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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K

(Mark One)

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

For the fiscal year ended: December 31, 2009

or

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

For the transition period from __________________to
__________________

Commission file number: 000-49833

ACRONGENOMICS INC.(Exact
name of registrant as specified in its charter)

|Nevada                         | 52-2219285         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

Fairfax House, 15 Fulwood Place, London UK WC1V
6AY(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code 30 697
724 3620

Securities registered pursuant to Section 12(b) of the Act

|Title of Each Class | Name of each Exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | N/A                                      

Securities registered pursuant to Section 12(g) of the Act

Common Stock, par value $0.001 per share(Title
of Class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No
[X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No
[X]

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. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
(Not currently applicable to registrant) 
Yes [ ] No [ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]

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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 [ ]                     | Smaller reporting company [X]
|(Do not check if a smaller reporting company) |                              

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

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter: $5,864,166 based on a price of $0.26 per
share, being the average of the bid and asked price of the registrants common
stock as quoted on the OTC Bulletin Board on June 30, 2009.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. 
Yes[ ] No[ ] N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
25,580,481 shares of common stock as of April 7, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or information statement; and (3) Any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980). Not Applicable

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TABLE OF CONTENTS

|PART
      I   |                                                                                                                    | 1 
|-------------- | ------------------------------------------------------------------------------------------------------------------ | --
|ITEM
      1.  | BUSINESS                                                                                                           | 1 
|ITEM
      1A. | RISK FACTORS                                                                                                       | 9 
|ITEM
      1B. | UNRESOLVED STAFF COMMENTS                                                                                          | 13
|ITEM
      2.  | PROPERTIES                                                                                                         | 13
|ITEM
      3.  | LEGAL PROCEEDINGS                                                                                                  | 14
|ITEM
      4.  | [REMOVED AND RESERVED]                                                                                             | 14
|PART
      II  |                                                                                                                    | 14
|ITEM
      5.  | MARKET FOR REGISTRANTS COMMON EQUITY,
      RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 14
|ITEM
      6   | SELECTED FINANCIAL DATA                                                                                            | 16
|ITEM
      7   | MANAGEMENTS DISCUSSION AND ANALYSIS
      OF FINANCIAL CONDITION AND RESULTS OF OPERATION                         | 16
|ITEM
      7A  | QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK                                                   | 23
|ITEM
      8.  | FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA                                                                  | 24
|ITEM
      9B  | OTHER INFORMATION                                                                                                  | 27
|PART
      III |                                                                                                                    | 28
|ITEM
      10  | DIRECTORS, EXECUTIVE OFFICERS AND
      CORPORATE GOVERNANCE                                                       | 28
|ITEM
      11. | EXECUTIVE COMPENSATION                                                                                             | 32
|ITEM
      12. | SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.              | 34
|ITEM
      13. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                    | 36
|ITEM
      14. | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                             | 37
|PART
      IV  |                                                                                                                    | 39
|ITEM
      15. | EXHIBITS, FINANCIAL STATEMENT
      SCHEDULES.                                                                     | 39
|SIGNATURES     | 41                                                                                                                

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PART I

Forward-Looking Statements

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors commencing on page 8 of this report, which may
cause our or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. Examples of forward-looking statements in this
annual report include statements regarding, by way of example and not in
limitation:

- the plans of Molecular Vision;
- our intention to acquire additional shares in Molecular Vision;
- our intention to close the share exchange transaction with Vardisto;
- our belief that certain products will be classified in certain categories
  for regulator purposes; and
- our cash requirements for the next 12 months.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

In this report, unless otherwise specified, all references to
common shares refer to the common shares of our capital stock.

As used in this annual report, the terms we, us, our, and
Acrongenomics refer to Acrongenomics, Inc., unless otherwise indicated. All
references to £ means the Pound Sterling and to $ means United States
dollars.

ITEM 1. BUSINESS

Corporate Overview

We were incorporated under the laws of the State of Nevada on
August 17, 1999 under the name Cellway Ventures Inc. On February 25, 2004, we
changed the name of our company to Acrongenomics, Inc.

We are a development stage company that focuses on investing
and commercializing novel technology platforms concerning the life sciences
sector. Previously, we were engaged solely in the business of the development
and commercialization of the BioLED Technology, which combines microfluidics and
polymer Light Emitting Diodes (pLED) for use in future point-of-care
diagnostic devices, under various joint development agreement with Molecular
Vision Limited (Molecular Vision). Molecular Vision owns the BioLED technology
and we had the right to develop and commercialize it in exchange for a royalty.
On August 19, 2008, we entered into a new agreement with Molecular Vision. Upon
the closing of the new agreement with Molecular Vision, our joint development
agreement was cancelled in exchange for 25% of the issued and outstanding shares
of Molecular Vision. As a result of this new arrangement, we intend to be much
less involved with the development of the BioLED technology than we have been in
the past and we intend to focus instead on acquiring an interest in another
technology through obtaining approximately 60% of the issued and outstanding
shares of Vardisto Investments Limited (Vardisto). However, we are still
interested in the BioLED technology and intend to continue to work toward
finding more uses for it in the market. In July 2009, we purchased 19,426
preferred shares of Molecular Vision for $275,000 USD (£166.042) . These
preferred shares are convertible into Class B common shares of Molecular Vision
at the rate of one Class B common share for each preferred share held. As of
April 7, 2010, we hold 33,734 shares in the common stock and 19,426 shares in the
preferred stock of Molecular Vision. We hold approximately 17.2% of the issued
and outstanding shares of Molecular Vision.

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Corporate History

Initially, we focused our research and development efforts in
the In Vitro Diagnostic sector. Our first product was the EP-CAM Detection Kit
(the EP Kit), which was a molecular diagnostic test for micrometastatic cancer
of epithelial origin. In connection with our development of the EP Kit, we
entered into a strategic collaboration with EuroGenet Labs S.A. (EuroGenet), a
research laboratory located in Athens, Greece, in order to explore future
prospects of the EP Kit. We estimated that the proprietary molecular diagnostics
technology platform still required extensive research costs and experiments for
the next two to three years before it reached a stage to attract the interest of
large pharmaceutical and diagnostics companies. We also felt that the series of
experiments required to advance the proprietary molecular diagnostic
technologies needed to be conducted by highly qualified personnel devoting 100%
of their efforts to the project. The development of the proprietary molecular
diagnostics technology platform would probably require collaborations with
international university research centers equipped with highly trained personnel
and appropriate instruments.

In early 2006, our board of directors decided against devoting
100% of our attention and efforts on a single project, such as the molecular
diagnostic technology platform, for the next two to three years, as it would
involve too much risk and market exposure. Therefore, we decided to diversify
our research activities.

On May 22, 2006, we signed a joint development agreement (the
First Joint Development Agreement) with Molecular Vision. Molecular Vision has
developed a technology platform combining microfluidics with an optical
detection system based on polymer light emitting diodes (commonly referred to as
pLED) to deliver potentially affordable, intelligent and readily portable
point-of-care medical diagnostic devices. The technology platform combining
microfluidics and pLED is known as BioLED Technology (see Business  BioLED
Technology for a detailed description of the technology). Under the First
Joint Development Agreement, we had the exclusive rights to develop and
commercialize the existing intellectual properties related to the BioLED
Technology and had first refusal rights to develop any additional applications
derived from Molecular Visions research and development results. This agreement
was replaced in its entirety by a subsequent agreement.

On February 27, 2007, we began negotiations to amend the First
Joint Development Agreement. On March 8, 2007, Molecular Vision, successfully
demonstrated its BioLED Lab-on-a-Chip technology using their patented, organic
semi-conductor technology in a high sensitivity, small size, medical diagnostic
device that took place at Imperial College in London, UK. The device
demonstrated its technological capability to measure biomarkers with high
sensitivity and at a low cost.

On April 17, 2007, we announced that Molecular Vision was
successful in winning the £250,000 Royal Society Brian Mercer Award for
Innovation. This is a prestigious award from the UKs Royal Society to develop
low-cost, high throughput, reel to reel, manufacturing techniques for plastic
electronics.

On May 23, 2007, we signed a second joint development agreement
(the Second Joint Development Agreement) with Molecular Vision, which replaced
the First Joint Development Agreement. The Second Joint Development Agreement
reduced our payments due to Molecular Vision by £550,000 to a total of
£2,325,000. The Second Joint Development Agreement re-priced the exercise price
of 2,000,000 options granted to Molecular Vision from $2.00 to $0.50. The Second
Joint Development Agreement was replaced in its entirety by a subsequent
agreement.

On October 11, 2007, we demonstrated the successful
implementation of a fully functional, portable medical diagnostic demonstrator
of Molecular Visions Lab-on-a-Chip technology. The demonstrator employs
patented, organic semiconductor technology in a high sensitivity, handheld,
medical diagnostic device. The successful presentation of the demonstrator
device took place at Imperial College in London, UK.

On November 14, 2007, we entered into a letter of intent with
Molecular Vision, whereby we would acquire, subject to certain payments, all of
the intellectual property and assets of Molecular Vision and retain its
founders, Professor Donald Bradley, Professor Andrew De Mello and Professor John De
Mello and their technical team to continue to develop point-of-care devices and
technology at Molecular Visions laboratory at Imperial College in London, UK.
On February 1, 2008, we agreed to extend the date to acquire 100% of Molecular
Visions to March 14, 2008. However, we did not close on this transaction.

- 2 -

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On February 1, 2008, we completed an agreement with Molecular
Vision, whereby we purchased 16,566 common shares of Molecular Vision for
£549,991.20. The transaction gave us a 13.97% interest in the issued and
outstanding shares of Molecular Vision at that time.

On August 19, 2008 we entered into an interim agreement and on
November 14, 2008, we entered into a definitive agreement (collectively, the
New Molecular Agreements), whereby Molecular Vision terminated the Second
Joint Development Agreement and we increased our ownership position in Molecular
Vision by virtue of receiving an additional 17,168 common shares of Molecular
Vision and received a royalty of 0.5% of net sales value and a licensing fee of
5% on all diagnostic products or components falling within the claims of certain
patents of Molecular Vision and a royalty of 0.3% of net sales value and a
licensing fee of 3% on all other products of Molecular Vision.

As a result of the restructuring of our relationship with
Molecular Vision, we will now seek other development opportunities in fields
possibly related or complimentary to Molecular Visions technology.

On July 22, 2009, we purchased 19,426 preferred shares in
Molecular Vision for $275,500.71 (£166,042). These preferred shares are
convertible into common shares of Molecular Vision at a rate of one Class B
common share for each preferred share held.

As of April 6, 2010, we hold 33,734 shares in the common stock
and 19,426 shares in the preferred stock of Molecular Vision. We hold
approximately 17.2% of the issued and outstanding shares of Molecular
Vision.

Our Business

Overview

We are a development stage company focusing on novel technology
platforms concerning the life sciences sector. We intend to acquire a subsidiary
that has an interest in the intellectual property rights to a potential
cholesterol-lowering agent that is currently in development.

Over the next 12 months, we believe that Molecular Vision will
continue to develop a prototype point-of-care testing device for diabetes
management and cardiovascular testing. We intend to continue to work toward
finding more uses for the BioLED Technology in the market an intend to continue
to follow the development of the technology. We intend to focus on completing
the acquisition of Vardisto Investments Limited, as described below.

Share Exchange Agreement

Effective January 31, 2009, we entered into a share exchange
agreement (the Share Exchange Agreement) with Vardisto Investments Limited
(Vardisto), a private Cyprus company.

Pursuant to the Share Exchange Agreement, we agreed to acquire
600 shares of common stock of Vardisto, which represents 60% of the total
outstanding share capital of Vardisto, in exchange for the issuance of 9,000,000
shares of our common stock. As at April 6, 2010, we have not issued the
9,000,000 shares in connection with the acquisition of Vardisto and the
transaction has not closed.

Vardistos main asset is its interest in Halldale Ventures
Limited (Halldale). Halldale is a private Cyprus company, which Vardisto holds
an 80% interest.

- 3 -

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Effective January 30, 2009, Halldale entered into an asset
purchase agreement (the Asset Purchase Agreement) with Maragrita
Hadzopoulou-Cladaras. Pursurant to the Asset Purchase Agreement, Halldale
agreed, among other things, to acquire certain assets comprised mainly of
intellectual property and certain research materials from Ms.
Hadzopoulou-Cladaras in exchange for 20% of its issued and outstanding shares of
its common stock.

The assets purchased by Halldale pursuant to the Asset Purchase
Agreement include research materials and experimental results from the use of a
compound referred to as compound X as a hypolipidemic agent and development of
a potential cholesterol-lowering agent, in combination with essential oil
derived from plants.

The Share Exchange Agreement is subject to a number of closing
conditions including the following:

| | (a) | the representations and warranties of both parties will
      be true, correct and complete on the closing date;                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                     
| | (b) | all covenants and obligations of the parties will be
      performed and complied with in all material respects;                                                                                                                    
| |     |                                                                                                                                                                                                                                     
| | (c) | all documents necessary or reasonably required to
      consummate the transaction will be executed and delivered to the other
      party;                                                                                         
| |     |                                                                                                                                                                                                                                     
| | (d) | we will have received a certificate from the Secretary of
      Vardisto attaching a copy of Vardistos charter documents and a copy of
      the resolutions of the board of directors of Vardisto approving the
      transaction;
| |     |                                                                                                                                                                                                                                     
| | (e) | we will have received all duly executed copies of all
      third party consents and approvals contemplated by the Share Exchange
      Agreement;                                                                                  
| |     |                                                                                                                                                                                                                                     
| | (f) | our common stock will continue to be quoted on the OTC
      Bulletin Board; and                                                                                                                                                    
| |     |                                                                                                                                                                                                                                     
| | (g) | there will be no material adverse change in
    Vardisto.                                                                                                                                                                           

There is no assurance that the transactions completed under the
Share Exchange Agreement will be completed as planned or at all. As of April 6,
2010, the transactions under the share exchange agreement had not been
completed.

On October 1, 2008, we signed a two year management and
operational services agreement with Vardisto Investments Limited, which includes
rental of office space, reception and secretarial services, at $5,000 per month
and located at 115 Ag. Paraskevis Street, Halandri, Greece.

BioLED Technology

Medical Diagnostic Testing  Point-of-Care Diagnostic
Devices

The multi-billion dollar point-of-care diagnostic market is set
to benefit most from the BioLED technology. BioLED offers a compelling solution
to point-of-care diagnostics. The stand-alone devices will generate quantitative
lab-quality results at the point-of-care using only small amounts of bodily
fluids such as blood and urine. The availability of such devices would directly
address key objectives of health providers in the UK, Europe and the US,
notably, reducing treatment time, improving quality of treatment, reducing
inequality of treatment by extending facilities available to remote surgeries
and improving ongoing care via home-based preventative and post-treatment
monitoring of at-risk patients. Potential products include:

- professional point-of-care devices (cartridge/reader configuration) for
  use in a physicians office, clinics and hospitals;
- single-use disposable diagnostic devices for home testing.

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The current proof-of-concept projects have shown that both
immunoassays and colorimetric assays can be successfully implemented on the
platform.

We continue to have an interest in the development of the
BioLED Technology. Terms such as Lab-on-a-Chip or Point-of-Care Testing
describe the concept of the technology, which is to have specialized, light
weight, readily portable and easy to use devices to perform complex biological
tests at the site where they are most needed. Traditionally, most of the complex
biological tests require specialized laboratories equipped with bulky, expensive
equipment and highly trained personnel. The difficulties in creating portable
diagnostic devices for point-of-care testing include the lack of suitable
miniaturization, low-power consumption and optical detection systems.

By combining the microfluidic technology with the pLED/OLED
(Organic Light Emitting Diodes), we believe that BioLED Technology once
developed, will offer medical devices at the point-of-care level that will allow
the quantitative and qualitative analysis of medical conditions with high
sensitivity and functionality at low cost.

Microfluidics refers to fluid flow in a network of
microchannels which can be integrated on disposable, low cost Lab-on-a-Chip
cartridges, while the flow of liquids or gases is controlled through valves and
switches. Microfluidics can automatically guide a test sample through the
various stages of an assay, perform multiple functions including sample
purification, mixing with analytes, labeling, reaction and separation of
products. Microfluidics can also be designed to guide the processed test sample
to the integrated detection component of a point-of-care testing device.

Low cost, organic semiconductor polymer Light Emitting Diodes
(pLED) with tunable optical properties provide BioLED Technology with
low-power consumption and optical detectable components in a point-of-care
testing device. Under electrical excitation the polymer emits light via
radiative combination of injected electrons and holes and therefore may be used
as a light source. The same structure can then be used in reverse as a
photodetector by illuminating the polymer in order to generate a measurable
electrical current.

In a future point-of-care testing device based on the BioLED
Technology, reagents of an assay will be mixed with the body fluid (blood,
urine) through the microfluidic network. The resulting mixture will be excited
by the integrated, battery driven pLED and the resulting light-signal will be
detected by the integrated photodetector, which will generate an electrical
readout.

A typical assay for disease markers comprises two steps.
First, specific immobilized antibodies are used to capture the protein markers
inside the detection zone. Secondly, fluorescently labeled detection antibodies
specific to the protein marker are flowed over the detection zone. The detection
antibodies bind to capture protein markers and unbound excess detection
antibodies are rinsed away. The labeled antibodies can then be excited with our
pLED light sources and any emitted fluorescence is detected with our organic
photodiodes. Without disease markers no detection antibodies are retained,
resulting in zero fluorescence. This format is applicable to most protein based
disease markers as long as suitable specific antibodies are available.

Market Potential

Following primary market research, a number of potential
point-of-care diagnostic device applications were evaluated in terms of
feasibility, market needs, generating revenue, market growth rate and
competition. Among these, two disease areas were chosen to be the primary
targets for BioLED device development. These point-of-care testing devices will
enable on-the-spot quantitative and qualitative diagnosis from a few drops of
blood, urine.

Diabetes Management (Kidney Health Markers):

The prevalence of diabetes for all age-groups worldwide was
estimated to be 2.8% in 2000 and 4.4% in 2030. The total number of people with
diabetes is projected to rise from 171 million in 2000 to 366 million in 2030
(Global Prevalence of Diabetes. Diabetes Care 27:1047-1053, 2004).
Microalbuminuria, a well known diabetic nephropathy marker, is defined by
increased urinary Human Serum Albumin excretion. The Albumin Blue 580 (AB 580)
assay is based on a red emitting fluorophore with specific affinity to human
serum albumin. Upon binding to the human serum albumin, the fluorescence
efficiency of AB 580 increases by two orders of magnitude. AB 580 shows significant fluorescence only when human serum albumin is
present. If diagnosed at an early stage, Microalbuminuria can be treated before
its progression to the development of diabetic nephropathy (kidney failure).
Approximately 25  30% of all diabetics develop evidence of nephropathy.

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Cardiovascular Diseases (Cardiac Markers):

Cardiovascular diseases are responsible for the deaths of 17
million people worldwide each year, making them the developed worlds leading
cause of death according to the World Health Organization. 32 million heart
attacks and strokes per year demonstrate the need for the development of
accurate, cost efficient and accessible diagnostics. Conventional diagnostic
techniques, however, are costly, time consuming and of limited predictive
potential. A smarter diagnostic approach is the in vitro measurement of various
cardiac biomarkers of high preventive value, using a point-of-care device. The
cardiac biomarker tests are based on a sandwich immunoassay format. The
detectable species is the secondary antibody labeled with a fluorescent tag. The
antibodies to be used are anti-myoglobin (Myoglobin), CK-MB antibody (creatine
kinase), and anti-troponin I (Troponin I).

Compliance with Government Regulation

We are aware that the production and marketing of medical
testing devices are subject to the laws and regulations of governmental
authorities in the United States and all other countries where the devices will
be marketed. Specifically, in the United States, the Food and Drug
Administration (the FDA), among other agencies, regulates new product
approvals to establish safety and efficacy of these products. Governments in
other countries have similar legal bodies handling the requirements for testing
and marketing.

The Regulatory Process

The FDA in the United States and Medical Devices Directive in
Europe are the official bodies that cover the regulatory requirements for
medical devices. Medical devices are classified into Class I, II, and III.
Regulatory control increases from Class I to Class III. The device
classification regulation defines the regulatory requirements for a general
device type. Most Class I devices are exempt from Pre-market Notification
510(k); most Class II devices require Pre-market Notification 510(k); and most
Class III devices require Pre-market Approval.

Class I devicesare defined as non-life sustaining.
These products are the least complicated and their failure poses little
risk.

Class II devicesare more complicated and present more
risk than Class I, though are also non-life sustaining. They are also subject to
any specific performance standards.

Class III devicessustain or support life, so that their
failure is life threatening.

The basic regulatory requirements that manufacturers of medical
devices distributed in the U.S. must comply with are:

- Pre-market Notification 510(k), unless exempt, or Pre-market Approval;
- Establishment registration on form FDA-2891;
- Medical Device Listing on form FDA-2892;
- Quality System (QS) regulation;
- Labeling requirements; and
- Medical Device Reporting (MDR).

We believe that a devices that uses the BioLED Technology will
be classified as Class I, as it will be used to diagnose rather than treat
medical conditions. Additionally, medical devices that will use the BioLED
Technology are non-invasive and the assays that will be used for testing are
already existing in the market. BioLED Technology, once developed, will cover a great medical niche and it may
undergo fast track review since there is no other such technology available in
the market.

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Regardless of how the BioLED technology is regulated, the
Federal Food, Drug, and Cosmetic Act and other Federal statutes and regulations
govern or influence the research, testing, manufacture, safety, labeling,
storage, record-keeping, approval, distribution, use, reporting, advertising and
promotion of our future products. Noncompliance with applicable requirements can
result in civil penalties, recall, injunction or seizure of products, refusal of
the government to approve or clear product approval applications or to allow us
to enter into government supply contracts, withdrawal of previously approved
applications and criminal prosecution.

Product Approval in the United States

The BioLED Technology is currently in the developmental stage
and the process of seeking regulatory approval from the FDA has not begun. There
can be no assurance that the BioLED Technology and potential products will
ultimately receive regulatory approval.

We believe that BioLED Technology, if successfully developed,
may be considered appropriate as part of a medical device and will be then
subjected to the requirements of FDA for clinical testing to demonstrate safety
and effectiveness prior to the approval.

Product Approval in Europe

If the BioLED Technology is successfully developed and
regulatory approval of its use is sought in Europe, we believe that the BioLED
Technology may be regulated in Europe as a Class I Sterile, Class IIb or Class
III medical device, under the authority of the Medical Device Directives being
implemented by European Union member countries. These classifications apply to
medical laboratory equipment and supplies including, among other products, many
devices that are used for the collection and processing of blood for patient
therapy.

The applicable regulations vest the authority to permit
affixing of the CE Mark with various notified bodies. These are private and
state organizations which operate under license from the member states of the
European Union to certify that appropriate quality assurance standards and
compliance procedures are followed by developers and manufacturers of medical
device products or, alternatively, that a manufactured medical product meets a
more limited set of requirements. Notified bodies are also given the
responsibility for determination of the appropriate standards to apply to a
medical product. Receipt of permission to affix the CE Mark enables a company to
sell a medical device or product in all European Union member countries. Other
registration requirements may also need to be satisfied in certain countries.
Molecular Vision has not received permission from a notified body to affix the
CE Mark to the BioLED Technology, nor have they as yet requested such
permission.

Status of Product

On March 8, 2007, a demonstrator device was presented at
Imperial College in London, UK, using MVL's patented, organic semiconductor
technology in a high sensitivity, small size, medical diagnostic device. The
device demonstrated its technological capability to measure biomarkers with high
sensitivity and at low cost.

On October 11, 2007, we demonstrated the successful
implementation of a fully functional, portable medical diagnostic demonstrator
of Molecular Visions Lab-on-a-Chip technology. The demonstrator employs
patented, organic semiconductor technology in a high sensitivity, handheld,
medical diagnostic device. The stand alone two-channel, battery-powered device,
complete with digital display and self-referencing capability has demonstrated
its capability to measure clinically relevant markers with high sensitivity and
at low cost. In particular, the demonstrator device has been used successfully
to measure creatinine in urine at physiologically significant concentrations.
The results, obtained within seconds, were comparable to those obtained using a
bench top spectrometer. The successful presentation of the demonstrator device
took place at Imperial College in London, UK.

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Molecular Vision is continuing to develop the prototype
point-of-care testing device for diabetes management and Cardiovascular testing
and has not yet begun the regulatory approval process.

Dependence on One or a Few Major Customers

As we are a development stage company, we do not yet have any
customers or customer contracts.

Employees and Consultants

Our company currently has two employment agreements and one
consulting agreement with an independent advisor.

Our employment agreement with our President, Mr. Platon
Tzouvalis, dated April 1, 2007 was recently renewed and is for a term of three
years ending March 31, 2013. Mr. Platon Tzouvalis has agreed to serve as our
President and is obligated to perform his duties and responsibilities in good
faith and on a best efforts basis. In consideration for his services, we pay him
a monthly salary of $7,000. We also compensate Mr. Platon Tzouvalis for any
expenses he incurs in carrying out his duties.

Our employment agreement with our Chief Technology Officer, Dr.
Manos Topoglidis, dated April 1, 2007 was recently renewed and is for a term of
three years ending March 31, 2013. Dr. Manos Topoglidis has agreed to serve as
our Chief Technology Officer and is obligated to perform his duties and
responsibilities in good faith and on a best efforts basis. In consideration for
his services, we pay him a monthly salary of $4,500. We also compensate Dr.
Manos Topoglidis for any expenses he incurs in carrying out his duties.

Our consulting agreement with our former President, Mr.
Constantine Poulios, dated April 1, 2008 was recently renewed and is for a term
of three years ending March 31, 2013. Mr. Constantine Poulios has agreed to
serve as an outside independent advisor on all issues as our board of directors
may need from time to time. Mr. Constantine Poulios has the obligation to serve
the company in good faith and on a best efforts basis. In consideration for his
services, we pay him a monthly fee of $10,000. We also compensate Mr.
Constantine Poulios for any expenses he incurs in carrying out his duties.
Further, in consideration of Mr. Constantine Poulios signing the original
consulting agreement dated April 1, 2008, we re-priced 100,000 options
exercisable at $2.50 to an exercise price of $0.50 and granted an additional
200,000 options at an exercise price of $0.50. The consulting agreement can be
terminated as follows:

- by Mr. Constantine Poulios upon a change of control of our company, upon
  which Mr. Constantine Poulios is entitled to the greater of the amount of
  compensation payable for the remaining term of the agreement and 12 months of
  fee payments;
- by Mr. Constantine Poulios, upon which Mr. Constantine Poulios will
  undertake to perform the required tasks until a proper replacement is found
  and we have the right to terminate all options or benefits accrued under the
  agreement;
- by us without cause, upon which Mr. Constantine Poulios is entitled to the
  amount of compensation payable for the remaining term of the agreement; and
- by us with cause, upon which the agreement is terminated and no payment is
  made to Mr. Constantine Poulios.

Our Director and CFO, Mr. Ron Lizée has been with us since June
of 2004 and is not on a contract. His professional accounting firm invoices us
monthly at the same billable rate as other clients.

Reports to Security Holders

We file reports and other information with the SEC. This annual
report on Form 10-K, historical information about our company and other
information can be inspected and copied at the Public Reference Room of the SEC
located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such
materials, including copies of any portion of this annual report on Form 10-K,
can be obtained from the Public Reference Room of the SEC at prescribed rates.

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You can call the SEC at 1-800-SEC-0330 to obtain information on
the operation of the Public Reference Room. Such materials may also be accessed
electronically by means of the SECs home page on the Internet
(http://www.sec.gov).

ITEM 1A. RISK FACTORS

Much of the information included in this report includes or is
based upon estimates, projections or other forward looking statements. Such
forward looking statements include any projections and estimates made by us and
our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein. Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.

Shares of our common stock are speculative, especially since we
are in the development stage of our new business. We operate in a volatile
sector of business that involves numerous risks and uncertainties. The risks and
uncertainties described below are not the only ones we face. Other risks and
uncertainties, including those that we do not currently consider material, may
impair our business. If any of the risks discussed below actually occur, our
business, financial condition, operating results or cash flows could be
materially adversely affected. This could cause the trading price of our
securities to decline, and you may lose all or part of your investment.
Prospective investors should consider carefully the risk factors set out below.

Risks Related to our Financial Condition

We have not earned any revenues since our incorporation and
only have a limited operating history in our current business, which raise doubt
about our ability to continue as a going concern.

Our company has a limited operating history in our current
business and is in the development stage. We have not generated any revenues
since our inception and we will, in all likelihood, continue to incur operating
expenses without significant revenues until Molecular Vision successfully
develops its BioLED Technology and commercializes its future point-of-care
testing devices. Our primary source of funds has been the sale of our common
stock. We cannot assure that we will be able to generate any significant
revenues or income. These circumstances make us dependent on additional
financial support until profitability is achieved.

Our independent auditors have expressed substantial doubt
about our ability to continue as a going concern, which may hinder our ability
to obtain future financing.

Since our inception, we have accumulated a deficit of
$27,570,395 as at December 31, 2009 and incurred a net loss of $937,573 during
the year ended December 31, 2009. These circumstances raise substantial doubt
about our ability to continue as a going concern, as described in the
explanatory paragraph to our independent auditors report on our consolidated
financial statements for the year ended December 31, 2009, which are included in
this annual report on Form 10-K. Although our consolidated financial statements
raise substantial doubt about our ability to continue as a going concern, they
do not include any adjustments relating to recoverability and classification of
recorded assets, or the amounts or classifications of liabilities that might be
necessary in the event our company cannot continue in existence.

Risks Related to our Business

The global financial crisis has had, and may continue to
have, an impact on our business and financial condition.

The ongoing global financial crisis may also limit our ability
to access the capital markets at a time when we would like, or need, to raise
capital, which could have an impact on our ability to react to changing economic
and business conditions. Accordingly, if the global financial crisis and
current economic downturn continue or worsen, our business, results of
operations and financial condition could be materially and adversely
affected.

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The Share Exchange Agreement with Vardisto may not complete
and we may not obtain an interest in the development of the potential
cholesterol-lowering agent.

The Share Exchange Agreement may not complete and we may not
obtain an interest in the development of the potential cholesterol-lowering
agent. Even if we do obtain an interest in the potential cholesterol-lowering
agent, there is no assurance that it will ever become commercially viable. The
development of life science technology is extremely risky and expensive. It is
likely that we will never develop and sell a product that will make us
profitable. If we never become profitable, we will go out of business and
investors will lose all of the money they have invested in our company.

We need to raise additional financing to support the
research and development of future business but we cannot be sure that we will
be able to obtain additional financing on terms favorable to us when needed. If
we are unable to obtain additional financing to meet our needs, our operations
may be adversely affected or terminated.

Our ability to develop our business is dependent upon our
ability to raise significant additional financing when needed. Our future
capital requirements will depend upon many factors, including:

- the closing of the Share Exchange Transaction;
- investments in other technologies or technology companies; and
- any additional investments in Molecular Vision, including investments
  required to maintain our ownership position.

We have limited financial resources and to date, no cash flow
from operations and we are dependent for funds on our ability to sell our common
stock, primarily on a private placement basis. There can be no assurance that we
will be able to obtain financing on that basis in light of factors such as the
market demand for our securities, the state of financial markets generally and
other relevant factors. Any sale of our common stock in the future will result
in dilution to existing stockholders. Furthermore, there is no assurance that we
will not incur debt in the future, that we will have sufficient funds to repay
our future indebtedness or that we will not default on our future debts,
jeopardizing our business viability. Finally, we may not be able to borrow or
raise additional capital in the future to meet our needs or to otherwise provide
the capital necessary to conduct the development of our technology, which might
result in the loss of some or all of your investment in our common stock.

Molecular Vision may be subject to intellectual property
litigation such as patent infringement claims, which could adversely affect our
business.

Other patents could exist or could be filed which would
prohibit or limit Molecular Visions ability to develop the BioLED Technology.
In the event of an intellectual property dispute, we may be forced to litigate.
Intellectual property litigation would divert attention away from developing the
Bio LED Technology and marketing our potential products and be very expensive.
An adverse outcome could take our ability to develop or commercialize a
potential product and could prevent us from becoming profitable.

Because some of our officers and directors are located in
non-U.S. jurisdictions, you may have no effective recourse against the
management for misconduct and may not be able to enforce judgment and civil
liabilities against our officers, directors, experts and agents.

Most of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of their assets are located outside the United States. As a result, it
may be difficult for you to enforce within the United States any judgments
obtained against our officers or directors, including judgments predicated upon
the civil liability provisions of the securities laws of the United States or
any U.S. state.

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If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted.

The Investment Company Act of 1940(the Investment
Company Act) contains substantive legal requirements that regulate the manner
in which investment companies are permitted to conduct their business
activities. If we are deemed to be an investment company under the Investment
Company Act, we may be required to institute burdensome compliance requirements
and our activities may be restricted, which would materially adversely affect
our business, financial condition and results of operations. In addition, our
contracts would be voidable and a court could appoint a receiver to take control
of and liquidate our business.

In order not to be regulated as an investment company under the
Investment Company Act, unless we can qualify for an exemption, we must ensure
that we are engaged primarily in a business other than investing, reinvesting,
owning, holding or trading in securities (as defined in the Investment Company
Act) and that we do not own or acquire investment securities having a value
exceeding 40% of the value of our total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. The SEC has adopted Rule
3a-1 that provides an exemption from registration as an investment company if a
company meets both an asset and an income test and is not otherwise primarily
engaged in an investment company business by, among other things, holding itself
out to the public as such or by taking controlling interests in companies with a
view to realizing profits through subsequent sales of these interests. A company
satisfies the asset test of Rule 3a-1 if it has no more than 45% of the value of
its total assets (adjusted to exclude U.S. Government securities and cash) in
the form of securities other than interests in majority-owned subsidiaries and
companies which it primarily and actively controls. A company satisfies the
income test of Rule 3a-1 if it has derived no more than 45% of its net income
for its last four fiscal quarters combined from securities other than interests
in majority owned subsidiaries and primarily controlled companies.

Our ability to hire and retain qualified personnel will be
an important factor in the success of our business and a failure to hire and
retain key personnel may result in our inability to manage and implement our
business plan.

Our ability to hire and retain qualified personnel will be an
important factor in the success of our business. In addition, in order to manage
growth effectively, we must implement management systems and continue to recruit
and train new employees. We may not be able to attract and retain the necessary
qualified personnel. If we are unable to retain or to hire qualified personnel
as required, we may not be able to adequately manage and implement our business
plan.

Our disclosure controls and procedures and internal control
over financial reporting were proven not effective, which may cause our
financial reporting to be unreliable and lead to misinformation being
disseminated to the public.

Our management evaluated our disclosure controls and procedures
as of December 31, 2009 and concluded that as of that date, our disclosure
controls and procedures were not effective. The ineffectiveness of our
disclosure controls and procedures was due to a lack of knowledge regarding U.S.
generally accepted accounting principles and the rules of the Securities and
Exchange Commission by responsible people within our company.

In addition, our management evaluated our internal control over
financial reporting as of December 31, 2009 and concluded that that there were
material weaknesses in our internal control over financial reporting as of that
date and that our internal control over financial reporting was not effective as
of that date. A material weakness is a deficiency or a combination of control
deficiencies in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of our annual or interim
financial statements will not be prevented or detected on a timely basis. We
intend to remedy these material weaknesses in the 2010 fiscal year.

We have not yet remediated these material weaknesses and we
believe that our disclosure controls and procedures and internal control over
financial reporting continue to be ineffective. Until these issues are
corrected, our ability to report quarterly and annual financial results or other
information required to be disclosed on a timely and accurate basis may be
adversely affected and our financial reporting may continue to be unreliable,
which could result in additional misinformation being disseminated to the public.
Investors relying upon this misinformation may make an uninformed investment
decision.

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Risks Related to our Common Shares

The recent weakening of economic conditions around the world
could have harmful effects on our company. If these harmful effects cause us to
cease our development of medical technologies, then our shareholders will likely
lose their entire investment in our company.

The recent weakening of economic conditions in the U.S. and
around the world could have harmful effects on our ability to raise money to
fund our planned operations. If this happens, we would likely go out of business
and our investors will lose their entire investment in our company.

We believe that recent decreases in value of the common shares
of many companies worldwide will make selling shares of our common stock
increasingly difficult. If we are not able to sell enough of our shares to meet
our financial needs, we will have to consider borrowing the money we need. A
tightening of credit conditions has also been experienced in the economy
recently. Because of the recent credit crisis, it is possible that we would not
be able to borrow adequate amounts to fund our operations on terms and at rates
of interest we find acceptable and in the best interests of our company. If we
are unable to obtain the amount of money that we need to fund our operations,
then we will likely go out of business and investors will lose their entire
investment in our company.

Because we do not intend to pay any dividends on our common
stock, investors seeking dividend income or liquidity should not purchase shares
of our common stock.

We have not declared or paid any dividends on our common stock
since our inception, and we do not anticipate paying any such dividends for the
foreseeable future. Investors seeking dividend income or liquidity should not
invest in our common stock.

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because a portion of our continued operations will
be financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our
operations. Such reductions may force us to reallocate funds from other planned
uses and may have a significant negative effect on our business plan and
operations, including our ability to develop new products and continue our
current operations. If our stock price declines, we can offer no assurance that
we will be able to raise additional capital or generate funds from operations
sufficient to meet our obligations. If we are unable to raise sufficient capital
in the future, we may not be able to have the resources to continue our normal
operations.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our certificate of incorporation authorizes the issuance of up
to 100,000,000 shares of common stock with a par value of $0.001. Our board of
directors may choose to issue some or all of such shares to acquire one or more
businesses or to provide additional financing in the future. The issuance of any
such shares will result in a reduction of the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will cause a reduction in the proportionate ownership and voting
power of all current shareholders. Further, such issuance may result in a change
of control of our corporation.

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Trading of our stock may be restricted by the Securities
Exchange Commissions penny stock regulations, which may limit a stockholders
ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and accredited investors. The term accredited investor refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the Securities and Exchange Commission, which provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholders ability
to buy and sell our stock.

In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our common stock currently trades on a limited basis on the OTC
Bulletin Board. Trading of our stock through the OTC Bulletin Board is
frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in our stock, in which case it could be difficult for
shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. PROPERTIES

Executive Offices and Resident Agent

Our registered office for mailing services is located at
Fairfax House, 15 Fulwood Place, London UK WC1V 6AY, at cost of £705 per year.

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Our registered office for service in the State of Nevada is
located at Paracorp Incorporated, 318 N Carson St #208, Carson City, NV 89701.

On October 1, 2008, we signed a two year management and
operational services agreement with Vardisto Investments Limited, which includes
rental of office space, reception and secretarial services, at $5,000 per month
and located at 115 Ag. Paraskevis Street, Halandri, Greece.

During 2008, we terminated a month-to-month management
agreement for $10,000 per month with CASAD Sarl for office space and
administration in Geneva, Switzerland.

In 2008, we terminated a rental agreement with PKL Ltd. for the
rental of a flat in London for £488 per week.

We believe our current premises are adequate for our current
operations and we do not anticipate that we will require any additional premises
in the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

ITEM 4. [REMOVED AND RESERVED]

PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market information

Our common shares are quoted on the OTC Bulletin Board under
the Symbol AGNM. Our stock was originally approved for trading on the OTC
Bulletin Board on July 15, 2003 under the symbol CWYV and was changed to
AGNM on March 4, 2004 in connection with a change of name.

The following table reflects the high and low bid information
for our common stock obtained from the OTC Bulletin Board and reflects
inter-dealer prices, without retail mark-up, markdown or commission, and may not
necessarily represent actual transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

|Quarter Ended |   | Bid High |  |   | Bid Low |  |   | Close | 
|------------- | - | -------- |  | - | ------- |  | - | ----- | 
|03/31/2010    | $ | 0.35     |  | $ | 0.11    |  | $ | 0.24  | 
|12/31/2009    | $ | 0.20     |  | $ | 0.09    |  | $ | 0.12  | 
|09/30/2009    | $ | 0.34     |  | $ | 0.12    |  | $ | 0.20  | 
|06/30/2009    | $ | 0.35     |  | $ | 0.18    |  | $ | 0.30  | 
|03/31/2009    | $ | 0.35     |  | $ | 0.17    |  | $ | 0.35  | 
|12/31/2008    | $ | 0.28     |  | $ | 0.21    |  | $ | 0.27  | 
|09/30/2008    | $ | 0.51     |  | $ | 0.25    |  | $ | 0.35  | 
|06/30/2008    | $ | 0.55     |  | $ | 0.55    |  | $ | 0.55  | 
|03/31/2008    | $ | 1.08     |  | $ | 0.55    |  | $ | 0.60  | 

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On March 31, 2010, the closing price for the common stock as
reported by the quotation service operated by the OTC Bulletin Board was $0.24.

Transfer Agent

Our common shares are issued in registered form. The Pacific
Stock Transfer Company of 500 E. Warm Springs Road, Suite 240, Las Vegas NV
89119, Phone: (702) 361-3033, Fax: (702) 433-1979 is the registrar and transfer
agent for our common shares.

Holders of Common Stock

As of April 7, 2010, there were 219 registered holders of
record of our common stock. As of such date, 25,580,481 common shares were
issued and outstanding.

Dividends

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities

During the fiscal year ended December 31, 2009 we completed the
following sales of unregistered securities:

On February 6, 2009, we issued 625,000 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 at price of
$0.40 per share for total proceeds of $250,000. Each unit consisted of one
common share and one common share purchase warrant exercisable at $0.75 for a
period of two years. We paid a commission of $25,000 on this placement.

On February 6, 2009, we issued 66,250 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 in settlement
of a subscription receivable of $26,500 as at December 31, 2008. Each unit
consisted of one share purchase warrant exercisable at $0.75 for a period of two
years.

On May 15, 2009, we issued 525,000 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 at price of
$0.40 per share for total proceeds of $210,000. Each unit consisted of one share
purchase warrant exercisable at $0.75 for a period of two years. We paid a
commission of $16,000 on this placement.

On September 16, 2009, we issued 165,000 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 at price of
$0.40 per share for total proceeds of $66,000. Each unit consisted of one common
share and one common share purchase warrant exercisable at $0.75 for a period of
two years. We paid a commission of $5,900 on this placement.

On September 16, 2009, we issued 105,000 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 at price of
$0.40 per unit for total proceeds of $42,000. Each unit consists of one common
share and one common share purchase warrant exercisable at $0.75 for a period of
two years. The Company paid a commission of $4,200 on this placement.

On September 30, 2009, we issued 137,500 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 at price of
$0.40 per unit for total proceeds of $55,000. Each unit consists of one common
share and one common share purchase warrant exercisable at $0.75 for a period of
two years. We paid a commission of $5,500 on this placement.

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On October 29, 2009, we issued 50,000 units to offshore
subscribers pursuant to Regulation S of the Securities Act of 1933 at price of
$0.40 per unit for total proceeds of $20,000. Each unit consists of one common
share and one common share purchase warrant exercisable at $0.75 for a period of
two years. We paid a commission of $2,000 on this placement.

Purchases of Equity Securities by the Issuer and
Affiliated Purchasers

We did not purchase any of our shares of common stock or other
securities during the year ended December 31, 2009.

ITEM 6 SELECTED FINANCIAL DATA

Not applicable.

ITEM 7 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

Our managements discussion and analysis of financial condition
and results of operation provides a narrative about our financial performance
and condition that should be read in conjunction with the audited consolidated
financial statements and related notes thereto included in this annual report on
Form 10-K. This discussion contains forward looking statements reflecting our
current expectations and estimates and assumptions about events and trends that
may affect our future operating results or financial position. Our actual
results and the timing of certain events could differ materially from those
discussed in these forward-looking statements due to a number of factors,
including, but not limited to, those set forth in the sections of this Form 10-K
titled Risk Factors and Forward-Looking Statements.

Plan of Operation

Until August 19, 2008, we had been operating pursuant to a
development agreement with Molecular Vision, whereby we funded the development
of the point-of-care device of Molecular Vision in return for a license to
commercialize and sell the device. On August 19, 2008, we changed our
relationship with Molecular Vision by entering into an interim agreement, and a
subsequent agreement on November 13, 2008, whereby, we terminated our previous
development agreement in exchange for a royalty on product sales or license fees
received by Molecular Vision for products or licenses based on Molecular
Visions suite of patents, and we received 17,168 additional common shares of
Molecular Vision. These agreements are described further under the heading
Business  Corporate History.

On January 31, 2009, we entered into a share exchange agreement
with Vardisto, whereby we agreed to acquire 600 shares of common stock of
Vardisto, representing 60% of their total outstanding share capital in exchange
for the issuance of 9,000,000 shares of our common stock. The share exchange
agreement is conditional upon certain events occurring and there is no assurance
that the share exchange agreement will close. The share exchange agreement and
Vardisto are described under the heading Business  Our Business  Vardisto.
As at April 6, 2010, we have not issued the 9,000,000 share in connection with
the acquisition of Vardisto and the transaction has not closed.

Over the next 12 months, we will work on closing the share
exchange agreement with Vardisto. Further, we intend to work with Molecular
Vision to develop and commercialize the BioLED Technology.

- 16 -

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Cash Requirements

We have not generated any revenues and our operating activities
have resulted in a loss of $937,573 for the year ended December 31, 2009 (2008:
loss of $3,022,005 ). This negative cash flow is attributable to our operating
expenses, including but not limited to, general and administration and the
payment of our audit fees and legal fees. We anticipate that our expenses will
increase as we intend to focus on the development of our new project with
Vardisto. We estimate our expenses in the next 12 months will be approximately
$1,800,000, generally falling in four major categories: research and
development, general and administrative expenses, investor relations and
professional fees.

We estimate our operating expenses and working capital
requirements for the next 12 months to be as follows:

|Expense                  |   | Amount    | 
|------------------------ | - | --------- | 
|Research & Development   | $ | 500,000   | 
|General & Administrative | $ | 600,000   | 
|Investor Relations       | $ | 400,000   | 
|Professional fees        | $ | 300,000   | 
|                         | $ | 1,800,000 | 

Research & Development expenses are expected to include our
contributions to the research and development of the potential
cholesterol-lowering agent that is currently in development by the subsidiary of
Vardisto. If we do not acquire Vardisto, then we intend to seek out and acquire
another, as yet unknown, technology and to spend approximately this amount on
its research and development.

General & Administrative will include office rent,
utilities, communication, office equipment and supplies, banking fees,
insurance, corporate materials, accounting and temporary office assistance.

Investor Relations will include the costs of paying for
investor relations representatives, press releases, advertising, and travel
expenses related to promoting the company.

Professional fees will include all payments to our outsourced
attorney and independent auditor.

As of December 31, 2009, we had approximately $4,303 in cash.
We do not have enough funds to pay for our estimated operating expenses for the
next 12 months and require additional financing to continue our business. We
anticipate that we will have to address the cash shortfall through additional
equity financings in the future. We can offer no assurance, however, that such
financings will be available on terms acceptable to our company. The recent
weakening of economic conditions in the U.S. and around the world could have
harmful effects on our ability to raise money to fund our planned
operations.

We believe that recent decreases in value of the common shares
of many companies worldwide will make selling shares of our common stock
increasingly difficult. If we are not able to sell enough of our shares to meet
our financial needs, we will have to consider borrowing the money we need. A
tightening of credit conditions has also been experienced in the economy
recently. Because of the recent credit crisis, it is possible that we would not
be able to borrow adequate amounts to fund our operations on terms and at rates
of interest we find acceptable and in our the best interests. If we are unable
to obtain the amount of money that we need to fund our operations, then we will
likely go out of business and investors will lose their entire investment in our
company.

We do not expect that the difficult economic conditions are
likely to improve significantly in the near future. Further deterioration of the
economy, and even consumer fear that the economy will deteriorate further could
intensify the adverse effects of these difficult market conditions.

- 17 -

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Purchase of Significant Equipment

We do not intend to purchase any significant equipment.

Personnel Plan

We currently have two executive officers and one consultant,
which are engaged pursuant to consulting agreements.

General Administration

We anticipate spending approximately $600,000 on general and
administration costs in the next 12 months. These costs are expected to consist
primarily of travel, office, rent and consulting fees.

Off-Balance Sheet Arrangements

We have no 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 that is material to
stockholders.

Liquidity and Capital Resources

Our financial condition for the years ended December 31, 2009
and 2008 and the changes between those periods for the respective items are
summarized as follows:

Working Capital

|                          |   | December 31, 2009 |   |   | December 31, 2008 |  
|------------------------- | - | ----------------- | - | - | ----------------- | -
|Current Assets            | $ | 19,303            |   | $ | 39,662            |  
|Current Liabilities       |   | 1,380,671         |   |   | 906,101           |  
|Working Capital (deficit) | $ | (1,361,368        | ) | $ | (866,439          | )

The increase in our working capital deficit of $499,021 was
primarily due to an increase of our accounts payables and from an increase of
our convertible promissory notes payable.

Cash Flows

|                                                      |   | Year Ended   |   |   | Year Ended   |  
|----------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                      |   | December 31, |   |   | December 31, |  
|                                                      |   | 2009         |   |   | 2008         |  
|Net cash used in Operating Activities                 | $ | (454,998     | ) | $ | (1,307,390   | )
|Net cash used in Investing Activities                 |   | (289,643     | ) |   | (947,845     | )
|Net cash provided by Financing Activities             |   | 726,900      |   |   | 1,933,584    |  
|Change in Cash and Cash Equivalents During the Period | $ | (17,741      | ) | $ | (321,651     | )

Cash Used In Operating Activities

During the year ended December 31, 2009 we used net cash in
operating activities in the amount of $454,998 primarily towards general and
administrative expenses as well as a net change in prepaid expenses of $2,618
and a net change in accounts payable and accrued liabilities of $210,184.

- 18 -

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Cash Used In Investing Activities

During the year ended December 31, 2009, we acquired 19,426
additional shares in Molecular Vision to maintain our 17.2% ownership for
$275,501 and advanced a deposit of $14,142 for net cash used in investing
activities for the year ended December 31, 2009 of $289,643.

Cash from Financing Activities

We received net cash from financing activities during the year
ended December 31, 2009. Net cash generated by financing activities is
attributable to cash received from common share issuances totaling $584,400, and
from the issuance of convertible notes totaling $150,000 less a financing fee of
$7,500 for net cash from financing activities totaling $726,900.

Results of Operations

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the year ended
December 31, 2009 which are included in this annual report.

Revenue

We have not earned any revenues since our inception and we do
not anticipate earning revenues until such time as we have begun commercial
production or royalties from our investment with Molecular Vision.

Income /Expenses

Our income /expenses for the 12 months ended December 31, 2009
and 2008 were as follows:

|                                                    |  | Year Ended        |   |  | Year Ended        |  
|--------------------------------------------------- |  | ----------------- | - |  | ----------------- | -
|                                                    |  | December 31, 2009 |   |  | December 31, 2008 |  
|Accounting and audit fees                           |  | 156,248           |   |  | 187,481           |  
|Bank charges                                        |  | 1,981             |   |  | 4,052             |  
|Change in fair value of derivative
      liability  |  | (169,452          | ) |  | -                 |  
|Consulting fees                                     |  | 307,437           |   |  | 759,164           |  
|Interest, fees and accretion on notes
      payable |  | 121,152           |   |  | 506,477           |  
|Interest income                                     |  | (10               | ) |  | (202              | )
|Foreign exchange gain (loss)                        |  | 101,806           |   |  | (7,581            | )
|Legal fees                                          |  | 82,961            |   |  | 89,614            |  
|Management fees                                     |  | 11,647            |   |  | 605,681           |  
|Office and miscellaneous                            |  | 3,717             |   |  | 37,370            |  
|Public relations and donation                       |  | 7,600             |   |  | 5,102             |  
|Rent                                                |  | 61,127            |   |  | 59,538            |  
|Research and development                            |  | -                 |   |  | 648,407           |  
|Transfer agent and filing fees                      |  | 7,050             |   |  | 6,363             |  
|Travel                                              |  | 4,979             |   |  | 120,539           |  
|Write-down of investment in Molecular Vision        |  | 239,330           |   |  | -                 |  
|                                                    |  | (937,573          | ) |  | (3,022,005        | )

Income /expenses for the 12 months ended December 31, 2009
decreased by $2,084,432 compared to the same period in 2008 largely due to a
decrease in consulting fees, a decrease in management fees (primarily resulting
from a reduction of stock-based compensation) , a decrease of Research and
Development resulting from the change in our relationship with Molecular Vision
in 2008, decrease in travel, and a decrease in interest, fees and accretion on
notes payable.

- 19 -

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Accounting and Audit Fees

Our accounting and audit fees decreased by $31,233 in the year
ended December 31, 2009 compared to the year ended December 31, 2008 due to a
decrease in audit fees.

Change in fair value of the derivative liability

This amount increased by $169,452 for the year ended December
31, 2009 as compared the balance of $Nil recorded in the year ended December 31,
2008. The reason for the difference was that we were required to bifurcate the
conversion feature on our convertible promissory notes in accordance to comply
with US GAAP. Moreover, once calculated, these liabilities are re-measured to
their fair value each reporting period which resulted in a gain of $169,452 for
the year ended December 31, 2009.

Consulting Fees

The consulting fees we paid decreased in the year ended
December 31, 2009 by $451,727 compared to the year ended December 31, 2008. This
was the result of us terminating the services of two consultants during the 2008
year.

Interest on Notes Payable

The interest we incurred on notes payable decreased by $417,198
in the year ended December 31, 2009 compared to the year ended December 31,
2008. This was the result of us not having to calculate the costs of the
conversion feature on convertible notes in 2009, as we were required to in
2008.

Foreign Exchange gain (loss)

We incurred a foreign exchange loss of $101, 806 for the year
ended December 31, 2009, an increase of $109,387 from the gain of $7,581
recorded in the year ended December 31, 2008. The primary for the increase was
as a result of our outstanding convertible promissory notes now being repayable
in Canadian dollars resulting in us being required to adjust the notes to their
US$ equivalent each reporting period.

Interest fees and accretion on Notes Payable

The interest, fees and accretion we incurred on notes payable
decreased by $ 385,325 in the year ended December 31, 2009 compared to the year
ended December 31, 2008. This was primarily as a result of us having to
calculate a beneficial conversion on the issuance of our convertible promissory
notes in 2008 in the total amount of $482,124; this amount was charged to income
upon the issuance of the notes due to their being repayable on demand. We were
not required to calculate a similar charge in our 2009 fiscal year.

Legal Fees

Our legal fees decreased in the year ended December 31, 2009 by
$6,653 compared to the year ended December 31, 2008. This was the result of us
not requiring as much legal services during the year 2009, because of reduction
in activity.

Management Fees

Our management fees decreased in the year ended December 31,
2009 by $594,034 compared to the year ended December 31, 2008. This was the
result of us not granting options or issuing shares for services during 2009 to
consultants and directors.

- 20 -

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Rent/Public Relations and Transfer Agent

Our combined rental expenses, public relations and transfer
agent fees increased in the year ended December 31, 2009 compared to the year
ended December 31, 2008 by $4,774. This was mainly the result of an increase in
rental fees for our premises in Athens, Greece.

Office and Bank Charges

Our combined office and bank charges decreased in the year
ended December 31, 2009 by $35,725 compared to the year ended December 31, 2008.
This was mainly the result of us undertaking less activity and the result of our
rental agreement for our office in Athens, Greece including office expense.

Research and Development

Our expenditures on research and development were nil in the
year ended December 31, 2009 compared to $648,407 in the year ended December 31,
2008. This was the result of us not having any research and development
expenditures in 2009, as we are no longer developing the BioLED Technology .

Travel

Our travel expenses decreased by $115,560 for the year ended
December 31, 2009 compared to the year ended December 31, 2008. This was the
result of us terminating two consultants in 2008 and we were required to pay
their travel expenses.

Going Concern

We have historically incurred losses and have incurred a loss
of $937,573 for the year ended December 31, 2009 and $3,022,005 for the year
ended December 31, 2008. Because of these historical losses, we will require
additional working capital to develop our business operations. We intend to
raise additional working capital through private placements, public offerings,
bank financing and/or advances from related parties or shareholder loans.

The continuation of our business is dependent upon obtaining
further financing and achieving a profitable level of operations. The issuance
of additional equity securities by us could result in a significant dilution in
the equity interests of our current or future stockholders. Obtaining commercial
loans, assuming those loans would be available, will increase our liabilities
and future cash commitments.

There are no assurances that we will be able to either (i)
achieve a level of revenues adequate to generate sufficient cash flow from
operations; or (ii) obtain additional financing through either private
placements, public offerings and/or bank financing necessary to support our
working capital requirements. To the extent that funds generated from operations
and any private placements, public offerings and/or bank financing are
insufficient, we will have to raise additional working capital. No assurance can
be given that additional financing will be available, or if available, will be
on terms acceptable to us. If adequate working capital is not available we may
cease operations.

These conditions raise substantial doubt about our ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might be necessary
should we be unable to continue as a going concern.

Application of Critical Accounting Policies

Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles in the United States.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses. These estimates and assumptions are affected by managements
application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with
the following aspects of our financial statements is critical to an
understanding of our financials.

- 21 -

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We base our assumptions and estimates on historical experience
and other sources that we believe to be reasonable at the time. Actual results
may vary from our estimates due to changes in circumstances, weather, politics,
global economics, mechanical problems, general business conditions and other
factors. Our significant estimates are related to the valuation of warrants and
options.

There are accounting policies that we believe are significant
to the presentation of our financial statements. The most significant of these
accounting policies relates to the valuation of intellectual property, the
accounting for our research and development expenses and stock-based
compensation expense.

Investment in Molecular Vision

We have made an equity investment in Molecular Vision, a
privately held company incorporated in Great Britain and whose business is
complementary to the our business, as described in more detail under the heading
Business  Corporate History. This investment is accounted for under the cost
method of accounting, as we held less than 20% of the voting stock outstanding
and did not exert significant influence over this company. We assess the
recoverability of this investment by reviewing various indicators of impairment.
We also review the sales of Molecular Vision securities to other investors when
that is a more reliable indicator of the fair value of our shareholdings. As a
result of performing a review of the fair value of our investment in the shares
of Molecular Vision for the year ended December 31, 2009, we recorded a
write-down of the investment in the amount of $239,330 based on our
determination that there was a decline in the value of the investment that was
other than temporary.

Stock-based Compensation

We account for all of our stock-based payments and awards under
the fair value based method.

Stock-based payments to non-employees are measured at the fair
value of the consideration received, or the fair value of the equity instruments
issued, or liabilities incurred, whichever is more reliably measurable. The fair
value of stock-based payments to non-employees is periodically re-measured until
the counterparty performance is complete, and any change therein is recognized
over the vesting period of the award and in the same manner as if the Company
had paid cash instead of paying with or using equity based instruments. The cost
of the stock-based payments to non-employees that are fully vested and
non-forfeitable as at the grant date is measured and recognized at that date,
unless there is a contractual term for services in which case such compensation
would be amortized over the contractual term.

We account for the granting of share purchase options to
employees using the fair value method whereby all awards to employees will be
recorded at fair value on the date of the grant. Share based awards granted to
employees with a performance condition are measured based on the probable
outcome of that performance condition during the requisite service period. We
assess the probability of any performance condition being achieved we accrue the
value of the award if it is probable that a performance condition will be
achieved. Compensation costs for stock-based payments to employees that do not
include performance conditions are recognized on a straight-line basis. The fair
value of all share purchase options are expensed over their vesting period with
a corresponding increase to additional capital surplus. Upon exercise of share
purchase options, the consideration paid by the option holder, together with the
amount previously recognized in additional capital surplus, is recorded as an
increase to share capital.

We use the Black-Scholes option valuation model to calculate
the fair value of share purchase options at the date of the grant. Option
pricing models require the input of highly subjective assumptions, including the
expected price volatility.. ASC 718 does not allow companies to account for
option forfeitures as they occur. Instead, estimated option forfeitures must be
calculated upfront to reduce the option expense to be recognized over the life
of the award and updated upon the receipt of further information as to the
amount of options expected to be forfeited.

- 22 -

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Recent Accounting Pronouncements

In March 2008, the FASB issued guidance included in ASC 815-10
Derivatives and Hedging,which seeks to enhance disclosure about how
and why a company uses derivatives; how derivative instruments are accounted for
and how derivatives affect a companys financial position, financial performance
and cash flows. This guidance was effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The adoption
of ASC 815-10 on January 1, 2009 had no material impact on the Companys
financial statements.

In June 2008, the FASB ratified guidance which is now part of
ASC 815-40, Contracts Indexed to the Entitys Own Equity. The objective
of this issue is to provide guidance for determining whether an equity-linked
financial instrument (or embedded feature) is indexed to an entitys own stock.
This Issue applies to any freestanding financial instrument or embedded feature
that has all the characteristics of a derivative instrument or an instrument
which may be potentially settled in an entitys own stock regardless of whether
the instrument possess derivative characteristics. This issue provides a
two-step approach to assist in making these determinations and is effective for
financial statements issued for fiscal years beginning after December 15, 2008.
The adoption of ASC 815-40 on January 1, 2009 had no material impact on the
Companys financial statements.

In April 2009, the FASB issued additional disclosure
requirements related to fair values, which are included in ASC 820, Interim
Disclosures about Fair Value of Financial Instruments.The provisions
require disclosures about fair value of financial instruments for interim
reporting periods of publicly traded companies as well as in annual financial
statements. The required disclosures were effective for interim reporting
periods ending after June 15, 2009. The adoption of the provisions did not have
a material impact on the Companys statements of financial position, results of
operations and cash flows.

In May 2009, the FASB issued ASC No. 855, Subsequent
Events, which established general standards of accounting for and
disclosure of events that occur after the balance sheet date but before the
financial statements are issued. It sets forth the period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date and up to the date the
financial statements are issued. ASC 855 was effective for financial statements
issued for interim and annual periods ending after June 15, 2009 and did not
have any impact on the Companys financial statements.

In June 2009, the Financial Accounting Standards Board, or
FASB, established the FASB Accounting Standards Codification, or ASC, as the
source of authoritative accounting principles recognized by the FASB to be
applied by nongovernmental entities in preparation of financial statements in
conformity with generally accepted accounting principles in the United States.
All other accounting literature not included in the ASC is now
non-authoritative. The ASC was effective for financial statements issued for
interim and annual periods ending after September 15, 2009 and its adoption did
not have any impact on the Companys financial statements.

In August 2009, the FASB issued ASU No. 2009-05, Measuring
Liabilities at Fair Value, or ASU 2009-05, which amends ASC 820 to provide
clarification of a circumstances in which a quoted price in an active market for
an identical liability is not available. A reporting entity is required to
measure fair value using one or more of the following methods: 1) a valuation
technique that uses a) the quoted price of the identical liability when traded
as an asset or b) quoted prices for similar liabilities (or similar liabilities
when traded as assets) and/or 2) a valuation technique that is consistent with
the principles of ASC 820. ASU 2009-05 also clarifies that when estimating the
fair value of a liability, a reporting entity is not required to adjust to
include inputs relating to the existence of transfer restrictions on that
liability. The adoption of this ASU did not have an impact on the Companys
financial statements.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Not Applicable

- 23 -

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

- 24 -

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ACRONGENOMICS, INC.

(A Development Stage Company)

FINANCIAL STATEMENTS

December 31, 2009 and 2008

(Stated in US Dollars)

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Directors and Stockholders, 
  Acrongenomics,
  Inc.
  (a Development Stage Company)

We have audited the accompanying balance sheets of
  Acrongenomics, Inc. (the Company) (A Development Stage Company) as of December
  31, 2009 and 2008 and the related statements of operations, cash flows and
  changes in capital deficit for the years then ended and for the period from
  August 17, 1999 (Date of Inception) to December 31, 2009. These financial
  statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The Company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audits included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Companys internal control
  over financial reporting. Accordingly, we express no such opinion. An audit also
  includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as well
  as evaluating the overall presentation of the financial statements. We believe
  that our audits provide a reasonable basis for our opinion.

In our opinion, these financial statements referred to above
  present fairly, in all material respects, the financial position of
  Acrongenomics, Inc. (A Development Stage Company) as of December 31, 2009 and
  2008 and the results of its operations and its cash flows for the years then
  ended and for the period from August 17, 1999 (Date of Inception) to December
  31, 2009 in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying financial statements have been prepared
  assuming that the Company will continue as a going concern. As discussed in Note
  1 to the financial statements, the Company had an accumulated deficit of
  $27,570,395 at December 31, 2009 and incurred a net loss of $937,573 for the
  year then ended. These conditions raise substantial doubt about the Companys
  ability to continue as a going concern. Managements plans in regard to these
  matters are also described in Note 1. The financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.

/s/ BDO Canada LLP
BDO Canada LLP

Chartered Accountants

Vancouver, Canada 
  April 14, 2010

---

|ACRONGENOMICS, INC.          
|-----------------------------
|(A Development Stage Company)
|BALANCE SHEETS               
|December 31, 2009 and 2008   
|(Stated in US Dollars)       

|ASSETS                                                                                                                           |   |             |   |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                                                                                 |   | 2009        |   |   | 2008        |  
|                                                                                                                                 |   |             |   |   |             |  
|Current                                                                                                                          |   |             |   |   |             |  
|Cash                                                                                                                             | $ | 4,303       |   | $ | 22,044      |  
|Prepaid expenses and deposit                                                                                                     |   | 15,000      |   |   | 17,618      |  
|                                                                                                                                 |   | 19,303      |   |   | 39,662      |  
|                                                                                                                                 |   |             |   |   |             |  
|Deposit  Note 13                                                                                                                |   | 14,142      |   |   | -           |  
|Investment in Molecular Vision Ltd.  Note 3                                                                                     |   | 827,401     |   |   | 791,230     |  
|                                                                                                                                 |   |             |   |   |             |  
|                                                                                                                                 | $ | 860,846     |   | $ | 830,892     |  
|                                                                                                                                 |   |             |   |   |             |  
|LIABILITIES                                                                                                                      |   |             |   |   |             |  
|                                                                                                                                 |   |             |   |   |             |  
|Current                                                                                                                          |   |             |   |   |             |  
|Accounts payable and
      accrued liabilities  Note 7                                                                          | $ | 721,149     |   | $ | 510,965     |  
|Convertible promissory notes payable 
      Note 5                                                                              |   | 658,522     |   |   | 394,136     |  
|Loans payable  Note 6                                                                                                           |   | 1,000       |   |   | 1,000       |  
|                                                                                                                                 |   |             |   |   |             |  
|                                                                                                                                 |   | 1,380,671   |   |   | 906,101     |  
|                                                                                                                                 |   |             |   |   |             |  
|CAPITAL DEFICIT                                                                                                                  |   |             |   |   |             |  
|                                                                                                                                 |   |             |   |   |             |  
|Common stock  Note 8                                                                                                            |   |             |   |   |             |  
|Par value $0.001 
           100,000,000
      shares authorized 
             25,580,481
      shares issued (2008: 23,906,731) |   | 25,580      |   |   | 23,906      |  
|Additional paid-in capital                                                                                                       |   | 27,024,990  |   |   | 26,507,207  |  
|Share subscriptions                                                                                                              |   | -           |   |   | 26,500      |  
|Deficit accumulated during the development
      stage                                                                           |   | (27,570,395 | ) |   | (26,632,822 | )
|                                                                                                                                 |   |             |   |   |             |  
|                                                                                                                                 |   | (519,825    | ) |   | (75,209     | )
|                                                                                                                                 |   |             |   |   |             |  
|                                                                                                                                 | $ | 860,846     |   | $ | 830,892     |  

Nature of Operations and Ability to Continue as a Going Concern
   Note 1 
  Commitments  Note 10

SEE ACCOMPANYING NOTES

F-1

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|STATEMENTS OF OPERATIONS                                                     
|for the Years ended December 31, 2009 and 2008 and                           
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2009
|(Stated in US Dollars)                                                       

|                                                             |   |                     |   |   |              |   |   | August 17, 1999 |  
|------------------------------------------------------------ | - | ------------------- | - | - | ------------ | - | - | --------------- | -
|                                                             |   |                     |   |   |              |   |   | ( Date of       |  
|                                                             |   |                     |   |   |              |   |   | Inception ) to  |  
|                                                             |   | For the years ended |   |   | December 31, |  
|                                                             |   | December 31         |   |   | 2009         |  
|                                                             |   | 2009                |   |   | 2008         |   |   | cumulative      |  
|Expenses                                                     |   |                     |   |   |              |   |   |                 |  
|Accounting and audit
      fees  Note 7                     | $ | 156,248             |   | $ | 187,481      |   | $ | 727,082         |  
|Amortization of patents                                      |   | -                   |   |   | -            |   |   | 741,430         |  
|Appraisals                                                   |   | -                   |   |   | -            |   |   | 14,500          |  
|Bank charges                                                 |   | 1,981               |   |   | 4,052        |   |   | 18,715          |  
|Consulting fees  Note
      7                               |   | 307,437             |   |   | 759,164      |   |   | 2,908,505       |  
|Legal fees - Note 7                                          |   | 82,961              |   |   | 89,614       |   |   | 428,570         |  
|Management fees  Note
      7                               |   | 11,647              |   |   | 605,681      |   |   | 3,326,506       |  
|Office and miscellaneous                                     |   | 3,717               |   |   | 37,370       |   |   | 139,812         |  
|Public relations and
      donation                          |   | 7,600               |   |   | 5,102        |   |   | 587,096         |  
|Rent - Note 7                                                |   | 61,127              |   |   | 59,538       |   |   | 169,430         |  
|Research and
      development  Note 7                      |   | -                   |   |   | 648,407      |   |   | 9,202,266       |  
|Transfer agent and filing fees                               |   | 7,050               |   |   | 6,363        |   |   | 39,743          |  
|Travel                                                       |   | 4,979               |   |   | 120,539      |   |   | 456,587         |  
|Write-down of patents                                        |   | -                   |   |   | -            |   |   | 8,004,447       |  
|                                                             |   |                     |   |   |              |   |   |                 |  
|Operating loss                                               |   | (644,747            | ) |   | (2,523,311   | ) |   | (26,764,689     | )
|Interest income                                              |   | 10                  |   |   | 202          |   |   | 23,150          |  
|Interest, fees and accretion on notes
      payable  Note 7 |   | (121,152            | ) |   | (506,477     | ) |   | (627,629        | )
|Write-down of
      investment in Molecular Vision  Note 3  |   | (239,330            | ) |   | -            |   |   | (239,330        | )
|Change in fair value of derivative
      liability  Note    |   | 169,452             |   |   | -            |   |   | 169,452         |  
|Foreign exchange gain
      (loss)                           |   | (101,806            | ) |   | 7,581        |   |   | (89,351         | )
|                                                             |   |                     |   |   |              |   |   |                 |  
|Loss from continuing operations                              |   | (937,573            | ) |   | (3,022,005   | ) |   | (27,528,397     | )
|Loss from discontinued operations                            |   | -                   |   |   | -            |   |   | (41,998         | )
|                                                             |   |                     |   |   |              |   |   |                 |  
|Net loss for the period                                      | $ | (937,573            | ) | $ | (3,022,005   | ) | $ | (27,570,395     | )
|                                                             |   |                     |   |   |              |   |   |                 |  
|Basic and diluted loss per share                             | $ | (0.04               | ) | $ | (0.14        | ) |   |                 |  
|                                                             |   |                     |   |   |              |   |   |                 |  
|Weighted average shares outstanding                          |   | 24,951,580          |   |   | 21,203,764   |   |   |                 |  

SEE ACCOMPANYING NOTES

F-2

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|STATEMENTS OF CASH FLOWS                                                     
|for the Years ended December 31, 2009 and 2008 and                           
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2009
|(Stated in US Dollars)                                                       

|                                                                                        |   |                     |   |   |               |   |   | August 17,    |  
|--------------------------------------------------------------------------------------- | - | ------------------- | - | - | ------------- | - | - | ------------- | -
|                                                                                        |   |                     |   |   |               |   |   | 1999 (Date of |  
|                                                                                        |   | For the Years Ended |   |   | Inception) to |  
|                                                                                        |   | December 31,        |   |   | December 31,  |  
|                                                                                        |   | 2009                |   |   | 2008          |   |   | 2009          |  
|Cash Flows used in Operating Activities                                                 |   |                     |   |   |               |   |   |               |  
|Net loss for the period                                                                 | $ | (937,573            | ) | $ | (3,022,005    | ) | $ | (27,570,395   | )
|Adjustments to reconcile net
      income to net cash provided by operating activities: |   |                     |   |   |               |   |   |               |  
|Amortization of patents                                                                 |   | -                   |   |   | -             |   |   | 741,430       |  
|Financing fee on
      convertible promissory note                                      |   | 7,500               |   |   | -             |   |   | 7,500         |  
|Write-down of investment in Molecular Vision                                            |   | 239,330             |   |   |               |   |   | 239,330       |  
|Change in fair
      value of derivative liability                                      |   | (169,452            | ) |   | -             |   |   | (169,452      | )
|Accretion of debt discount                                                              |   | 56,138              |   |   | 482,124       |   |   | 538,262       |  
|Unrealized foreign
      exchange loss                                                  |   | 98,141              |   |   | -             |   |   | 98,141        |  
|Shares issued for consulting and management fees                                        |   | -                   |   |   | 667,500       |   |   | 1,312,500     |  
|Loan origination
      fee  Note 5                                                     |   | 16,245              |   |   | -             |   |   | 16,245        |  
|Stock-based compensation                                                                |   | 21,871              |   |   | 454,919       |   |   | 1,903,715     |  
|Write-down of
      patents                                                             |   | -                   |   |   | -             |   |   | 8,004,447     |  
|Changes in non-cash
      working capital items:                                        |   |                     |   |   |               |   |   |               |  
|Prepaid expenses
      and deposit                                                      |   | 2,618               |   |   | 4,662         |   |   | (15,000       | )
|Accounts payable and accrued liabilities                                                |   | 210,184             |   |   | 105,410       |   |   | 2,554,764     |  
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Net cash used in operating activities                                                   |   | (454,998            | ) |   | (1,307,390    | ) |   | (12,338,513   | )
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Cash Flows used in Investing Activity                                                   |   |                     |   |   |               |   |   |               |  
|Investment in Molecular Vision                                                          |   | (275,501            | ) |   | (1,097,639    | ) |   | (1,373,140    | )
|Refund on
      termination of development agreement with Molecular Vision              |   | -                   |   |   | 149,794       |   |   | 149,794       |  
|Deposit                                                                                 |   | (14,142             | ) |   | -             |   |   | (14,142       | )
|Patents                                                                                 |   | -                   |   |   | -             |   |   | (121,877      | )
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Net cash used in investing activities                                                   |   | (289,643            | ) |   | (947,845      | ) |   | (1,359,365    | )
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Cash Flows provided by Financing Activities                                             |   |                     |   |   |               |   |   |               |  
|Common stock issued for cash                                                            |   | 584,400             |   |   | 1,509,648     |   |   | 12,764,438    |  
|Stock purchase warrants                                                                 |   | -                   |   |   | -             |   |   | 370,307       |  
|Common stock subscriptions                                                              |   | -                   |   |   | 29,800        |   |   | 29,800        |  
|Issuance of convertible
      notes                                                     |   | 142,500             |   |   | 694,136       |   |   | 836,636       |  
|Repayment of convertible note                                                           |   | -                   |   |   | (300,000      | ) |   | (300,000      | )
|Increase in loan
      payable                                                          |   | -                   |   |   | -             |   |   | 1,000         |  
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Net cash provided by financing activities                                               |   | 726,900             |   |   | 1,933,584     |   |   | 13,702,181    |  
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Increase (decrease) in cash during the
      period                                     |   | (17,741             | ) |   | (321,651      | ) |   | 4,303         |  
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Cash, beginning of period                                                               |   | 22,044              |   |   | 343,695       |   |   | -             |  
|                                                                                        |   |                     |   |   |               |   |   |               |  
|Cash, end of period                                                                     | $ | 4,303               |   | $ | 22,044        |   | $ | 4,303         |  

Non-cash Transactions  Note 14

SEE ACCOMPANYING NOTES

F-3

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|STATEMENT OF CHANGES IN CAPITAL DEFICIT                                      
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2009
|(Stated in US Dollars)                                                       

|                                           |  |           |  |  |              |  |   |                 |  |   |             |   |   |               |  |   | Deficit     |   |   |            |  
|------------------------------------------ |  | --------- |  |  | ------------ |  | - | --------------- |  | - | ----------- | - | - | ------------- |  | - | ----------- | - | - | ---------- | -
|                                           |  |           |  |  | Common Stock |  |   |                 |  |   | Accumulated |   |   |               | 
|                                           |  |           |  |  |              |  |   |                 |  |   | Additional  |   |   | Share         |  |   | During the  |   |   |            |  
|                                           |  |           |  |  |              |  |   |                 |  |   | Paid-in     |   |   | Subscriptions |  |   | Development |   |   |            |  
|                                           |  |           |  |  | Shares       |  |   | Par
      Value |  |   | Capital     |   |   | (Receivable)  |  |   | Stage       |   |   | Total      |  
|                                           |  |           |  |  |              |  |   |                 |  |   |             |   |   |               |  |   |             |   |   |            |  
|Capital stock issued for cash              |  | at $0.001 |  |  | 5,000,000    |  | $ | 5,000           |  | $ | -           |   | $ | -             |  | $ | -           |   | $ | 5,000      |  
|                                           |  | at $0.01  |  |  | 5,000,000    |  |   | 5,000           |  |   | 45,000      |   |   | -             |  |   |             |   |   | 50,000     |  
|Net loss for the period                    |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | -             |  |   | (2,116      | ) |   | (2,116     | )
|Balance, December 31, 1999                 |  |           |  |  | 10,000,000   |  |   | 10,000          |  |   | 45,000      |   |   | -             |  |   | (2,116      | ) |   | 52,884     |  
|Capital stock issued for cash              |  | at $0.20  |  |  | 100,000      |  |   | 100             |  |   | 19,900      |   |   | -             |  |   | -           |   |   | 20,000     |  
|Net loss for the year                      |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | -             |  |   | (8,176      | ) |   | (8,176     | )
|Balance, December 31, 2000                 |  |           |  |  | 10,100,000   |  |   | 10,100          |  |   | 64,900      |   |   | -             |  |   | (10,292     | ) |   | 64,708     |  
|Net loss for the year                      |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | -             |  |   | (205        | ) |   | (205       | )
|                                           |  |           |  |  |              |  |   |                 |  |   |             |   |   |               |  |   |             |   |   |            |  
|Balance, December 31, 2001                 |  |           |  |  | 10,100,000   |  |   | 10,100          |  |   | 64,900      |   |   | -             |  |   | (10,497     | ) |   | 64,503     |  
|Capital stock issued for cash              |  | at $0.20  |  |  | 15,000       |  |   | 15              |  |   | 2,985       |   |   | -             |  |   | -           |   |   | 3,000      |  
|Net loss for the year                      |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | -             |  |   | (24,818     | ) |   | (24,818    | )
|Balance, December 31, 2002                 |  |           |  |  | 10,115,000   |  |   | 10,115          |  |   | 67,885      |   |   | -             |  |   | (35,315     | ) |   | 42,685     |  
|Net loss for the year                      |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | -             |  |   | (21,576     | ) |   | (21,576    | )
|Balance, December 31, 2003                 |  |           |  |  | 10,115,000   |  |   | 10,115          |  |   | 67,885      |   |   | -             |  |   | (56,891     | ) |   | 21,109     |  
|Pursuant to the acquisition of patent      |  | at $1.96  |  |  | 4,000,000    |  |   | 4,000           |  |   | 7,836,000   |   |   | -             |  |   | -           |   |   | 7,840,000  |  
|Capital stock issued for patent commission |  | at $1.96  |  |  | 400,000      |  |   | 400             |  |   | 783,600     |   |   | -             |  |   | -           |   |   | 784,000    |  
|Capital stock issued for cash              |  | at $1.00  |  |  | 420,000      |  |   | 420             |  |   | 419,580     |   |   | -             |  |   | -           |   |   | 420,000    |  
|Capital stock issued for commission        |  | at $1.00  |  |  | 42,000       |  |   | 42              |  |   | 41,958      |   |   | -             |  |   | -           |   |   | 42,000     |  
|Less: commission                           |  |           |  |  | -            |  |   | -               |  |   | (77,000     | ) |   | -             |  |   | -           |   |   | (77,000    | )
|Capital stock issued for cash              |  | at $2.30  |  |  | 537,956      |  |   | 538             |  |   | 1,236,761   |   |   | -             |  |   | -           |   |   | 1,237,299  |  
|Capital stock issued for commission        |  |           |  |  | 50,594       |  |   | 50              |  |   | 116,316     |   |   | -             |  |   | -           |   |   | 116,366    |  
|Less: commission                           |  |           |  |  | -            |  |   | -               |  |   | (116,366    | ) |   | -             |  |   | -           |   |   | (116,366   | )
|Capital contribution                       |  |           |  |  | -            |  |   | -               |  |   | 6,000       |   |   | -             |  |   | -           |   |   | 6,000      |  
|Stock subscriptions                        |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | 426,329       |  |   | -           |   |   | 426,329    |  
|Net loss for the year                      |  |           |  |  | -            |  |   | -               |  |   | -           |   |   | -             |  |   | (1,863,376  | ) |   | (1,863,376 | )
|Balance, December 31, 2004                 |  |           |  |  | 15,565,550   |  | $ | 15,565          |  | $ | 10,314,734  |   | $ | 426,329       |  | $ | (1,920,267  | ) | $ | 8,836,361  |  

SEE ACCOMPANYING NOTES

F-4

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|STATEMENT OF CHANGES IN CAPITAL DEFICIT                                      
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2009
|(Stated in US Dollars)                                                       

|                                                                     |  |          |  |   |              |   |   |                 |   |   |             |   |   |               |   |   | Deficit     |   |   |             |  
|-------------------------------------------------------------------- |  | -------- |  | - | ------------ | - | - | --------------- | - | - | ----------- | - | - | ------------- | - | - | ----------- | - | - | ----------- | -
|                                                                     |  |          |  |   | Common Stock |   |   |                 |   |   | Accumulated |   |   |               |  
|                                                                     |  |          |  |   |              |   |   |                 |   |   | Additional  |   |   | Share         |   |   | During the  |   |   |             |  
|                                                                     |  |          |  |   |              |   |   |                 |   |   | Paid-in     |   |   | Subscriptions |   |   | Development |   |   |             |  
|                                                                     |  |          |  |   | Shares       |   |   | Par
      Value |   |   | Capital     |   |   | (Receivable)  |   |   | Stage       |   |   | Total       |  
|                                                                     |  |          |  |   |              |   |   |                 |   |   |             |   |   |               |   |   |             |   |   |             |  
|Balance, December 31, 2004                                           |  |          |  | $ | 15,565,550   |   | $ | 15,565          |   | $ | 10,314,734  |   | $ | 426,329       |   | $ | (1,920,267  | ) | $ | 8,836,361   |  
|                                                                     |  |          |  |   |              |   |   |                 |   |   |             |   |   |               |   |   |             |   |   |             |  
|Capital stock issued for cash                                        |  | at $2.30 |  |   | 72,500       |   |   | 73              |   |   | 166,677     |   |   | -             |   |   | -           |   |   | 166,750     |  
|                                                                     |  | at $2.40 |  |   | 108,168      |   |   | 108             |   |   | 259,495     |   |   | -             |   |   | -           |   |   | 259,603     |  
|                                                                     |  | at $3.50 |  |   | 551,443      |   |   | 551             |   |   | 1,929,499   |   |   | -             |   |   | -           |   |   | 1,930,050   |  
|                                                                     |  | at $4.00 |  |   | 915,125      |   |   | 915             |   |   | 3,659,585   |   |   | (386,329      | ) |   | -           |   |   | 3,274,171   |  
|Capital stock issued for commission                                  |  | at $4.00 |  |   | 81,337       |   |   | 82              |   |   | 325,266     |   |   | -             |   |   | -           |   |   | 325,348     |  
|Less: commission                                                     |  |          |  |   | -            |   |   | -               |   |   | (325,348    | ) |   | -             |   |   | -           |   |   | (325,348    | )
|commission                                                           |  |          |  |   | -            |   |   | -               |   |   | (24,900     | ) |   | -             |   |   | -           |   |   | (24,900     | )
|Capital stock issued for cash pursuant to exercise of
      warrants |  | at $1.00 |  |   | 420,000      |   |   | 420             |   |   | 419,580     |   |   | -             |   |   | -           |   |   | 420,000     |  
|Stock-based compensation                                             |  |          |  |   | -            |   |   | -               |   |   | 364,000     |   |   | -             |   |   | -           |   |   | 364,000     |  
|Capital stock issued for consulting services                         |  | at $4.68 |  |   | 100,000      |   |   | 100             |   |   | 467,900     |   |   | -             |   |   | -           |   |   | 468,000     |  
|Net loss from continuing operations                                  |  |          |  |   | -            |   |   | -               |   |   | -           |   |   | -             |   |   | (14,152,210 | ) |   | (14,152,210 | )
|Net loss from discontinued operations                                |  |          |  |   |              |   |   |                 |   |   |             |   |   |               |   |   | (1,935      | ) |   | (1,935      | )
|Capital contribution from subsidiary on
      disposition            |  |          |  |   | -            |   |   | -               |   |   | (6,000      | ) |   | -             |   |   | -           |   |   | (6,000      | )
|Balance, December 31, 2005                                           |  |          |  |   | 17,814,123   |   |   | 17,814          |   |   | 17,550,488  |   |   | 40,000        |   |   | (16,074,412 | ) |   | 1,533,890   |  
|Cancellation of shares                                               |  |          |  |   | (4,000,000   | ) |   | (4,000          | ) |   | 4,000       |   |   | -             |   |   | -           |   |   | -           |  
|Stock-based compensation                                             |  |          |  |   | -            |   |   | -               |   |   | 529,673     |   |   | -             |   |   | -           |   |   | 529,673     |  
|Capital stock issued for cash                                        |  | at $0.75 |  |   | 317,334      |   |   | 317             |   |   | 237,683     |   |   | -             |   |   | -           |   |   | 238,000     |  
|Less: share issue costs                                              |  |          |  |   | -            |   |   | -               |   |   | (6,300      | ) |   | -             |   |   | -           |   |   | (6,300      | )
|Net loss for the year                                                |  |          |  |   | -            |   |   | -               |   |   | -           |   |   | -             |   |   | (2,480,288  | ) |   | (2,480,288  | )
|Balance, December 31, 2006                                           |  |          |  |   | 14,131,457   |   |   | 14,131          |   |   | 18,315,544  |   |   | 40,000        |   |   | (18,554,700 | ) |   | (185,025    | )
|Capital stock issued for cash:                                       |  | at $0.50 |  |   | 220,000      |   |   | 220             |   |   | 109,780     |   |   | (40,000       | ) |   | -           |   |   | 70,000      |  
|                                                                     |  | at $0.80 |  |   | 250,000      |   |   | 250             |   |   | 199,750     |   |   | -             |   |   | -           |   |   | 200,000     |  
|                                                                     |  | at $1.10 |  |   | 2,230,924    |   |   | 2,231           |   |   | 2,451,785   |   |   | (3,300        | ) |   | -           |   |   | 2,450,716   |  
|Capital stock issued for commission                                  |  |          |  |   | 126,090      |   |   | 126             |   |   | (126        | ) |   | -             |   |   | -           |   |   | -           |  
|Less: commission - cash                                              |  |          |  |   | -            |   |   | -               |   |   | (64,021     | ) |   | -             |   |   | -           |   |   | (64,021     | )
|Stock as bonus                                                       |  | at $0.86 |  |   | 750,000      |   |   | 750             |   |   | 644,250     |   |   | -             |   |   | -           |   |   | 645,000     |  
|Stock issued to settle accounts payable                              |  | at $1.00 |  |   | 158,000      |   |   | 158             |   |   | 157,842     |   |   | -             |   |   | -           |   |   | 158,000     |  
|Stock-based compensation                                             |  |          |  |   | -            |   |   | -               |   |   | 533,252     |   |   | -             |   |   | -           |   |   | 533,252     |  
|Net loss for the year                                                |  |          |  |   | -            |   |   | -               |   |   | -           |   |   | -             |   |   | (5,056,117  | ) |   | (5,056,117  | )
|Balance, December 31, 2007                                           |  |          |  | $ | 17,866,471   |   | $ | 17,866          |   | $ | 22,348,056  |   | $ | (3,300        | ) | $ | (23,610,817 | ) | $ | (1,248,195  | )

SEE ACCOMPANYING NOTES

F-5

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|STATEMENT OF CHANGES IN CAPITAL DEFICIT                                      
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2009
|(Stated in US Dollars)                                                       

|                                                         |  |            |   |  |              |   |   |                 |          |   |             |   |   |               |   |   | Deficit     |          |   |            |  
|-------------------------------------------------------- |  | ---------- | - |  | ------------ | - | - | --------------- | -------- | - | ----------- | - | - | ------------- | - | - | ----------- | -------- | - | ---------- | -
|                                                         |  |            |   |  | Common Stock |   |   |                 |          |   | Accumulated |   |   |               |  
|                                                         |  |            |   |  |              |   |   |                 |          |   | Additional  |   |   | Share         |   |   | During the  |          |   |            |  
|                                                         |  |            |   |  |              |   |   |                 |          |   | Paid-in     |   |   | Subscriptions |   |   | Development |          |   |            |  
|                                                         |  |            |   |  | Shares       |   |   | Par
      Value |          |   | Capital     |   |   | (Receivable)  |   |   | Stage       |          |   | Total      |  
|                                                         |  |            |   |  |              |   |   |                 |          |   |             |   |   |               |   |   |             |          |   |            |  
|Balance, December 31, 2007                               |  |            |   |  | 17,866,471   |   | $ | 17,866          |          | $ | 22,348,056  |   | $ | (3,300        | ) | $ | (23,610,817 | )        | $ | (1,248,195 | )
|Stock Subscriptions                                      |  |            |   |  | -            |   |   | -               |          |   | -           |   |   | 29,800        |   |   | -           |          |   | 29,800     |  
|Capital stock issued for cash:                           |  | - at $0.80 |   |  | 1,250,010    |   |   | 1,250           |          |   | 998,758     |   |   | -             |   |   | -           |          |   | 1,000,008  |  
|                                                         |  | - at $1.10 |   |  | 90,000       |   |   | 90              |          |   | 98,910      |   |   | -             |   |   | -           |          |   | 99,000     |  
|                                                         |  | - at $0.40 |   |  | 1,450,250    |   |   | 1,450           |          |   | 578,650     |   |   | -             |   |   | -           |          |   | 580,100    |  
|Capital stock issued for consulting and management fees  |  | - at $0.95 |   |  | 150,000      |   |   | 150             |          |   | 142,350     |   |   | -             |   |   | -           |          |   | 142,500    |  
|                                                         |  | - at $0.53 |   |  | 150,000      |   |   | 150             |          |   | 79,350      |   |   | -             |   |   | -           |          |   | 79,500     |  
|                                                         |  | - at $0.27 |   |  | 1,650,000    |   |   | 1,650           |          |   | 443,850     |   |   | -             |   |   | -           |          |   | 445,500    |  
|Less: commission - cash                                  |  |            |   |  | -            |   |   | -               |          |   | (169,460    | ) |   | -             |   |   | -           |          |   | (169,460   | )
|Capital stock issued to settle accounts payable:         |  | - at $0.95 |   |  | 150,000      |   |   | 150             |          |   | 142,350     |   |   | -             |   |   | -           |          |   | 142,500    |  
|                                                         |  | - at $0.79 |   |  | 1,150,000    |   |   | 1,150           |          |   | 907,350     |   |   | -             |   |   | -           |          |   | 908,500    |  
|Beneficial conversion feature on convertible
      notes |  |            | - |  |              | - |   |                 | 482,124  |   |             | - |   |               | - |   |             | 482,124  |  
|Stock-based compensation                                 |  |            |   |  | -            |   |   | -               |          |   | 454,919     |   |   | -             |   |   | -           |          |   | 454,919    |  
|Net loss for the year                                    |  |            |   |  | -            |   |   | -               |          |   | -           |   |   | -             |   |   | (3,022,005  | )        |   | (3,022,005 | )
|                                                         |  |            |   |  |              |   |   |                 |          |   |             |   |   |               |   |   |             |          |   |            |  
|Balance, December 31, 2008                               |  |            |   |  | 23,906,731   |   |   | 23,906          |          |   | 26,507,207  |   |   | 26,500        |   |   | (26,632,822 | )        |   | (75,209    | )
|Capital stock issued for cash                            |  | - at $0.40 |   |  | 1,673,750    |   |   | 1,674           |          |   | 667,826     |   |   | (26,500       | ) |   | -           |          |   | 643,000    |  
|Less: commission                                         |  |            |   |  | -            |   |   | -               |          |   | (58,600     | ) |   | -             |   |   | -           |          |   | (58,600    | )
|Reclassification of derivative
      liability  Note 5  |  |            |   |  |              |   |   |                 | (113,314 | ) |             |   |   |               |   |   |             | (113,314 | )
|Stock-based compensation  Note 8                        |  |            | - |  |              | - |   |                 | 21,871   |   |             | - |   |               | - |   |             | 21,871   |  
|Net loss for the period                                  |  |            |   |  | -            |   |   | -               |          |   | -           |   |   | -             |   |   | (937,573    | )        |   | (937,573   | )
|Balance, December 31, 2009                               |  |            |   |  | 25,580,481   |   | $ | 25,580 $        |          |   | 27,024,990  |   | $ | -             |   | $ | (27,570,395 | )        | $ | (519,825   | )

SEE ACCOMPANYING NOTES

F-6

---

|ACRONGENOMICS, INC.              
|---------------------------------
|(A Development Stage Company)    
|NOTES TO THE FINANCIAL STATEMENTS
|December 31, 2009 and 2008       
|(Stated in US Dollars)           

|Note 1 | Nature of Operations and Ability to Continue
      as a Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | The Company is in the development stage and has not yet
      realized any revenues from its planned operations. The Companys business
      is research and development in the field of life science including BioLED
      technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | These financial statements have been prepared in
      accordance with generally accepted accounting principles in the United
      States of America on a going concern basis, which assumes that the Company
      will continue to realize its assets and discharge its obligations and
      commitments in the normal course of operations. Realization values may be
      substantially different from carrying values as shown and these financial
      statements do not give effect to adjustments that would be necessary to
      the carrying values and classification of assets and liabilities should
      the Company be unable to continue as a going concern. At December 31,
      2009, the Company had not yet achieved profitable operations, had an
      accumulated deficit of $27,570,395 (2008 - $26,632,822) since its
      inception and incurred a net loss of $937,573 (2008 - $3,022,005) for the
      year then ended and expects to incur further losses in the development of
      its business, all of which casts substantial doubt about the Companys
      ability to continue as a going concern. The Companys ability to continue
      as a going concern is dependent upon its ability to generate future
      profitable operations and/or to obtain the necessary financing to meet its
      obligations and repay its liabilities arising from normal business
      operations when they come due. Management expects the Companys cash
      requirement over the twelve-month period ended December 31, 2010 to be
      $1,800,000 to continue operations. The Company plans to raise necessary
      cash through equity issuances and/or debt financing. While the Company is
      expending its best efforts to achieve the above plans, there is no
      assurance that any such activity will generate funds for operations.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | The Company was incorporated in the State of Nevada, USA
      on August 17, 1999 as Cellway Ventures Inc. Effective February 25, 2004,
      the Company changed its name to Acrongenomics, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Note 2 | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | The preparation of financial statements in accordance
      with United States generally accepted accounting principles requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities at the date of the financial statements
      and the reported amounts of revenue and expenses in the reporting period.
      The Company regularly evaluates estimates and assumptions related to
      deferred income tax asset valuations, asset impairment, stock based
      compensation and loss contingencies. The Company bases its estimates and
      assumptions on current facts, historical experience and various other
      factors that it believes to be reasonable under the circumstances, the
      results of which form the basis for making judgments about the carrying
      values of assets and liabilities and the accrual of costs and expenses
      that are not readily apparent from other sources. The actual results
      experienced by the Company may differ materially and adversely from the
      Companys estimates. To the extent there are material differences between
      the estimates and the actual results, future results of operations will be
      affected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-7

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 2  

|Note 2 | Summary of Significant Accounting
      Policies (contd)                                                                                                               
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                          
|       | The financial statements have, in managements opinion
      been properly prepared within the framework of the significant accounting
      principles summarized below:
|       |                                                                                                                                                                          
|       | a)                                                                                                                                                                       
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          
|       | b)                                                                                                                                                                       
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          
|       | c)                                                                                                                                                                       
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          
|       | d)                                                                                                                                                                       
|       |                                                                                                                                                                          
|       |                                                                                                                                                                          

F-8

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 3  

|Note 2 | Summary of Significant Accounting
      Policies (contd)
|------ | ----------------------------------------------------------
|       |                                                           
|       | e)                                                        
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       | f)                                                        
|       |                                                           
|       |                                                           

F-9

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 4  

|Note 2 | Summary of Significant Accounting
      Policies (contd)
|------ | ----------------------------------------------------------
|       |                                                           
|       | g)                                                        
|       |                                                           
|       |                                                           
|       |                                                           
|       | h)                                                        
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           

F-10

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 5  

|Note 2 | Summary of Significant Accounting
      Policies (contd)
|------ | ----------------------------------------------------------
|       |                                                           
|       | i)                                                        
|       |                                                           
|       |                                                           
|       |                                                           
|       | j)                                                        
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           

F-11

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 6  

|Note 2 | Summary of Significant Accounting
      Policies (contd)
|------ | ----------------------------------------------------------
|       |                                                           
|       | j)                                                        
|       |                                                           
|       |                                                           
|       |                                                           
|       |                                                           

|Note 3 | Investment in Molecular Vision Ltd.                                                            
|------ | -----------------------------------------------------------------------------------------------
|       |                                                                                                
|       | The Companys investment in Molecular Vision
      Ltd. (Molecular) is summarized as follows:

|                                                                                          |  | Number and Class of Molecular 
      shares owned |  |  |                 | 
|----------------------------------------------------------------------------------------- |  | ------------------------------------------------- |  |  | --------------- | 
|                                                                                          |  |                                                   |  |  |                 | 
|                                                                                          |  | Class A                                           |  |  | Class A         | 
|                                                                                          |  | Preferred Shares                                  |  |  | Ordinary Shares | 
|                                                                                          |  |                                                   |  |  |                 | 
|Balance, December 31, 2007                                                                |  | -                                                 |  |  | -               | 
|Acquisition of Molecular shares for GBP £550,000                                          |  | -                                                 |  |  | 16,566          | 
|                                                                                          |  |                                                   |  |  |                 | 
|Refund of amounts previously advanced on termination of
      development agreement:      |  |                                                   |  |  |                 | 
|Credit applied to amounts owed
      Molecular                                            |  | -                                                 |  |  | -               | 
|Cash refunded                                                                             |  | -                                                 |  |  | -               | 
|                                                                                          |  |                                                   |  |  |                 | 
|Molecular shares received as consideration
      for termination of development agreement |  | -                                                 |  |  | 17,168          | 
|                                                                                          |  |                                                   |  |  |                 | 
|Balance - December 31, 2008                                                               |  | -                                                 |  |  | 33,734          | 
|                                                                                          |  |                                                   |  |  |                 | 
|Acquisition of Molecular Class A Preferred
      shares for GBP £166,042                  |  | 19,426                                            |  |  | -               | 
|Less: Write-down of Class A Ordinary shares                                               |  | -                                                 |  |  | -               | 
|                                                                                          |  |                                                   |  |  |                 | 
|Balance as at December 31, 2009                                                           |  | 19,426                                            |  |  | 33,734          | 

F-12

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 7  

|Note 3 | Investment in Molecular Vision Ltd. 
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | By a development agreement dated February 13, 2007 and
      amended May 23, 2007, the Company agreed to collaborate with Molecular to
      acquire the exclusive rights to commercialize certain technology relating
      to the analysis/diagnostic fields (BioLED Technology), to contract
      Molecular to complete the research and development necessary to achieve
      manufacturable prototypes and have first right of refusal to fund the
      development of additional applications of the technology by agreeing to
      pay $4,225,700 (GBP£2,325,000) (this sum is in addition to the GBP£575,000
      previously paid under the February 13, 2007 agreement) over 3 years and
      grant 2,000,000 share purchase options entitling the holders thereof the
      right to purchase one common share of the Company at $0.50 per share. The
      options were to vest at 50% per milestone and be exercisable within a
      period of 5 years from the date of vesting. As the vesting of the share
      purchase options granted were contingent upon the performance milestones,
      no value was ascribed to them as it was unlikely that they would be
      vested. These options did not vest and were cancelled pursuant to the
      termination of the development agreement as noted below.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | Molecular also granted to the Company an exclusive,
      worldwide, perpetual license to the intellectual property to develop and
      commercialize it, subject to the payment to the vendor of a royalty of 30%
      of gross receipts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On January 31, 2008, by a Heads of Terms agreement dated
      in November 2007 and amended February 1, 2008, the Company acquired 16,566
      common shares amounting to 13.97 % of the share capital of Molecular at
      that date for $1,097,639 (GBP£550,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | By a letter agreement dated August 19, 2008 and
      formalized November 12, 2008, the development agreement was terminated. As
      consideration for the Companys contributions made under the development
      agreement and in lieu of certain rights granted under the development
      agreement, Molecular will pay to the Company royalties of 0.3-0.5% on net
      product sales and 3% to 5% of licensing fees received by Molecular until
      patents owned by Molecular expire and issued to the Company 17,168 common
      shares of Molecular for which no value has been recorded. In addition, the
      Company received a refund of $306,409 (GBP£200,000) for amounts previously
      advanced during the year ended December 31, 2008 to Molecular for research
      and development costs but which had not been utilized. The amount was
      refunded as follows: $156,615 (GBP£98,500) applied to amounts owing to
      Molecular and the remaining $149,794 (GBP£101,500) was refunded in cash.
      The Company was also granted the option to purchase 4,518 shares of
      Molecular at £33.20 ($60.34) per share from three founders of Molecular on
      or before December 31, 2008. On December 31, 2008, this option expired
      unexercised.                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | During the year ended December 31, 2009, Molecular
      undertook additional equity financings and the Company participated in the
      Molecular offerings by acquiring 19,426 Class A Preferred Shares at a cost
      of £ 8.55 (US$14.18) per share for a total of £166,093 (US$ 275,501). Each
      Class A preferred share of Molecular is convertible into one common share
      at any time. As a result of this additional acquisition, the Companys
      ownership in the equity of Molecular represented 17.2% of Moleculars
      total outstanding shares (December 31, 2008: 17.2%).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-13

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 8  

|Note 3 | Investment in Molecular Vision
      Ltd.  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In addition to its offering of Class A Preferred shares,
      during its fiscal year ended July 31, 2009, Molecular raised equity
      financing through additional offerings of its Class A Ordinary shares to
      other investors at a price of £10.21 per share. Molecular is a private
      company in the United Kingdom and undertakes infrequent equity offerings
      and, there is no active market for transactions of its shares. In
      accordance with the guidance of ASC 820, the Company determined that the
      price paid by other investors for the Class A Ordinary shares of Molecular
      was representative of an exit price providing evidence of the fair value
      of its holding of Molecular Class A Ordinary shares. As a result, the
      Company wrote-down its shareholdings of Molecular Class A Ordinary shares
      during the year ended December 31, 2009 to the equivalent of £10.21 per
      share; this write-down totalled $239,330 (2008: $Nil).
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note 4 | Fair Value Measurements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | ASC 820 defines fair value, establishes a framework for
      measuring fair value under generally accepted accounting principles and
      enhances disclosures about fair value measurements. Fair value is defined
      under ASC 820 as the exchange price that would be received for an asset or
      paid to transfer a liability (an exit price) in the principal or most
      advantageous market for the asset or liability in an orderly transaction
      between market participants on the measurement date. Valuation techniques
      used to measure fair value under ASC 820 must maximize the use of
      observable inputs and minimize the use of unobservable inputs. The
      standard describes a fair value hierarchy based on three levels of inputs,
      of which the first two are considered observable and the last
      unobservable, that may be used to measure fair value which are the
      following:                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Level 1 -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Level 2 -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Level 3 -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | As at December 31, 2009, the Company has determined that
      it does not hold any Level 1 assets and its shareholdings in Molecular
      Vision, which are measured on a non-recurring basis, represent Level 2
      assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-14

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 9  

|Note 4 | Fair Value Measurements  (contd)                                                     
|------ | ---------------------------------------------------------------------------------------
|       |                                                                                        
|       | The fair value changes of the Companys Level 2
      assets are summarized as follows:

|                                          |   | Beginning Value |  |   |           |  |   | Refund and      |   |   |            |   |   | Ending Fair    | 
|----------------------------------------- | - | --------------- |  | - | --------- |  | - | --------------- | - | - | ---------- | - | - | -------------- | 
|                                          |   | of              |  |   | Shares    |  |   | Credit Applied  |   |   | Impairment |   |   | Value of Level | 
|                                          |   | Level 2 Assets  |  |   | Acquired  |  |   | to Shareholding |   |   | Charge     |   |   | 2
      Assets | 
|For the 12 months ended December 31, 2009 | $ | 791,230         |  | $ | 275,501   |  | $ | -               |   | $ | (239,330   | ) | $ | 827,401        | 
|                                          |   |                 |  |   |           |  |   |                 |   |   |            |   |   |                | 
|For the 12 months ended December 31, 2008 | $ | -               |  | $ | 1,097,639 |  | $ | (306,409        | ) | $ | -          |   | $ | 791,230        | 

During the year ended December 31,
  2009, in accordance with ASC 815-40-15, the Company determined that the
  conversion features associated with its convertible promissory notes required
  bifurcation as derivative liabilities  (Note 5). The resulting derivatives are
  required to be measured at their fair value each reporting period and they
  constitute Level 3 liabilities given that they have no active market and are
  measured based on information that is unobservable. A summary of the Companys
  Level 3 for the years ended December 31, 2009 and 2008 is as follows:

|                                          |   |                 |  |   | Derivative       |  |   |                |   |   |                  | 
|----------------------------------------- | - | --------------- |  | - | ---------------- |  | - | -------------- | - | - | ---------------- | 
|                                          |   | Beginning Value |  |   | Liabilities      |  |   | Change in fair |   |   |                  | 
|                                          |   | of              |  |   | bifurcated from  |  |   | value of       |   |   | Ending Fair      | 
|                                          |   | Level 3         |  |   | convertible      |  |   | derivative     |   |   | Value of Level 3 | 
|                                          |   | Liabilities     |  |   | promissory notes |  |   | liabilities    |   |   | Liabilities      | 
|For the 12 months ended December 31, 2009 | $ | -               |  | $ | 169,452          |  | $ | (169,452       | ) | $ | -                | 
|                                          |   |                 |  |   |                  |  |   |                |   |   |                  | 
|For the 12 months ended December 31, 2008 | $ | -               |  | $ | -                |  | $ | -              |   | $ | -                | 

The Company determined for the fair
  value of the component of derivative liability represented by the warrants
  issuable on conversion of the promissory notes by using the Black Scholes model
  with the following assumptions:

|Expected life           | 2 years          
|----------------------- | -----------------
|Expected Volatility     | 166.94% - 181.45%
|Risk free interest rate | 1.00% - 1.70%    
|Dividend Yield          | 0%               

F-15

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 10 

|Note 5 | Convertible Promissory Notes Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | $394,136 Convertible Promissory Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | During the year ended December 31, 2008, the Company was
      loaned $394,136 by a director of the Company by the issuance of a
      convertible promissory note, payable on demand, with interest accruing on
      the balance of principal outstanding at 8% per annum, compounded monthly
      and payable monthly. The note is convertible into units of the Company at
      a price of $0.40 per unit. Each unit will consist of one common share and
      one share purchase warrant exercisable at $0.75 per share for a period of
      two years from the date of issuance. Upon the issuance of the note, the
      Company recorded a beneficial conversion feature totalling $292,124 which
      was accreted to income in its entirety and included in interest, fees and
      accretion on notes payable in the financial statements for the year ended
      December 31, 2008.                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | Effective March 1, 2009, the Company and the lender
      agreed to modify the terms of the note by increasing the interest rate to
      10% per annum and by changing the terms of repayment such that the Company
      is to repay the note in Canadian dollars at a foreign exchange rate of not
      less than $1US = $1.27 Canadian. As a result of the Company having to
      repay the note in a currency other than its functional currency, in
      accordance with ASC 830-35-1 Transaction Gains and Losses,changes in the exchange rate between the US and Canadian dollar will
      affect the expected amount of the payment upon the settlement of the note
      requiring the Company to record the change in rate as a transaction gain
      or loss in the Statement of Operations. For the year ended December 31,
      2009, the Company recorded a foreign exchange loss of $82,854 (2008: $Nil)
      on the note resulting in a balance payable as at December 31, 2009 of
      $476,990.                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | Additionally, due to the Company having adopted ASC
      815-40 as of the first day of the 2009 fiscal year, the conversion feature
      of this note failed the two-step evaluation criteria contained in ASC
      815-40 and, as a result, it was determined that it was required to be
      bifurcated from the host contract and recorded as a derivative liability.
      At March 1, 2009, the Company determined that this liability had a fair
      value of $113,314 and, in accordance with ASC 815-40, this amount was
      reclassified from stockholders equity to derivative liability. In
      accordance with the guidance provided by ASC 815, Derivatives and
        Hedging, the Company re-measured the fair value of this derivative
      liability as at December 31, 2009 and determined its fair value then to be
      $Nil.                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | During the year ended December 31, 2009, the Company
      accrued interest of $35,483 (2008: $17,363) on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | $150,000 Promissory Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On July 15, 2009, the Company was loaned an additional
      $150,000 by the same director of the Company by issuance of a convertible
      promissory note, payable on demand, with interest accruing on the balance
      of the principal outstanding at 10% per annum compounded monthly and
      payable monthly. The Company agreed to pay to the lender a 5% fee ($7,500)
      to cover the cost of obtaining funds. The note contained a similar
      repayment feature wherein the Company agreed to repay the note in Canadian
      dollars at a foreign exchange rate of not less than $1US = $1.27 Canadian.
      When the funds were advanced to the Company, the exchange rate was $1US =
      $1.1459 Canadian resulting in the loan being recorded at a value of
      $166,245 at its inception with $16,245 recorded as a loan origination fee.
      The note is convertible into units of the Company at a price of $0.40 per
      unit. Each unit will consist of one common share and one share purchase
      warrant exercisable at $0.75 per share for a period of two years from the
      date of issuance.

F-16

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 11 

|Note 5 | Convertible Promissory Notes Payable 
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | $150,000 Promissory Note  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | In accordance with ASC 830-35-1, for the year ended
      December 31, 2009, the Company recorded a foreign exchange loss of $15,287
      (2008: $Nil) on the note resulting in a balance payable as at December 31,
      2009 of $181,532.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | The conversion feature of this note failed the two-step
      evaluation criteria contained in ASC 815-40 and, as a result, it was
      determined that it was required to be bifurcated from the host contract
      and recorded as a derivative liability. As at the inception of the note,
      the Company determined that this liability had a fair value of $56,138. As
      the note is repayable on demand, the resulting debt discount was accreted
      in its entirety to the Statement of Operations at the inception of the
      note. The Company re-measured the fair value of this derivative liability
      as at December 31, 2009 and determined its fair value then to be $Nil.                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | During the year ended December 31, 2009, the Company
      accrued interest of $5,786 (2008: $Nil) on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | $300,000 Promissory Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On June 17, 2008 the Company was loaned $300,000 by the
      issuance of a convertible promissory note, maturing on September 30, 2008,
      with interest accruing on the balance of principal outstanding at 8% per
      annum, compounded monthly and payable monthly. The promissory note was
      convertible into units of the Company at any time and at the option of the
      lender at the rate of $0.40 per unit. Each unit consisted of one common
      share and one share purchase warrant exercisable at $0.75 for a period of
      two years from the date of issuance. The note was secured by an interest
      in all property of the Company and a further guarantee by a third party.
      Upon the issuance of the note, the Company recorded a beneficial
      conversion feature totalling $190,000 which was accreted to income in its
      entirety and included in interest, fees and accretion on notes payable in
      the financial statements for the year ended December 31, 2008. During the
      year-ended December 31, 2008, Company repaid the amount owing on this
      note.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | These notes are collateralized by an interest in all
      property of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Note 6 | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | Loans payable are unsecured, non-interest bearing and
      have no specific terms for repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-17

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 12 

|Note 7 | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                               
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | The Company incurred the following charges with directors
      and officers, companies with a common director and former director, an
      officer and director of a company of which a former officer and director
      is the spouse of the Companys president; the research and development
      expenditures were paid to a company in which a former officer and director
      of the Company is the spouse of the Companys former president:

| |                                                                                |   |                     |  |   |                     |  |   | August 17, 1999 | 
| | ------------------------------------------------------------------------------ | - | ------------------- |  | - | ------------------- |  | - | --------------- | 
| |                                                                                |   | For the Years Ended |  |   | (Date of Inception) | 
| |                                                                                |   |                     |  |   |                     |  |   | to              | 
| |                                                                                |   | December 31,        |  |   | December 31,        | 
| |                                                                                |   | 2009                |  |   | 2008                |  |   | 2009            | 
| |                                                                                |   |                     |  |   |                     |  |   |                 | 
| | Accounting fees                                                                | $ | 81,215              |  | $ | 85,244              |  | $ | 356,358         | 
| | Consulting fees                                                                |   | 158,000             |  |   | 169,600             |  |   | 724,901         | 
| | Legal fees                                                                     |   | -                   |  |   | -                   |  |   | 60,656          | 
| | Management fees                                                                |   | -                   |  |   | 192,750             |  |   | 2,747,128       | 
| | Rent                                                                           |   | -                   |  |   | -                   |  |   | 36,000          | 
| | Research and development                                                       |   | -                   |  |   | -                   |  |   | 5,604,189       | 
| | Interest and accretion and fees on
      convertible Promissory notes - Note 5 |   | 121,152             |  |   | 309,487             |  |   | 430,639         | 
| |                                                                                | $ | 360,367             |  | $ | 757,081             |  | $ | 9.959,871       | 

|Note 7 | Related Party Transactions (contd)                                                                                                                                                                                                                                                                                                                                 
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                      
|       | Research and development expenditures charged by a
      related company were comprised of testing costs of the molecular
      diagnostic test products.                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                      
|       | Accounts payable and accrued liabilities at December 31,
      2009 includes $ 195,037 (December 31, 2008: $149,062) owing to companies
      with a common director, a former director and a company of which a former
      officer and director is the spouse of the Companys former president for
      accounting, management and consulting services received.
|       |                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                      
|Note 8 | Common Stock                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                      
|       | On February 1, 2008, the Company issued 90,000 units at
      $1.10 per unit for total proceeds of $99,000. Each unit consisted of one
      share and one half common share purchase warrant exercisable for 18 months
      at a price of $1.50 per warrant.                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                      
|       | On February 1, 2008, the Company issued a total of
      300,000 common shares to two consultants at a quoted market price of $0.95
      per share for a total of $285,000 for their consulting services performed
      for the Company, of which 150,000 common shares were issued in respect of
      amounts previously accrued in accounts payable.            
|       |                                                                                                                                                                                                                                                                                                                                                                      
|       | On February 14, 2008, the Company issued 1,150,000 common
      shares to two consultants at a quoted market price of $0.79 per share for
      a total of $908,500 to settle accounts payable for past consulting
      services performed for the Company.                                                                                                         

F-18

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 13 

|Note 8 | Common Stock  (contd)                                                                                                                                                                                                                                                                                                                                
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On February 15, 2008, the Company issued 1,250,010 units
      at $0.80 per unit for total proceeds of $1,000,008. Each unit consisted of
      one share and one common share purchase warrant exercisable for 18 months
      at a price of $1.60 per warrant.                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | Between July 2, 2008 and February 6, 2009, the Company
      issued 2,141,500 units at $0.40 per unit for total proceeds of $856,600
      (2008: 1,450,250 units for total proceeds of $580,100). Each unit
      consisted of one common share and one share purchase warrant exercisable
      at $0.75 until April 20, 2009.                       
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On June 12, 2008, the Company issued 150,000 common
      shares to two consultants at a quoted market price of $0.53 per share for
      a total of $79,500 for their consulting services performed for the
      Company.                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On November 14, 2008, the Company issued 200,000 common
      shares to one consultant at a quoted market price of $0.27 per share for a
      total of $54,000 for consulting services rendered to the Company.                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On December 12, 2008, the Company issued 1,450,000 common
      shares to three consultants at a quoted market price of $0.27 per share
      for a total of $391,500 for their consulting services rendered to the
      Company.                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On February 6, 2009, the Company issued 625,000 units
      pursuant to a private placement at $0.40 per share for total proceeds of
      $250,000. Each unit consisted of one share and one common share purchase
      warrant exercisable at $0.75 for a period of two (2) years. The Company
      paid a commission of $25,000 on this placement.
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On February 6, 2009, the Company issued 66,250 units
      pursuant to a subscription received of $26,500 as at December 31, 2008.
      Each unit consisted of one share and one common share purchase warrant
      exercisable at $0.75 for a period of two (2) years.                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On May 15, 2009, the Company issued 525,000 units
      pursuant to a private placement at $0.40 per share for total proceeds of
      $210,000. Each unit consisted of one share and one common share purchase
      warrant exercisable at $0.75 for a period of two (2) years. The Company
      paid a commission of $16,000 on this placement.    
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On July 22, 2009, the Company issued 105,000 units
      pursuant to a private placement at $0.40 per share for total proceeds of
      $42,000. Each unit consisted of one share and one common share purchase
      warrant exercisable at $0.75 for a period of two (2) years. The Company
      paid a commission of $4,200 on this placement.     
|       |                                                                                                                                                                                                                                                                                                                                                        
|       | On September 16, 2009, the Company issued 165,000 units
      pursuant to a private placement at $0.40 per share for total proceeds of
      $66,000. Each unit consisted of one share and one common share purchase
      warrant exercisable at $0.75 for a period of two (2) years. The Company
      paid a commission of $5,900 on this placement.

F-19

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 14 

|Note 8 | Common Stock (contd)                                                                                                                                                                                                                                                                                               
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                      
|       | On September 30, 2009, the Company issued 137,500 units
      at $0.40 per unit for total proceeds of $55,000. Each unit consists of one
      share and one common share purchase warrant exercisable at $0.75 for a
      period of two (2) years. The Company paid a commission of $5,500 on this
      placement.
|       |                                                                                                                                                                                                                                                                                                                      
|       | On October 29, 2009, the Company issued 50,000 units @
      $0.40 per unit for total proceeds of $20,000. Each unit consists of one
      share and one common share purchase warrant exercisable at $0.75 for a
      period of two (2) years. The Company paid a commission of $2,000 on this
      placement.    
|       |                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                      
|       | Commitments                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                      
|       | a)                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                      

| |                                |  | December 31, 2009 |   |  | December 31, 2008 | 
| | ------------------------------ |  | ----------------- | - |  | ----------------- | 
| |                                |  |                   |   |  | Weighted          | 
| |                                |  |                   |   |  | Average           | 
| |                                |  | Number of         |   |  | Exercise          | 
| |                                |  | Warrants          |   |  | Price             | 
| |                                |  |                   |   |  |                   | 
| | Outstanding, beginning of year |  | 3,257,870         |   |  | $1.20             | 
| | Issued                         |  | 1,673,750         |   |  | $0.75             | 
| | Expired                        |  | (1,807,620        | ) |  | $1.57             | 
| |                                |  |                   |   |  |                   | 
| | Outstanding, end of year       |  | 3,124,000         |   |  | $0.75             | 

F-20

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 15 

|Note 8 | Common Stock (contd)                                                                
|------ | --------------------------------------------------------------------------------------
|       |                                                                                       
|       | Commitments (contd)                                                                 
|       |                                                                                       
|       | b)                                                                                    
|       |                                                                                       
|       | The following table summarizes the warrants outstanding
      as at December 31, 2009:

| | Number Outstanding |  | Exercise |  |                         
| | ------------------ |  | -------- |  | ------------------------
| | and Exercisable    |  | Price    |  | Expiry Date             
| |                    |  |          |  |                         
| | 290,000            |  | $0.75    |  | July 31,2010            
| | 317,750            |  | $0.75    |  | August 31, 2010         
| | 120,000            |  | $0.75    |  | September
      30,2010 
| | 375,000            |  | $0.75    |  | October 31, 2010        
| | 347,500            |  | $0.75    |  | December 31,
      2010 
| | 20,000             |  | $0.75    |  | January 31,2011         
| | 671,250            |  | $0.75    |  | February 28,
      2011 
| | 525,000            |  | $0.75    |  | May 31, 2011            
| | 165,000            |  | $0.75    |  | September 30,
      2011
| | 187,500            |  | $0.75    |  | October 31, 2011        
| | 105,000            |  | $0.75    |  | February 28,
      2012 
| |                    |  |          |  |                         
| | 3,124,000          |  |          |  |                         

| | c) | Stock Based Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | In May, 2005, the Company adopted a stock option plan
      which provides for the granting of stock options to selected directors,
      officers, employees or consultants in an aggregate amount of up to
      2,600,000 common shares of the Company and, in any case, the number of
      shares to be issued to any one individual pursuant to the exercise of
      options shall not exceed 10% of the issued and outstanding share capital.
      The grant of stock options, exercise prices and terms are determined by
      the Company's Board of Directors.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | A summary of changes in the Companys stock options for
      the year ended December 31, 2008 and the year ended December 31, 2009 is
      presented below:                                                                                                                                                                                                                                                                                                                                                                                                              

| |                                  |  | December 31, 2009 |  |  | December 31, 2008 | 
| | -------------------------------- |  | ----------------- |  |  | ----------------- | 
| |                                  |  |                   |  |  | Weighted          | 
| |                                  |  |                   |  |  | Average           | 
| |                                  |  | Number of         |  |  | Exercise          | 
| |                                  |  | Options           |  |  | Price             | 
| |                                  |  |                   |  |  |                   | 
| | Outstanding, beginning of period |  | 2,100,000         |  |  | $0.86             | 
| | Granted                          |  | -                 |  |  | -                 | 
| | Cancelled                        |  | -                 |  |  | -                 | 
| |                                  |  |                   |  |  |                   | 
| | Outstanding, end of period       |  | 2,100,000         |  |  | $0.86             | 
| |                                  |  |                   |  |  |                   | 
| | Exercisable, end of period       |  | 2,050,000         |  |  | $0.86             | 

F-21

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 16 

|Note 8 | Common Stock (contd)
|------ | ----------------------
|       |                       
|       | Commitments (contd) 
|       |                       
|       | c)                    
|       |                       
|       |                       

| |  | Number of shares |     |  |           |  |  |          |  |  |                   | 
| |  | ---------------- | --- |  | --------- |  |  | -------- |  |  | ----------------- | 
| |  |                  |     |  |           |  |  |          |  |  |                   | 
| |  | Total            |     |  | Number    |  |  | Exercise |  |  | Expiry            | 
| |  | Number           |     |  | Vested    |  |  | Price    |  |  | Date              | 
| |  |                  |     |  |           |  |  |          |  |  |                   | 
| |  | 600,000          | (1) |  | 600,000   |  |  | $1.00    |  |  | March 22, 2012    | 
| |  | 100,000          | (2) |  | 100,000   |  |  | $2.50    |  |  | May 3, 2016       | 
| |  | 600,000          | (3) |  | 600,000   |  |  | $0.50    |  |  | February 12, 2017 | 
| |  | 500,000          | (4) |  | 500,000   |  |  | $0.60    |  |  | March 31, 2018    | 
| |  | 100,000          | (5) |  | 100,000   |  |  | $0.50    |  |  | April 1, 2018     | 
| |  | 200,000          | (6) |  | 150,000   |  |  | $0.50    |  |  | April 1, 2018     | 
| |  | 2,100,000        |     |  | 2,050,000 |  |  |          |  |  |                   | 

| | (1) | These options had fully vested in the year ended December
      31, 2008. There was no stock- based compensation recognized in the
      financial statements for the year ended December 31, 2009 and an amount of
      $106,521 was recognized and included with management fees in the financial
      statements for the year ended December 31, 2008.                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (2) | These options had fully vested at December 31, 2007.
      There was no stock-based compensation expense recognized in the financial
      statements for each of the years ended December 31, 2009 and
      2008.                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (3) | As at December 31, 2009, these options had fully vested.
      The fair value of these options on their grant date was calculated to be
      $198,000 which was being amortized on a straight-line basis over the
      vesting term. The Company recognized $11,647 (2008: $99,000) included with
      management fees in the financial statements for the year ended December
      31, 2009.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (4) | These options had fully vested during the year ended
      December 31, 2008. There was no stock-based compensation recognized in the
      financial statements for the year ended December 31, 2009 and an amount of
      $159,563 was recognized and included with consulting fees in the financial
      statements for the year ended December 31, 2008.                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (5) | These options had fully vested as at December 31, 2008.
      There was no stock-based compensation recognized in the financial
      statements for the year ended December 31, 2009 and an amount of $53,410
      was recognized and included with management fees in the financial
      statements for the year ended December 31, 2008.                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (6) | As at December 31, 2009, 150,000 of these options were
      fully vested. The remaining 50,000 options vested on April 1, 2010. During
      the year ended December 31, 2009, the Company recognized stock-based
      compensation of $10,224 (2008: $36,425) included in consulting fees in the
      financial statements.                                                                  

F-22

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 17 

|Note 8 | Common Stock (contd)                                                                                                                                                                                                        
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                               
|       | Commitments (contd)                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                               
|       | a)                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                               
|       | The fair value of stock options granted has been
      determined using the Black-Scholes option pricing model using the
      following weighted average assumptions applied to stock options granted
      during the years:

| |                         | 2009 | 2008         
| | ----------------------- | ---- | -------------
| |                         |      |              
| | Expected dividend yield | -    | 0.0%         
| | Expected volatility     | -    | 83.0% - 90.8%
| | Risk-free Interest Rate | -    | 4.04% - 4.81%
| | Term in years           | -    | 5.0 - 10.0   
| | Fair value              | -    | $0.33 - $1.01

A summary of changes in the Companys
  unvested stock options for the years ended December 31, 2009 and 2008 is
  presented below:

|                               |  |           |   |  | 2009     |  |  |                  |  |  |            |   |  | 2008     |  |  |                  | 
|------------------------------ |  | --------- | - |  | -------- |  |  | ---------------- |  |  | ---------- | - |  | -------- |  |  | ---------------- | 
|                               |  |           |   |  | Weighted |  |  | Weighted         |  |  |            |   |  | Weighted |  |  | Weighted         | 
|                               |  |           |   |  | Average  |  |  | Average          |  |  |            |   |  | Average  |  |  | Average          | 
|                               |  | Number of |   |  | Exercise |  |  | Grant Date       |  |  | Number of  |   |  | Exercise |  |  | Grant Date       | 
|                               |  | Options   |   |  | Price    |  |  | Fair
      Value |  |  | Options    |   |  | Price    |  |  | Fair
      Value | 
|                               |  |           |   |  |          |  |  |                  |  |  |            |   |  |          |  |  |                  | 
|Outstanding, beginning of year |  | 300,000   |   |  | $0.50    |  |  | $0.43            |  |  | 2,825,000  |   |  | $0.55    |  |  | $0.40            | 
|Granted                        |  | -         |   |  | -        |  |  | -                |  |  | 700,000    |   |  | $0.57    |  |  | $0.53            | 
|Cancelled                      |  | -         |   |  | -        |  |  | -                |  |  | (2,050,000 | ) |  | $0.50    |  |  | $0.35            | 
|Vested                         |  | (250,000  | ) |  | $0.50    |  |  | $0.43            |  |  | (1,175,000 | ) |  | $0.67    |  |  | $0.56            | 
|                               |  |           |   |  |          |  |  |                  |  |  |            |   |  |          |  |  |                  | 
|Outstanding, end of year       |  | 50,000    |   |  | $0.50    |  |  | $0.43            |  |  | 300,000    |   |  | $0.50    |  |  | $0.43            | 

As at December 31, 2009, there was a
  total of $674 of unrecognized compensation cost that is expected to be
  recognized in 2010 when the remaining options vest.

F-23

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 18 

|Note 8 | Common Stock (contd)                                                                                                                                                                                      
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                             
|       | Commitments (contd)                                                                                                                                                                                       
|       |                                                                                                                                                                                                             
|       | c)                                                                                                                                                                                                          
|       |                                                                                                                                                                                                             
|       | Stock-based compensation amounts,
      including those related to shares issued for non-cash consideration during
      the year, are classified in the Companys Statement of Operations as
      follows:

| |                 |   | 2009   |  |   | 2008      | 
| | --------------- | - | ------ |  | - | --------- | 
| | Consulting fees | $ | 10,224 |  | $ | 863,488   | 
| | Management fees |   | 11,647 |  |   | 258,931   | 
| |                 | $ | 21,871 |  | $ | 1,122,419 | 

|Note 9 | Income Taxes                                                                                                                                          
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                       
|       | The tax effects of the temporary differences that give
      rise to the Company's estimated deferred tax assets and liabilities are as
      follows:

| |                                                    |   | 2009       |   |   | 2008       |  
| | -------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                    |   |            |   |   |            |  
| | Deferred tax assets                                |   |            |   |   |            |  
| | Net operating losses carryforward                  | $ | 4,942,000  |   | $ | 4,835,000  |  
| | Undeducted accruals                                |   | 244,000    |   |   | 104,000    |  
| | Basis difference in convertible promissory notes   |   | 33,000     |   |   | -          |  
| | Basis difference in investment in Molecular Vision |   | 81,000     |   |   | -          |  
| | Less: valuation allowance                          |   | (5,280,000 | ) |   | (4,939,000 | )
| |                                                    |   |            |   |   |            |  
| | Deferred tax assets                                | $ | -          |   | $ | -          |  

The Company's income tax expense for
  the years ended December 31, 2009 and 2008 differed from the United States
  statutory rates:

| |                                                    |   | 2009     |   |   | 2008       |  
| | -------------------------------------------------- | - | -------- | - | - | ---------- | -
| | Effective tax rate                                 |   | 34%      |   |   | 34%        |  
| |                                                    |   |          |   |   |            |  
| | Income tax benefit at statutory rate               | $ | (319,000 | ) | $ | (1,027,000 | )
| | Increase in income taxes resulting from:           |   |          |   |   |            |  
| | Non-deductible expenses                            |   | 9,000    |   |   | 2,000      |  
| | Stock-based compensation                           |   | 8,000    |   |   | 214,000    |  
| | Effect of reclassification of derivative liability |   | (39,000  | ) |   | -          |  
| | Research and development                           |   | -        |   |   | 221,000    |  
| | Debt accretion                                     |   | -        |   |   | 172,000    |  
| | Change in valuation allowance                      |   | 341,000  |   |   | 418,000    |  
| | Income tax expense                                 | $ | -        |   | $ | -          |  

F-24

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 19 

|Note 9 | Income Taxes  (contd)                                                                                                                                                                                                                     
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                             
|       | At December 31, 2009, the Company has incurred
      accumulated net operating losses in the United States of America totalling
      approximately $14,534,000 which are available to reduce taxable income in
      future taxation years.
|       |                                                                                                                                                                                                                                             
|       | These losses expire as follows:                                                                                                                                                                                                             

| | Year of Expiry |   | Amount     | 
| | -------------- | - | ---------- | 
| | 2021           | $ | 10,000     | 
| | 2022           |   | 25,000     | 
| | 2023           |   | 23,000     | 
| | 2024           |   | 1,550,000  | 
| | 2025           |   | 5,316,000  | 
| | 2026           |   | 1,951,000  | 
| | 2027           |   | 4,115,000  | 
| | 2028           |   | 1,230,000  | 
| | 2029           |   | 314,000    | 
| |                | $ | 14,534,000 | 

The Company evaluates its valuation
  allowance requirements based on projected future operations. When circumstances
  change and this causes a change in managements judgment about the
  recoverability of deferred tax assets, the impact of the change on the valuation
  allowance is reflected in current income. As management of the Company does not
  currently believe that it is more likely than not that the Company will receive
  the benefit of this asset, a valuation allowance equal to the deferred tax asset
  has been established at both December 31, 2009 and December 31, 2008.

As at December 31, 2009, the Company
  is in arrears on filing its statutory income tax returns and the amounts
  presented above are based on estimates. The actual losses available could differ
  from these estimates.

Uncertain Tax Positions

The Company has adopted ASC 740,
  "Accounting for Uncertainty in Income Taxes" ("ASC 740"). ASC 740 prescribes a
  recognition threshold and measurement attribute for the recognition and
  measurement of tax positions taken or expected to be taken in income tax
  returns. ASC 740 also provides guidance on de-recognition of income tax assets
  and liabilities, classification of current and deferred income tax assets and
  liabilities, and accounting for interest and penalties associated with tax
  positions.

The Company files income tax returns
  in the U.S. federal jurisdiction, various state and foreign jurisdictions. The
  Companys tax returns are subject to tax examinations by U.S. federal and state
  tax authorities, or examinations by foreign tax authorities until the respective
  statute of limitation. It is subject to tax examinations by tax authorities for
  all taxation years commencing on or after 1999.

F-25

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 20 

|Note 9  | Income Taxes  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | Uncertain Tax Positions  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | Managements analysis of ASC 740 supports the conclusion
      that the Company does not have any accruals for uncertain tax positions as
      of December 31, 2009. As a result, tabular reconciliation of beginning and
      ending balances would not be meaningful. If interest and penalties were to
      be assessed, we would charge interest to interest expense, and penalties
      to other operating expense. It is not anticipated that unrecognized tax
      benefits would significantly increase or decrease within 12 months of the
      reporting date.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 10 | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 11 | Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | The Company is subject to various amounts claimed arising
      in the ordinary course of business and which are in dispute. There has not
      been any material amount accrued in the financial statements with respect
      to the various amounts claimed due to the Company being unable to make a
      reasonable estimate of any potential liability resulting from the
      resolution of these claims.                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 12 | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | Subsequent to December 31, 2009:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F-26

---

|Acrongenomics, Inc.              
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|December 31, 2009 and 2008       
|(Stated in US Dollars) - Page 21 

|Note 13 | Deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | In January 2009, the Company agreed to acquire 60% of the
      outstanding shares of a private Cyprus company which has beneficial
      ownership in intellectual property. As consideration for this acquisition,
      the Company intends to issue 9,000,000 common shares at $0.40 per share to
      the vendor. This acquisition will be accounted for in accordance with SFAS
      141(R) whereby the Company will recognize the assets acquired, the
      liabilities assumed, and any non- controlling interest at the acquisition
      date, measured at their fair values as of that date. The acquisition has
      not yet closed and is conditional upon various approvals and other events
      occurring.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | During the year ended December 31, 2009, the Company
      advanced $14,142 (€10,000) to the vendor as a deposit on the acquisition.
      The Company intends to complete this transaction in 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Note 14 | Non-cash Transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the statements of
      cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | During the year ended December 31, 2008, the Company
      issued 1,950,000 common shares in respect of consulting fees. The fair
      value of these share issuances was $667,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | During the year ended December 31, 2008, the Company
      issued 1,300,000 common shares having a fair value of $1,051,000 in
      respect of settling accounts payable for unpaid consulting fees to two
      officers of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | These transactions have been excluded from the statements
      of cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Note 15 | Comparative Figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | Certain of the comparative figures have been reclassified
      to conform with the presentation for the current period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-30

---



ITEM 9A(T). CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under
the Exchange Act, our principal executive officer and principal financial
officer evaluated our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2009. Based on
this evaluation, these officers concluded that as of December 31, 2009, these
disclosure controls and procedures were not effective. These officers determined
that our disclosure controls and procedures were not adequate to ensure that the
information required to be disclosed by our company in reports we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the Securities and Exchange
Commission and include controls and procedures designed to ensure that such
information is accumulated and communicated to our management, including our
principal executive officer and principal financial officer, to allow timely
decisions regarding required disclosure.

Managements Report on Internal Control over Financial
Reporting.

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our internal
control over financial reporting is designed to provide reasonable assurance,
not absolute assurance, regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles in the United States of America.
Internal control over financial reporting includes those policies and procedures
that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles in the United States of America, and that our receipts and
expenditures are being made only in accordance with authorizations of our
management and directors; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. In addition,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions
and that the degree of compliance with the policies or procedures may
deteriorate.

Our management, with the participation of our principal
executive and principal financial officers, conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December
31, 2009, based on the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control Integrated
Framework. Based on its evaluation under the framework in Internal
ControlIntegrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission, our management, with the participation
of our principal executive and principal financial officer concluded that our
internal control over financial reporting was not effective as of December 31,
2009, due to the existence of significant deficiencies constituting material
weaknesses. A material weakness is a control deficiency, or combination of
control deficiencies, such that there is a reasonable possibility that a
material misstatement of the annual or interim financial statements will not be
prevented or detected on a timely basis.

Our principal executive officer and our principal financial
officer do not expect that our disclosure controls or our internal control over
financial reporting will prevent all errors and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of a simple error or mistake.

- 25 -

---

Weaknesses Identified

Management has identified material weaknesses in our internal
control processes over procurement and disbursements, primarily related to lack
of segregations of duties.

More specifically, management has identified the following
weaknesses:

- Our company does not have a code of conduct or ethics;
- Our company does not have Human Resources policies and Procedures and
  Function Activities are not clearly defined;
- Our company does not have a specific Mission Statement or Key Performance
  indicators;
- Our company's accounting staff does not have sufficient technical
  accounting knowledge relating to accounting for income taxes and complex US
  GAAP matters. Management corrected any errors prior to the release of our
  company's December 31, 2009 financial statements.

Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.

We intend to implement remediation measures for the material
weaknesses described in this annual report. Such remediation activities include
the following:

| | (1) | We intend to appoint independent members to our audit
      committee in the 2010 fiscal year; and                                                                                                          
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                             
| | (2) | We intend to update the documentation of our internal
      control processes, including formal risk assessment of our financial
      reporting processes as well as codify a code of conduct and
  ethics.
| |     |                                                                                                                                                                                                             
| | (3) | We intend to update our business plan to include a
      Mission Statement and document our key performance indicators.                                                                                     
| |     |                                                                                                                                                                                                             
| | (4) | We intend to engage the services of an independent
      consultant with sufficient expertise in complex US GAAP matters to assist
      us in the preparation of our financial statements                  

This report does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the SEC that permit us to
provide only management's report in this annual report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
reporting during the fourth quarter ended December 31, 2009 that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.

Certificates

Certificates with respect to disclosure controls and procedures
and internal control over financial reporting under Rules 13a-14(a) or 15d-14(a)
of the Exchange Act are attached to this annual report on Form 10-K.

ITEM 9B OTHER INFORMATION

None

- 26 -

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PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Directors and Executive Officers, Promoters and Control
Persons

As at April 12, 2010, our directors and executive officers,
their age, positions held, and duration of such, are as follows:

|Name                       | Position Held with our Company            | Age | Date First Elected or Appointed   
|-------------------------- | ----------------------------------------- | --- | ----------------------------------
|Platon Tzouvalis           | Vice President & Director
      President | 44  | February 14, 2005 October 5, 2006 
|Ron Lizée                  | Chief Financial Officer & Director        | 51  | June
      4, 2004                
|Dr. Manos
      Topoglidis | Chief Technology Officer and Director     | 36  | February 14, 2006                 
|Dr. Evan Manolis           | Director 
    Chairman                    | 50  | May 8, 2007 
    September 2, 2008

Family Relationships

There are no family relationships between any director or
executive officer.

Certain Significant Employees

As of the date of this annual report, our significant
employees, their age, positions held, and duration of such, are as follows:

|Name                      | Position Held with our Company | Age | Date First Appointed
|------------------------- | ------------------------------ | --- | --------------------
|Kailash C. Sharma         | Scientific Advisory Board      | 55  | September 2, 2008   
|Constantine
      Poulios | General Manager(1)             | 38  | April
1, 2007       

(1)Mr. Poulios was previously President of our
company and resigned on October 5, 2006

Business Experience

The following is a brief account of the education and business
experience of directors, executive officers and significant employees during at
least the past five years, indicating their principal occupation during the
period, and the name and principal business of the organization by which they
were employed.

Platon Tzouvalis  President and Director

Platon Tzouvalis, M.Sc., was appointed as our Vice President on
February 14, 2006 and subsequently as the President on October 5, 2006. As a
Biochemist and ex-Abbott Laboratories Associate, he is an experienced
pharmaceutical industry professional. He has been a member of our companys
Scientific Advisory Board since May 2004. His expertise lies in the areas of
Quality Control, Operational Procedures as well as Pharmaceutical Product and
Process Improvement. He received his B.Sc. Degree in Biochemistry from the
University of Illinois in 1990 and his Master's Degree in the same field from
DePaul University at Chicago in 1995.

- 27 -

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Mr. Tzouvalis' earlier career includes working as a Research
Chemist in collaboration with the University of Illinois at Chicago, holding the
position of Research and Development Chemist at SynQuest, Inc. and as Advanced
Quality Assurance Specialist of Organic Operations and then Project Manager in
Bioanalytical Quality Assurance for Abbott Laboratories. Mr. Tzouvalis has also
been awarded with the Abbott Diagnostics Division Science Award of 2002 as part
of the Organic Operation Remediation Team.

We believe Mr. Tzouvalis is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Ron Lizée  Chief Financial Officer and Director

In June 2004, Ron Lizée was appointed as a director of our
company and Chief Financial Officer.

Mr. Lizée is the owner/operator of Lizée Gauthier, Certified
General Accountants where he has practiced since 1982. Mr. Lizée has over 27
years experience in the fields of Taxation, Accounting and Auditing. He
graduated from the University of Saskatchewan, Canada in 1981 with a B. Comm.,
majoring in Accounting and gained his Certified General Accountant (CGA)
designation in 1987, and Certified Financial Planner (CFP) designation in 1993.
Mr. Lizée has experience in financial management within public companies having
served as a director and Chief Financial Officer during 1995 to 1999. He is also
a director and CFO of PreAxia Health Care System Inc. a OTCBB public company. He
is the former owner and Chief Executive Officer of a franchise chain operating
in several Canadian provinces. Mr. Lizée is also the CEO and President of
Gemstar Capital Properties Inc., a private corporation, which is involved in
Land and Building Development Projects.

We believe Mr. Lizée is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Dr. Evan Manolis  Chairman and Director

Dr. Manolis was appointed a director of our company on May 8,
2007. Dr. Manolis received his B.S. from the University of Illinois at Chicago
in 1987 and his M.D. in surgery from Southern Illinois University Medical School
in 1991. He received extensive postgraduate training in general surgery
internship and residency from the Medical College in Ohio. Dr. Manolis practices
surgery in Chicago and Orland Park, Illinois and has been in the profession for
seventeen years.

We believe Dr. Manolis is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Dr. Manos Topoglidis  Chief Technology Officer and
Director

Dr. Topoglidis was appointed as Chief Technology Officer, as a
director of our company and to the Scientific Advisory Board on February 24,
2006. He received his Bachelors of Science from Kings College (University of
London) in 1996, his MSc in Biochemistry from Imperial College in London, UK in
1997 and his Ph.D. in Chemistry (Biosensors and Nanomaterials) from Imperial
College in London, UK in 2001. His research interests and expertise lie in the
areas of Biosensors, Nanomaterials, Biotechnology and Nanotechnology. He has
worked in research at the Center of Electronic Materials and Devices of Imperial
College in London, UK and as manager of European and National programs of the
MESL laboratory of the National Centre for Scientific Research, Demokritos in
Athens. He is a member of the Electrochemical and British Biochemical Societies.
Dr. Topoglidis has 15 scientific publications during his eight years of research
and has presented his work in ten U.S./international conferences.

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Dr. Topoglidis has impressive experience leading international
research teams in academia to unlock nanotechnology solutions. He ranks among
the first to extensively research the use of nanoporous surfaces for biosensing
applications and has written numerous original nanotechnology-related
publications which have been cited worldwide.

We believe Dr. Topoglidis is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Dr. Kailash C. Sharma  Scientific Advisory Board

Dr. Sharma was appointed as a member of the Scientific Advisory
Board in July of 2008. Dr. Sharma has over 25 years of clinical experience in
the areas of Pulmonary and Internal medicine. He is a medical graduate from the
University of Delhi, India, 1981, received his fellowships to the Royal College
of Physicians in Ireland and the UK in 1985 and is ABIM certified in the USA for
Internal Medicine, Pulmonary Diseases and Critical Care Medicine with 13
publications to his credit. Dr. Sharma is currently a practicing physician in
the areas of Pulmonary/critical care in the Chicago area.

Involvement in Certain Legal Proceedings

Our directors, executive officers, or control persons have not
been involved in any of the following events during the past ten years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Commission or the Commodity Futures Trading Commission
      to have violated a federal or state securities or commodities law, and the
      judgment has not been reversed, suspended, or vacated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 5. | being the subject of, or a party to, any federal or state
      judicial or administrative order, judgment, decree, or finding, not
      subsequently reversed, suspended or vacated, relating to an alleged
      violation of: (i) any federal or state securities or commodities law or
      regulation; or (ii) any law or regulation respecting financial
      institutions or insurance companies including, but not limited to, a
      temporary or permanent injunction, order of disgorgement or restitution,
      civil money penalty or temporary or permanent cease-and-desist order, or
      removal or prohibition order; or (iii) any law or regulation prohibiting
      mail or wire fraud or fraud in connection with any business entity;
    or
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 6. | being the subject of, or a party to, any sanction or
      order, not subsequently reversed, suspended or vacated, of any
      self-regulatory organization (as defined in Section 3(a)(26) of the
      Securities Exchange Act of 1934), any registered entity (as defined in
      Section 1(a)(29) of the Commodity Exchange Act), or any equivalent
      exchange, association, entity or organization that has disciplinary
      authority over its members or persons associated with a
  member.                                                                                                                                                                                                                                                              

- 29 -

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Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended December 31, 2009, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with, with the exception of the following:

|Name                       | Number of Late Reports | Number of Transactions Not
      Reported **on a**Timely Basis | **Failure** **to**
      File **Requested Forms**
|-------------------------- | ---------------------- | -------------------------------------------------------------- | -------------------------------------------------
|Platon Tzouvalis           | 1                      | Nil                                                            | Nil                                              
|Ron Lizée                  | Nil                    | Nil                                                            | Nil                                              
|Dr. Manos
      Topoglidis | 1                      | Nil                                                            | Nil                                              
|Dr. Evan Manolis           | 3                      | 3                                                              | Nil                                              

Code of Ethics

We have not yet adopted a Code of Ethics but intend to do so in
the near future.

Nominating Committee

We do not have a Nominating Committee, our entire board of
director performs the functions of a Nominating Committee and oversees the
process by which individuals may be nominated to our board of directors.

The current size of our board of directors does not facilitate
the establishment of a separate committee. We hope to establish a separate
Nominating Committee consisting of independent directors, if the number of our
directors is expanded.

Compensation Committee

We do not have a Compensation Committee.

Audit Committee and Audit Committee Financial
Expert

We currently do not have an audit committee. During the year
ended December 31, 2009, our board of directors performed some of the same
functions of an audit committee, such as: recommending a firm of independent
certified public accountants to audit our annual financial statements; reviewing
the independent auditors independence, the financial statements and their audit
report; and reviewing managements administration of our system of internal
accounting controls.

Our board of directors has determined that it does not have a
member of the audit committee that qualifies as an audit committee financial
expert as defined in Item 407(d)(5)(ii) of Regulation S-K.

We believe that our entire board of directors is capable of
analyzing and evaluating financial statements that present a breadth and level
of complexity of accounting issues that are generally comparable to the breadth
and complexity of the issues reasonably expected to be raised by our company. In
addition, our board of directors constantly consults with the financial advisor.
We believe that retaining an independent director who would qualify as an audit
committee financial expert would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated revenues to date.

- 30 -

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ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation

The particulars of compensation paid to the following persons:

| | (a) | our principal executive officer;                                                                                                                                                                                                                 
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                  
| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the year
      ended December 31, 2009 who had total compensation exceeding $100,000;
      and                            
| |     |                                                                                                                                                                                                                                                  
| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the most recently
      completed financial year,

who we will collectively refer to as the named executive
officers, of our years ended December 31, 2009 and, 2008, are set out in the
following summary compensation table.

|Name and
      principal position | Year      | Salary($)     | **Bonus**($) | Stock**awards**($) | **Option**
      **awards** ($) | Non-equityincentive
      plan **compensation** ($) | **Nonqualified**
      deferred compensation earnings
      ($) | All other compensation($) | **Total**
      ($)
|--------------------------------- | --------- | ------------- | ------------ | ------------------ | ------------------------------- | --------------------------------------------------- | --------------------------------------------------------------- | ------------------------- | -------------------
|(a)                               | (b)       | (c)           | (d)          | (e)                | (f)                             | (g)                                                 | (h)                                                             | (i)                       | (j)                
|Platon Tzouvalis(1)               | 2009 2008 | 84,000 84,000 | Nil Nil      | Nil 
    Nil       | Nil Nil                         | Nil Nil                                             | Nil Nil                                                         | Nil Nil                   | 84,000 
    84,000 
|Ron Lizée                         | 2009 2008 | 81,215 85,244 | Nil Nil      | Nil 
      Nil     | Nil Nil                         | Nil Nil                                             | Nil Nil                                                         | Nil Nil                   | 81,215 
    85,244 
|Dr. Manos Topoglidis              | 2009 2008 | 54,000 54,000 | Nil Nil      | Nil 
      Nil     | Nil Nil                         | Nil Nil                                             | Nil Nil                                                         | Nil Nil                   | 54,000 
    54,000 
|Dr. Evan Manolis(2)               | 2009 2008 | 20,000 Nil    | Nil Nil      | Nil Nil            | Nil Nil                         | Nil Nil                                             | Nil Nil                                                         | Nil Nil                   | 20,000 
    Nil    

|(1)Platon Tzouvalis and Manos Topoglidis
      commenced employment April, 2007
|-------------------------------------------------------------------------------
|(2)Evan Manolis is chairman of the board                                       

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer
certain information concerning the outstanding equity awards as of December 31
2009.

- 31 -

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|OUTSTANDING EQUITY AWARDS AT FISCAL
      YEAR-END
|--------------------------------------------------
|OPTION AWARDS                                     
|Name
      (a)                                    
|Dr. Dimitri
    Goundis 
    Former               
|Platon Tzouvalis                                  
|Ron Lizée                                         
|Dr. Manos Topoglidis                              

(1)Dr. Goundis resigned as our Chief Executive
Officer on September 2, 2008

Option Exercises and Stock Vested

The following table sets forth for each named executive officer
certain information concerning option exercises and stock vested as of December
31 2009.

|OPTION EXERCISES AND STOCK VESTED
|---------------------------------
|                                 
|Name (a)                         
|Dr. Dimitri
      Goundis        
|Platon Tzouvalis                 
|Ron Lizée                        
|Dr. Manos
      Topoglidis       

- 32 -

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Compensation of Directors

Our directors may be paid for their expenses incurred in
attending each meeting of the directors. In addition to expenses, our directors
may be paid a sum for attending each meeting of the directors or may receive a
stated salary as director. No payment precludes any director from serving our
company in any other capacity and being compensated for such service. Members of
special or standing committees may be allowed similar reimbursement and
compensation for attending committee meetings.

We reimburse our directors for expenses incurred in connection
with attending board meetings, but did not pay directors fees or other cash
compensation for services rendered as a director in the periods ended December
31, 2009 and 2008.

|Name                 | Fees Earned or Paid
      in Cash ($) | Stock Awards
      ($) | Option Awards
      ($) | Non-Equity Incentive PlanCompensation ($) | Nonqualified Deferred
      **Compensation** Earnings ($) | All Other
      Compensation ($) | Total ($)
|-------------------- | ------------------------------------- | ---------------------- | ----------------------- | ----------------------------------------- | --------------------------------------------------------- | -------------------------------- | ---------
|(a)                  | (b)                                   | (c)                    | (d)                     | (e)                                       | (f)                                                       | (g)                              | (h)      
|Platon Tzouvalis     | Nil                                   | Nil                    | Nil                     | Nil                                       | Nil                                                       | Nil                              | Nil      
|Ron Lizée            | Nil                                   | Nil                    | Nil                     | Nil                                       | Nil                                                       | Nil                              | Nil      
|Dr. Manos Topoglidis | Nil                                   | Nil                    | Nil                     | Nil                                       | Nil                                                       | Nil                              | Nil      
|Dr. Evan Manolis     | Nil                                   | Nil                    | Nil                     | Nil                                       | Nil                                                       | Nil                              | Nil      

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers, except that
our directors and executive officers may receive stock options at the discretion
of our board of directors. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of our board of directors.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Securities authorized for issuance under equity
compensation plans

We have no long-term incentive plans.

The following table summarizes certain information regarding
our equity compensation plan as at December 31, 2009:

- 33 -

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|Plan Category                                                          | Number of Securities to be Issued
      Upon Exercise of Outstanding Options, Warrants and
      Rights | Weighted-Average Exercise Price
      of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for
      Future Issuance Under Equity Compensation
      Plans (Excluding Securities Reflected in
      Column)
|---------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plans       approved by security
      holders     | 2,100,000                                                                                               | $0.86                                                                             | 500,000                                                                                                                                                  
|Equity compensation plans       not approved by security
      holders | Nil                                                                                                     | Nil                                                                               | Nil                                                                                                                                                      
|Total                                                                  | 2,100,000                                                                                               | $0.86                                                                             | 500,000                                                                                                                                                  

Security ownership of certain beneficial owners and
management

In the following tables, we have determined the number and
percentage of shares beneficially owned in accordance with Rule 13d-3 of the
Exchange Act based on information provided to us by our controlling shareholder,
executive officers and directors, and this information does not necessarily
indicate beneficial ownership for any other purpose. In determining the number
of shares of our common stock beneficially owned by a person and the percentage
ownership of that person, we include any shares as to which the person has sole
or shared voting power or investment power, as well as any shares subject to
warrants or options held by that person that are currently exercisable or
exercisable within 60 days.

Security ownership of certain beneficial owners and
management

The security ownership of individuals known to us who
beneficially owns more than 5% of our common stock and of our management is set
forth in the following table.

|(1) Title of class | (2) Name and address of beneficial
      owner                                               | (3) Amount and nature of
      beneficial ownership | (4) Percent of class1
|------------------ | -------------------------------------------------------------------------------------------- | --------------------------------------------------- | ---------------------
|common stock       | Ron Lizée c/o Lizeé Gauthier CGA
      202-3550 Taylor St. East Saskatoon, SK Canada S7H 5H9 | 600,000 2 Direct                                    | 2.3%                 
|common stock       | Evan T. Manolis 15300 West Ave, Suite 310
      Orland Park, IL 60462                        | 225,993 Direct                                      | 0.9%                 
|common stock       | Manos Topoglidis Panagi Tsaldari 5 Marcousi
      Athens Greece 15122                        | 600,000 3 Direct                                    | 2.3%                 
|common stock       | Platon Tzouvalis 4 Isminis St. Chalandri
      Athens, Greece 15232                          | 1,600,000 4 Direct                                  | 6.2%                 
|Total              | Directors and Officers as a Group (4)                                                        | 3,025,993                                           | 11.8%                
|5% Stockholders   
|common stock       | Platon Tzouvalis 4 Isminis St. Chalandri
      Athens, Greece 15232                          | 1,600,000 4 Direct                                  | 6.2%                 

- 34 -

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1Percentage of ownership is
based on 25,580,481 common shares issued as of April 7, 2010. Except as
otherwise indicated, we believe that the beneficial owners of the common stock
listed above, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable. Beneficial ownership is determined in accordance
with the rules of the SEC and generally includes voting or investment power with
respect to securities. Shares of common stock subject to options or warrants
currently exercisable, or exercisable within 60 days, are deemed outstanding for
purposes of computing the percentage ownership of the person holding such option
or warrants, but are not deemed outstanding for purposes of computing the
percentage ownership of any other person. 2Includes 350,000
shares of common stock and 250,000 stock options exercisable within 60 days of
April 7, 2010. 3Includes 400,000 shares of common stock and
200,000 stock options exercisable within 60 days of April 7, 2010.4Includes 750,000 shares of common stock and 850,000 stock options
exercisable within 60 days of April 7, 2010.

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE

Transactions with related persons

Except as described below, none of the following parties has,
since our date of incorporation, had any material interest, direct or indirect,
in any transaction with us or in any presently proposed transaction that has or
will materially affect us, other than as noted in this section:

| | (i)   | any of our directors or officers;                                                                                                                                          
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | any person proposed as a nominee for election as a
      director;                                                                                                         
| | (iii) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our
      outstanding shares of common stock;
| | (iv)  | any of our promoters; and                                                                                                                                                  
| | (v)   | any member of the immediate family (including spouse,
      parents, children, siblings and in- laws) of any of the foregoing
      persons.                               

| | 1. | For the fiscal year ended December 31, 2009, a total of
      $81,215 in fees was billed to us by Lizée Gauthier Certified General
      Accountants, of which our Chief Financial Officer, Mr. Lizée, is the
      proprietor. These fees were invoiced at the same billable rate as other
      clients of the firm. As at December 31, 2009 $54,936 of the $81,215 was
      payable to Mr. Lizée.                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2. | During the fiscal year ended December 31, 2008, we issued
      350,000 shares to our Chief Financial Officer for past services for a
      value calculated at $133,500. No shares were issued for the year ended
      December 31, 2009.                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 3. | During the fiscal year ended December 31, 2008, we issued
      750,000 shares to our President for past services of which $533,250 was
      recorded in the fiscal year ended December 31, 2007 and $59,250 in the
      fiscal year ended December 31, 2008. In addition, we also incurred
      consulting fees to the President of $84,000 for the year ended December
      31, 2009 (2008: $84,000). As at December 31, 2009 $84,000 was
    payable.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 4. | During the fiscal year ended December 31, 2008, we issued
      400,000 shares to our Scientific Advisor of which the value of $284,400
      was recorded in the fiscal year ended December 31, 2007 and $31,600
    in the fiscal year ended December 31,
2008. In addition we also incurred consulting fees of $54,000 for the year ended
December 31, 2009 (2008: $54,000) as at December 31, 2009 $56,101 was
payable.                                 

- 35 -

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Employment Contracts

Other than as described below, we are not party to any
employment contracts with our directors and officers:

We have employment contracts with Mr. Platon Tzouvalis, our
President and Dr. Manos Topoglidis, our Chief Technology Officer. Their
agreements were recently renewed and expire on March 31, 2013 and they are
described in detail under the heading Item 1. Business  Employees and
Consultants.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

The following table sets forth the fees billed to us for
professional services rendered by our independent registered public accounting
firm, for the years ended December 31, 2009 and 2008:

|Fees               |   | 2009   |  |   | 2008    | 
|------------------ | - | ------ |  | - | ------- | 
|                   |   |        |  |   |         | 
|Audit Fees         | $ | 68,661 |  | $ | 102,236 | 
|Audit related Fees |   | Nil    |  |   | Nil     | 
|Tax fees           |   | 6,371  |  |   | Nil     | 
|Other fees         |   | Nil    |  |   | Nil     | 
|Total Fees         | $ | 75,032 |  | $ | 102,236 | 

Audit Fees.Consist of fees billed for professional
services rendered for the audits of our financial statements, reviews of our
interim consolidated financial statements included in quarterly reports,
services performed in connection with filings with the Securities and Exchange
Commission and related comfort letters and other services that are normally
provided by BDO Canada LLP for the fiscal years ended December 31, 2009 and
2008, in connection with statutory and regulatory filings or engagements.

Tax Fees.Consist of fees billed for professional
services for tax compliance, tax advice and tax planning. These services include
assistance regarding federal, state and local tax compliance and consultation in
connection with various transactions and acquisitions.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

We do not use BDO Canada LLP, for financial information system
design and implementation. These services, which include designing or
implementing a system that aggregates source data underlying the financial
statements or generates information that is significant to our financial
statements, are provided internally or by other service providers. We do not
engage BDO Canada LLP to provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before BDO Canada LLP is engaged by us to render
any auditing or permitted non-audit related service, the engagement be:

- approved by our audit committee (the functions of which are performed by
  our entire board of directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

- 36 -

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Our entire board of directors pre-approves all services
provided by our independent auditors. All of the above services and fees were
reviewed and approved by our sole director either before or after the respective
services were rendered.

Our board of directors have considered the nature and amount of
fees billed by BDO Canada LLP and believe that the provision of services for
activities unrelated to the audit is compatible with maintaining BDO Canada
LLPs independence.

- 37 -

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibits required by Item 601 of Regulation S-K:

|Exhibit No. | Document Name                                                                                                                                                                                                                                                   
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3)         | Articles of Incorporation and Bylaws                                                                                                                                                                                                                            
|3.1         | Articles of Incorporation (attached as an
      exhibit to our registration statement on Form 10-SB filed on May 24, 2002,
      as amended)                                                                                                                    
|3.2         | Bylaws, as amended (attached as an exhibit to
      our registration statement on Form 10- SB filed on May 24, 2002, as
      amended)                                                                                                                          
|(10)        | Material Contracts                                                                                                                                                                                                                                              
|10.1        | Agreement for the Sale of Stock between our
      company and Dr. Leftheris Georgakopoulos dated February 13, 2006 (attached
    as an exhibit to our current report on Form 8-K filed February 16, 2006)                                                       
|10.2        | Development Agreement between our company and
      Molecular Vision Limited (attached as an exhibit to our current report on
      Form 8-K filed on February 20, 2007)                                                                                        
|10.3        | Employment Agreement dated September 3, 2007
      between our company and Dr. Dimitris Goundis (attached as an exhibit to
      our current report on Form 8-K filed on September 28, 2007)                                                                    
|10.4        | Letter Agreement dated February 1, 2008 with
      Molecular Vision Limited (attached as an exhibit to our current report on
      Form 8-K filed on February 19, 2008)                                                                                         
|10.5        | Royalty Agreement dated November 13, 2008 with
      Molecular Vision Limited (attached as an exhibit to our current report on
      Form 8-K filed on November 20, 2008)                                                                                       
|10.6        | Supplemental Agreement to the Subscription and
      Shareholders Agreement relating to Molecular Vision Limited dated
      November 13, 2008 (attached as an exhibit to our current report on Form
      8-K filed on November 20, 2008)                     
|10.7        | Option Agreement dated November 13, 2008 with
      Molecular Vision Limited to acquire additional 20,000 shares of Molecular
      Vision Limited (attached as an exhibit to our current report on Form 8-K
      filed on November 20, 2008)                  
|10.8        | Deed of Termination and Release dated November
      13, 2008 with Molecular Vision Limited (attached as an exhibit to our
      current report on Form 8-K filed on November 20, 2008)                                                                         
|10.9        | Share Exchange Agreement dated January 31, 2009
      between our company, Vardisto Investments Limited and a certain
      shareholder of Vardisto Investments Limited (attached as an exhibit to our
      current report on Form 8-K filed on March 12, 2009)
|10.10       | Asset Purchase Agreement dated January 30, 2009
      between Maragrita Hadzopoulou-Cladaras and Halldale Ventures Limited
      (attached as an exhibit to our current report on Form 8-K filed on March
      12, 2009)                                       
|10.11       | Promissory note dated June 12, 2008 issued to
      Ron and Johanne Lizée by our company (attached as our quarterly report on
      Form 10-Q filed on May 15, 2009)                                                                                            
|10.12       | Promissory note dated July 15, 2009 issued to
      Ron and Johanne Lizée by our company (attached as our quarterly report on
      Form 10-Q filed on August 14, 2009)                                                                                         
|10.13*      | Employment Agreement dated April 1, 2007 between our company
      and Platon Tzouvalis                                                                                                                                                                         
|10.14*      | Employment Agreement dated April 1, 2007 between our company
      and Manos Topoglidis                                                                                                                                                                         
|10.15*      | Management and Operational Services Agreement
    dated October 1, 2008 between our company and Vardisto Investments Limited                                                                                                                                    
|(31)        | Section 302 Certifications                                                                                                                                                                                                                                      
|31.1*       | Section 302 Certification of Platon Tzouvalis                                                                                                                                                                                                                   
|31.2*       | Section 302 Certification of Ron Lizée                                                                                                                                                                                                                          
|(32)        | Section 906 Certifications                                                                                                                                                                                                                                      
|32.1*       | Section 906 Certification of Platon Tzouvalis                                                                                                                                                                                                                   
|32.2*       | Section 906 Certification of Ron Lizée                                                                                                                                                                                                                          

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

ACRONGENOMICS INC.By:

/s/ Platon TzouvalisPlaton Tzouvalis President
& Director (Principal Executive Officer) Date: April 14, 2010

/s/ Ron LizéeRon Lizée Chief Financial Officer
& Director (Principal Financial Officer and Principal Accounting
Officer) Date: April 14, 2010

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

/s/ Platon TzouvalisPlaton Tzouvalis President
& Director (Principal Executive Officer) Date: April 14, 2010

/s/ Ron LizéeRon Lizée Chief Financial Officer
& Director (Principal Financial Officer and Principal Accounting
Officer) Date: April 14, 2010

/s/ Dr. Evan ManolisDr. Evan Manolis Director
Date: April 14, 2010

/s/ Dr. Manos TopoglidisDr. Manos Topoglidis
Director Date: April 14, 2010

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