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<SEC-DOCUMENT>0000898430-02-003027.txt : 20020813
<SEC-HEADER>0000898430-02-003027.hdr.sgml : 20020813
<ACCEPTANCE-DATETIME>20020813160151
ACCESSION NUMBER:		0000898430-02-003027
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020630
FILED AS OF DATE:		20020813

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VYREX CORP
		CENTRAL INDEX KEY:			0000933972
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				880271109
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-27866
		FILM NUMBER:		02729766

	BUSINESS ADDRESS:	
		STREET 1:		2159 AVENIDA DE LA PLAYA
		CITY:			LA JOLLA
		STATE:			CA
		ZIP:			92037
		BUSINESS PHONE:		6194544462

	MAIL ADDRESS:	
		STREET 1:		2159 AVENIDA DE LA PLAYA
		CITY:			LA JOLLA
		STATE:			CA
		ZIP:			92037
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>d10qsb.htm
<DESCRIPTION>FORM 10-QSB FOR PERIOD ENDED JUNE 30, 2002
<TEXT>
<HTML><HEAD>
<TITLE>Prepared by R.R. Donnelley Financial -- Form 10-QSB for period ended June 30, 2002</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <hr size="4" width="100%" noshade color="black" align="center"> <p align="center"><b><font size="5" face="Times New Roman">United States<br> Securities and Exchange Commission<br> </font></b><b><font size="2"
face="Times New Roman">Washington D.C. 20549</font></b></p> <p align="center"><b><font size="5" face="Times New Roman">Form 10-QSB</font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="8%" valign="top"> <p><b><font size="3" face="Wingdings">x</font></b></p> </td>
<td width="91%" valign="bottom"> <p><b><font size="3" face="Times New Roman">Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></b></p> </td> </tr>
<tr>
<td width="8%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="91%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p align="center"><b><font size="2" face="Times New Roman">For the Quarterly Period ended June 30, 2002</font></b></p> </td> </tr>
<tr>
<td width="8%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="91%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="8%" valign="top"> <p><b><font size="3" face="Wingdings">o</font></b></p> </td>
<td width="91%" valign="bottom"> <p><b><font size="3" face="Times New Roman">Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></b></p> </td> </tr> </table> <p><b><font size="2"
face="Times New Roman">Commission file number: 000-27866</font></b></p> <p align="center"><b><font size="5" face="Times New Roman">VYREX CORPORATION<br> </font></b><b><font size="1">(Name of small business issuer as specified in its
charter)</font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="49%" valign="bottom"> <p align="center"><b><font size="2" face="Times New Roman">Nevada</font></b></p> </td>
<td width="1%" valign="bottom"> </td>
<td width="49%" valign="bottom"> <p align="center"><b><font size="2" face="Times New Roman">88-0271109</font></b></p> </td> </tr>
<tr>
<td width="49%" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">(State or other jurisdiction of<BR>incorporation or organization)</font></b></p> </td>
<td width="1%" valign="bottom"> </td>
<td width="49%" valign="top"> <p align="center"><b><font size="1" face="Times New Roman">(IRS Employer Identification No.)</font></b></p> </td> </tr>
<tr>
<td>&nbsp;</td> </tr>
<tr>
<td width="49%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="49%" valign="bottom"> </td> </tr>
<tr>
<td width="100%" colspan="3" valign="bottom"> <p align="center"><b><font size="2" face="Times New Roman">2159 Avenida de la Playa, La Jolla, California, 92037</font></b></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">(Address of principal executive offices)</font></b></p> </td> </tr>
<tr>
<td width="49%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="49%" valign="bottom"> <p align="center">&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign="bottom"> <p align="center"><b><font size="2" face="Times New Roman">(858) 454-4446</font></b></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">(Issuer&#146;s telephone number including area code)</font></b></p> </td> </tr> </table> <p><font size="2" face="Times New Roman">Check whether
the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 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.</font></p> <p><font size="2" face="Times New Roman">Yes </font><font size="2" face="Wingdings">x</font> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No </font> <font
size="2" face="Wingdings">o</font></p> <p align="center"><font size="2" face="Times New Roman">Applicable Only to Issuers Involved in Bankruptcy<br> Proceedings During the Preceding Five Years</font></p> <p><font size="2"
face="Times New Roman">Check whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan by a court.</font></p> <p><font size="2"
face="Times New Roman">Yes </font><font size="2" face="Wingdings">o</font> <font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No </font> <font
size="2" face="Wingdings">o</font></p> <p align="center"><font size="2" face="Times New Roman">Applicable Only to Corporate Issuers</font></p> <p><font size="2" face="Times New Roman">State the number of shares outstanding of each of the
issuer&#146;s classes of common equity, as of latest practicable date:</font></p> <p><font size="2" face="Times New Roman">As of June 30, 2002, there are 8,492,867 shares of common stock outstanding and warrants to purchase 220,000 shares of common
stock outstanding.</font></p> <p><font size="2" face="Times New Roman">Transitional Small Business Disclosure Format</font></p> <p><font size="2" face="Times New Roman">Yes </font> <font size="2" face="Times New Roman"> </font><font size="2"
face="Wingdings">o</font><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No </font> <font size="2" face="Wingdings">x</font></p> <hr size="4" width="100%" noshade color="black" align="center"> <font
size="2" face="Times New Roman"><b> </b></font>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <font size="2" face="Times New Roman"><b><BR> </b></font>
<A name="toc"> </A> <p align="center"><b><font size="2" face="Times New Roman">Vyrex Corporation<br> Index to Form 10-QSB</font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="90%">
<tr>
<td width="7%" valign="bottom"> <p><b><font size="2" face="Times New Roman">Part I</font></b></p> </td>
<td width="88%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">
<A HREF="#l196tx1">Financial Information</A></font></b></p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="95%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="88%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 1 -
<A HREF="#l196tx2">Financial Statements</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="7%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td>
<td width="80%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">
<A HREF="#l196tx3">Condensed Balance Sheets</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">3&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="7%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td>
<td width="80%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">
<A HREF="#l196tx4">Condensed Statements of Operations</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">4&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="7%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td>
<td width="80%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">
<A HREF="#l196tx5">Condensed Statements of Cash Flows</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">5&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="7%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td>
<td width="80%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">
<A HREF="#l196tx6">Notes to Condensed Financial Statements</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">6&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="95%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="88%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 2 -
<A HREF="#l196tx7">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">7&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="95%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p><b><font size="2" face="Times New Roman">Part II</font></b></p> </td>
<td width="88%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">
<A HREF="#l196tx8">Other Information</A></font></b></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="95%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 1 -&nbsp;</font><font size="2" face="Times New Roman">
<a href="#l196tx9">Legal Proceedings</A></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="82%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 2 -&nbsp;</font><font size="2" face="Times New Roman">
<a href="#l196tx10">Changes in Securities</a></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="82%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 3 -&nbsp;</font><font size="2" face="Times New Roman">
<A HREF="#l196tx11">Defaults upon Senior Securities</a></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="82%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 4 -&nbsp;</font><font size="2" face="Times New Roman">
<a href="#l196tx12">Submission of Matters to a Vote of Security Holders</a></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="82%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 5 -&nbsp;</font><font size="2" face="Times New Roman">
<a href="#l196tx13">Other Information</a></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="82%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="7%" valign="bottom"> <p>&nbsp;</p> </td>
<td colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Item 6 -&nbsp;</font><font size="2" face="Times New Roman">
<a href="#l196tx14">Exhibits and Reports on Form 8-K</a></font></p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="95%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right">&nbsp;</p> </td> </tr>
<tr>
<td width="66%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">
<a href="#l196tx15">Signatures</a></font></p> </td>
<td width="29%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">10</font></p> </td> </tr>
<tr>
<td width="54"></td>
<td width="40"></td>
<td width="13"></td>
<td width="369"></td>
<td width="215"></td>
<td width="31"></td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">2</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p align="center"><b><font size="2" face="Times New Roman">
<A NAME="l196tx1">PART I&#160; Financial Information</A></font></b></p> <p><b><font size="2" face="Times New Roman">
<A NAME="l196tx2">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements</A></font></b></p> <p align="center"><b><font size="2" face="Times New Roman">Vyrex Corporation<br> </font></b><font size="2" face="Times New Roman">(a development stage
enterprise)</font><br>
<a name="l196tx3"><b><font size="2" face="Times New Roman">Condensed Balance Sheets</font></b></a></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="68%" colspan="4" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Jun 30, 2002</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Dec 31, 2001</font></b></p> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">Assets</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Unaudited</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">(Note 1)</font></b></p> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Cash</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">16,750</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">60,003</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Accounts receivable</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">5,000</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Prepaid assets</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">529</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">529</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total assets</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">22,279</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">60,532</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">Liabilities and stockholders&#146; deficiency</font></b></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Current liabilities:</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Accounts payable and accrued liabilities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">207,871</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">212,577</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Notes payable to related parties</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">5,000</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">5,000</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Notes payable</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">160,000</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total current liabilities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">372,871</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">217,577</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Notes payable</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">160,000</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total liabilities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">372,871</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">377,577</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Commitments and contingencies</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Stockholders&#146; deficiency:</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Common stock, $.001 par value; 50,000,000 shares authorized; 8,492,867 and 8,342,867 issued and outstanding</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">8,493</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">8,343</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Additional paid-in capital</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">12,932,747</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">12,913,897</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Deficit accumulated during the development stage</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(13,291,832</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(13,239,285</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="66%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total stockholders&#146; deficiency</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(350,592</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(317,045</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total liabilities and stockholders&#146; deficiency</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">22,279</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">60,532</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="68%" colspan="4" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td> </tr> </table> <p><i><font size="2" face="Times New Roman">See accompanying notes.</font></i></p> <p align="center"><font size="2" face="Times New Roman">3</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p align="center"><b><font size="2" face="Times New Roman">Vyrex Corporation<br> </font></b><font size="2" face="Times New Roman">(a development stage enterprise)</font></p> <p align="center">
<a name="l196tx4"><b><font size="2" face="Times New Roman">Condensed Statements of Operations</font></b></a><b><br> </b><font size="2" face="Times New Roman">(Unaudited)</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="22%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="26%" colspan="5" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Three Months Ended<br> June 30,</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="26%" colspan="5" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Six Months Ended<br> June 30,</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Cumulative<br> From</font></b></p> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="22%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="11%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">2002</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="11%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">2001</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="11%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">2002</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">2001</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="12%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Inception</font></b></p> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="22%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Licensing and royalty revenue</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">12,500</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">125</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">17,500</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">849</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">470,699</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Operating expenses:</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Research and development</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">443</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">1,921</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">1,686</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(37,201</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">6,440,029</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Marketing and selling</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">118</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">516</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">376</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">1,338</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">437,558</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">General and administrative</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">25,462</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">45,663</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">61,647</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">103,047</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">5,904,805</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total operating expenses</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">26,023</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">48,100</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">63,709</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">67,184</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">12,782,392</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Loss from operations</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(13,523</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(47,975</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(46,209</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(66,335</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(12,311,693</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Other income (expense):</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Interest income</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">80</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">1,326</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">257</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">3,160</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">474,949</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Loss on disposal of fixed assets</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(12,605</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Interest expense</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(3,316</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(4,035</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(6,595</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(7,438</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(92,583</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="25%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Charge from issuance of stock options for arranging bridge financing costs</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">&#151;</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(1,349,900</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Total other income (expense)</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(3,236</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(2,709</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(6,338</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(4,278</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(980,139</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net loss</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(16,759</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(50,684</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(52,547</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(70,613</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(13,291,832</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net loss per share - basic and diluted</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(0.00</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(0.01</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(0.01</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(0.01</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="27%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Weighted average number of common shares outstanding</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">8,492,867</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">8,342,867</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">8,440,367</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">8,342,867</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="10%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="22%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="10%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="right"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr> </table> <p><i><font size="2" face="Times New Roman">See accompanying notes.</font></i></p> <p align="center"><font size="2" face="Times New Roman">4</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p align="center"><b><font size="2" face="Times New Roman">Vyrex Corporation<br> </font></b><font size="2" face="Times New Roman">(a development stage enterprise)</font></p> <p align="center">
<a name="l196tx5"><font size="2" face="Times New Roman">Condensed Statements of Cash Flows</font></a><br> <font size="2" face="Times New Roman">(Unaudited)</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="44%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="29%" colspan="5" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman"> </font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="13%" colspan="2" rowspan="3" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Cumulative<br> From<br> Inception</font></b></p> </td>
<td width="2%" valign="bottom"> </td> </tr>
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="44%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="13%" colspan="5" align="center"> <p align="center"><b><font size="1" face="Times New Roman">Six Months ended</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="11%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="44%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="13%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Jun 30, 2002</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="13%" colspan="2" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Jun 30, 2001</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="1%" valign="bottom"> </td>
<td width="44%" valign="bottom"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="50%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">Operating activities</font></b></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><b><font size="2" face="Times New Roman">&nbsp;</font></b></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><b><font size="2" face="Times New Roman">&nbsp;</font></b></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><b><font size="2" face="Times New Roman">&nbsp;</font></b></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net loss</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(52,547</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(70,613</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(13,291,832</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Adjustments to reconcile net loss to net cash used in operating activities:</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="60%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Depreciation, amortization and impairment charges</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">8,975</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">336,329</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="60%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Interest receivable</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">3,506</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="60%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Loss on disposal of fixed assets</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">13,664</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="60%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Issuance of compensatory notes, stock, stock options and warrants</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">4,000</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">2,302,212</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="60%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Changes in operating assets and liabilities:</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="58%" colspan="2" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Other assets, accounts receivable</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(5,000</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">94,471</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="58%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">Accounts payable and accrued liabilities</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(4,706</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(43,882</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">630,434</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="58%" colspan="2" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Deferred revenue</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(849</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(100,000</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="58%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">Accrued interest on convertible debentures</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">9,041</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net cash used in operating activities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(58,253</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(106,369</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(10,002,175</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">Investing activities</font></b></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Purchase of short-term investments</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(8,440,442</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Sale of short-term investments</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">8,467,931</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Purchases of furniture and equipment</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(209,595</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Proceeds on sale of fixed assets</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">10,000</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Patent, trademark and copyrights costs</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(133,519</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Other assets, including notes receivable from related parties</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(4,202</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net cash used in investing activities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(309,827</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><b><font size="2" face="Times New Roman">Financing activities</font></b></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net proceeds from issuance of common stock</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">7,889,808</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Exercise of stock options and sale of options</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">975,100</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Exercise of warrants</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">15,000</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">25,000</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Proceeds from short-term loan</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">867,730</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Proceeds from note payable</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">591,114</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Repayment of note payable</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(5,000</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(20,000</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Advances from potential investors</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">100,000</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Repayment of advances</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">(100,000</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net cash provided by (used in) financing activities</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">15,000</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(5,000</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">10,328,752</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Net increase (decrease) in cash</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(43,253</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">(111,369</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">)</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">16,750</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom"> <p><font size="2" face="Times New Roman">Cash, beginning of period</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">60,003</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">238,817</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="11%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p align="center">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="62%" colspan="4" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Cash, end of period</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">16,750</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">127,448</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">$</font></p> </td>
<td width="11%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">16,750</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="56%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="11%" valign="bottom"> <hr size="4" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p><i><font size="2" face="Times New Roman">See accompanying notes.</font></i></p> <p align="center"><font size="2"
face="Times New Roman">5</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p align="center"><b><font size="2" face="Times New Roman">Vyrex Corporation<br> </font></b><font size="2" face="Times New Roman">(A Development Stage Enterprise)</font></p> <p align="center">
<a name="l196tx6"><font size="2" face="Times New Roman">Notes To Condensed Financial Statements</font></a><br> <font size="2" face="Times New Roman">(Unaudited)</font></p> <p><b><i><font size="2" face="Times New Roman">(1)&nbsp;&nbsp;Basis of
Presentation</font></i></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">The accompanying condensed financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America
for interim financial information. Certain information and disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. In
the opinion of the Company&#146;s management, the unaudited financial statements contain all adjustments necessary (consisting of normal recurring accruals) for a fair presentation of the financial position as of June 30, 2002, and its results of
operations for the three and six months ended June 30, 2002 and 2001 and cash flows for the six months ended June 30, 2002 and 2001. The results of operations for the three and six months ended June 30, 2002 are not necessarily indicative of the
results to be expected for the full year. For further information, refer to the financial statements and notes thereto included in Vyrex&#146;s Form 10-KSB for the year ended December 31, 2001.</font></p> </td> </tr>
<tr>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="50%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="50%" valign="bottom"> <p><font size="2" face="Times New Roman">The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern.&#160; This basis of accounting contemplates the
recovery of the Company&#146;s assets and the satisfaction of its liabilities in the normal course of business.&#160; As of June 30, 2002, the Company had an accumulated deficit of $13,291,832, a net capital deficiency of $350,592 and a working
capital deficiency of $350,592.&#160; Due to the Company&#146;s recurring losses and capital deficiency, there can be no assurance that the Company will be able to obtain additional operating capital, which may impact the Company&#146;s ability to
continue as a going concern.&#160; The accompanying condensed financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Company to continue as a going concern.</font></p> </td> </tr>
<tr>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="50%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="50%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company continues to seek additional collaborative or other arrangements with larger pharmaceutical and nutraceutical companies, under which such companies would provide
additional capital to the Company in exchange for exclusive or non-exclusive licenses or other rights to certain of the technologies and products the Company is developing.&#160; Competition for corporate partnering arrangements with major
pharmaceutical and nutraceutical companies is intense, with a large number of biopharmaceutical companies attempting to arrive at such arrangements.&#160; Accordingly, there can be no assurance that an agreement will arise in a timely manner, or at
all, or that any agreement that may arise will successfully reduce the Company&#146;s short-term or long-term funding requirements.</font></p> </td> </tr>
<tr>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="50%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="50%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company&#146;s major activities through June 30, 2002 have been limited to raising funds for conducting research and development on its proposed products.&#160; These
activities have not generated any significant revenues; accordingly, the Company has been in the development stage since its inception.&#160; Successful completion of the Company&#146;s development program and its transition, ultimately, to
attaining profitable operations is dependent upon obtaining additional financing adequate to fulfill its research and development activities, and achieving a level of revenue adequate to support the Company&#146;s cost structure.&#160; There can be
no assurance that the Company will be successful in these areas.&#160; To supplement its existing resources, the Company will require additional capital through the sale of debt or equity.&#160; There can be no assurance that such capital will be
available on favorable terms, or at all, and if additional funds are raised by issuing equity securities, dilution to existing stockholders is likely to result.</font></p> </td> </tr> </table> <p align="center"><font size="2"
face="Times New Roman">6</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p><b><font size="2" face="Times New Roman">(2)&nbsp;&nbsp;Common stock</font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">During the six month period ended June 30, 2002, the Company sold 150,000 shares of common stock upon the exercise of warrants for $15,000.</font></p> </td> </tr> </table>
<p><b><font size="2" face="Times New Roman">(3)&nbsp;&nbsp;Warrants</font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">During the six month period ended June 30, 2002, the Company issued 20,000 warrants for the purchase of common stock at $.37 per share in exchange for consulting
services.&#160; The fair value of the warrants was $2,000 and has been charged to general and administrative expenses in the accompanying 2002 condensed statement of operations.</font></p> </td> </tr> </table> <p><b><font size="2"
face="Times New Roman">(4)&nbsp;&nbsp;Notes Payable</font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">At March 31, 2002, the Company had outstanding notes payable with an aggregate principal balance of $160,000 which had a maturity date of March 22, 2002.&#160; During the
first quarter of 2002, the Company extended the due date of this note until March 22, 2003.&#160; In connection with the extension of the maturity of this debt, the Company modified the option to purchase 50,000 shares of common stock by extending
the expiration date from January 4, 2003 to March 5, 2004.&#160; The fair value of the new option in excess of the value of the prior option at the date of amendment was insignificant.</font></p> </td> </tr> </table> <p><b><font size="2"
face="Times New Roman">
<a name="l196tx7">Item 2.&nbsp;&nbsp;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</a></font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="100%" valign="bottom"> <p><font size="2" face="Times New Roman">This report on Form 10-QSB contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934.&#160; The Company intends that such forward-looking statements be subject to the safe harbors created thereby.&#160; This report should be read in conjunction with the Company&#146;s annual report on Form 10-KSB for the year ended December
31, 2001.</font></p> </td> </tr> </table> <p><b><i><font size="2" face="Times New Roman">Results of Operations</font></i></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><b><font size="2" face="Times New Roman">Three months ended June 30, 2002 and June 30, 2001</font></b></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company earned $13,000 in license fee income for two of our compounds from the FutureCeutical division of VanDrunen Farms.&#160; An initial licensing fee of&#160; $25,000
was received in 2000.&#160; The Company is to receive supplemental license issue fees until attaining $75,000 in initial sales of licensed products. The Company earned $10,000 in license fees during 2001.&#160; To date the Company has received a
total of $28,000 of the supplemental license issue fee of $75,000.&#160; General and administrative expenses decreased $21,000 to $25,000 in the current period, compared to $46,000 for the same period in 2001. This decrease was due to the reduction
of patent expenses and the elimination of depreciation expenses as all assets are fully depreciated.&#160; Second quarter expenses were limited to maintenance of patents and general office expenses such as accounting fees, utility expenses,
telephone expenses, rent and postage.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">Net loss decreased $34,000 to $17,000, compared to $51,000 for the same period during 2001.&#160; Basic and diluted loss per share decreased $0.01 to $0.00 in the three months
ended June 30, 2002 compared to $0.01 loss in the same period of 2001.</font></p> </td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">7</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><b><font size="2" face="Times New Roman">Six months ended June 30, 2002 and June 30, 2001</font></b></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company earned $18,000 in license fee income for two of our compounds from the FutureCeutical division of VanDrunen Farms.&#160; An initial licensing fee of&#160; $25,000
was received in 2000.&#160; The Company is to receive supplemental license issue fees until attaining $75,000 in initial sales of licensed products. The Company earned $10,000 in license fees during 2001.&#160; To date the Company has received a
total of $28,000 of the supplemental license issue fee of $75,000.</font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">Research and development expenses increased $39,000 to $2,000 in the six months ended June 30, 2002 compared to a credit balance of $37,000 in the same period of 2001. This
increase was due to the reversal of previously accrued, but contested purchased service liability of $40,000 during 2001.&#160; General and administrative expenses decreased $41,000 to $62,000 in the current period, compared to $103,000 for the same
period in 2001. This decrease was due to the reduction of patent expenses and the elimination of depreciation expenses as all assets are fully depreciated.&#160; Second quarter expenses were limited to maintenance of patents and general office
expenses such as accounting fees, utility expenses, telephone expenses, rent and postage.</font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">Net loss decreased $18,000 to $53,000 compared to $71,000 for the same period during 2001.&#160; Basic and diluted loss per share remained the same at $0.01 for the six months
ended June 30, 2002.</font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company was awarded U.S. Patent Number 6,362,234 on March 26, 2002 from the United States Patent and Trademark Office for all claims of its U.S. patent application for
Water-Soluble Prodrugs of Propofol for the Treatment of Migraine.&#160; Although the Company believes the indications of their water-soluble prodrug of propofol for the treatment of this frequently disabling condition is promising, there is no
assurance the Company will be successful in funding further development and commercialization of this compound.</font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p><b><i><font size="2" face="Times New Roman">Liquidity and Capital Resources</font></i></b></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company has financed its operations since inception solely through the sales of debt and equity securities. As of June 30, 2002, the Company had negative working capital
of $351,000.&#160; Net cash used in operating activities during the six months ended June 30, 2002 was $58,000, compared to $106,000 for the same period during 2001.</font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">There can be no assurance that any further significant revenues will be realized in 2002 and therefore without additional financing the Company may be unable to continue as a
going concern.&#160; The Company is actively pursuing collaborations with potential partners in both the pharmaceutical and nutraceutical divisions with the objective of raising financing to enable the Company to continue operations.&#160; To date
the Company does not have any commitments for financing.&#160; To date the Company has no prospects for merger or acquisition.&#160; The Company does not have any lease or other commitments.&#160; The Company does not have an existing bank line of
credit or other form of revolving or renewable credit facility.&#160; There can be no assurance the Company will generate significant revenues during 2002 to continue its operations, or that funds will be available through the public or private
markets.</font></p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="94%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company believes that its current cash reserves and other resources will fund the business for the next twelve months. The Company does not anticipate having significant
revenues in the foreseeable future and will likely be required to raise additional funds to continue operations. There can be no assurance that additional funds will be available.</font></p> </td> </tr> </table> <p align="center"><font size="2"
face="Times New Roman">8</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p align="center"><b><font size="2" face="Times New Roman">
<a name="l196tx8">PART II&nbsp;&nbsp;Other Information</a></font></b></p> <p><b><font size="2" face="Times New Roman">Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a name="l196tx9">&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings</a></font></b></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
applicable</font></p> <p><b><font size="2" face="Times New Roman">Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a name="l196tx10">&nbsp;&nbsp;&nbsp;&nbsp;Changes in Securities</a></font></b></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
applicable</font></p> <p><b><font size="2" face="Times New Roman">Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a name="l196tx11">&nbsp;&nbsp;&nbsp;&nbsp;Defaults upon Senior Securities</a></font></b></p> <p><font size="2"
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p> <p><b><font size="2" face="Times New Roman">Item
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a name="l196tx12">&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders</a></font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p><font size="2" face="Times New Roman">(a)</font></p> </td>
<td width="90%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">The annual meeting of shareholders was held June 10, 2002.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p><font size="2" face="Times New Roman">(b)</font></p> </td>
<td width="90%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">The following directors were elected at the meeting:</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="85%" valign="bottom"> <p><font size="2" face="Times New Roman">Sheldon S. Hendler Ph.D., M.D</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="85%" valign="bottom"> <p><font size="2" face="Times New Roman">G. Dale Garlow</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="85%" valign="bottom"> <p><font size="2" face="Times New Roman">Richard G. McKee, Jr.</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="85%" valign="bottom"> <p><font size="2" face="Times New Roman">Laurie A. Robinson</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="85%" valign="bottom"> <p><font size="2" face="Times New Roman">Tom K. Larson, Jr.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" valign="bottom"> <p><font size="2" face="Times New Roman">(c)</font></p> </td>
<td width="90%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">The following table reflects the voting in connection with each matter voted on at the meeting:</font></p> </td> </tr> </table> <p><font size="2"
face="Times New Roman">&nbsp;</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="6%" valign="bottom"> </td>
<td width="43%" colspan="5" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Matter</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="14%" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">For</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="14%" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Against</font></b></p> </td>
<td width="2%" valign="bottom"> </td>
<td width="14%" valign="bottom"> <p align="center"><b><font size="1" face="Times New Roman">Abstain</font></b></p> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="6%" valign="bottom"> </td>
<td width="43%" colspan="5" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> </td>
<td width="14%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> </td>
<td width="14%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="2%" valign="bottom"> </td>
<td width="14%" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td>
<td width="1%" valign="bottom"> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">1.</font></p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="38%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Election of Directors</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="35%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Sheldon S. Hendler Ph.D., M.D.</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">5,889,867</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">0</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">10,850</FONT></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="35%" valign="bottom"> <p><font size="2" face="Times New Roman">G. Dale Garlow</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">5,888,367</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">0</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">12,350</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="35%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Richard G. McKee</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">5,888,367</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">0</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">12,350</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="35%" valign="bottom"> <p><font size="2" face="Times New Roman">Laurie A. Robinson</font></p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">5,888,367</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">0</font></p> </td>
<td width="2%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom"> <p align="right"><font size="2" face="Times New Roman">12,350</font></p> </td>
<td width="1%" valign="bottom"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="35%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Tom K. Larson, Jr.</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">5,888,367</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">0</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">12,350</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="35%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom"> <p align="right">&nbsp;</p> </td>
<td width="1%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">2.</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="38%" colspan="3" valign="bottom" bgcolor="#cceeff"> <p><font size="2" face="Times New Roman">Appointment of Auditor</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">5,887,517</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">0</font></p> </td>
<td width="2%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td>
<td width="14%" valign="bottom" bgcolor="#cceeff"> <p align="right"><font size="2" face="Times New Roman">13,200</font></p> </td>
<td width="1%" valign="bottom" bgcolor="#cceeff"> <p>&nbsp;</p> </td> </tr> </table> <p><b><font size="2" face="Times New Roman">Item 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a name="l196tx13">&nbsp;&nbsp;&nbsp;&nbsp;Other Information</a></font></b></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
applicable</font></p> <p><b><font size="2" face="Times New Roman">Item 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<a name="l196tx14">&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K</a></font></b></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">(a)</font></p> </td>
<td width="87%" valign="bottom"> <p><font size="2" face="Times New Roman">The Company did not file any reports on Form 8-K during the six months ended June 30, 2002</font></p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="87%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="6%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="5%" valign="bottom"> <p><font size="2" face="Times New Roman">(b)</font></p> </td>
<td width="87%" valign="bottom"> <p><font size="2" face="Times New Roman">Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002</font></p> </td> </tr> </table> <p align="center"><font
size="2" face="Times New Roman">9</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#CCEEFF" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
<BR> <p align="center">
<a name="l196tx15"><b><font size="2" face="Times New Roman">SIGNATURES</font></b></a></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with Section
13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="51%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="48%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">VYREX CORPORATION</font></p> </td> </tr>
<tr>
<td width="51%" valign="bottom"> </td>
<td width="48%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">Registrant</font></p> </td> </tr>
<tr>
<td width="51%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="48%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="51%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="48%" colspan="3" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="51%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="48%" colspan="3" valign="bottom"> <p><font size="2" face="Times New Roman">By:&nbsp;&nbsp;&nbsp;<i>/S/ G. Dale Garlow/</i></font></p> </td> </tr>
<tr>
<td width="51%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="2%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="46%" colspan="2" valign="bottom"> <hr size="2" width="100%" noshade color="black" align="center"> </td> </tr>
<tr>
<td width="51%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="3%" colspan="2" valign="bottom"> <p>&nbsp;</p> </td>
<td width="44%" valign="bottom"> <p><font size="2" face="Times New Roman">G. Dale Garlow,</font></p> </td> </tr>
<tr>
<td width="51%" valign="bottom"> </td>
<td width="3%" colspan="2" valign="bottom"> </td>
<td width="44%" valign="bottom"> <p><font size="2" face="Times New Roman">Chief Executive Officer</font></p> </td> </tr>
<tr>
<td width="370"></td>
<td width="17"></td>
<td width="11"></td>
<td width="323"></td> </tr> </table> <p align="center"><font size="2" face="Times New Roman">10</font></p> <font size="2" face="Times New Roman"> <BR> </font>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>dex991.htm
<DESCRIPTION>CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
<HTML><HEAD>
<TITLE>Prepared by R.R. Donnelley Financial -- Certificate Pursuant to 18 U.S.C. Section 1350</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align="right"><font size="2" face="Times New Roman">Exhibit 99.1</font></p> <p align="center"><font size="2" face="Times New Roman">CERTIFICATION PURSUANT TO <br> 18 U.S.C. SECTION 1350, <br> AS ADOPTED PURSUANT TO
<br> SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></p> <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of Vyrex
Corporation (the &#147;Company&#148;) on Form&nbsp;10-QSB for the period ending June&nbsp;30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, G. Dale Garlow, Chief Executive Officer of the
Company, certify, pursuant to 18&nbsp;U.S.C. &#167;1350, as adopted pursuant to &#167;906 of the Sarbanes-Oxley Act of 2002, that:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="10%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">(1)</font></p> </td>
<td width="79%" valign="top"> <p><font size="2" face="Times New Roman">The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</font></p> </td> </tr>
<tr>
<td width="10%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="bottom"> <p></p> </td>
<td width="79%" valign="bottom"> <p>&nbsp; </p> </td> </tr>
<tr>
<td width="10%" valign="bottom"> <p>&nbsp;</p> </td>
<td width="4%" valign="top"> <p><font size="2" face="Times New Roman">(2)</font></p> </td>
<td width="79%" valign="top"> <p><font size="2" face="Times New Roman">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.</font></p> </td> </tr>
</table> <p><font size="2" face="Times New Roman">&nbsp;</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="100%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">/s/&nbsp;&nbsp;<i>G. Dale Garlow</i></font></p> </td> </tr>
<tr>
<td width="25%" valign="bottom"> <hr size="2" width="90%" noshade color="black" align="left"> <p></p> </td>
<td width="74%" valign="bottom"> <p>&nbsp;</p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">G. Dale Garlow,</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">Chief Executive Officer</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="bottom"> <p><font size="2" face="Times New Roman">August 12, 2002</font></p> </td> </tr> </table> <p><font size="2" face="Times New Roman">&nbsp;</font></p>
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</SEC-DOCUMENT>
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