U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-KSB



(Mark One)



xANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2007



oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from ______________ to ______________



Commission File Number 000-51833



Verbena Pharmaceuticals Inc.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 20-4142447                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               |  |                                     
|843 Persimmon Lane
Langhorne PA                                |  | 19047                               
|(Address of principal executive offices)                       |  | (zip code)                          



Registrants telephone number, including area code:

((215-741-7006)



Securities registered under Section 12(b) of the Exchange Act:



None.



Securities registered under Section 12(g) of the Exchange Act:



Common Stock, $0.0001 par value per share

(Title of Class)



Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. o



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



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB. o



Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No. o



The Company’s revenues for fiscal year end December 31, 2007 were $0.



As of August 27, 2008, there were 2,500,000 shares of common stock outstanding.



DOCUMENTS INCORPORATED BY REFERENCE:

None



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FORWARD-LOOKING STATEMENTS



Certain statements made in this Annual Report on Form 10-KSB are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Verbena Pharmaceuticals Inc. (the Company) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.



Transitional Small Business Disclosure Format (check one): Yes o No x





PART I



Item 1. Description of Business.



Introduction



Verbena Pharmaceuticals Inc. (“we”, “us”, “our”, the “Company” or the “Registrant”) was incorporated in the State of Delaware on January 3, 2006 and maintains its principal executive offices at 270 Presidential Drive, Wilmington, DE 19807. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination. The Company filed a registration statement on Form 10-SB with the U.S. Securities and Exchange Commission (the SEC) on March 7, 2006, and since its effectiveness, the Company has begun efforts to identify a possible business combination. However, the Company has not entered into a letter of intent or any definitive agreement concerning any target business. The business purpose of the Company is to seek the acquisition of, or merger with, an existing company.



The Company, based on proposed business activities, is a "blank check" company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. The Company, as defined in Rule 12b-2 under the Exchange Act, also is a shell company, defined as a company with no or nominal assets (other than cash) and no or nominal operations. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.



The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Companys principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.



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Competition



Currently, with our primary goal the acquisition of a target company or business seeking the perceived advantages of being a publicly held corporation, the Company faces vast competition from other shell companies with the same objectives. The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.



Employees



The Company currently has no employees other than its sole officer.



Risk Factors



An investment in our securities is highly speculative and subject to numerous and substantial risks. These risks include those set forth below and elsewhere in this Form 10-KSB. Readers are encouraged to review these risks carefully before making any investment decision.



There may be conflicts of interest between our management and our non-management stockholders.



Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of the Company. A conflict of interest may arise between our management's personal pecuniary interest and its fiduciary duty to our stockholders. In addition, our management is currently involved with other blank check companies, and in the pursuit of business combinations, conflicts with such other blank check companies with which it is, and may in the future become, affiliated, may arise. If we and the other blank check companies that our management is affiliated with desire to take advantage of the same opportunity, then those members of management that are affiliated with both companies would abstain from voting upon the opportunity. In the event of identical officers and directors, the officers and directors will arbitrarily determine the company that will be entitled to proceed with the proposed transaction.



Our business is difficult to evaluate because we have no operating history.



As the Company has no operating history or revenue and only minimal assets, there is a risk that we will be unable to consummate a business combination. The Company has had no recent operating history nor any revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss that will increase continuously until we can consummate a business combination with a profitable business opportunity. We cannot assure you that we can identify a suitable business opportunity and consummate a business combination.





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There is competition for those private companies suitable for a merger transaction of the type contemplated by management.



The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.



Future success is highly dependent on the ability of management to locate and attract a suitable acquisition.



The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.



The Company has no existing agreement for a business combination or other transaction.



We have no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested in a company with active business operations.



Management intends to devote only a limited amount of time to seeking a target company which may adversely impact our ability to identify a suitable acquisition candidate.



While seeking a business combination, management anticipates devoting very limited time to the Company's affairs. Our sole officer has not entered into a written employment agreement with us and is not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination.



The time and cost of preparing a private company to become a public reporting company may preclude us from entering into a merger or acquisition with the most attractive private companies.



Target companies that fail to comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements for the company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.





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The Company may be subject to further government regulation which would adversely affect our operations.



Although we are subject to the reporting requirements under the Exchange Act, management believes we are not subject to regulation under the Investment Company Act of 1940, as amended (the Investment Company Act), since we are not engaged in the business of investing or trading in securities. If we engage in business combinations which result in our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the SEC as to our status under the Investment Company Act and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.



Any potential acquisition or merger with a foreign company may subject us to additional risks.



If we enter into a business combination with a foreign company, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.



There is currently no trading market for our common stock, and liquidity of shares of our common stock is limited.



Our shares of common stock are not registered under the securities laws of any state or other jurisdiction, and accordingly there is no public trading market for our common stock. Further, no public trading market is expected to develop in the foreseeable future unless and until the Company completes a business combination with an operating business and the Company thereafter files a registration statement under the Securities Act. Therefore, outstanding shares of our common stock cannot be offered, sold, pledged or otherwise transferred unless subsequently registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. Shares of our common stock cannot be sold under the exemptions from registration provided by Rule 144 under or Section 4(1) of the Securities Act, in accordance with the letter from Richard K. Wulff, Chief of the Office of Small Business Policy of the Securities and Exchange Commissions Division of Corporation Finance, to Ken Worm of NASD Regulation, dated January 21, 2000. This letter provides that certain private transfers of the shares of common stock also may be prohibited without registration under federal securities laws. Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex, especially in respect of those exemptions affording flexibility and the elimination of trading restrictions in respect of securities received in exempt transactions and subsequently disposed of without registration under the Securities Act or state securities laws.



There are issues impacting liquidity of our securities with respect to the SECs review of a future resale registration statement.



Since our shares of common stock issued prior to a business combination or reverse merger cannot currently, nor will they for a considerable period of time after we complete a business combination, be available to be offered, sold, pledged or otherwise transferred without being registered pursuant to the Securities Act, we will likely file a resale registration statement on Form SB-2 or Form S-1, or some other available form, to register for resale such shares of common stock.  We cannot control this future registration process in all respects as some matters are outside our control.  Even if we are successful in causing the effectiveness of the resale registration statement, there can be no assurances that the occurrence of subsequent events may not preclude our ability to maintain the effectiveness of the registration statement. Any of the foregoing items could have adverse effects on the liquidity of our shares of common stock.



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In addition, the SEC has recently disclosed that it has developed internal guidelines concerning the use of a resale registration statement to register the securities issued to certain investors in private investment in public equity (PIPE) transactions, where the issuer has a market capitalization of less than $75 million and, in general, does not qualify to file a Registration Statement on Form S-3 to register its securities.  The SEC has taken the position that  these smaller issuers may not be able to rely on Rule 415 under the Securities Act, which generally permits the offer and sale of securities on a continued or delayed basis over a period of time, but instead would require that the issuer offer and sell such securities in a  direct or "primary" public offering, at a fixed price, if the facts and circumstances are such that the SEC believes the investors seeking to have their shares registered are underwriters and/or affiliates of the issuer.  It appears that the SEC in most cases will permit a registration for resale of up to one third of the total number of shares of common stock then currently owned by persons who are not affiliates of such issuer and, in some cases, a larger percentage depending on the facts and circumstances.  Staff members also have indicated that an issuer in most cases will have to wait until the later of six months after effectiveness of the first registration or such time as substantially all securities registered in the first registration are sold before filing a subsequent registration on behalf of the same investors.  Since, following a reverse merger or business combination, we may have little or no tradable shares of common stock, it is unclear as to how many, if any, shares of common stock the SEC will permit us to register for resale, but SEC staff members have indicated a willingness to consider a higher percentage in connection with registrations following reverse mergers with shell companies such as the Company.  The SEC may require as a condition to the declaration of effectiveness of a resale registration statement that we reduce or cut back the number of shares of common stock to be registered in such registration statement.   The result of the foregoing is that a stockholders liquidity in our common stock may be adversely affected in the event the SEC requires a cut back of the securities as a condition to allow the Company to rely on Rule 415 with respect to a resale registration statement, or, if the SEC requires us to file a primary registration statement.



We have never paid dividends on our common stock.



We have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy.



The Company may be subject to certain tax consequences in our business, which may increase our cost of doing business.



We may not be able to structure our acquisition to result in tax-free treatment for the companies or their stockholders, which could deter third parties from entering into certain business combinations with us or result in being taxed on consideration received in a transaction. Currently, a transaction may be structured so as to result in tax-free treatment to both companies, as prescribed by various federal and state tax provisions. We intend to structure any business combination so as to minimize the federal and state tax consequences to both us and the target entity; however, we cannot guarantee that the business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes that may have an adverse effect on both parties to the transaction.



Our business will have no revenue unless and until we merge with or acquire an operating business.



We are a development stage company and have had no revenue from operations. We may not realize any revenue unless and until we successfully merge with or acquire an operating business.





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The Company intends to issue more shares in a merger or acquisition, which will result in substantial dilution.



Our Certificate of Incorporation authorizes the issuance of a maximum of 150,000,000 shares of common stock and a maximum of 10,000,000 shares of preferred stock. Any merger or acquisition effected by us may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arms-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially adversely affected.



Our principal stockholders may engage in a transaction to cause the Company to repurchase their shares of common stock.



In order to provide an interest in the Company to a third party, our principal stockholders may choose to cause the Company to sell Company securities to third parties, with the proceeds of such sale being utilized by the Company to repurchase shares of common stock held by the stockholders. As a result of such transaction, our management, principal stockholders and Board of Directors may change.



The Company has conducted limited market research of business opportunities, which may affect our ability to identify a business to merge with or acquire.



The Company has conducted limited market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists for a merger or acquisition as contemplated by us. Our management has not identified any specific business combination or other transactions for formal evaluation by us, such that it may be expected that any such target business or transaction will present such a level of risk that conventional private or public offerings of securities or conventional bank financing will not be available. There is no assurance that we will be able to acquire a business opportunity on terms favorable to us. Decisions as to which business opportunity to participate in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.



Because we may seek to complete a business combination through a reverse merger, following such a transaction we may not be able to attract the attention of major brokerage firms.



Additional risks may exist since we will assist a privately held business to become public through a reverse merger. Securities analysts of major brokerage firms may not provide coverage of our Company since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of our post-merger company in the future.





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We cannot assure you that following a business combination with an operating business, our common stock will be listed on NASDAQ or any other securities exchange.



Following a business combination, we may seek the listing of our common stock on NASDAQ or the American Stock Exchange. However, we cannot assure you that following such a transaction, we will be able to meet the initial listing standards of either of those or any other stock exchange, or that we will be able to maintain a listing of our common stock on either of those or any other stock exchange. After completing a business combination, until our common stock is listed on the NASDAQ or another stock exchange, we expect that our common stock would be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, where our stockholders may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock. In addition, we would be subject to an SEC rule that, if it failed to meet the criteria set forth in such rule, imposes various practice requirements on broker-dealers who sell securities governed by the rule to persons other than established customers and accredited investors. Consequently, such rule may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital following a business combination.



Authorization of preferred stock.



Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of its authorized preferred stock, there can be no assurance that the Company will not do so in the future.



This report on Form 10-KSB contains forward-looking statements and information relating to us, our industry and to other businesses.



These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this prospectus, the words "estimate," "project," "believe," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are subject to risks and uncertainties that may cause our actual results to differ materially from those contemplated in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.



Item 2. Description of Property.



The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.



Item 3. Legal Proceedings.



Presently, there are not any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.





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Item 4. Submission of Matters to a Vote of Security Holders.



None.



PART II



Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.



Common Stock



Our Certificate of Incorporation authorizes the issuance of up to 150,000,000 shares of common stock, par value $.0001 per share (the Common Stock). The Common Stock is not listed on a publicly-traded market. As of August 27, 2008, there was one holder of record of the Common Stock.



Preferred Stock



Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, par value $.0001 per share (the Preferred Stock). The Company has not yet issued any of its Preferred Stock.



Dividend Policy



The Company has not declared or paid any cash dividends on its Common Stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Board of Directors and will depend on the Companys earnings, if any, its capital requirements and financial condition and such other factors as the Board of Directors may consider.



Securities Authorized for Issuance Under Equity Compensation Plans.



None.



Recent Sales of Unregistered Securities



The Registrant sold 2,500,000 shares of Common Stock on January 31, 2006, to Randy Milby, the sole officer and director of the Registrant, for an aggregate purchase price of $12,500. The Registrant sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act.



The purchaser represented in writing that he acquired the securities for his own account. A legend was placed on the stock certificate stating that the securities have not been registered under the Securities Act and cannot be sold or otherwise transferred without an effective registration or an exemption therefrom, but may not be sold pursuant to the exemptions provided by Section 4(1) of the Securities Act or Rule 144 under the Securities Act, in accordance with the letter from Richard K. Wulff, Chief of the Office of Small Business Policy of the Securities and Exchange Commissions Division of Corporation Finance, to Ken Worm of NASD Regulation, Inc., dated January 21, 2000.





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On November 14, 2007, the Company redeemed, in accordance with The Redemption Agreement (the Redemption Agreement) an aggregate of 2,500,000 shares of its common stock from the then current sole stockholder (Selling Stockholder) for an aggregate purchase price equal to $50,000. The purchase price was paid as $16,700 in cash and a promissory note in the principal amount of $33,300, both of which were   delivered to the Selling Stockholder upon the execution and delivery of the Redemption Agreement. The promissory note provides that the principal amount shall accrue interest at 9.25% per annum, and shall be paid no later than two business days after the Company has completed a transaction (the Merger) pursuant to which the Company is no longer a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act) and has received approval to commence the trading of its securities on the Pink Sheets LLC, the Nasdaq Over-the-Counter Bulletin Board or other established trading market. Upon execution and delivery of the Redemption Agreement (the Closing), the Selling Stockholder was no longer a stockholder of the Company. At the Closing, the shares of common stock were placed in escrow with an escrow agent (the Escrow Agreement) pursuant to an escrow agreement (the Escrow Agreement).



On November 14, 2007, the Company sold 2,500,000 shares of common stock to Genesis Holdings, Inc., a Texas corporation (Genesis). The Company sold such shares of common stock to Genesis for an aggregate purchase price equal to $50,000 pursuant to the terms and conditions contained in the common stock purchase agreement (the Purchase Agreement). In accordance with the Purchase Agreement, the purchase price was paid as $16,700 in cash and a promissory note in the principal amount of $33,300, both of which were delivered to the Company upon the execution and delivery of the Purchase Agreement. The promissory note provides that the principal amount shall accrue interest at 9.25% per annum, and shall be paid no later than two business days after the Company has completed the Merger. A condition to the sale of stock was that all outstanding indebtedness of the Company to the Selling Stockholder shall have been converted to equity and canceled. Genesis, as part of the Purchase Agreement, agreed to enter into the Escrow Agreement.



In accordance with both promissory notes discussed above, if the Merger has not been completed within one year of the promissory notes, then, at any time thereafter, unless all principal and interest outstanding on the promissory notes shall have previously been paid, upon written notice to the escrow agent under the Escrow Agreement, the 2,500,000 shares of common stock then held in escrow shall be returned to the Selling Stockholder  in exchange for the cancellation of the promissory notes, and the Company shall receive from the escrow agent and redeem, for a nominal purchase price equal to the par value thereof, the 2,500,000 shares of Common Stock owned by Genesis. These common stock shares shall represent all then outstanding shares of capital stock on a fully diluted basis. The parties shall take such action and complete such filings as may be necessary, at the expense of Genesis, in accordance with applicable securities laws to ensure that the actions described herein are in compliance therewith. Either Genesis or the Companys failure to take any action described herein shall be deemed an Event of Default. If there is any Event of Default the entire balance of principal of the promissory note then outstanding shall bear interest at 25% per annum thereafter.



Item 6. Managements Discussion and Analysis or Plan of Operation.



Plan of Operation



The Company has not realized any revenues from operations since inception, and its plan of operation for the next twelve months is to locate a suitable acquisition or merger candidate and consummate a business combination. The Company may need additional cash advances from stockholders or loans from other parties to pay for operating expenses until the Company consummates the merger with a privately-held company. Although it is currently anticipated that the Company can satisfy its cash requirements with additional cash advances or loans from other parties, if needed, for at least the next twelve months, the Company can provide no assurance that it can continue to satisfy its cash requirements for such period.





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Results of Operations



The Company has not conducted any active operations since inception, except for its efforts to locate a suitable acquisition or merger transaction. No revenue has been generated by the Company during such period, and it is unlikely the Company will have any revenues unless it is able to consummate or effect an acquisition of, or merger with, an operating company, of which there can be no assurance.



Item 7. Financial Statements.



VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Table of Contents

December 31, 2007



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|                                                        |  |  | Page(s)  
|                                                        |  |  |          
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |  |  | F-1      
|                                                        |  |  |          
|FINANCIAL STATEMENTS                                    |  |  |          
|Balance Sheet                                           |  |  | F-2      
|Statements of Operations                                |  |  | F-3      
|Statement of Changes in Stockholder's Deficiency        |  |  | F-4      
|Statement of Cash Flows                                 |  |  | F-5      
|                                                        |  |  |          
|NOTES TO FINANCIAL STATEMENTS                           |  |  | F-6 - F-8







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Report of Independent Registered Public Accounting Firm









To the Board of Directors

Verbena Pharmaceuticals Inc.





We have audited the accompanying balance sheet of Verbena Pharmaceuticals Inc. (a development stage company) (the Company) as of December 31, 2007, and the related statements of operations, stockholders (deficiency), and cash flows for the year then ended, the period January 3, 2006 (inception) through December 31, 2006, and the cumulative period January 3, 2006 (inception) through December 31, 2007. The Companys management is responsible for these financial statements.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits 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 auditing 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position as of December 31, 2007 and the results of its operations and its cash flows for the year ended December 31, 2007, the period January 3, 2006 (inception) through December 31, 2006, and the cumulative period January 3, 2006 (inception) through December 31, 2007, 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 is in the development stage and has suffered recurring losses. This raises substantial doubt about its ability to continue as a going concern. Managements plans in regards to these matters are also described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.







/s/ Raich Ende Malter & Co. LLP



RAICH ENDE MALTER & CO. LLP

New York, New York

August 27, 2008







F-1





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Balance Sheet

December 31, 2007



|                                                                                                        |  |   |         
|------------------------------------------------------------------------------------------------------- |  | - | --------
|ASSETS                                                                                                  |  |  
|Total assets                                                                                            |  | $ | 0       
|                                                                                                        |  |   |         
|                                                                                                        |  |   |         
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                    |  |   |         
|Current liabilities                                                                                     |  |   |         
|Accounts payable and accrued expenses                                                                   |  | $ | 70      
|                                                                                                        |  |   |         
|Total liabilities                                                                                       |  | $ | 70      
|                                                                                                        |  |   |         
|                                                                                                        |  |   |         
|Stockholders equity                                                                                    |  |   |         
|Preferred stock - $.0001 par value; 10,000,000 shares authorized; -0- shares issued and outstanding     |  |   | -       
|Common stock - $.0001 par value, 150,000,000 shares authorized; 2,500,000 shares issued and outstanding |  |   | 250     
|Additional paid-in capital                                                                              |  |   | 91,682  
|(Deficit) accumulated during the development stage                                                      |  |   | (92,002)
|                                                                                                        |  |   |         
|Total stockholders equity                                                                              |  |   | (70)    
|                                                                                                        |  |   |         
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                              |  | $ | 0       



See notes to financial statements.





F-2





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Statements of Operations



|                                                     |                                      |           |                                                                   |   |                                                                   |  |   |         
|---------------------------------------------------- | ------------------------------------ | --------- | ----------------------------------------------------------------- | - | ----------------------------------------------------------------- |  | - | --------
|                                                     | For the Year
Ended
December 31,
2007 |           | Period from
January 3, 2006
(Inception)
Through
December 31,
2006 |   | Period from
January 3, 2006
(Inception)
Through
December 31,
2007
|Revenues                                             | $                                    | -         |                                                                   | $ | -                                                                 |  | $ | -       
|General and administrative expenses                  |                                      | 39,326    |                                                                   |   | 51,609                                                            |  |   | 90,935  
|Interest                                             |                                      | 467       |                                                                   |   | 600                                                               |  |   | 1,067   
|Net (loss)                                           | $                                    | (39,793)  |                                                                   | $ | (52,209)                                                          |  | $ | (92,002)
|                                                     |                                      |           |                                                                   |   |                                                                   |  |   |         
|Basic and diluted (loss) per share                   | $                                    | (0.02)    |                                                                   | $ | (0.02)                                                            |  |   |         
|                                                     |                                      |           |                                                                   |   |                                                                   |  |   |         
|Weighted average number of common shares outstanding |                                      | 2,500,000 |                                                                   |   | 2,500,000                                                         |  |   |         



See notes to financial statements.





F-3





---



VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Statement of Changes in Stockholders Equity

For the period January 3, 2006 (Inception) Through December 31, 2007



|                                                |  |              |           |        |     |                |                            |                      |        |                                                    |          |          |   |             |   |   |          |   |          |         
|----------------------------------------------- |  | ------------ | --------- | ------ | --- | -------------- | -------------------------- | -------------------- | ------ | -------------------------------------------------- | -------- | -------- | - | ----------- | - | - | -------- | - | -------- | --------
|                                                |  |              |           |        |     |                |                            |                      |        | (Deficit)
Accumulated
During the
Development
Stage |          |          |   |             |   |   |          |  
|                                                |  |              |           |        |     |                |                            |                      |        |                                                    |          |          |   |             |   |   |         
|                                                |  |              |           |        |     |                | Additional
Paid-In
Capital |                      |        |                                                    |          |          |   |             |   |  
|                                                |  | Common Stock |           |        |     | Treasury Stock |                            | Stockholders
Equity
|                                                |  | Shares       |           | Amount |     |                |                            | Shares               |        | Amount                                             |         
|Balance January 3, 2006 (inception)             |  | -            |           | $      | -   |                | $                          | -                    |        | $                                                  | -        |          | - |             | $ | - |          | $ | -       
|Issuance of common stock on January 31, 2006    |  |              | 2,500,000 |        |     | 250            |                            |                      | 12,250 |                                                    |          | -        |   | -           |   |   | -        |   |          | 12,500  
|Capital contributions from stockholder          |  |              | -         |        |     | -              |                            |                      | 19,250 |                                                    |          | -        |   | -           |   |   | -        |   |          | 19,250  
|                                                |  |              |           |        |     |                |                            |                      |        |                                                    |          |          |   |             |   |   |          |   |          |         
|Net (loss)                                      |  |              | -         |        |     | -              |                            |                      | -      |                                                    |          | (52,209) |   | -           |   |   | -        |   |          | (52,209)
|                                                |  |              |           |        |     |                |                            |                      |        |                                                    |          |          |   |             |   |   |          |   |          |         
|Balance December 31, 2006                       |  | 2,500,000    |           | $      | 250 |                | $                          | 31,500               |        | $                                                  | (52,209) |          | - |             | $ | - |          | $ | (20,459)
|Capital contributions from stockholder          |  |              | -         |        |     | -              |                            |                      | 60,182 |                                                    |          | -        |   | -           |   |   | -        |   |          | 60,182  
|Purchase of treasury stock on November 14, 2007 |  |              | -         |        |     | -              |                            |                      | -      |                                                    |          | -        |   | (2,500,000) |   |   | (16,700) |   |          | (16,700)
|Issuance of treasury stock on November 14, 2007 |  |              | -         |        |     | -              |                            |                      | -      |                                                    |          | -        |   | 2,500,000   |   |   | 16,700   |   |          | 16,700  
|                                                |  |              |           |        |     |                |                            |                      |        |                                                    |          |          |   |             |   |   |          |   |          |         
|Net (loss)                                      |  |              | -         |        |     | -              |                            |                      | -      |                                                    |          | (39,793) |   | -           |   |   | -        |   |          | (39,793)
|                                                |  |              |           |        |     |                |                            |                      |        |                                                    |          |          |   |             |   |   |          |   |          |         
|Balance December 31, 2007                       |  | 2,500,000    |           | $      | 250 |                | $                          | 91,682               |        | $                                                  | (92,002) |          | - |             | $ | - |          | $ | (70)    



See notes to financial statements.





F-4





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Statements of Cash Flows



|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|--------------------------------------------------------------------------- |  | ------------------------------------ | -------- | ----------------------------------------------------------------- | - | ----------------------------------------------------------------- |  | - | --------
|                                                                            |  | For the Year
Ended
December 31,
2007 |          | Period from
January 3, 2006
(Inception)
Through
December 31,
2006 |   | Period from
January 3, 2006
(Inception)
Through
December 31,
2007
|Cash flows from operating activities:                                       |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Net (loss)                                                                  |  | $                                    | (39,793) |                                                                   | $ | (52,209)                                                          |  | $ | (92,002)
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Accounts payable                                                            |  |                                      | (4,500)  |                                                                   |   | 4,570                                                             |  |   | 70      
|Accrued interest on stockholder loan                                        |  |                                      | (600)    |                                                                   |   | 600                                                               |  |   | -       
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Net cash (used in) operating activities                                     |  |                                      | (44,893) |                                                                   |   | (47,039)                                                          |  |   | (91,932)
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Cash flows from financing activities:                                       |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Proceeds from issuance of common stock                                      |  |                                      | -        |                                                                   |   | 12,500                                                            |  |   | 12,500  
|Additional capital contributions from sole shareholder                      |  |                                      | 60,182   |                                                                   |   | 19,250                                                            |  |   | 79,432  
|Proceeds from (repayment of) stockholders loan                             |  |                                      | (17,500) |                                                                   |   | 17,500                                                            |  |   | -       
|Purchase of treasury stock                                                  |  |                                      | (16,700) |                                                                   |   | -                                                                 |  |   | (16,700)
|Sale of treasury stock                                                      |  |                                      | 16,700   |                                                                   |   | -                                                                 |  |   | 16,700  
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Cash provided by financing activities                                       |  |                                      | 42,682   |                                                                   |   | 49,250                                                            |  |   | 91,932  
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Net increase in cash and cash equivalents                                   |  |                                      | (2,211)  |                                                                   |   | 2,211                                                             |  |   | -       
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Cash and cash equivalents - beginning                                       |  |                                      | 2,211    |                                                                   |   | -                                                                 |  |   | -       
|                                                                            |  |                                      |          |                                                                   |   |                                                                   |  |   |         
|Cash and cash equivalents - ending                                          |  | $                                    | -        |                                                                   | $ | 2,211                                                             |  | $ | -       



See notes to financial statements.





F-5





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Notes to Financial Statements

December 31, 2007





1

-

ORGANIZATION AND BUSINESS



Verbena Pharmaceuticals Inc., a development stage company (the "Company"), was incorporated in the State of Delaware on January 3, 2006.  All activities of the Company to date relate to its organization, initial funding and share issuance.  The Company is looking to acquire an existing company or acquire the technology to begin operations.



The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business.  The Company has had no revenue and has incurred accumulated net losses from January 3, 2006 (inception) through December 31, 2007 of $92,002.  These factors, among others, raise substantial doubt about the Companys ability to continue as a going concern.  In addition, the Companys development activities since inception have been financially sustained through stockholder loans and contributions.  The ability of the Company to continue as a going concern is dependent upon managements plan to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock, receive additional loans from its shareholders and, ultimately, the achievement of significant operating revenues.  The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.



2

-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



a.

Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



b.

Cash Equivalents - For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.  There are no cash equivalents at the balance sheet date.



c.

Income Taxes  The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.



The Companys gross deferred tax asset related to capitalized startup costs totaled approximately $20,000, an increase of $12,000 for the year ended December 31, 2007, and has been fully offset by a valuation allowance.  The variance between the Statutory Tax Rate of 34% and the Actual Tax Rate of 0% is attributed to the capitalization of the Companys start-up costs, the surtax exemption and the valuation allowance.





F-6





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Notes to Financial Statements

December 31, 2007



On January 1, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48).  There was no impact on the Companys consolidated financial position, results of operations or cash flows at December 31, 2007 and for the year then ended as a result of implementing FIN 48.  At the adoption date of January 1, 2007 and at December 31, 2007, the Company did not have any unrecognized tax benefits.  The Companys practice is to recognize interest and/or penalties related to income tax matters in income tax expense.  As of January 1, 2007 and December 31, 2007, the Company had no accrued interest or penalties.  The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since its inception.  All of its tax years are subject to federal and state tax examination.



d.

Loss Per Common Share - Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.  The Company does not have any potentially dilutive instruments.



e.

Fair Value of Financial Instruments - The carrying value of current assets and liabilities approximates fair value due to the short period of time to maturity.



3

-

RELATED PARTY TRANSACTIONS



The Company utilizes the office space and equipment of its sole stockholder at no cost. Management estimates such amounts to be immaterial.



The Company had two notes payable to its sole stockholder aggregating $17,500 and bearing interest at 4% per annum.  Interest expense for the year ended December 31, 2007 and 2006 was $467 and $600, respectively, and interest expense for the period January 3, 2006(inception) through December 31, 2007 was $1,067.  The entire amount, principal and accrued interest of $18,507, was paid in full on September 1, 2007.



The sole stockholder made additional contributions to additional paid-in-capital in 2007 and 2006 as follows:



|                   |  |   |       
|------------------ |  | - | ------
|April 20, 2006     |  | $ | 6,000 
|July 17, 2006      |  |   | 2,400 
|August 14, 2006    |  |   | 3,200 
|September 5, 2006  |  |   | 5,150 
|September 25, 2006 |  |   | 2,500 
|                   |  | $ | 19,250
|                   |  |   |       
|March 12, 2007     |  | $ | 10,000
|April 2, 2007      |  |   | 10,000
|August 21, 2007    |  |   | 1,000 
|August 31, 2007    |  |   | 33,700
|October 22, 2007   |  |   | 5,482 
|                   |  | $ | 60,182





F-7





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Notes to Financial Statements

December 31, 2007



On November 14, 2007, the Company redeemed, in accordance with The Redemption Agreement (the Redemption Agreement) an aggregate of 2,500,000 shares of its common stock from the then current sole stockholder (Selling Stockholder) for an aggregate purchase price equal to $50,000. The purchase price was paid as $16,700 in cash and a promissory note in the principal amount of $33,300, both of which were delivered to the Selling Stockholder upon the execution and delivery of the Redemption Agreement. The promissory note provides that the principal amount shall accrue interest at 9.25% per annum, and shall be paid no later than two business days after the Company has completed a transaction (the Merger) pursuant to which the Company is no longer a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act) and has received approval to commence the trading of its securities on the Pink Sheets LLC, the Nasdaq Over-the-Counter Bulletin Board or other established trading market. Upon execution and delivery of the Redemption Agreement (the Closing), the Selling Stockholder was no longer a stockholder of the Company. At the Closing, the shares of common stock were placed in escrow with an escrow agent (the Escrow Agreement) pursuant to an escrow agreement (the Escrow Agreement).



On November 14, 2007, the Company sold 2,500,000 shares of common stock to Genesis Holdings, Inc., a Texas corporation (Genesis). The Company sold such shares of common stock to Genesis for an aggregate purchase price equal to $50,000 pursuant to the terms and conditions contained in the common stock purchase agreement (the Purchase Agreement). In accordance with the Purchase Agreement, the purchase price was paid as $16,700 in cash and a promissory note in the principal amount of $33,300, both of which were delivered to the Company upon the execution and delivery of the Purchase Agreement. The promissory note provides that the principal amount shall accrue interest at 9.25% per annum, and shall be paid no later than two business days after the Company has completed the Merger. A condition to the sale of stock was that all outstanding indebtedness of the Company to the Selling Stockholder shall have been converted to equity and canceled. Genesis, as part of the Purchase Agreement, agreed to enter into the Escrow Agreement.



In accordance with both promissory notes discussed above, if the Merger has not been completed within one year of the promissory notes, then, at any time thereafter, unless all principal and interest outstanding on the promissory notes shall have previously been paid, upon written notice to the escrow agent under the Escrow Agreement, the 2,500,000 shares of common stock then held in escrow shall be returned to the Selling Stockholder  in exchange for the cancellation of the promissory notes, and the Company shall receive from the escrow agent and redeem, for a nominal purchase price equal to the par value thereof, the 2,500,000 shares of Common Stock owned by Genesis. These common stock shares shall represent all then outstanding shares of capital stock on a fully diluted basis. The parties shall take such action and complete such filings as may be necessary, at the expense of Genesis, in accordance with applicable securities laws to ensure that the actions described herein are in compliance therewith. Either Genesis or the Companys failure to take any action described herein shall be deemed an Event of Default. If there is any Event of Default the entire balance of principal of the promissory note then outstanding shall bear interest at 25% per annum thereafter.



Until either of the promissory notes is paid in full, the Company shall not issue any shares of its common stock nor any direct or indirect rights to receive or acquire shares of common stock other than in connection with the Merger and thereafter, the Company shall not affect any forward or reverse stock split, recapitalization, reorganization or the like prior to completion of a Merger without the Lenders prior written consent.



In connection with the sale of common stock, our President immediately prior to the sale of stock resigned and a new Director was elected and appointed to serve as President and Secretary of the Company.





F-8





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Notes to Financial Statements

December 31, 2007



On November 14, 2007, the Company, the Selling Stockholder, Genesis, and the Escrow Agent entered into the Escrow Agreement. The Escrow Agreement provides that the Escrow Agent hold in escrow and then distribute the common stock shares to be released to certain parties pursuant to the Escrow Agreement. If a party to this agreement believes that certain shares may be released from the Escrow Agent and written notice is sent to the Escrow Agent and this written notice is sent to the remaining parties and the remaining parties do not object in writing within three business days, the Escrow Agent shall release the common stock shares.



Since the above mentioned notes have not been paid, the Company has accounted for the purchase and sale of treasury stock at the $16,700 cash paid.



4

-

CAPITAL STOCK



The preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.



Holders of shares of common stock shall be entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors.  The common stock does not have cumulative voting rights.



No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.



5

-

RECENT ACCOUNTING PRONOUNCEMENTS



In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, that defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements.  This Statement applies under other accounting pronouncements that require or permit fair value measurements.  Prior to this Statement, there were different definitions of fair value and limited guidance for applying those definitions in GAAP.  Moreover, that guidance was dispersed among many accounting pronouncements that require fair value measurements.  Differences in that guidance created inconsistencies that added to the complexity in applying GAAP.  The changes to current practice resulting from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements.  Statement 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The Company does not expect the adoption of SFAS 157 to have an effect on its financial statements.



In February 2007, the Financial Accounting Standards Board issued Statement of Financial Standards No. 159 (FAS 159), The Fair Value Option for Financial Assets and Financial Liabilities, which permits entities to choose to measure many financial instruments and certain other items at fair value which are not currently required to be measured at fair value.  FAS 159 is effective for financial statements issued for fiscal years ending after November 15, 2007, and interim periods within those fiscal years.  The Company does not expect the adoption of FAS 159 to have an effect on its financial statements.





F-9





---

VERBENA PHARMACEUTICALS INC.

A Development Stage Company

Notes to Financial Statements

December 31, 2007



In December 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141 (revised 2007), Business Combinations, which replaces SFAS No 141. The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141R is effective for us beginning January 1, 2008 and will apply prospectively to business combinations completed on or after that date.



In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB 51, which changes the accounting and reporting for minority interests. Minority interests will be re-characterized as non-controlling interests and will be reported as a component of equity separate from the parent's equity, and purchases or sales of equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net income attributable to the non-controlling interest will be included in consolidated net income on the face of the income statement and, upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for us beginning January 1, 2008 and will apply prospectively, except for the presentation and disclosure requirements, which will apply retrospectively. We are currently assessing the potential impact that adoption of SFAS No. 160 would have on our financial statements.



In March 2008, the FASB issued SFAS No. 161, Disclosures About Derivative Instruments and Hedging Activities.  The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows.  The new standard also improves transparency about the location and amounts of derivative instruments in an entitys financial statements; how derivative instruments and related hedged items are accounted for under Statement 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows.  SFAS No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tubular format.  It also provides more information about an entitys liquidity by requiring disclosure of derivative features that are credit risk-related.



Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.



6

-

SUBSEQUENT EVENTS



On January 8, 2008, the Company entered into an agreement and plan of merger with Wright Plumbing and Heating (Wright).   As a result of this agreement, Wright Shareholders will own forty eight (48%) of the issued and outstanding common stock of the Company.



In connection with this transaction a new Director was elected and appointed to serve as President and Secretary of the Company.





F-10





---

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.



None.



Item 8A. Controls and Procedures.



The Company's management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuers management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.



There have been no significant changes to the Companys internal controls over financial reporting that occurred during our last fiscal quarter of the year ended December 31, 2006, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting. This annual report does not include a report of managements assessment regarding internal control over financial reporting or an attestation report of the Companys registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.



Item 8B. Other Information.



None.



PART III



Item 9. Directors and Executive Officers of the Registrant.



(a) Identification of Directors and Executive Officers. The following table sets forth certain information regarding the Companys sole director and executive officer for the fiscal year ended December 31, 2007:



|                    |  |     |  |                               |  |                                         
|------------------- |  | --- |  | ----------------------------- |  | ----------------------------------------
|Name                |  | Age |  | Position                      |  | Term                                    
|Robert Schneiderman |  | 65  |  | President, Secretary Director |  | November 14, 2007 thru November 13, 2008



The Companys officers and directors are elected annually for a one year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.



Robert Schneiderman,Mr. Schneiderman has an extensive background in business operations consultancy earned over more than thirty years. His experience includes marketing and consulting on a broad range of financial projects focused on the development and retail product placement for a variety of public and non-public enterprises.



Over the years he has specialized in expanding customer bases, development of business-specific marketing programs, assisting with mergers and acquisitions, and establishing/maintaining communications and related operational tasks. Mr. Schneiderman has also helped develop effective marketing strategies for several large joint ventures, developing advertising-media programs and advising on the structuring of operations on a private consulting basis.Mr. Schneiderman has a B.S. in accounting from Temple University.



(b) Significant Employees.



As of the date hereof, the Company has no significant employees.



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(c) Family Relationships.



None.



(d) Involvement in Certain Legal Proceedings.



There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.



Compliance with Section 16(a) of the Exchange Act



Section 16(a) of the Exchange Act requires the Companys directors and officers, and persons who beneficially own more than 10% of a registered class of the Companys equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Companys securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.



Based solely on the Companys review of the copies of the forms received by it during the fiscal year ended December 31, 2006 and written representations that no other reports were required, the Company believes that no person who, at any time during such fiscal year, was a director, officer or beneficial owner of more than 10% of the Companys common stock failed to comply with all Section 16(a) filing requirements during such fiscal years.



Code of Ethics



We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer serves in these capacities.



Nominating Committee



We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.



Audit Committee



The Board of Directors acts as the audit committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.



Item 10. Executive Compensation.



The following table sets forth the cash compensation paid by the Company to its President and all other executive officers who earned annual compensation exceeding $100,000 for services rendered during the fiscal year ended December 31, 2007.



|                                             |  |      |  |                   
|-------------------------------------------- |  | ---- |  | ------------------
|Name and Position                            |  | Year |  | Total Compensation
|Robert Schneiderman, President and Secretary |  | 2007 |  | None              





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Director Compensation



We do not currently pay any cash fees to our directors, nor do we pay directors expenses in attending board meetings.



Employment Agreements



The Company is not a party to any employment agreements.



Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.



The following tables set forth certain information as of December 31, 2007, regarding (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director, nominee and executive officer of the Company and (iii) all officers and directors as a group.



|                                                                   |  |                                           |   |                     |  |  
|------------------------------------------------------------------ |  | ----------------------------------------- | - | ------------------- |  | -
|Name and Address                                                   |  | Amount and Nature of Beneficial Ownership |   | Percentage
of Class
|Genesis Holdings, Inc.
270 Presidential Drive
Wilmington, DE 19807 |  | 2,500,000                                 |   | 100                
|                                                                   |  |                                           |   |                     |  |  
|All Directors and Officers as a Group                              |  |                                           | 0 |                     |  | 0

________________



Item 12. Certain Relationships and Related Transactions.



On February 7, 2006, the Company issued a 4% promissory note payable for $12,500, to Randy Milby, our sole officer and director (the February Note). On June 15, 2006, the Company issued a 4% promissory note payable for $5,000, to Randy Milby (the June Note and, together with the February Note, the Notes). The Notes and all accrued interest mature upon completion of a merger, and if no merger is consummated, then the Notes will reach maturity on December 31, 2010. In the event of default under the Notes, Mr. Milby may declare the Notes immediately due and payable. Mr. Milby, in connection with a merger, may decide to capitalize his loans and add it to his capital, or he may decide to forgive the loans in their entirety. Given the small amount of the loans, we do not expect it to be a concern in our ability to complete a merger or any other business combination.



Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-B.





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Item 13. Exhibits.



Index to Exhibits



|        |  |                                                         
|------- |  | --------------------------------------------------------
|Exhibit |  | Description                                             
|*3.1    |  | Certificate of Incorporation                            
|        |  |                                                         
|*3.2    |  | Certificate of Amendment to Certificate of Incorporation
|        |  |                                                         
|*3.3    |  | By-laws                                                 



|     |  |                                                                                                                                                                                                                                                          
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of the Companys Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrants Annual Report on Form 10-KSB for the year ended December 31, 2006.
|     |  |                                                                                                                                                                                                                                                          
|32.1 |  | Certification of the Companys Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                     

________________

*

Filed as an exhibit to the Company's registration statement on Form 10-SB, as filed with the Securities and Exchange Commission on March 7, 2006, and incorporated herein by this reference.



Item 14. Principal Accountant Fees and Services



Raich Ende Malter & Co. LLP (Raich Ende) is the Company's independent registered public accounting firm.



Audit Fees



The aggregate fees billed by Raich Ende for professional services rendered for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-QSB or services that are normally provided in connection with statutory and regulatory filings were $12,000 for fiscal year ended December 31, 2007.



Audit-Related Fees



There were no fees billed by Raich Ende for assurance and related services that are reasonably related to the performance of the audit or review of the Companys financial statements for the fiscal year ended December 31, 2007.



Tax Fees



There were no fees billed by Raich Ende for professional services for tax compliance, tax advice, and tax planning for the fiscal year ended December 31, 2007.



All Other Fees



There were no fees billed by Raich Ende for other products and services for the fiscal year ended December 31, 2007.





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SIGNATURES



In accordance with 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.



|                       |                                                                    |                        
|---------------------- | ------------------------------------------------------------------ | -----------------------
|                       |                                                                    |                        
|                       | VERBENA PHARMACEUTICALS INC.                                      
|                       |                                                                    |                        
|                       |                                                                    |                        
|Dated: August 27, 2008 | By:                                                                | /s/ Robert Schneiderman
|                       | Name: Robert Schneiderman
Title: President, Secretary and Director





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