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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, 2010

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 [ ] No [X]

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- ii -

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. [
]

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: $2,275,449 based on a price of $0.10 per
share, being the closing price of the registrants common stock as quoted on the
OTC Bulletin Board on June 30, 2010.

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.
28,858,481 shares of common stock as of March 12, 2012.

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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- iii -

TABLE OF CONTENTS

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

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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 10 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:

- our plans with respect to Vardisto Investments Limited, Halldale Ventures
  Limited, and Irwingom Ventures Limited;
- the plans of Molecular Vision Limited;
- 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, and our
refer to Acrongenomics, Inc. and its subsidiaries, Vardisto Investments Limited,
Halldale Ventures Limited and Irwingom Ventures Limited, 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. We intend to focus and devote resources and time on our recent
acquisition of Vardisto Investments Limited, as described below. We are looking
for potential investors or partners that would be interested in completing the
development of our point-of-care testing device for diabetes management and
cardiovascular testing. 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
have been much less involved with the development of the BioLED technology than
we had been in the past and we have focused instead on acquiring an interest in
another technology through obtaining 100% 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 investors
or partners in the market. In July 2009, we purchased 19,426 preferred shares of
Molecular Vision for $275,000 (£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 December 31, 2010, we
hold 33,734 shares in the common stock and 19,426 shares in the preferred stock of Molecular Vision, which is
approximately 17.2% of the issued and outstanding shares of Molecular
Vision.

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In our audited financial statements for the year ended December
31, 2010, we wrote-down our investment in Molecular Vision due to minimal cash
flow available in Molecular Vision and lack of finding suitable investors or
partners interested in developing that technology.

On December 29, 2010, we completed the acquisition of 100% of
the total outstanding share capital of Vardisto Investments Limited. In
consideration for the total shares outstanding, we issued a promissory note to
Inter Jura CY (Services) Limited, a Cyprus company and the previous sole direct
shareholder of Vardisto Investments Limited , for the principal sum of
$2,000,000, together with interest thereon at a rate equal to 4% per annum
compounded annually, until the balance of principal and interest outstanding is
paid in full.

Vardisto Investments Limited

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 1,200 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 at a price of $0.40.
Such transaction was never completed, since the price of our common stock failed
to reach the price of $0.40.

As a result of renegotiation of the initial Share Exchange
Agreement, effective December 29, 2010, we acquired 2,000 shares of Vardisto,
representing 100% ownership of Vardisto in consideration for a promissory note
(the Promissory Note) issued to Inter Jura CY (Services) Limited, a Cyprus
company and the previous sole direct shareholder of Vardisto Investments Limited
, for the principal sum of $2,000,000, together with interest thereon at a rate
equal to 4% per annum compounded annually, until the balance of principal and
interest outstanding is paid in full,

We have the option and right at any time prior to this note
being paid to convert any amount outstanding under this Promissory Note
(including accrued interest) into shares of our common stock. The conversion
will be deemed to occur at the average of the three prior day closing price (the
Average Price) of our common stock on the OTCBB or any other stock exchange or
trading market where our stock is listed for trading. We may deliver a notice of
such conversion (the Conversion Notice) to Inter Jura CY (Services) Limited at
any time before maturity of this note, together with a calculation of the amount
converted, the Average Price and the number of common shares to be issued (the
Payment Shares). Upon issuance and delivery of the Payment Shares to Inter
Jura CY (Services) Limited, the amount of this Promissory Note indicated in the
Conversion Notice will be deemed satisfied and fully paid.

Vardistos assets are its ownership interest in Halldale
Ventures Limited (Halldale) and Irwingom Ventures Limited (Irwingom).
Halldale and Irwingom are Cyprus private companies, in which Vardisto holds an
80% and 65% interest respectively. This majority ownership interest in the share
capital of Halldale and Irwingom gives Vardisto a majority interest in the
intellectual property and the business of Halldale and Irwingom.

As a result of the Share Exchange Agreement, (i) Vardisto
became a direct wholly-owned subsidiary of our company; (ii) Halldale Ventures
Limited became an indirect 80% subsidiary of our company and (iii) Irwingom
Ventures Limited became an indirect 65% subsidiary of our company.

Halldale Ventures Limited

Effective January 30, 2009, Halldale entered into an asset
purchase agreement with Professor Margarita Hadzopoulou-Cladaras, whereby,
Halldale agreed, among other things, to acquire the assets comprised mainly of
intellectual properties and 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, and main competitor of Statins in
combination with essential oil derived from plants to treat effectively
hypercholesterolemia.

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Irwingom Ventures Limited

Effective January 30, 2009, Irwingom entered into an asset
purchase agreement with Mr. Emmanuel Aslanis. Pursuant to the asset purchase
agreement, Irwingom agreed, among other things, to acquire certain assets
comprised mainly of intellectual property (Greek patent) and certain research
materials from Mr. Emmanuel Aslanis, in exchange for 35% of its issued and
outstanding shares of its common stock.

The assets purchased by Irwingom pursuant to the Asset Purchase
Agreement include plans for the development of a system called IKAROS-1000, as a
sophisticated and friendly to the environment fire extinguishing system, while
its mechanics may also have applications in other sectors.

The IKAROS-1000 aspires to be a pioneering system which aims at
changing worldwide the way of extinguishing fires more quickly and effectively.
Apart from that, IKAROS-1000 may be used in agriculture, as crop dusting system,
watering large rural areas, as well as neutralizing any size of oil spills at
seas. The whole idea is based on information technology in conjunction with
robotics and nanotechnology of materials.

The system consists of an air-balloon kind of pipeline, with a
diameter up to one meter and a reachable length up to 10,000 meters according to
the operational needs, and a water pump that can reach pressure up to 600 bars.
With one valve each for intake and release helium, the balloon can be inflated
or deflated and can be extended to reach the necessary height for each project.
Every five meters the balloon is divided into autonomous departments. Each
department has separate electronic plaque composed of GPS, IR camera and a 30cm
diameter fan operated by compressed air with the ability to a 360o rotation
around the axis, allowing the balloon to move right and left and making the
whole system flexible in all directions. Under the fans passes a water pipeline
with a 5cm diameter. The IKAROS-1000 can be fitted to a specially designed fire
vehicle, for terrestrial operations, to an especially designed navigable vehicle
for coastal and island operations as well as a tank-type vehicle for off-road
and areas with difficult access.

Molecular Vision Limited

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. 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
semiconductor 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.

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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.

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.

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 December 31, 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.

Throughout the 2010 year, Molecular Vision has continued to
develop the BioLED optical detection platform. In the latest phase the company
has progressed from a research organization and is now focusing on challenges
associated with developing a novel technology into a commercial competitive
offering.

The Kidney prototype detecting creatinine and albumin in urine
and the ratio of those two was developed and evaluated successfully as a proof
of concept. Molecular Vision has moved on to testing blood in the device. While
urine is the easiest to handle bodily fluid with no need of special treatment,
blood is more complicated and requires special filters within the device in
order to take a measurement. In order for this technology to offer competitive
commercial edge, it requires the ability to measure blood directly into the
device.

The BioLED unit was integrated into a pre-prototype instrument
and a series of microfluidic chips were successfully measured using plasma
samples of known Myoglobin concentrations (Cardiac Marker); early results show
expected accuracy and precision. A combined CK-MB/Myoglobin chips was designed
and this dual test delivered good correlation of serum concentrations in
clinically relevant levels.

The current focus is to demonstrate analytical performance of
the technology using a tri-panel cardiac test combining myoglobin, CK-MB and
Troponin 1 on a quantitative single-use device. Matrix development for the 3
assays on the 2-channel chips has made progress, allowing good dose response
curves for each of the assays.

Dose response curves for both CK-MB and myoglobin have been run
on the 3-channel chips. Signal levels are as expected.

On February 1, 2011, Imperial Innovation Business LLP, a
leading technology, commercialization and investment company, increased its
stake in Molecular Vision by committing a further investment of £750,000.
Molecular Vision will issue as security loan notes, which are convertible into
Class A Preferred Shares to Imperial Innovation Business LLP in two tranches
as set out in the subscription agreement. The first tranche being of £500,000
and the second tranche being of up to £250,000. The interest rate on the
convertible promissory note is at 10 percent per annum. The promissory notes are
convertible into Class A Preferred Shares which are convertible into Class B
ordinary shares. The promissory notes are secured by a debenture which
establishes fixed and floating charges over the assets of Molecular Vision.

In our December 2010 audited year end financial statements, we
wrote-off our investment in Molecular Vision to a nominal amount due to minimal
cash flow and inability to find suitable partners or investors to inject
additional funds to complete the development of our technology.

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Industry Overview

Halldale Ventures Limited

Coronary heart disease (CHD) is the leading cause of
morbidity and mortality in the developed world. In the United States more than
500,000 deaths per year are attributed to CHD and the disease costs more than
100 billion USDs in medical expenses and lost income. Hypercholesterolemia is
regarded as the major cause of atherosclerosis and coronary heart disease. The
accumulation of lipids, cholesterol and triglycerides, within the intimae of
arterial blood vessels is the principal etiologic factor in the development of
CHD. Multiple evidences have established a strong causal relationship between
CHD and elevated LDL-cholesterol which is the major atherogenic lipoprotein.
Importantly, reduction of serum cholesterol levels by diet or pharmacological
intervention reduces the incidence of CHD. One of the most effective ways of
reducing circulating cholesterol levels is to inhibit endogenous cholesterol
biosynthesis in the liver. This is primarily achieved with Statins, which
inhibit 3-hydroxy-3-methylglutaryl-coenzyme A (HMG-CoA) reductase and lower
LDL-cholesterol effectively. HMG-CoA reductase catalyzes the rate limiting step
of cholesterol biosynthesis and it is a prime target for pharmacological
prevention of hypercholesterolemia. Statins have been the most widely prescribed
drugs for the treatment of hypercholesterolemia. However, for many patients
Statins do not reduce LDL-cholesterol to acceptable levels and a significant
number of patients do not tolerate Statins well due to side effects. Therefore,
we believe that there is a need for the development of new classes of drugs for
the treatment of hypercholesterolemia.

Statins(or HMG-CoA reductase inhibitors) are a
class of drug used to lower cholesterol levels by inhibiting the enzyme HMG-CoA
reductase, which plays a central role in the production of cholesterol in the
liver. Increased cholesterol levels have been associated with cardiovascular
diseases (CVD), and Statins are therefore used in the prevention of these
diseases. Randomized controlled trials have shown that they are most effective
in those already suffering from cardiovascular disease (secondary prevention),
but they are also advocated and used extensively in those without previous CVD
but with elevated cholesterol levels and other risk factors (such as diabetes
and high blood pressure) that increase a persons risk.

When it comes to Halldale for the further development and usage
of compound X as a lowering-cholesterol drug, we believe that compound X has the
potential to be developed into a potent hypolipidemic drug with a mechanism of
action that is distinct from the mechanism of action of Statins.

Irwingom Ventures Limited

When it comes to the IKAROS-1000 system, we believe that if it
is successfully developed as planned, its competitors, although not direct,
would be the firefighting helicopters and airplanes as well as the manned
firefighting vehicles used to combat fires.

Molecular Vision Limited

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.

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.

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- 6 -

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
Molecular Visions pLED light sources and any emitted fluorescence is detected
with Molecular Visions 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.

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).

---

- 7 -

Compliance with Government Regulation

Halldale Ventures Limited

The Research Phases

Before a drug can be approved for sale to the public there is a
set of clinical tests that must be performed. There is the Pre-Clinical Research
Stage. Here the drug is synthesized and purified. Animal tests are performed,
and institutional review boards assess the studies and make recommendations on
how to proceed. If the recommendations are positive, then an application to the
FDA occurs and clinical tests begin.

Phase 1clinical studies in this phase represent the
first time that an Introduction to New Drug (IND) is tested on humans either
healthy volunteers or sometimes patients. The purpose of these studies is study
in a clinical setting the metabolism, structure-reactivity relationships,
mechanism of action, and side effects of the drug in humans. If possible, phase
1 studies are used to determine how effective the drug is. Phase 1 studies are
usually conducted on 20 to 80 subjects.

The purpose of phase 2clinical trials is to determine
the efficacy of a drug to treat patients with a specific disease or condition,
as well as learn about common short-term side effects or risks. These studies
are conducted on a larger scale than phase 1 studies and typically involve
several hundred patients.

Phase 3clinical trials provide more information about
the effects and safety of the drug and they allow scientists to extrapolate the
results of clinical studies to the general population. Phase 3 studies generally
involve several hundred to several thousand people.

There are several checks and balances in the process of
clinical trials; among them is the use of institutional review boards (IRBs) and
advisory committees. IRBs are designed to protect the rights and welfare of
people participating in clinical trials both before and during the trials. IRBs
are made up of a group of at least five experts and lay people with diverse
backgrounds to provide a complete review of clinical proceedings. The CDER uses
advisory committees of various experts in order to obtain outside opinions and
advice about a new drug. It also provides new information for a previously
approved drug, as well as labeling information about a drug, guidelines for
developing particular kinds of drugs, or data showing the adequate safety and
effects of the drug.

The Application Process

The sponsor of a drug makes a formal application to the FDA to
approve a new drug for use in the United States by submitting a new drug
application (NDA). The NDA must include results and analyses from tests of the
drug on both animals and humans, as well as a description of how the drug was
manufactured. The NDA must provide enough detailed information for FDA reviewers
to make several critical decisions. The result of the study must show whether
the drug is safe and effective and whether its benefits outweigh its risks. It
also decides whether the drugs labeling information is appropriate, and whether
the manufacturing methods used to obtain the drug are adequate for ensuring the
purity and integrity of the drug.

The process of developing and testing a new drug is a lengthy
one. The FDA estimates that it takes a little over 8 years to test a drug,
including early laboratory and animal testing, before there is final approval
for use by the general public. Various efforts, however, are underway to reduce
the approval time.

Promising Experimental Drugs

Eight years is a long time to review a drug. Some patients,
especially terminally ill patients, dont particularly care if the drug meets
high standards of safety. They dont have the time. Taking any drug, in their
view, is better than the alternative. So todays policies also allow some
investigational drugs even before they are approved for marketing.

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- 8 -

These new policies called expanded access protocols include
the Treatment Investigational New Drug (IND) application and the parallel track
mechanism. Both tracks allow promising drugs, not yet approved for marketing, to
be used in moderately unrestricted studies where the intent is not only to learn
more about the drug, especially about its safety, but also to provide treatment
for people with no real alternative. But these expanded access protocols still
require clinical researchers to formally investigate the drug in well-controlled
studies and to supply some evidence that the drug is likely to be helpful.

Final Actions

The FDAs decision whether to approve a new drug for marketing
comes down to answering two questions:

1. Do the results of well-controlled studies provide
substantial evidence of its effectiveness?

2. Do the results show that the product is safe under the
explicit conditions of use in the proposed labeling? Here safe is a relative
term; it means that the benefits of the drug appear to outweigh its risks.

When the review is complete, the FDA writes to the applicant to
say the drug is either approved for marketing, is approvable, provided minor
changes are made, or is not approvable because of major problems. In the last
case, the applicant can then amend or withdraw the NDA or ask for a hearing.
Once its NDA is approved, a drug is on the market as soon as the firm gets its
production and distribution systems going.

Status of Compound X

We have continued with pre-clinical studies involving small
animals for the final determination of the action of the Compound X into
lowering the cholesterol and the level of the tri-glycerides. We expect that the
timeline of the conclusion of the pre-clinical stage will be in the next 12-18
months. At that time, Compound X should be ready to follow the clinical study
phases as described above according to the FDA.

Status of IKAROS-1000

We do not have any approved procedures that need to be
concluded for IKAROS-1000.

Molecular Vision Limited

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.

---

- 9 -

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.

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 Molecular Visions 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 Molecular Vision 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

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.

Molecular Vision 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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- 10 -

Throughout the year ended December 31, 2010, Molecular Vision
has continued to develop the BioLED optical detection platform. In the latest
phase the company has progressed from a research organization and is now
focusing on challenges associated with developing a novel technology into a
commercial competitive offering.

The Kidney prototype detecting creatinine and albumin in urine
and the ratio of those two was developed and evaluated successfully as proof of
concept. While urine is the easiest to handle bodily fluid with no need of
special treatment, blood is more complicated and requires special filters within
the device in order to take a measurement. In order for this technology to offer
competitive commercial edge, it requires the ability to measure blood directly
into the device.

The BioLED unit was integrated into a pre-prototype instrument
and a series of microfluidic chips were successfully measured using plasma
samples of known Myoglobin concentrations (Cardiac Marker); early results show
expected accuracy and precision. A combined CK-MB/Myoglobin chip was designed
and this dual test delivered good correlation of serum concentrations in
clinically relevant levels.

The current focus is to demonstrate analytical performance of
the technology using a tri-panel cardiac test combining myoblobin, CK-MB and
Troponin 1 on a quantitative single-use device.

Molecular Vision is searching for potential investors or
partners to assist with the development of 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

We have two part time employees, who are our President and our
Chief Technology Officer. Effective March 31, 2011 both of their contracts were
terminated. We are in the process of reviewing a new compensation package based
on a combination of shares and fees. We have also engaged our Chief Financial
Officer as a consultant.

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.

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- 11 -

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 we successfully develop a compound
referred to as compound X as a hypolipidemic agent and a potential
cholesterol-lowering agent or develop a system called IKAROS-1000 as a
sophisticated and friendly to the environment fire extinguishing system, or
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
$30,528,065 as at December 31, 2010 (2009 - $27,570,395) and incurred a net loss
during the year ended December 31, 2010 of $2,957,670 (2009 - $937,573). 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,
2010, 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.

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:

- investments in Vardisto;
- any additional investments in Molecular Vision, including investments
  required to maintain our ownership position; and
- investments in other technologies or technology companies.

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.

Risks Related to our Business

Substantial Research on our projects is still needed without
any results guaranteed

Our projects involve substantial research with unpredictable
results. There is a high risk that such further research produces results that
make our projects unrealistic or too difficult to complete and that may impair
our ability to conduct business operations as currently planned.

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- 12 -

Loss of the inventors could impair our ability to further
develop the projects.

We expect Dr. Margarita Hantzopoulou-Cladaras, the inventor for
  the compound X, and Mr. Emmanuel Aslanis, the inventor for the IKAROS-1000
  system, to continue working on their respective projects. If we lose Dr.
  Hantzopoulou-Cladaras and/or Mr. Emmanuel Aslanis, our business could suffer.
  Our success is highly dependent on our ability to attract and retain qualified
  personnel. If we were to lose our inventors, we may experience difficulties in
  competing effectively, developing our technology and implementing our business
  strategies. We do not have key man life insurance in place for any of our key
  personnel.

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.

Molecular Vision or we 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 our ability to develop compound X or the IKAROS-1000 system,
or 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.

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, 2010 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.

We have not yet remediated these disclosure weaknesses and we
believe that our disclosure controls and procedures 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.

Risks Related to our Common Shares

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.

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- 13 -

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 articles 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.

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.

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- 14 -

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
Pink. Trading of our stock through the OTC Pink 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.

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

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 stock is quoted on the OTC Pink under the symbol
AGNM. Until May 19, 2011, our common stock was quoted on the OTC Bulletin
Board, but effective May 20, 2011, our common stock has not been eligible for
quotation on the OTC Bulletin Board because we failed to timely file our annual
report on Form 10-K for the year ended December 31, 2010 with the Securities and
Exchange Commission.

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

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- 15 -

Quarter Ended
    
    Bid High
    
    
    Bid Low03/31/2011
    $
    0.01
    
    $
    0.0012/31/2010
    $
    0.0586
    
    $
    0.0009/30/2010
    $
    0.095
    
    $
    0.0506/30/2010
    $
    0.20
    
    $
    0.0803/31/2010
    $
    0.35
    
    $
    0.1112/31/2009
    $
    0.20
    
    $
    0.0909/30/2009
    $
    0.34
    
    $
    0.1206/30/2009
    $
    0.35
    
    $
    0.1803/31/2009
    $
    0.35
    
    $
    0.17


On March 9, 2012, the closing price for the common stock as
reported on the OTC Pink was $0.099.

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 March 12, 2012, there were approximately 226
registered holders of record of our common stock. As of such date, 28,858,481
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.

Securities Authorized for Issuance Under Equity
Compensation Plans

The following table summarizes certain information regarding
our equity compensation plan as of December 31, 2010:

|                                                                 |                         |                      | Number of securities   
|---------------------------------------------------------------- | ----------------------- | -------------------- | -----------------------
|                                                                 |                         |                      | remaining available for
|                                                                 |                         |                      | future issuance under  
|                                                                 | Number of securities to | Weighted-average     | equity compensation    
|                                                                 | be issued upon exercise | exercise price of    | plans (excluding       
|                                                                 | of outstanding options, | outstanding options, | securities reflected in
|Plan category                                                    | warrants and rights     | warrants and rights  | column (a))            
|                                                                 | (a)                     | (b)                  | (c)                    
|Equity compensation plans approved by
      security holders     | 2,600,000               | $0.71                | Nil                    
|Equity compensation plans not approved by security
      holders | Nil                     | Nil                  | Nil                    
|Total                                                            | 2,600,000               | $0.71                | Nil                    

In May, 2005, we 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 our
company and, in any case, the number of shares to be issued to any one
individual pursuant to the exercise of options must not exceed 10% of the issued
and outstanding share capital. The grant of stock options, exercise prices and
terms are determined by our board of directors.

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- 16 -

Recent Sales of Unregistered Securities

Except as disclosed below, since the beginning of the fiscal
year ended December 31, 2010, we have not sold any equity securities that were
not registered under the Securities Act of 1933 that were not previously
reported in a quarterly report on Form 10-Q or in a current report on Form
8-K.

On April 15, 2010, we issued 25,000 units at $0.40 per unit for
total proceeds of $10,000. Each unit consists of one share and one common share
purchase warrant exercisable at $0.75 for a period of two (2) years. We issued
these units to an offshore subscriber pursuant to Regulation S of the Securities
Act of 1933.

On May 14, 2010, we issued 175,000 units at $0.20 per unit for
total proceeds of $35,000. Each unit consists of one share of common stock and
one common share purchase warrant exercisable at $0.50 for a period of two (2)
years. We issued 50,000 of these units to an offshore subscriber pursuant to
Regulation S of the Securities Act of 1933 and 125,000 of these units to a U.S.
person pursuant to Section 4(2) and/or Rule 506 of the Securities Act of
1933.

On August 9, 2010, we issued 985,000 shares at a fair value of
$0.10 per share for a total of $98,500 to nine (9) different consultants of the
company for in respect of consulting services rendered. These consultants were
all offshore residents. We issued these shares pursuant to Regulation S of the
Securities Act of 1933.

On August 9, 2010, we issued 100,000 units at $0.10 per unit
for total proceeds of $10,000. Each unit consists of one share of common stock
and one common share purchase warrant exercisable at $0.50 for a period of two
(2) years. We paid a commission of 10,000 shares. We issued these units to an
offshore subscriber pursuant to Regulation S of the Securities Act of 1933.

On August 9, 2010, the Company issued 100,000 units at $0.10
per unit for total proceeds of $10,000. Each unit consists of one share of
common stock and one common share purchase warrant exercisable at $0.50 for a
period of two (2) years. The Company paid a commission of 10% totaling $1,000
cash. We issued these shares to an offshore subscriber pursuant to Regulation S
of the Securities Act of 1933.

On August 24, 2010, the Company issued 100,000 units at $0.10
per unit for total proceeds of $10,000. Each unit consists of one share of
common stock and one common share purchase warrant exercisable at $0.50 for a
period of two (2) years. The Company paid a commission of $1,000 on this
placement. We issued these shares to an offshore subscriber pursuant to
Regulation S of the Securities Act of 1933.

On September 22, 2010, we issued 102,000 units at $0.10 per
unit for total proceeds of $10,200. Each unit consists of one share of common
stock and one common share purchase warrant exercisable at $0.50 for a period of
two (2) years. We paid a commission of $1,000 on this placement. We issued these
units to an offshore subscriber pursuant to Regulation S of the Securities Act
of 1933.

On October 13, 2010, we issued 12,500 shares at $0.40 per share
for commissions. We issued these shares to an offshore subscriber pursuant to
Regulation S of the Securities Act of 1933.

On November 3, 2010, we issued 146,000 units at $0.10 per unit
for total proceeds of $14,600. Each unit consists of one share of common stock
and one common share purchase warrant exercisable at $0.50 for a period of two
(2) years. We paid a commission of $1,500 on this placement. We issued these
units to an offshore subscriber pursuant to Regulation S of the Securities Act
of 1933.

On November 11, 2010, we issued 447,500 fully vested common
shares at a fair value of $0.07 based on quoted market price for a total of
$31,325 for consulting services rendered to our company. We issued these shares
to an offshore subscriber pursuant to Regulation S of the Securities Act of
1933.

On February 15, 2011, we issued 75,000 shares at a value of
$0.10 per share for a total of $7,500 for services. We issued these shares to an
offshore subscriber pursuant to Regulation S of the Securities Act of 1933.

During May 2011, we received $70,000 for the sale of 700,000
units at $0.10 per unit from two (2) U.S. investors. Each unit consists of one
share and one common share purchase warrant exercisable at $0.50 for a period of
2 years. We issued these units pursuant to Section 4(2) and/or Rule 506 of the
Securities Act of 1933.

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- 17 -

During June 2011, we received $30,000 for the sale of 300,000
units at $0.10 per unit from two (2) offshore investors. Each unit consists of
one share and one common share purchase warrant exercisable at $0.50 for a
period of two (2) years. We issued these units pursuant to Regulation S of the
Securities Act of 1933.

During October 2011, we received $20,000 for the sale of
200,000 units at $0.10 per unit from one offshore investor. Each unit consists
of one share and one common share purchase warrant exercisable at $0.50 for a
period of two (2) years . We issued these units pursuant to Regulation S of the
Securities Act of 1933.

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, 2010.

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.

Overview

We are a development stage company that focuses on investing
and commercializing novel technology platforms concerning the life sciences
sector. We intend to focus and devote resources and time on our recent
acquisition of Vardisto Investments Limited. In addition, over the next 12
months, we believe that Molecular Vision will continue to search for suitable
partners or investors to finalize the development of a prototype point-of-care
testing device for diabetes management and cardiovascular testing. We intend to
continue to work toward finding investors and more uses for the BioLED
Technology in the market and intend to continue to follow the development of the
technology.

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
have been much less involved with the development of the BioLED technology than
we had been in the past and we have focused instead on acquiring an interest in
another technology through obtaining 100% 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 potential
investors and/or partners interested in developing this technology in the
market. In July 2009, we purchased 19,426 preferred shares of Molecular Vision
for $275,000 (£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 December 31, 2010, we hold 33,734 shares in the
common stock and 19,426 shares in the preferred stock of Molecular Vision, which
is approximately 17.2% of the issued and outstanding shares of Molecular Vision.
In our December 31, 2010 audited financial statements, we wrote-down our
investment in Molecular Vision to a nominal amount. This was mainly due to the
minimal cash flow available to continue with the development costs. However, we
continue to search for an investor or partner to assist with the costs of
development.

On December 29, 2010, we completed the acquisition of 100% of
the total outstanding share capital of Vardisto Investments Limited. In
consideration for the total shares outstanding, we issued a promissory note to
Inter Jura CY (Services) Limited, a Cyprus company and the previous sole
direct shareholder of Vardisto Investments Limited , for the principal sum of
$2,000,000, together with interest thereon at a rate equal to 4% per annum
compounded annually, until the balance of principal and interest outstanding is
paid in full.

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- 18 -

We have the option and right at any time prior to this note
being paid to convert any amount outstanding under this Promissory Note
(including accrued interest) into shares of our common stock. The conversion
will be deemed to occur at the average of the three prior day closing price (the
Average Price) of our common stock on the OTCBB or any other stock exchange or
trading market where our stock is listed for trading. We may deliver a notice of
such conversion (the Conversion Notice) to Inter Jura CY (Services) Limited at
any time before maturity of this note, together with a calculation of the amount
converted, the Average Price and the number of common shares to be issued (the
Payment Shares). Upon issuance and delivery of the Payment Shares to Inter
Jura CY (Services) Limited, the amount of this Promissory Note indicated in the
Conversion Notice will be deemed satisfied and fully paid.

Vardistos assets are its ownership interest in Halldale
Ventures Limited (Halldale) and Irwingom Ventures Limited (Irwingom).
Halldale and Irwingom are Cyprus private companies, in which Vardisto holds an
80% and 65% interest respectively. This majority ownership interest in the share
capital of Halldale and Irwingom gives Vardisto a majority interest in the
intellectual property and the business of Halldale and Irwingom.

As a result of the Share Exchange Agreement, (i) Vardisto
became a direct wholly-owned subsidiary of our company; (ii) Halldale Ventures
Limited became an indirect 80% subsidiary of our company and (iii) Irwingom
Ventures Limited became an indirect 65% subsidiary of our company.

Halldales assets 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,
and main competitor of Statins in combination with essential oil derived from
plants to treat effectively hypercholesterolemia.

Irwingoms assets include plans for the development of a system
called IKAROS-1000, as a sophisticated and friendly to the environment fire
extinguishing system, while its mechanics may also have applications in other
sectors.

Cash Requirements

We have not generated any revenues and our operating activities
have resulted in a loss of $2,965,670 for the year ended December 31, 2010
(2009: loss of $937,573). This negative cash flow is attributable to our
operating expenses, including but not limited to, a write-down of our investment
in Molecular Vision of $827,400, and recording as research and development
expense a substantial amount of our acquisition in Vardisto Investment in the
amount of $1,349,225, general and administration and the payment of our audit
fees and legal fees. We estimate our expenses in the next 12 months will be
approximately $450,000, 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
    
    AmountResearch & Development
    $
    150,000General & Administrative
    $
    100,000Investor Relations
    $
    50,000Professional fees
    $
    150,000$
    450,000


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.

General & Administrative expenses are expected to include
travel, transfer agents, office rent, office supplies, banking fees, corporate
materials, accounting and temporary office assistance.

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- 19 -

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

Professional fees are expected to include all payments to our
outsourced attorney, accountant and independent auditor.

As of December 31, 2010, we had approximately $6,615 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. If we are able to raise additional financing by issuing equity
securities, our existing stockholders ownership will be diluted.

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. 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 best
interests. Obtaining commercial or other loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, if and when it is needed, we will be forced to
delay or scale down some or all of our marketing, business development and
product development activities or perhaps even cease the operation of our
business.

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 were engaged pursuant to consulting agreements. As at March 31, 2011 and
subsequent to our year end, we have terminated these agreements.

General Administration

We anticipate spending approximately $100,000 on general and
administration costs in the next 12 months. These costs are expected to consist
primarily of travel, office, rent and consulting fees.

Liquidity and Capital Resources

Our financial condition for the years ended December 31, 2010
and 2009 and the changes between those periods for the respective items are
summarized as follows:

Working Capital

December 31, 2010
    
    
    December 31, 2009Current Assets
    $
    6,615
    
    $
    19,303Current Liabilities
    
    1,876,404
    
    
    1,380,671Working Capital (deficit)
    $
    (1,869,789
    )
    $
    (1,361,368
    )


The increase in our working capital deficit of $508,421 was
primarily due to an increase of our accounts payables of $403,584, an increase
in the US$ carrying value of our convertible promissory notes payable of $32,391
and increase of loans payable of $59,758.

On February 14, 2011, subsequent to our December 31, 2010 year
end, we entered into a debt agreement with Asher Enterprises, Inc. in exchange
for $53,000 in cash financing maturing on November 16, 2011. The convertible
note accrues interest at a rate of 8% per annum to maturity and 22% thereafter.
The note is convertible at 61% of the closing price of the common shares on the
day prior to the conversion date.

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- 20 -

On April 18, 2011, we received a demand letter with respect to
a convertible promissory note dated February 14, 2011 issued to Asher
Enterprises, Inc. in the principal amount of $53,000 bearing a per annum
interest rate of 8%. The letter stated that the convertible promissory note
provides that we would be in default if we fail to comply with the reporting
requirements of the Securities Exchange Act of 1934. Based on this, the letter
stated that we were in default under the convertible promissory note and
demanded the immediate payment as provided in the convertible promissory note of
$79,500 together with default interest as provided in the convertible promissory
note. The letter stated that Asher Enterprises, Inc. would consider waiving this
default, provided that we immediately become current in our filing obligations.
Asher Enterprises, Inc. agreed to postpone the demand for payment, as long as we
provided them with regular updates on our status of our reporting
requirements.

Cash Flows

Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,2010
    
    
    2009Net Cash Used in Operating Activities
    $
    (167,724
    )
    $
    (454,998
    )Net Cash Provided by (Used in) Investing Activities
    
    18,978
    
    
    (289,643
    )Net cash Provided by Financing Activities
    
    151,058
    
    
    726,900Change in Cash and Cash Equivalents During the Period
    $
    2,312
    
    $
    (17,741
    )


Cash Used In Operating Activities

During the year ended December 31, 2010 we used net cash in
operating activities in the amount of $167,724 primarily towards general and
administrative expenses as well as a net change in accounts payable and accrued
liabilities of $403,795 net change in shares issued for consulting and
management fees of $129,825, write-down of Molecular Vision of $827,400, expense
of research and development of $1,349,225, stock-based compensation of $35,352,
reduction in unrealized foreign exchange of $29,349 and changes in prepaid
expenses of $15,000.

Cash from Investing Activities

During the year ended December 31, 2010, cash provided by
investing activities were primarily from cash acquired in asset acquisition of
$4,836 and deposits received in the amount of $14,142.

Cash from Financing Activities

We received net cash of $151,058 from financing activities
during the year ended December 31, 2010. Net cash generated by financing
activities is attributable to cash received from common share issuances totaling
$91,300, and from the loan advances totaling $59,758.

Results of Operations

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 or Vardisto.

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- 21 -

Expenses

Our expenses for the 12 months ended December 31, 2010 and 2009
were as follows:

Year Ended
    
    
    Year EndedDecember 31, 2010
    
    
    December 31, 2009Accounting and audit fees
    
    171,483
    
    
    156,248Bank charges
    
    1,304
    
    
    1,981Change in fair value of derivative
      liability
    
    -
    
    
    (169,452
    )Consulting fees
    
    468,176
    
    
    307,437Interest, fees and accretion on notes
      payable
    
    61,010
    
    
    121,152Interest income
    
    -
    
    
    (10
    )Foreign exchange gain (loss)
    
    29,157
    
    
    101,806Legal fees
    
    23,516
    
    
    82,961Management fees
    
    -
    
    
    11,647Office and miscellaneous
    
    2,279
    
    
    3,717Investor relations
    
    14,924
    
    
    7,600Rent
    
    1,907
    
    
    61,127Transfer agent and filing fees
    
    7,289
    
    
    7,050Travel
    
    -
    
    
    4,979Write-down of investment in Molecular
      Vision
    
    827,400
    
    
    239,330In Process research and development
    
    1,349,225
    
    
    -(2,957,670
    )
    
    (937,573
    )


Expenses for the 12 months ended December 31, 2010 increased by
$2,020,097 compared to the same period in 2009 largely due to an increase of in
process research and development charges of $1,349,225, an increase in the
write-down of investment in Molecular Vision of $588,070, an increase in
consulting fees of $160,739 and an increase in audit and accounting fees of
$15,235.

Audit Fees and accounting fees

Our accounting and audit fees increased by $15,235 in the year
ended December 31, 2010 compared to the year ended December 31, 2009 due to an
increase in audit fees of $35,179 resulting from increased complex GAAP matters
and a decrease in accounting fees of $19,944.

Change in fair value of the derivative liability

This amount decreased by $169,452 for the year ended December
31, 2010 as the calculation of the fair value of the embedded derivative
liability in our convertible promissory notes was $Nil at each of December 31,
2010 and 2009.

Consulting Fees

The consulting fees we paid increased in the year ended
December 31, 2010 by $160,739 compared to the year ended December 31, 2009. This
was the result of us requesting additional services from consultants during the
2010 year.

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- 22 -

Interest, fees and accretion on Notes Payable

The interest we incurred on notes payable decreased by $60,142
in the year ended December 31, 2010 compared to the year ended December 31,
2009. This was the result of us not having to record accretion expense in the
current year on the debt discount associated with the convertible promissory
note having a principal of $150,000.

Foreign Exchange gain (loss)

We incurred a reduction in foreign exchange of $72,649 for the
year ended December 31, 2010, due to changes in US dollar compared to Canadian
dollar.

Legal Fees

Our legal fees decreased in the year ended December 31, 2010 by
$59,445 compared to the year ended December 31, 2009. This was the result of us
not requiring as much legal services during the year 2010, because of reduction
in activity.

Management Fees

Our management fees decreased in the year ended December 31,
2010 by $11,647 compared to the year ended December 31, 2009. Management fees
arose in the year ended December 31, 2009 as a result of issuing shares for
management services whereas no such issuances were incurred in the year ended
December 31, 2010.

Rent, Transfer Agent and Travel

Our combined rental expenses, transfer agent fees and travel
expenses decreased in the year ended December 31, 2010 compared to the year
ended December 31, 2009 by $63,960. This was mainly the result of the Company
acquiring 100% of the outstanding shares of Vardisto Investments during the
year, an entity to which we were paying for the rent of office premises.

Office and Bank Charges

Our combined office and bank charges decreased in the year
ended December 31, 2010 by $2,115 compared to the year ended December 31, 2009.
This was mainly the result of us undertaking less activities.

Write-Down of Investment in Molecular Vision

Our expenses increased by $588,070 for the year ended December
31, 2010, because of the write-down in our investment in Molecular Vision to a
nominal value of $1.00.

Investor Relations and Public Relations

Our expenses increased for the year ended December 31, 2010 by
$7,324 compared to the year ended December 31, 2009 as we provided shares for
services to various investors that assisted the company.

Research and Development

Our expenses increased for the year ended December 31, 2010 by
$1,349,225 compared to the year ended December 31, 2009, as we expensed in
process research and development charges acquired in the acquisition of Vardisto
Investments as required by the guidance of US GAAP when the acquisition of an
entity is determined to be the acquisition of assets.

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- 23 -

Going Concern

We have historically incurred losses and have incurred a loss
of $2,957,670 for the year ended December 31, 2010 and $937,573 for the year
ended December 31, 2009. 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.

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.

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.

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 reviewed the sales of Molecular Vision securities to other investors
when that is a more reliable indicator of the fair value of our shareholdings
and reviewed cash flow projections prepared by Molecular Vision. 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 and a further reduction of $827,400
for the year ended December 31, 2010 based on our determination that there was a
decline in the value of the investment that was other than temporary.

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- 24 -

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.

Recent Accounting Pronouncements

There are no accounting pronouncements that the Company
recently adopted or are pending the Companys adoption that are expected to have
a material impact on the Companys financial position or results of
operations.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Not Applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

---

- 25 -

|ACRONGENOMICS, INC.              
|---------------------------------
|(A Development Stage Company)    
|CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2010 and 2009       
|(Stated in US Dollars)           

---

|                            | Tel: 604 688 5421       | BDO Canada LLP
|--------------------------- | ----------------------- | --------------
|Fax: 604 688 5132           | 600 Cathedral Place    
|www.bdo.ca                  | 925 West Georgia Street
|Vancouver BC V6C 3L2 Canada

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying consolidated balance sheets of
Acrongenomics, Inc. (the Company, a Development Stage Company) as of December
31, 2010 and 2009 and the related consolidated 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, 2010. 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. as of December 31, 2010 and 2009 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, 2010 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
$30,528,065 at December 31, 2010 and incurred a net loss of $2,957,670 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                                                
|March 9, 2012                                                    

---

|ACRONGENOMICS, INC.                    
|---------------------------------------
|(A Development Stage Company)          
|CONSOLIDATED BALANCE SHEETS            
|December 31, 2010 and December 31, 2009
|(Stated in US Dollars)                 

|ASSETS                                                          |   | December 31, |   |   | December 31, |  
|--------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                |   | 2010         |   |   | 2009         |  
|                                                                |   |              |   |   |              |  
|Current                                                         |   |              |   |   |              |  
|Cash                                                            |   | 6,615        |   | $ | 4,303        |  
|Prepaid expenses and deposit                                    |   | -            |   |   | 15,000       |  
|                                                                |   | 6,615        |   |   | 19,303       |  
|                                                                |   |              |   |   |              |  
|Deposit                                                         |   | -            |   |   | 14,142       |  
|Patent and other intangible assets - Note 4                     |   | 49,737       |   |   | -            |  
|Investment in Molecular Vision - Note 3                         |   | 1            |   |   | 827,401      |  
|                                                                | $ | 56,353       |   | $ | 860,846      |  
|                                                                |   |              |   |   |              |  
|LIABILITIES                                                     |   |              |   |   |              |  
|                                                                |   |              |   |   |              |  
|Current                                                         |   |              |   |   |              |  
|Accounts payable and accrued liabilities - Note 8               | $ | 1,124,731    |   | $ | 721,149      |  
|Promissory notes payable - Note 6                               |   | 690,913      |   |   | 658,522      |  
|Loans payable - Note 7                                          |   | 60,758       |   |   | 1,000        |  
|                                                                |   | 1,876,402    |   |   | 1,380,671    |  
|                                                                |   |              |   |   |              |  
|Promissory note payable - Notes 4 and 6                         |   | 1,394,969    |   |   | -            |  
|                                                                |   | 3,271,371    |   |   | 1,380,671    |  
|                                                                |   |              |   |   |              |  
|                                                                |   |              |   |   |              |  
|CAPITAL DEFICIT                                                 |   |              |   |   |              |  
|                                                                |   |              |   |   |              |  
|Capital stock - Note 9                                          |   |              |   |   |              |  
|Authorized:                                                     |   |              |   |   |              |  
|100,000,000 common shares, par value $0.001
      per share     |   |              |   |   |              |  
|Issued and outstanding:                                         |   |              |   |   |              |  
|27,783,481 common shares (December 31, 2010
      - 25,580,481) |   | 27,783       |   |   | 25,580       |  
|Additional paid-in capital                                      |   | 27,285,264   |   |   | 27,024,990   |  
|Deficit accumulated during the development
      stage          |   | (30,528,065  | ) |   | (27,570,395  | )
|                                                                |   | (3,215,018   | ) |   | (519,825     | )
|                                                                | $ | 56,353       |   | $ | 860,846      |  

SEE ACCOMPANYING NOTES

---

|ACRONGENOMICS, INC.                                                               
|----------------------------------------------------------------------------------
|(A Development Stage Company)                                                     
|CONSOLIDATED STATEMENTS OF OPERATIONS                                             
|for the years ended December 31, 2010 and 2009 and                                
|for the period from August 17, 1999 (Date of Inception)
      to December 31, 2010
|(Stated in US Dollars)                                                            

|                                                             |   | Years Ended  |   |   | August 17,1999      |  
|------------------------------------------------------------ | - | ------------ | - | - | ------------------- | -
|                                                             |   | December 31, |   |   | (Date of Inception) |  
|                                                             |   | 2010         |   |   | 2009                |  
|Expenses                                                     |   |              |   |   |                     |  
|Accounting and audit fees - Note 8                           | $ | 171,483      |   | $ | 156,248             |  
|Amortization of patents                                      |   | -            |   |   | -                   |  
|Appraisals                                                   |   | -            |   |   | -                   |  
|Bank charges                                                 |   | 1,304        |   |   | 1,981               |  
|Consulting fees - Notes 8 and 9                              |   | 468,176      |   |   | 307,437             |  
|In-process research and development - Note 4                 |   | 1,349,225    |   |   | -                   |  
|Investor relations                                           |   | 14,924       |   |   | 7,600               |  
|Legal fees                                                   |   | 23,516       |   |   | 82,961              |  
|Management fees                                              |   | -            |   |   | 11,647              |  
|Office and miscellaneous                                     |   | 2,279        |   |   | 3,717               |  
|Rent - Note 8                                                |   | 1,907        |   |   | 61,127              |  
|Research and development - Note 8                            |   | -            |   |   | -                   |  
|Transfer agent and filing fees                               |   | 7,289        |   |   | 7,050               |  
|Travel                                                       |   | -            |   |   | 4,979               |  
|Write-down of patents                                        |   |              |   |   | -                   |  
|                                                             |   |              |   |   |                     |  
|Loss before other income (expenses)                          |   | (2,040,103   | ) |   | (644,747            | )
|                                                             |   |              |   |   |                     |  
|Other income (expenses)                                      |   |              |   |   |                     |  
|Interest income                                              |   | -            |   |   | 10                  |  
|Interest, fees and accretion on notes
      payable - Note 8 |   | (61,010      | ) |   | (121,152            | )
|Change in fair value of derivative liability - Note 5        |   | -            |   |   | 169,452             |  
|Write-down of investment in Molecular
      Vision - Note 3  |   | (827,400     | ) |   | (239,330            | )
|Foreign exchange gain (loss)                                 |   | (29,157      | ) |   | (101,806            | )
|                                                             |   |              |   |   |                     |  
|Loss from continuing operations                              | $ | (2,957,670   | ) | $ | (937,573            | )
|Loss from discontinued operations                            |   | -            |   |   | -                   |  
|                                                             |   |              |   |   |                     |  
|Net loss for the period                                      | $ | (2,957,670   | ) | $ | (937,573            | )
|Basic and diluted loss per share                             | $ | (0.11        | ) | $ | (0.04               | )
|                                                             |   |              |   |   |                     |  
|Weighted average number of shares outstanding                |   | 26,329,892   |   |   | 24,951,580          |  

SEE ACCOMPANYING NOTES

---

|ACRONGENOMICS, INC.                                                               
|----------------------------------------------------------------------------------
|(A Development Stage Company)                                                     
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                             
|for the years ended December 31, 2010 and December 31,
      2009 and             
|for the period from August 17, 1999 (Date of Inception)
      to December 31, 2010
|(Stated in US Dollars)                                                            

|                                                                          |   |                          |   |   |                            |     |   | August 17,1999    |  
|------------------------------------------------------------------------- | - | ------------------------ | - | - | -------------------------- | --- | - | ----------------- | -
|                                                                          |   | Years ended December 31, |   |   | (Date of Inception)
    to |    
|                                                                          |   | 2010                     |   |   | 2009                       |     |   | December 31, 2010 |  
|                                                                          |   |                          |   |   |                            |     |   |                   |  
|Cash Flows used in Operating Activities                                   |   |                          |   |   |                            |     |   |                   |  
|Net loss for the period                                                   | $ | (2,957,670               | ) | $ | (937,573                   | ) $ |   | (30,528,065       | )
|Adjustments to reconcile net loss to net cash used in
      operations:   |   |                          |   |   |                            |     |   |                   |  
|Amortization of patents                                                   |   |                          |   |   | -                          |     |   | 741,430           |  
|Financing fee on convertible promissory note                              |   |                          |   |   | 7,500                      |     |   | 7,500             |  
|In-process research and development                                       |   | 1,349,225                |   |   | -                          |     |   | 1,349,225         |  
|Write-down of investment in Molecular Vision                              |   | 827,400                  |   |   | 239,330                    |     |   | 1,066,730         |  
|Change in fair value of derivative
      liability                        |   | -                        |   |   | (169,452                   | )   |   | (169,452          | )
|Accretion of debt discount                                                |   |                          |   |   | 56,138                     |     |   | 538,262           |  
|Unrealized foreign exchange                                               |   | 29,349                   |   |   | 98,141                     |     |   | 127,490           |  
|Shares issued for consulting and management fees                          |   | 129,825                  |   |   | -                          |     |   | 1,442,325         |  
|Loan origination fee - Note 6                                             |   | -                        |   |   | 16,245                     |     |   | 16,245            |  
|Stock-based compensation                                                  |   | 35,352                   |   |   | 21,871                     |     |   | 1,939,067         |  
|Write-down of patents                                                     |   | -                        |   |   | -                          |     |   | 8,004,447         |  
|Changes in non-cash working capital balances related to
      operations: |   |                          |   |   |                            |     |   |                   |  
|Prepaid expenses and deposit                                              |   | 15,000                   |   |   | 2,618                      |     |   | -                 |  
|Accounts payable and accrued liabilities                                  |   | 403,795                  |   |   | 210,184                    |     |   | 2,958,559         |  
|Net cash used in operating activities                                     |   | (167,724                 | ) |   | (454,998                   | )   |   | (12,506,237       | )
|                                                                          |   |                          |   |   |                            |     |   |                   |  
|Cash Flows provided by Financing Activities                               |   |                          |   |   |                            |     |   |                   |  
|Issuance of common shares                                                 |   | 91,300                   |   |   | 584,400                    |     |   | 12,855,738        |  
|Share purchase warrants                                                   |   | -                        |   |   | -                          |     |   | 370,307           |  
|Common stock subscriptions                                                |   | -                        |   |   | -                          |     |   | 29,800            |  
|Issuance of convertible notes                                             |   | -                        |   |   | 142,500                    |     |   | 836,636           |  
|Repayment of convertible note                                             |   | -                        |   |   | -                          |     |   | (300,000          | )
|Loan payable                                                              |   | 59,758                   |   |   | -                          |     |   | 60,758            |  
|Net cash provided by financing activities                                 |   | 151,058                  |   |   | 726,900                    |     |   | 13,853,239        |  
|                                                                          |   |                          |   |   |                            |     |   |                   |  
|Cash Flows used in Investing Activities                                   |   |                          |   |   |                            |     |   |                   |  
|Investment in Molecular Vision                                            |   | -                        |   |   | (275,501                   | )   |   | (1,373,140        | )
|Cash acquired in asset acquisition                                        |   | 4,836                    |   |   | -                          |     |   | 4,836             |  
|Refund on termination of development
      agreement                      |   | -                        |   |   | -                          |     |   | 149,794           |  
|Deposit                                                                   |   | 14,142                   |   |   | (14,142                    | )   |   | -                 |  
|Patents                                                                   |   | -                        |   |   | -                          |     |   | (121,877          | )
|Net cash used in investing activities                                     |   | 18,978                   |   |   | (289,643                   | )   |   | (1,340,387        | )
|                                                                          |   |                          |   |   |                            |     |   |                   |  
|Increase (decrease) in cash during the period                             |   | 2,312                    |   |   | (17,741                    | )   |   | 6,615             |  
|Cash, beginning of period                                                 |   | 4,303                    |   |   | 22,044                     |     |   | -                 |  
|Cash, end of period                                                       | $ | 6,615                    |   | $ | 4,303                      |     | $ | 6,615             |  

Supplemental Cash Flow Information - Note 12

SEE ACCOMPANYING NOTES

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT                         
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2010
|(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  |  

SEE ACCOMPANYING NOTES

---

|ACRONGENOMICS, INC.                                                           
|------------------------------------------------------------------------------
|(A Development Stage Company)                                                 
|CONSOLIDA TED STA TEM ENT OF CHA NGES IN CA PITA L
      DEFICIT              
|for the period A ugust 17, 1999 (Date of Inception) to
      December 31, 2010
|(Stated in US
      Dollars)                                                  

|                                                           |  |          |  |              |            |              |  |                 |  |  |             |   |  |               |   |  | Deficit     |   |  |             |  
|---------------------------------------------------------- |  | -------- |  | ------------ | ---------- | ------------ |  | --------------- |  |  | ----------- | - |  | ------------- | - |  | ----------- | - |  | ----------- | -
|                                                           |  |          |  | Common Stock |            | A ccumulated |  |                 |  | 
|                                                           |  |          |  |              |            |              |  |                 |  |  | A dditional |   |  | Share         |   |  | During the  |   |  |             |  
|                                                           |  |          |  |              |            |              |  |                 |  |  | Paid-in     |   |  | Subscriptions |   |  | Development |   |  |             |  
|                                                           |  |          |  |              | Shares     |              |  | Par
      Value |  |  | Capital     |   |  | (Receivable)  |   |  | Stage       |   |  | Total       |  
|                                                           |  |          |  |              |            |              |  |                 |  |  |             |   |  |               |   |  |             |   |  |             |  
|Balance, December 31, 2003 - brought
      forward         |  |          |  |              | 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 s ubscriptions                                       |  |          |  |              | -          |              |  | -               |  |  | -           |   |  | 426,329       |   |  |             |   |  | 426,329     |  
|Net loss for the year                                      |  |          |  |              | -          |              |  | -               |  |  | -           |   |  | -             |   |  | (1,863,376  | ) |  | (1,863,376  | )
|                                                           |  |          |  |              |            |              |  |                 |  |  |             |   |  |               |   |  |             |   |  |             |  
|Balance, December 31, 2004 - brought forward               |  |          |  |              | 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                                           |  |          |  |              | -          |              |  | -               |  |  | (350,248    | ) |  | -             |   |  | -           |   |  | (350,248    | )
|Capital stock issued purs uant to the 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 s
      ervices        |  | 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   |  

SEE ACCOMPANYING NOTES

---

|ACRONGENOMICS, INC.                                                          
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT                         
|for the period August 17, 1999 (Date of Inception) to
      December 31, 2010
|(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, 2005 - brought
      forward |  |          |  |              | 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 - brought forward       |  |          |  |              | 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

---

|ACRONGENOMICS , INC .                                                         
|------------------------------------------------------------------------------
|(A Development Stage Company )                                                
|CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT                          
|for the period August 17, 1999 (Date of Inception ) to
      December 31, 2010
|(Stated in US Dollars)                                                        

|                                                        |          |              |            |             |   |                  |  |   |             |   |   |               |   |   | Deficit     |   |   |            |  
|------------------------------------------------------- | -------- | ------------ | ---------- | ----------- | - | ---------------- |  | - | ----------- | - | - | ------------- | - | - | ----------- | - | - | ---------- | -
|                                                        |          | Common Stock |            | Accumulated |   |                  |  |  
|                                                        |          |              |            |             |   |                  |  |   | Additiona l |   |   | Share         |   |   | During the  |   |   |            |  
|                                                        |          |              |            |             |   |                  |  |   | Paid-in     |   |   | Subscriptions |   |   | Development |   |   |            |  
|                                                        |          |              | Shares     |             |   | Par
      Valu e |  |   | Capital     |   |   | (Receivable ) |   |   | Stage       |   |   | Total      |  
|                                                        |          |              |            |             |   |                  |  |   |             |   |   |               |   |   |             |   |   |            |  
|Balance , December 31, 2007 - brought
      forward     |          |              | 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 liabilit y               |          |              | -          |             |   | -                |  |   | (113,314    | ) |   | -             |   |   | -           |   |   | (113,314   | )
|Stock-based compensation                                |          |              | -          |             |   | -                |  |   | 21,871      |   |   | -             |   |   | -           |   |   | 21,871     |  
|Net loss for the year                                   |          |              | -          |             |   | -                |  |   | -           |   |   | -             |   |   | (937,573    | ) |   | (937,573   | )
|                                                        |          |              |            |             |   |                  |  |   |             |   |   |               |   |   |             |   |   |            |  
|Balance , December 31, 2009                             |          |              | 25,580,481 |             |   | 25,580           |  |   | 27,024,990  |   |   | -             |   |   | (27,570,395 | ) |   | (519,825   | )
|                                                        |          |              |            |             |   |                  |  |   |             |   |   |               |   |   |             |   |   |            |  
|Capital stock issued for cash :                         | at $0.40 |              | 25,000     |             |   | 25               |  |   | 9,975       |   |   | -             |   |   | -           |   |   | 10,000     |  
|                                                        | at $0.20 |              | 175,000    |             |   | 175              |  |   | 34,825      |   |   | -             |   |   | -           |   |   | 35,000     |  
|                                                        | at $0.10 |              | 548,000    |             |   | 548              |  |   | 54,252      |   |   | -             |   |   | -           |   |   | 54,800     |  
|Capital stock issued for services :                     | at $0.10 |              | 985,000    |             |   | 985              |  |   | 97,515      |   |   | -             |   |   | -           |   |   | 98,500     |  
|                                                        | at $0.07 |              | 447,500    |             |   | 448              |  |   | 30,877      |   |   | -             |   |   | -           |   |   | 31,325     |  
|Capital stock issued for commission :                   | at $0.10 |              | 10,000     |             |   | 10               |  |   | 990         |   |   | -             |   |   | -           |   |   | 1,000      |  
|                                                        | at $0.40 |              | 12,500     |             |   | 12               |  |   | 4,988       |   |   | -             |   |   | -           |   |   | 5,000      |  
|Less: commission paid                                   |          |              | -          |             |   | -                |  |   | (8,500      | ) |   | -             |   |   | -           |   |   | (8,500     | )
|Stock-based compensatio n                               |          |              | -          |             |   | -                |  |   | 35,352      |   |   | -             |   |   | -           |   |   | 35,352     |  
|Net loss for the period                                 |          |              | -          |             |   | -                |  |   | -           |   |   | -             |   |   | (2,957,670  | ) |   | (2,957,670 | )
|                                                        |          |              |            |             |   |                  |  |   |             |   |   |               |   |   |             |   |   |            |  
|Balance, December 31, 2010                              |          |              | 27,783,481 |             | $ | 27,783           |  | $ | 27,285,264  |   | $ | -             |   | $ | (30,528,065 | ) | $ | (3,215,018 | )

SEE ACCOMPANYING NOTES

---

|ACRONGENOMICS, INC.                           
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2010 and 2009                    
|(Stated in US Dollars)                        

|Note 1 | Business
      Description, Basis of Presentation and Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | The Company is a
      development stage company focusing on commercializing novel technology
      platforms concerning the life sciences sector. The Company intends to
      focus its resources on the development of a compound as a potential
      cholesterol-lowering agent to treat effectively hypercholesterolemia, the
      research and experimental results of which were acquired in the
      acquisition of Vardisto Investments Ltd (Vardisto). Additionally, the
      acquisition of Vardisto included the intellectual property associated with
      the development of a system called IKAROS-1000, a sophisticated and
      environmentally friendly fire extinguishing system.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Basis of
      Presentation and Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | These financial
      statements have been prepared in accordance with generally accepted
      accounting principles in the United States of America and the instructions
      to Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | 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, 2010, the Company had not yet
      achieved profitable operations, had an accumulated deficit of $30,528,065
      since its inception and incurred a net loss of $2,957,670 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 has no formal plan in place to
      address this concern but is considering obtaining additional funds by
      either debt or equity 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.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 2 | Summary of
      Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 2               

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

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 3               

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

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 4               

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

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 5               

|Note 2 | Summary of Significant Accounting
      Policies (contd)                                     
|------ | -----------------------------------------------------------------------------------------------
|       |                                                                                                
|       | l)                                                                                             
|       |                                                                                                
|       |                                                                                                
|       |                                                                                                
|       | m)                                                                                             
|       |                                                                                                
|       |                                                                                                
|       |                                                                                                
|       | n)                                                                                             
|       |                                                                                                
|       |                                                                                                
|       |                                                                                                
|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 Preferred             |  |  | Class A         | 
|                                                                        |  | Shares                        |  |  | Ordinary Shares | 
|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          | 
|Less: Write-down of Class A ordinary and
      Preferred shares         |  | -                             |  |  | -               | 
|Balance as at December 31, 2010                                         |  | 19,426                        |  |  | 33,734          | 

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 6               

|Note 3 | Investment in Molecular Vision Ltd. 
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | During the year ended December 31, 2009, the
      Company recorded an impairment charge of $239,330 on its investment in
      Class A Ordinary Shares of Molecular to an amount equivalent to what other
      investors paid for these shares. This amount was determined to be more
      representative of an exit price in accordance with the guidance of ASC
      820.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | During the year ended December 31, 2010, the
      Company determined the fair value of its investment in Molecular Vision
      Ltd. to be impaired due to the inability of Molecular Vision Ltd. to
      obtain additional financing in order to develop its BioLED technology to
      the stage of commercial applications. Accordingly, the Company has written
      down its investment to $1 in recognition thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note 4 | Acquisition of Vardisto Investments Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On December 29, 2010, the Company completed a
      transaction by which it acquired 100% of the issued and outstanding shares
      of Vardisto Investments Limited (Vardisto), a private company located in
      Cyprus for consideration consisting of a promissory note (the Note). The
      promissory note is due on or before December 31, 2013 for the principal
      sum of $2,000,000, together with interest thereon at a rate equal to four
      (4%) percent per annum compounded annually.                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | The Company will have the option and right at
      any time until the Note is fully paid to convert any amount outstanding,
      including accrued interest into common shares at the average closing price
      of the three days prior to conversion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | The promissory note has been recorded at its
      fair value on issuance in the amount of $1,394,969 by determining its
      present value at inception using a risk-adjusted discount rate of 17.3%.
      The resulting discount from its face value in the amount of $605,031 will
      be accreted to income over the term of the note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | The acquisition of Vardisto Investments Ltd.
      was not considered to be a business combination primarily because the set
      of assets and activities of Vardisto Investments did not include the
      processes requisite to meet the definition of a business. Therefore, the
      transaction has been accounted for as an acquisition of assets by the
      Company. The transaction has been measured at fair value with the
      allocation of the purchase price based on the assets acquired, measured at
      fair value at the date of the acquisition. The assets of Vardisto include
      investments in two companies incorporated in Cyprus of which it owns 80%
      and 65% interests respectively. The Company has not recorded any
      non-controlling interest in respect of these investments in its
      consolidated financial statements due to their immateriality.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | The allocation of the purchase price to the
      assets acquired is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

Cash
    $
    4,836Patents and other assets
    
    49,737Accounts payables
    
    (8,829
    )Fair value of net assets acquired
    $
    45,744Consideration paid:Convertible promissory note
    $
    1,394,969


The excess of consideration over fair
value of net assets acquired totalling $1,349,225 has been included in In
Process Research and Development expense for the year ended December 31,
2010.

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 7               

|Note 5 | 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, 2010, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The fair value changes of the
      Companys Level 2 assets are summarized as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|                                          |   | Beginning Value |  |   |          |  |   |            |   |   | Ending Fair      | 
|----------------------------------------- | - | --------------- |  | - | -------- |  | - | ---------- | - | - | ---------------- | 
|                                          |   | of              |  |   | Shares   |  |   | Impairment |   |   | Value of Level 2 | 
|                                          |   | Level 2 Assets  |  |   | Acquired |  |   | Charge     |   |   | Assets           | 
|For the 12 months ended December 31, 2010 | $ | 827,401         |  | $ | -        |  | $ | (827,400   | ) | $ | 1                | 
|                                          |   |                 |  |   |          |  |   |            |   |   |                  | 
|For the 12 months ended December 31, 2009 | $ | 791,230         |  | $ | 275,501  |  | $ | (239,330   | ) | $ | 827,401          | 

| | The Companys embedded conversion features in
      each of the $394,136 and $150,000 convertible promissory notes (Note 6)
      contain clauses that call for the repayment of the note at a foreign
      exchange rate of not less than $1US = $CDN1.27. In accordance with ASC
      815-40-15, a conversion option embedded in a convertible debt instrument
      that is denominated in a currency other than the issuer's functional
      currency fails the fixed-for fixed criteria of that guidance thus
      requiring bifurcation as a derivative liability. Given the decline in the
      cumulative fair value of the Companys shares and warrants to below the
      conversion prices inherent in these notes, the derivative liability has a
      fair value of $Nil at December 31, 2010 (December 31, 2009: $Nil)
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 8               

|Note 5 | Fair Value Measurements  (contd)                                                                                                                                                                                                                                                                                                                                                             
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | 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 year ended December 31, 2010 and year ended December 31,
      2009 is as follows:

|                                          |   |                     |  |   | Derivative Liabilities |  |   |                     |   |   |                  | 
|----------------------------------------- | - | ------------------- |  | - | ---------------------- |  | - | ------------------- | - | - | ---------------- | 
|                                          |   | Beginning Value     |  |   | bifurcated from        |  |   | Change in fair      |   |   | Ending Fair      | 
|                                          |   | of                  |  |   | convertible            |  |   | value of derivative |   |   | Value of Level 3 | 
|                                          |   | Level 3 Liabilities |  |   | promissory notes       |  |   | liabilities         |   |   | Liabilities      | 
|For the 12 months ended December 31, 2010 | $ | -                   |  | $ | -                      |  | $ | -                   |   | $ | -                | 
|                                          |   |                     |  |   |                        |  |   |                     |   |   |                  | 
|For the 12 months ended December 31, 2009 | $ | -                   |  | $ | 169,452                |  | $ | (169,452            | ) | $ | -                | 

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:

December 31, 2010
    December 31, 2009Expected life
    2 years
    2 yearsExpected Volatility
    193.13%
    166.94-181.45%Risk free interest rate
    0.62%
    1.00-1.70%Dividend Yield
    0%
    0%


|Note 6 | Promissory Notes Payable
|------ | ------------------------

| |                                      |   | December 31, |  |   | December 31, | 
| | ------------------------------------ | - | ------------ |  | - | ------------ | 
| |                                      |   | 2010         |  |   | 2009         | 
| |                                      |   |              |  |   |              | 
| | $394,136 convertible promissory note |   |              |  |   |              | 
| |                                      |   |              |  |   |              | 
| | - principal                          | $ | 394,136      |  | $ | 394,136      | 
| | - foreign exchange adjustment        |   | 106,316      |  |   | 82,674       | 
| |                                      |   |              |  |   |              | 
| |                                      |   | 500,452      |  |   | 476,810      | 
| | $150,000 convertible promissory note |   |              |  |   |              | 
| |                                      |   |              |  |   |              | 
| | - principal                          |   | 150,000      |  |   | 150,000      | 
| | - loan origination fee               |   | 16,245       |  |   | 16,425       | 
| | - foreign exchange
      adjustment  |   | 24,216       |  |   | 15,287       | 
| |                                      |   |              |  |   |              | 
| |                                      |   | 190,461      |  |   | 181,712      | 

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 9               

|Note 6 | Promissory Notes Payable  (contd)
|------ | -----------------------------------

| | $2,000,000 promissory note |   |           |   |   |          |  
| | -------------------------- | - | --------- | - | - | -------- | -
| | - principal                |   | 2,000,000 |   |   | -        |  
| | - debt discount            |   | (605,031  | ) |   | -        |  
| | - accretion                |   | -         |   |   | -        |  
| |                            |   | 1,394,969 |   |   | -        |  
| |                            |   | 2,085,882 |   |   | 658,522  |  
| | Less: current portion      |   | (690,913  | ) |   | (658,522 | )
| |                            | $ | 1,394,969 |   | $ | -        |  

$394,136 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 during 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 twelve months ended December 31, 2010, the Company recorded a foreign
exchange loss of $23,642 (2009: $82,674) on the note resulting in a balance
payable as at December 31, 2010 of $500,452 (2009: $476,810).

Additionally, 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. In accordance with ASC
815, the Company is required to re-measure the fair value of the derivative at
each reporting period with the change in fair value recorded as a gain or loss
in the Statement of Operations. At December 31, 2010, the Company remeasured the
fair value of the derivative liability and determined it had a fair value of
$nil (2009: $nil).

During the year ended December 31,
2010, the Company accrued interest of $44,697 (2009: $35,483) on this note.

This note is secured by an interest in
all property of the Company.

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 10              

|Note 6 | Promissory Notes Payable  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | $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 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.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | For the year ended December 31, 2010, the
      Company recorded a foreign exchange loss of $8,929 (2009: 15,287) on the
      note resulting in a balance payable as at December 31, 2010 of $190,461
      (2009: $181,712).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Additionally, 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. In accordance
      with ASC 815, the Company is required to re-measure the fair value of the
      derivative at each reporting period with the change in fair value recorded
      as a gain or loss in the Statement of Operations. At December 31, 2010,
      the Company re- measured the fair value of the derivative liability and
      determined it had a fair value of $nil (2009: $nil).                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | During the year ended December 31, 2010, the
      Company accrued interest of $16,313 (2009: $5,786) on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | This note is secured by an interest in all
      property of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | $2,000,000 Promissory Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | In conjunction with its acquisition of Vardisto
      Investments Ltd (Note 4), the Company issued a promissory note (the
      Note) due on or before December 31, 2013 for the principal sum of $US
      2,000,000, together with interest thereon at a rate equal to four (4%)
      percent per annum compounded annually. The Company will have the option
      and right at any time until the Note is fully paid to convert any amount
      outstanding, including accrued interest into common shares at the average
      closing price of the three days prior to conversion. The promissory note
      has been recorded at its fair value on issuance in the amount of
      $1,394,969 with the resulting discount from its face value of $605,031
      being accreted to income as interest expense over the term of the note
      using the effective interest method. The Company has recorded no interest
      or accretion on the Note for the year ended December 31, 2010.                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 7 | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | On April 7, 2010, the Company was loaned
      €25,000 (US $33,090) by issuance of a promissory note, payable on demand,
      with interest accruing on the balance of the principal outstanding at 8
      percent per annum compounding monthly and payable quarterly, maturing on
      October 1, 2010. For the twelve months ended December 31, 2010, the
      Company recorded a foreign exchange loss of $40 on the note resulting in a
      balance payable as at December 31, 2010 of $33,130. The Company has
      negotiated with the holder of the loan to extend the maturity date to
      January 1, 2011.                                                                                                                                                                                                                                                                                                                                                                                                           

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 11              

|Note 7 | Loans Payable  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | The Company received additional loans from two
      (2) other Shareholders of the Company in the amount of $8,000.                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | During the year ended December 31, 2010, the
      Company received additional unsecured advances from an officer of the
      Company totalling $18,628. These advances are non-interest bearing and
      have no specific terms for repayment. Loans payable at December 31, 2010
      includes $19,628 (December 31, 2009: $1,000) owing to an officer and
      director and the spouse of an officer of the company.                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Note 8 | 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(Date ofInception)For the Years Ended
    
    
    toDecember 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010Accounting fees
    $
    61,271
    
    $
    81,215
    
    $
    417,629Consulting fees
    
    175,139
    
    
    158,000
    
    
    900,040Legal fees
    
    -
    
    
    -
    
    
    60,656Management fees
    
    -
    
    
    -
    
    
    2,747,128Rent (Note 11)
    
    -
    
    
    -
    
    
    36,000Research and development
    
    -
    
    
    -
    
    
    5,604,189Interest and accretion and fees on
      convertible Promissory notes - Note 5
    
    61,010
    
    
    121,152
    
    
    491,649$
    297,420 $
    
    
    360,367
    
    $
    10,257,291


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, 2010
  includes $393,917 (December 31, 2009: $195,037) 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 and a company subject to
  significant influence for accounting, management, consulting services received
and rent.

During the 12 months ended December 31, 2010, the Board of
  Directors approved the grant of 500,000 options to a director of the company for
  services rendered. The options vest on a graded vesting schedule where 25% of
  the options will vest 3 months after the grant date and every 3 months
  thereafter until fully vested. They have an exercise price of $0.50 per share
  and are exercisable for a period of 8 years from the date of issue. Of the
  500,000 options granted, there were 250,000 that vested during the year ended
  December 31, 2010 for which the Company recorded stock-based compensation
  totalling $31,139 (Note 9).

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 12              

|Note 9 | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | 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 two (2) subscriptions for a total of $26,500. 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 three (3) private placements 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 commissions totalling $19,000 consisting of
      $16,000 cash and 7,500 shares issued at a fair value of $0.40 per share on
      this placement.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On July 22, 2009, the Company issued 105,000
      units at $0.40 per unit for total proceeds of $42,000 received on February
      1, 2010. 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 $4,200 on this placement.                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On September 16, 2009, the Company issued
      165,000 units pursuant to four (4) private placements 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.                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On October 29, 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 at $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 5,000
      shares for this placement.                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On April 15, 2010, the Company issued 25,000
      units at $0.40 per unit for total proceeds of $10,000. Each unit consists
      of one share and one common share purchase warrant exercisable at $0.75
      for a period of two (2) years.                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On May 14, 2010, the Company issued 175,000
      units at $0.20 per unit for total proceeds of $35,000. Each unit consists
      of one share of common stock and one common share purchase warrant
      exercisable at $0.50 for a period of two (2) years.                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On August 9, 2010, the Company issued 985,000
      fully vested shares at a fair value of $0.10 per share based on quoted
      market price for a total of $98,500 in respect of consulting services
      rendered.                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | On August 9, 2010, the Company issued 100,000
      units at $0.10 per unit for total proceeds of $10,000. Each unit consists
      of one share of common stock and one common share purchase warrant
      exercisable at $0.50 for a period of two (2) years. The Company paid a
      commission of 10,000 shares.                                                                                                                                              

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 13              

|Note 9 | Common Stock  (contd)                                                                                                                                                                                                                                                                                                              
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                      
|       | On August 9, 2010, the Company issued 100,000
      units at $0.10 per unit for total proceeds of $10,000. Each unit consists
      of one share of common stock and one common share purchase warrant
      exercisable at $0.50 for a period of two (2) years. The Company paid a
      commission of $1,000.                      
|       |                                                                                                                                                                                                                                                                                                                                      
|       | On August 24, 2010, the Company issued 100,000
      units at $0.10 per unit for total proceeds of $10,000. Each unit consists
      of one share of common stock and one common share purchase warrant
      exercisable at $0.50 for a period of two (2) years. The Company paid a
      commission of $1,000 on this placement.   
|       |                                                                                                                                                                                                                                                                                                                                      
|       | On September 22, 2010, the Company issued
      102,000 units at $0.10 per unit for total proceeds of $10,200. Each unit
      consists of one share of common stock and one common share purchase
      warrant exercisable at $0.50 for a period of two (2) years. The Company
      paid a commission of $1,000 on this placement.
|       |                                                                                                                                                                                                                                                                                                                                      
|       | On October 13, 2010, the Company issued 12,500
      shares at $0.40 per share in respect of commissions.                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                      
|       | On November 3, 2010, the Company issued 146,000
      units at $0.10 per unit for total proceeds of $14,600. Each unit consists
      of one share of common stock and one common share purchase warrant
      exercisable at $0.50 for a period of two (2) years. The Company paid a
      commission of $1,500 on this placement.  
|       |                                                                                                                                                                                                                                                                                                                                      
|       | On November 11, 2010, the Company issued
      447,500 fully vested common shares at a fair value of $0.07 based on
      quoted market price for a total of $31,325 for consulting services
      rendered to the Company.                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                      
|       | Commitments                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                      
|       | Share Purchase Warrants                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                      
|       | A summary of changes in the Companys share
      purchase warrants for the year ended December 31, 2010 and December 31,
      2009 outstanding is presented below:                                                                                                                                                                 

| |                                  |  | December 31, 2010 |   |   | December 31, 2009 | 
| | -------------------------------- |  | ----------------- | - | - | ----------------- | 
| |                                  |  |                   |   |   | Weighted          | 
| |                                  |  |                   |   |   | Average           | 
| |                                  |  | Number of         |   |   | Exercise          | 
| |                                  |  | Warrants          |   |   | Price             | 
| |                                  |  |                   |   |   |                   | 
| | Outstanding, beginning of period |  | 3,124,000         |   | $ | 0.75              | 
| | Issued                           |  | 748,000           |   | $ | 0.51              | 
| | Expired                          |  | (1,450,250        | ) | $ | 0.75              | 
| |                                  |  |                   |   |   |                   | 
| | Outstanding, end of period       |  | 2,421,750         |   | $ | 0.68              | 

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 14              

|Note 9 | Common Stock  (contd)                                                               
|------ | --------------------------------------------------------------------------------------
|       |                                                                                       
|       | Commitments  (contd)                                                                
|       |                                                                                       
|       | Share Purchase Warrants  (contd)                                                    
|       |                                                                                       
|       | The following table summarizes the warrants
      outstanding as at December 31, 2010:

| | Number Outstanding |  | Exercise |                    |  
| | ------------------ |  | -------- | ------------------ | -
| | and Exercisable    |  | Price    | Expiry Date        |  
| |                    |  |          |                    |  
| | 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  | *
| | 25,000             |  | $0.75    | April 15, 2012     |  
| | 723,000            |  | $0.50    | June 15, 2012      |  
| |                    |  |          |                    |  
| | 2,421,750          |  |          |                    |  

* subsequent to December 31, 2010, these warrants expired unexercised

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, 2010 and the year ended December
31, 2009 is presented below:

| |                                  |  | December 31, 2010 |  |   | December 31, 2009 | 
| | -------------------------------- |  | ----------------- |  | - | ----------------- | 
| |                                  |  |                   |  |   | Weighted          | 
| |                                  |  |                   |  |   | Average           | 
| |                                  |  | Number of         |  |   | Exercise          | 
| |                                  |  | Options           |  |   | Price             | 
| |                                  |  |                   |  |   |                   | 
| | Outstanding, beginning of period |  | 2,100,000         |  | $ | 0.76              | 
| |                                  |  |                   |  |   |                   | 
| | Granted                          |  | 500,000           |  | $ | 0.50              | 
| |                                  |  |                   |  |   |                   | 
| | Outstanding, end of period       |  | 2,600,000         |  | $ | 0.71              | 
| |                                  |  |                   |  |   |                   | 
| | Exercisable, end of period       |  | 2,350,000         |  | $ | 0.73              | 

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 15              

|Note 9 | Common Stock  (contd)                                                 
|------ | ------------------------------------------------------------------------
|       |                                                                         
|       | Commitments  (contd)                                                  
|       |                                                                         
|       | Stock-Based Compensation Plan  (contd)                                
|       |                                                                         
|       | At December 31, 2010 the following stock
      options were outstanding:

| | 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) | 200,000   |  | $ | 0.50     |  |  | April 1, 2018     |  | $
| | 500,000          | (7) | 250,000   |  | $ | 0.50     |  |  | June 1, 2018      |  | $
| | 2,600,000        |     | 2,350,000 |  |   |          |  |  |                   |  |  

| | (1) | As at December 31, 2010, these options had fully vested
      and no stock-based compensation was recognized in the financial statements
      for the years ended December 31, 2010 and 2009.                                                                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                               
| | (2) | As at December 31, 2010, these options had fully vested
      and no stock-based compensation was recognized in the financial statements
      for the years ended December 31, 2010 and 2009.                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                               
| | (3) | As at December 31, 2010, these options had fully vested
      and no stock-based compensation was recognized in the financial statements
      for the year ended December 31, 2010 (2009: $11,647).                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                               
| | (4) | As at December 31, 2010, these options had fully vested
      and no stock-based compensation was recognized in the financial statements
      for the years ended December 31, 2010 and 2009.                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                               
| | (5) | As at December 31, 2010, these options had fully vested
      and no stock-based compensation was recognized in the financial statements
      for the years ended December 31, 2010 and 2009.                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                               
| | (6) | As at December 31, 2010, of these options had fully
      vested. During the year ended December 31, 2010, the Company recognized
      stock-based compensation of $4,213 (2009: $10,224) included in consulting
      fees in the financial statements.                                                     
| |     |                                                                                                                                                                                                                                                                                                               
| | (7) | These options were granted during the year ended December
      31, 2010 and as that date, a total of 250,000 had fully vested. During the
      year ended December 31, 2010, the Company recognized stock-based
      compensation of $31,139 included in consulting fees in the financial
      statements.

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 16              

|Note 9 | Common Stock  (contd)                                                                                                                                                                              
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                      
|       | Commitments  (contd)                                                                                                                                                                               
|       |                                                                                                                                                                                                      
|       | Stock-Based Compensation Plan  (contd)                                                                                                                                                             
|       |                                                                                                                                                                                                      
|       | The fair value of stock options granted has
      been determined using the Black-Scholes option pricing model using the
    following assumptions applied to stock options granted during the years:

| |                         |   | 2010            |  |  | 2009 | 
| | ----------------------- | - | --------------- |  |  | ---- | 
| |                         |   |                 |  |  |      | 
| | Expected dividend yield |   | 0%              |  |  | -    | 
| | Expected volatility     |   | 141.6% - 149.4% |  |  | -    | 
| | Risk-free Interest Rate |   | 2.21% - 3.09%   |  |  | -    | 
| | Term in years           |   | 8               |  |  | -    | 
| | Fair value              | $ | 0.07 - $0.23    |  |  | -    | 

A summary of changes in the Companys
unvested stock options for the year period ended December 31, 2010 and the year
ended December 31, 2009 is presented below:

|                                 |  | December 31, 2010 |   |   | December 31, 2009 | 
|-------------------------------- |  | ----------------- | - | - | ----------------- | 
|                                 |  |                   |   |   | Weighted          | 
|                                 |  |                   |   |   | Average           | 
|                                 |  | Number of         |   |   | Exercise          | 
|                                 |  | Options           |   |   | Price             | 
|                                 |  |                   |   |   |                   | 
|Outstanding, beginning of period |  | 50,000            |   | $ | 0.50              | 
|Granted                          |  | 500,000           |   | $ | 0.50              | 
|Cancelled                        |  | -                 |   |   | -                 | 
|Vested                           |  | (300,000          | ) | $ | 0.50              | 
|                                 |  |                   |   |   |                   | 
|Outstanding, end of period       |  | 250,000           |   | $ | 0.50              | 

As at December 31, 2010, there remains
a total of $15,269 of unrecognized compensation expense that is expected to be
recognized in 2011 when the remaining options vest.

Stock-based compensation amounts,
including those related to shares issued for non-cash consideration during the
period, are classified in the Companys Statement of Operations as follows:

| |                 |  |   | 2010    |  |   | 2009   | 
| | --------------- |  | - | ------- |  | - | ------ | 
| | Consulting fees |  | $ | 165,177 |  | $ | 21,871 | 

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 17              

|Note 10 | 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:                                                                   

| |                                   |   | 2010       |   |   | 2009       |  
| | --------------------------------- | - | ---------- | - | - | ---------- | -
| |                                   |   |            |   |   |            |  
| | Deferred tax assets               |   |            |   |   |            |  
| | Net operating losses carryforward | $ | 2,111,000  |   | $ | 1,924,000  |  
| | Undeducted accruals               |   | 280,000    |   |   | 224,000    |  
| | Convertible promissory notes      |   | 43,000     |   |   | 33,000     |  
| | Investment in Molecular Vision    |   | 363,000    |   |   | 81,000     |  
| | Less: valuation allowance         |   | (2,797,000 | ) |   | (2,262,000 | )
| |                                   |   |            |   |   |            |  
| | Deferred tax assets               | $ | -          |   | $ | -          |  

The Company's income tax expense for
the years ended December 31, 2010 and 2009 differed from the United States
statutory rates:

| |                                                          |   | 2010       |   |   | 2009     |  
| | -------------------------------------------------------- | - | ---------- | - | - | -------- | -
| | Statutory tax rate                                       |   | 34%        |   |   | 34%      |  
| |                                                          |   |            |   |   |          |  
| | Income tax benefit at statutory rate                     | $ | (1,006,000 | ) | $ | (319,000 | )
| | Increase in income taxes resulting from:                 |   |            |   |   |          |  
| | Non-deductible expenses                                  |   | -          |   |   | 9,000    |  
| | Effect of reclassification of derivative
      liability |   | -          |   |   | (39,000  | )
| | In process research and
      development                |   | 459,000    |   |   | -        |  
| | Stock-based compensation                                 |   | 12,000     |   |   | 8,000    |  
| | Change in valuation allowance                            |   | 535,000    |   |   | 341,000  |  
| | Income tax expense                                       | $ | -          |   | $ | -        |  

At December 31, 2010, the Company has
incurred accumulated net operating losses in the United States of America
totalling approximately $6,207 which are available to reduce taxable income in
future taxation years. These losses expire as follows:

| | Year of Expiry |   | Amount    |  |  |  | 
| | -------------- | - | --------- |  |  |  | 
| | 2027           |   | 4,115,000 |  |  |  | 
| | 2028           |   | 1,230,000 |  |  |  | 
| | 2029           |   | 314,000   |  |  |  | 
| | 2030           |   | 548,000   |  |  |  | 
| |                |   |           |  |  |  | 
| |                | $ | 6,207,000 |  |  |  | 

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 18              

|Note 10 | Income Taxes  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 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,
      2010 and December 31, 2009.
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | As at December 31, 2010, 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.                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 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, 2010. 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 11 | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | On March 28, 2008, the Company entered into a
      consulting agreement at $10,000 per month. The agreement was for one year
      ending March 27, 2009. The agreement was then extended for another year
      ending March 27, 2010 and further year ended March 27, 2011, except if
      terminated by the parties. Subsequent to December 31, 2010, this contract
      was terminated by the Company.                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | On October 1, 2008, the Company entered into a
      rent agreement at $5,000 per month. The agreement was for two years and
      contained an automatic renewal period for one additional year unless
      either party gives the other 30 days written notice of its intention not
      to further renew the agreement. Due to the acquisition of Vardisto
      Investment the rent agreement terminated September 30, 2010.                                                                                                                                                                                                            

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 19              

|Note 12 | 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, 2010, the
      Company issued 1,432,500 (2009 - nil) common shares in respect of
      consulting fees. The fair value of these share issuances was $129,825
      (2009 - nil).
|        |                                                                                                                                                                                                                     
|        | During the year ended December 31, 2010, the
      Company issued 22,500 (2009  nil) common shares having a fair value of
      $6,000 (2009  nil) in respect of payment of commissions.                          
|        |                                                                                                                                                                                                                     
|        | These transactions have been excluded from the
      statements of cash flows.                                                                                                                                      
|        |                                                                                                                                                                                                                     
|Note 13 | Subsequent Events                                                                                                                                                                                                   

| | 1. | Subscription Agreements         
| | -- | --------------------------------
| |    |                                 
| |    | Subsequent to December 31, 2010:
| |    |                                 
| |    | a)                              
| |    |                                 
| |    | b)                              
| |    |                                 
| |    | c)                              
| |    |                                 
| |    | d)                              
| |    |                                 
| |    | e)                              
| |    |                                 
| |    | f)                              

---

|Acrongenomics, Inc.                           
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|December 31, 2010 and 2009                    
|(Stated in US Dollars) - Page 20              

|Note 13 | Subsequent Events (contd)
|------- | --------------------------

| |    | g)               | On June 10, 2011, the Company received $20,000 pursuant
      to a subscription agreement for 200,000 units at $0.10 per unit. Each unit
      consists of one common share and one share purchase warrant exercisable
      into one additional common share of the Company for $0.50 for a period of
      two (2) years from the month of issue. A commission of $2,000 was paid on
      this subscription.                                                                                                                                                                                                                                                                                                              
| | -- | ---------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | h)               | On October 31, 2011, the Company received $20,000
      pursuant to a subscription agreement for 200,000 units at $0.10 per unit.
      Each unit consists of one common share and one share purchase warrant
      exercisable into one additional common share of the Company for $0.50 for
      a period of two (2) years from the month of issue.                                                                                                                                                                                                                                                                                                                                                                       
| |    |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | 2. | Promissory Notes
| |    |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | a)               | Subsequent to December 31, 2010, the Company entered into
      a debt agreement in exchange for $53,000 in cash financing maturing on
      November 16, 2011. The convertible note accrues interest at a rate of 8%
      per annum to maturity and 22% thereafter. The note is convertible at 61%
      of the closing price of the common shares on the day prior to the
      conversion date. The debtor had sent a request for payment with penalty of
      50% of the amount due by Acrongenomics for failure to file the required
      10-K for the year ended December 31, 2010 by June 2011. The debtor
      postponed any action against Acrongenomics to allow the Company to file
      the required report.
| |    |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | b)               | On March 25, 2011, subsequent to December 31, 2010, the
      Company signed a convertible promissory note in the amount of $50,000 USD.
      The note is convertible into shares of the Company at $0.08 per
    share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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- 26 -

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 under the
Securities Exchange Act of 1934, our principal executive officer and principal
financial officer evaluated our disclosure controls and procedures (as defined
in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of December 31,
2010.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commissions rules and forms. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934 is accumulated and communicated to our principal executive
officer and our principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.

Based on this evaluation, these officers concluded that as of
December 31, 2010, our disclosure controls and procedures were not effective.
The ineffectiveness of our disclosure controls and procedures were due to
material weaknesses described below.

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) of the Securities Exchange Act of 1934) 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 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.

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, 2010, 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, 2010.

---

- 27 -

Weaknesses Identified

Management has identified material weaknesses in our internal
control over financial reporting primarily in the following areas:

- 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, 2010 financial statements.

Because of the inherent limitations in our technical accounting
knowledge of US GAAP, 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 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 by December 31, 2012.

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, 2010 that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.

ITEM 9B OTHER INFORMATION

On February 14, 2011, we entered into a debt agreement with
Asher Enterprises, Inc. in exchange for $53,000 in cash financing maturing on
November 16, 2011. The convertible note accrues interest at a rate of 8% per
annum to maturity and 22% thereafter. The note is convertible at 61% of the
closing price of the common shares on the day prior to the conversion date.

On April 18, 2011, we received a demand letter with respect to
a convertible promissory note dated February 14, 2011 issued to Asher
Enterprises, Inc. in the principal amount of $53,000 bearing a per annum
interest rate of 8%. The letter stated that the convertible promissory note
provides that we would be in default if we fail to comply with the reporting
requirements of the Securities Exchange Act of 1934. Based on this, the letter
stated that we were in default under the convertible promissory note and
demanded the immediate payment as provided in the convertible promissory note of
$79,500 together with default interest as provided in the convertible promissory
note. The letter stated that Asher Enterprises, Inc. would consider waiving this
default, provided that we immediately become current in our filing obligations.
Asher Enterprises, Inc. agreed to postpone the demand for payment, as long as we
provided them the periodic status of our reporting requirements.

On February 2, 2012, the board received a Notice of Resignation
from Dr. Manos Topoglidis to be effective March 1, 2012. Effective March 1,
2012, Dr. Manos Topoglidis ceased to be our Chief Technology Officer and
director. Dr. Topoglidiss resignation was not as a result of any disagreements
with our company on any matter relating to our operations, policies or
practices.

---

- 28 -

PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Directors and Executive Officers

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
      AppointedPlaton Tzouvalis
    Director President
    46
    February 14, 2005 October 5, 2006Ron Lizée
    Chief Financial Officer &
      Director
    52
    June 4, 2004Dr. Evan Manolis
    Director Chairman
    53
    May 8, 2007 September 2,
      2008


Business Experience

The following is a brief account of the education and business
experience of directors and executive officers 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.

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 29
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 Payment Systems 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.

---

- 29 -

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
eighteen 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.

Term of Office

Each director of our company is to serve until his successor is
elected and qualified or until his death, resignation or removal. Each officer
of our company is to hold office at the pleasure of our board of directors and
until their successors have been duly elected and qualified or until his death,
resignation or removal.

Family Relationships

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

Involvement in Certain Legal Proceedings

Our directors and executive officers 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;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- 30 -

| | 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 being found by a court of competent jurisdiction
      (in a civil action), the Commission or the Commodity Futures                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 4. | 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.                                                                                                                                                                                                                                                              

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 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, 2010, all filing requirements
applicable to our executive 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
      FormsDr. Evan Manolis
    Nil
    1
    1


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.

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- 31 -

Audit Committee and Audit Committee Financial
Expert

We currently do not have an audit committee. During the year
ended December 31, 2010, 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.

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, 2010 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, 2010 and, 2009, are set out in the
following summary compensation table.

SUMMARY COMPENSATION TABLE  YEARS ENDED
      DECEMBER 31, 2010 AND 2009Name and
      principal position
    Year
    Salary ($)
    Bonus ($)
    Stock awards
      ($)
    Option awards($)
    Non-equityincentive
      plan **compensation** ($)
    **Nonqualified**
      deferred compensation earnings
      ($)
    All other
      compensation ($)
    Total ($)Platon Tzouvalis
    2010 2009
    84,000 84,000
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    84,000 84,000Ron Lizée
    2010 2009
    61,271 81,215
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    61,271 81,215Dr. Manos Topoglidis
    2010 2009
    54,000 54,000
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    54,000 54,000


Our employment agreement with our President, Mr. Platon
Tzouvalis, dated April 1, 2007 was renewed over the years till March 31, 2011.
Mr. Platon Tzouvalis agreed to serve as our President and was obligated to
perform his duties and responsibilities in good faith and on a best efforts
basis. In consideration for his services, we paid him a monthly salary of
$7,000. We also compensated Mr. Platon Tzouvalis for any expenses he incurred in
carrying out his duties. On March 31, 2011, this employment contract was
terminated by mutual consent. Mr. Platon Tzouvalis still acts as our President.
The board is in the process of reviewing a new compensation package based on
shares and fees.

---

- 32 -

Our employment agreement with our Chief Technology Officer, Dr.
Manos Topoglidis, dated April 1, 2007 was renewed and was for a term of three
years ending March 31, 2011. Dr. Manos Topoglidis agreed to serve as our Chief
Technology Officer and was obligated to perform his duties and responsibilities
in good faith and on a best efforts basis. In consideration for his services, we
paid him a monthly salary of $4,500. We also compensated Dr. Manos Topoglidis
for any expenses he incurred in carrying out his duties. On March 31, 2011, this
employment agreement was terminated. On February 2, 2012, the board received a
Notice of Resignation from Dr. Manos Topoglidis to be effective March 1, 2012.
Effective March 1, 2012, Dr. Manos Topoglidis ceased to be our Chief
Technology Officer and director. Our director and Chief Financial Officer, Mr.
Ron Lizée has been with us since June of 2004 and is not on a contract. His
professional accounting firm invoices our company monthly at the same billable
rate as other clients.

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,
2010.

OUTSTANDING EQUITY AWARDS AT
      FISCAL YEAR-ENDOPTION AWARDS
    STOCK AWARDSName
      (a)
    Number ofSecurities UnderlyingUnexercisedOptions (#) Exercisable(b)
    **Number of**Securities **Underlying****Unexercised**Options
      (#) **Unexercisable** (c)
    Equity
      Incentive Plan Awards: **Number
      of** Securities **Underlying**
      **Unexercised** Unearned Options
      (#) (d)
    Option
      Exercise Price ($) (e)
    Option
      Expiration Date (f)
    Number
      of Shares or Units of Stock
      That Have Not Vested
      (#) (g)
    Market
      Value of Shares or
      Units of Stock That
      Have Not Have Vested ($)
      (h)
    Equity Incentive
      Plan Awards: Number of
      Unearned Shares, Units or
      Other Rights That Not Have
      Vested (#) (i)
    Equity Incentive
      Plan Awards: Market or
      Payout Value of Unearned
      Shares, Units or Other Rights
      That Not Vested (#)
      (j)Platon Tzouvalis
    250,000 600,000
    Nil Nil
    Nil Nil
    0.50 1.00
    Feb 12, 2017 Mar 22, 2012
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilRon Lizée
    150,000 100,000
    Nil Nil
    Nil Nil
    0.50 2.50
    Feb 12, 2017 May 3, 2016
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilDr. Manos Topoglidis
    200,000
    Nil
    Nil
    0.50
    Feb 12, 2017
    Nil
    Nil
    Nil
    Nil


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 year ended December 31,
2010.

---

- 33 -

Name
    Fees Earned or Paid
      in Cash ($)
    Stock Awards
      ($)
    Option Awards
      ($)
    Non-Equity Incentive
      Plan Compensation ($)
    Nonqualified Deferred
      Compensation Earnings ($)
    All Other
      Compensation ($)
    Total ($)Platon Tzouvalis
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilRon Lizée
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilDr. Manos Topoglidis
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilDr. Evan Manolis
    Nil
    Nil
    $50,0001
    Nil
    Nil
    Nil
    $50,000


1On June 1, 2010, we granted 1,200,000 options to
Dr. Evan Manolis, a director of our company, for the services rendered. The
options vest on a graded vesting schedule whereby 25% of the options vest 3
months after the grant date and every 3 months thereafter until fully vested.
They have an exercise price of $0.50 per share and are exercisable for a period
of 8 years from the date of grant., Subsequent to this grant, the Company
determined it was unauthorized as the number of options then outstanding
exceeded the amount allowable under our stock option plan. Therefore, the
Company amended this award by reducing the amount of options awarded to 500,000
in order to comply with the plan. As of December 31, 2010, Dr. Manolis had
500,000 options outstanding.

Retirement or Similar Benefit 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.

Resignation, Retirement, Other Termination, or Change in
Control Arrangements

We have no contract, agreement, plan or arrangement, whether
written or unwritten, that provides for payments to our directors or executive
officers at, following, or in connection with the resignation, retirement or
other termination of our directors or executive officers, or a change in control
of our company or a change in our directors or executive officers
responsibilities following a change in control.

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

Security ownership of certain beneficial owners and
management

In the following table, we have determined the number and
percentage of shares beneficially owned in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934 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.

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- 34 -

Title of class
    Name and address of beneficial
      owner
    Amount and nature of beneficial
      ownership
    Percent of class1Managementcommon stock
    Ron Lizée c/o Lizeé Gauthier CGA
      202-3550 Taylor St. East Saskatoon, SK Canada S7H 5H9
    600,000 2Direct
    2.1%common stock
    Evan T. Manolis 15300 West Ave, Suite 310
      Orland Park, IL 60462
    725,993 3Direct
    2.5%common stock
    Platon Tzouvalis 
      4 Isminis St. Chalandri 
      Athens, Greece 15232
    1,600,000 4Direct
    5.5%common stock
    Manos Topoglidis5Panagi Tsaldari 5 Marcousi
      Athens Greece 15122
    600,000 6Direct
    2.1%Total
    Directors and Executive 
      Officers as a Group
      (3)
    2,925,993
    10.1%5% Stockholderscommon stock
    Platon Tzouvalis 4 Isminis St. Chalandri
      Athens, Greece 15232
    1,600,000 4Direct
    5.5%common stock
    Elias Margellos 74 Konstadinoupoleos St
      16232 Vironas Greece
    2,120,000 Direct
    7.3%


1Percentage of ownership is
based on 28,858,481 common shares issued as of March 12, 2012. 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.
3Includes 225,993 shares of common stock and 500,000 stock
options exercisable within 60 days.4Includes 750,000 shares of common stock and 850,000 stock options
exercisable within 60 days.5Effective March 1, 2012, Dr. Manos Topoglidis ceased to be our Chief Technology Officer and director.6Includes 400,000 shares of common stock and 200,000 stock options exercisable within 60 days.

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 disclosed below, since January 1, 2009, there have
been no transactions, or currently proposed transactions, in which we were or
are to be a participant and the amount involved exceeds the lesser of $120,000
or one percent of the average of our total assets at year end for the last two
completed fiscal years, and in which any of the following persons had or will
have a direct or indirect material interest:

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| | (i)   | any director or executive officer of our
  company;                                                                                                                                                                                                                                                                                                                                                    
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                        
| | (ii)  | 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;                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                        
| | (iii) | any of our promoters and control persons; and                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                        
| | (iv)  | 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, 2010, a total of
      $61,271 (2009: $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, 2010 $109,816 was
      payable to Mr. Lizée.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                        
| | 2.    | We also incurred consulting fees to the President of
      $90,000 for the year ended December 31, 2010 (2009: $84,000). As at
      December 31, 2010 $174,000 was payable to our President.                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                        
| | 3.    | During the fiscal year ended December 31, 2010, we
      incurred consulting fees to Dr. Manos Topoglidis, our former Chief Technology
      Officer, of $54,000 for the year ended December 31, 2010 (2009: $54,000)
      as at December 31, 2010 $110,101 was payable.                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                        
| | 4.    | During the fiscal year ended December 31, 2010, we
      incurred consulting fees to director of $Nil (2009: $20,000). As at
      December 31, 2010, $Nil was payable to the
director.                                                                                                                                                                                                                

Our consulting agreement with our former President, Mr.
Constantine Poulios, dated April 1, 2008 was renewed and was for a term of three
years ending March 31, 2011. Mr. Constantine Poulios 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 had the obligation to serve our
company in good faith and on a best efforts basis. In consideration for his
services, we paid him a monthly fee of $10,000. We also compensated Mr.
Constantine Poulios for any expenses he incurred 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. On March 31, 2011, the consulting
agreement was terminated by mutual consent. Mr. Poulios still assists the
company on an as needed basis.

Employment Contracts

For information regarding compensation for our executive
officers and directors, see Item 11. Executive Compensation.

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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, 2010 and 2009:

Fees
    
    2010
    
    
    2009Audit Fees
    $
    106,919
    
    $
    68,661Audit related Fees
    
    Nil
    
    
    NilTax fees
    
    3,293
    
    
    6,371Other fees
    
    Nil
    
    
    NilTotal Fees
    $
    110,212
    
    $
    75,032


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, 2010 and
2009, 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

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 board of directors before 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.

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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 Bylaws3.1
    Articles of Incorporation (incorporated by reference to
      an exhibit to an exhibit to our registration statement on Form 10-SB filed
      on May 24, 2002, as amended)3.2
    Bylaws, as amended (incorporated by reference to an
      exhibit to an exhibit to our registration statement on Form 10- SB filed
      on May 24, 2002, as amended)(10)
    Material Contracts10.1
    Agreement for the Sale of Stock between our company and
      Dr. Leftheris Georgakopoulos dated February 13, 2006 (incorporated by
      reference to an exhibit to 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 (incorporated by reference to an exhibit to 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 (incorporated by reference to an exhibit
      to 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 (incorporated by reference to an exhibit to 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 (incorporated by reference to an exhibit to 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 (incorporated by reference to an exhibit to 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 (incorporated by reference to an exhibit to 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 (incorporated by reference to an exhibit to
      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 (incorporated by reference to an exhibit to
      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 (incorporated
      by reference to an exhibit to an exhibit to our current report on Form 8-K
      filed on March 12, 2009)


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- 38 -

10.11
    Promissory note dated June 12, 2008 issued to Ron and
      Johanne Lizée by our company (incorporated by reference to an exhibit to
      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 (incorporated by reference to an exhibit to
      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 (incorporated by reference to an exhibit to
      our annual report on Form 10-K filed on April 15, 2010)10.14
    Employment Agreement dated April 1, 2007 between our
      company and Manos Topoglidis (incorporated by reference to an exhibit to
      our annual report on Form 10-K filed on April 15, 2010)10.15
    Management and Operational Services Agreement dated
      October 1, 2008 between our company and Vardisto Investments Limited
      (incorporated by reference to an exhibit to our annual report on Form 10-
      K filed on April 15, 2010)10.16*
    Consulting Agreement dated April 1, 2008 with Constantine
      Poulios10.17*
    Share Exchange Agreement dated January 31, 2009 with
      Vardisto Investments Limited and its shareholder10.18*
    Amendment Agreement dated December 29, 2010 to the Share
      Exchange Agreement dated January 31, 2009 with Vardisto Investments
      Limited and its shareholder10.19*
    Promissory note dated December 29, 2010 issued to Inter
      Jura Cy (Services) Ltd.10.20*
    Convertible Promissory Note dated February 14, 2011
      issued to Asher Enterprises, Inc.(31)
    Section 302 Certifications31.1*
    Section 302 Certification of Platon Tzouvalis31.2*
    Section 302 Certification of Ron Lizée(32)
    Section 906 Certifications32.1*
    Section 906 Certification of Platon Tzouvalis32.2*
    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 Tzouvalis         
|-----------------------------
|Platon Tzouvalis             
|President & Director         
|(Principal Executive Officer)
|Date: March 12, 2012         

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 Tzouvalis                                                
|--------------------------------------------------------------------
|Platon Tzouvalis                                                    
|President & Director                                                
|(Principal Executive Officer)                                       
|Date: March 12, 2012                                                
|                                                                    
|/s/ Ron Lizée                                                       
|Ron Lizée                                                           
|Chief Financial Officer & Director                                  
|(Principal Financial Officer and Principal Accounting
      Officer)
|Date: March 12, 2012                                                
|                                                                    
|/s/ Dr. Evan Manolis                                                
|Dr. Evan Manolis                                                    
|Director                                                            
|Date: March 12, 2012                                                

---