 2011.

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 Securities Exchange Act of 1934 (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,Percentage
    
    
    
    
    
    
    
    
    
    PercentageIncrease /
    
    
    
    
    
    
    
    
    
    Increase /2011
    
    
    2010
    
    
    (Decrease)
    
    
    
    2011
    
    
    2010
    
    
    (Decrease)Revenue
    $
    -
    
    $
    -
    
    
    n/a
    
    
    $
    -
    
    $
    -
    
    
    n/aExpenses
    
    (243,058
    )
    
    (652,748
    )
    
    (62.8
    )%
    
    
    (139,018
    )
    
    (484,797
    )
    
    (71.3
    )%Other Expenses
    
    (5,519
    )
    
    (5,528
    )
    
    (0.2
    )%
    
    
    (2,645
    )
    
    (3,214
    )
    
    (17.7
    )%Net Loss
    $
    (248,577
    )
    $
    (658,276
    )
    
    (62.2
    )%
    
    $
    (141,663
    )
    $
    (488,011
    )
    
    (71.0
    )%


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, or we will be able to manufacture and
develop our naturally sourced products.

6

---

ExpensesSix Months Ended April 30,
    
    
    
    Three Months Ended April 30,Percentage
    
    
    
    
    
    
    
    
    
    PercentageIncrease /
    
    
    
    
    
    
    
    
    
    Increase /2011
    
    
    2010
    
    
    (Decrease)
    
    
    
    2011
    
    
    2010
    
    
    (Decrease)Management fees
    $
    21,000
    
    $
    21,000
    
    
    n/a
    
    
    $
    10,500
    
    $
    10,500
    
    
    n/aProfessional fees
    
    169,609
    
    
    523,446
    
    
    (67.6
    )%
    
    
    84,020
    
    
    423,400
    
    
    (80.2
    )%Other operating expenses
    
    34,920
    
    
    135,846
    
    
    (74.3
    )%
    
    
    20,844
    
    
    63,790
    
    
    (67.3
    )%Foreign currency loss (gain)
    
    17,529
    
    
    (27,544
    )
    
    (163.6
    )%
    
    
    23,654
    
    
    (12,893
    )
    
    (283.5
    )%Total Expenses
    $
    243,058
    
    $
    652,748
    
    
    (62.8
    )%
    
    $
    139,018
    
    $
    484,797
    
    
    (71.3
    )%


Our expenses decreased from $484,797, during the three months
ended April 30, 2010, to $139,018 during the three months ended April 30, 2011.
The decrease in our expenses is primarily attributable to a decrease in
professional fees and other operating expenses. The decrease in expenses was
partially offset by a change from foreign currency gain to foreign currency
loss.

Management fees include amounts paid as compensation to our
officers and directors. During the three months April 30, 2011, 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, accounting and
audit fees related to meeting our reporting requirements under the Exchange Act;
and (ii) consulting fees related to payments to consultants regarding product
development and investor relations activities. The additional professional fees
during the quarter ended April 30, 2010 are primarily related to product
development.

Other operating expenses primarily consisted of travel and
office expenses.

The change from foreign currency gain to foreign currency
primarily relates to unfavorable exchange rates in connection with our
outstanding accounts 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, 2011 |          |   | At
      October 31, 2010 |          |   | Increase / (Decrease) |   
|Current Assets                                              | $ | 904                     |          | $ | 5,080                     |          |   | (82.2                 | )%
|Current Liabilities                                         |   | (931,628                | )        |   | (837,227                  | )        |   | 11.3%                 |   
|Working Capital Deficit                                     | $ | (930,724                | )        | $ | (832,147                  | )        |   | 11.8%                 |   
|                                                            |   |                         |          |   |                           |          |   |                       |   
|Cash Flows                                                  |   |                         |          |   |                           |          |   |                       |   
|                                                            |   |                         |          |   | Six Months Ended          |          |   | Six Months Ended      |   
|                                                            |   |                         |          |   | April 30, 2011            |          |   | April 30, 2010        |   
|Cash Flows used in (provided by)
      Operating Activities |   | $                       | (130,232 | ) | $                         | (711,627 | )
|Cash Flows used in Investing
      Activities               |   |                         | -        |   |                           | -        |  
|Cash Flows from Financing
      Activities                  |   |                         | 126,056  |   |                           | 542,100  |  
|Effect of Foreign Currency
      Translations               |   |                         | -        |   |                           | -        |  
|Net Decrease in Cash During
      Period                    |   | $                       | (4,176   | ) | $                         | (169,527 | )

7

---

Our working capital deficit increased from $832,147, as at
October 31, 2010, to $930,724, as at April 30, 2011. The decrease in our working
capital deficit is due to an increase in accounts payable as a result of our
lack of capital to meet our ongoing requirements.

During the six months ended April 30, 2011, we issued 3,000,000
shares at a price of $0.05 per share for proceeds of $150,000 under our foreign
private placement offering. The investor represented that she was not a U.S.
Person as contemplated under Regulation S of the U.S. Securities Act.

Future Financings

As at April 30, 2011, we had cash on hand of $904. 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.

On November 9, 2010, our Board of Directors approved a $500,000
foreign private placement offering. We have issued 3,000,000 shares at a price
of $0.05 per share for proceeds of $150,000 under the foreign private placement
offering. There are no assurances that the remainder of the foreign private
placement offering will be completed.

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, 2011 included in
this Quarterly Report on Form 10-Q.

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK
|------- | ----------------------------------------------------------------

Not Applicable.

8

---

|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, 2011 (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, 2010 (the 2010 Annual Report).

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in our 2010 Annual Report, we believe that our financial statements
contained in our Quarterly Report on Form 10-Q for the quarter ended April 30,
2011 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, 2011 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.

9

---

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.

10

---

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.

11

---

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 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.

12

---

|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)                                                     

13

---

|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)                                                                                                                                                                                                                          

14

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|Exhibit |                                                                                                                                                                
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                        
|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)
|10.38   | Public Relations, Promotion and Marketing
      Letter Agreement dated August 12, 2010 between the Company and Mary Kratka
      d/b/a CityVac(31)             
|10.39   | Investor Relations Consulting
      Agreement between the Company and Institutional Analyst, Inc. dated May
      10, 2011(32)                                 
|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)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   
|(8)   
|(9)   
|(10)  
|(11)  
|(12)  
|(13)  
|(14)  
|(15)  
|(16)  
|(17)  
|(18)  
|(19)  
|(20)  
|(21)  
|(22)  
|(23)  
|(24)  
|(25)  
|(26)  
|(27)  
|(28)  
|(29)  
|(30)  
|(31)  
|(32)  

15

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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, 2011 | By: | /s/ John Boschert                                              
|      |                     |     |                                                                
|      |                     |     | JOHN BOSCHERT                                                  
|      |                     |     | Chief Executive Officer, President, Secretary
      & Treasurer
|      |                     |     | (Principal Executive Officer)                                  
|      |                     |     |                                                                
|      |                     |     |                                                                
|Date: | June
      14, 2011 | By: | /s/ Luc Vanhal                                                 
|      |                     |     |                                                                
|      |                     |     | LUC VANHAL                                                     
|      |                     |     | Chief Financial Officer                                        
|      |                     |     | (Principal Financial Officer)                                  

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