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<SEC-DOCUMENT>0000898430-02-004119.txt : 20021114
<SEC-HEADER>0000898430-02-004119.hdr.sgml : 20021114
<ACCEPTANCE-DATETIME>20021113174428
ACCESSION NUMBER:		0000898430-02-004119
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020930
FILED AS OF DATE:		20021114

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:		02821222

	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>QUARTERLY REPORT
<TEXT>
<HTML><HEAD>
<TITLE>Quarterly Report</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><font size=5 face="Times New Roman"><b>United States<br> Securities and Exchange Commission<br></b></font><font size=3
face="Times New Roman"><b>Washington D.C. 20549</b></font></p> <p align=center><font size=5 face="Times New Roman"><b>Form 10-QSB</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="5%" valign=top> <p><font size=3 face="Wingdings">x</font></p> </td>
<td width="95%" valign=top> <p><font size=3 face="Times New Roman"><b>Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</b></font></p> </td> </tr> </table> <p align=center><font size=2
face="Times New Roman"><b>For the Quarterly Period ended September 30, 2002</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="5%" valign=top> <p><font size=3 face="Wingdings">o</font></p> </td>
<td width="95%" valign=top> <p><font size=3 face="Times New Roman"><b>Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</b></font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman"><b>Commission
file number: 000-27866</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><font size=6 face="Times New Roman"><b>VYREX CORPORATION</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><font size=1 face="Times New Roman"><b>(Name of small business issuer as specified in its charter)</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="49%" valign=top> <p align=center><font size=2 face="Times New Roman"><b>Nevada</b></font></p> </td>
<td width="1%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=top> <p align=center><font size=2 face="Times New Roman"><b>88-0271109</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=top> <p align=center><font size=1 face="Times New Roman"><b>(State or other jurisdiction of<br> incorporation or organization)</b></font></p> </td>
<td width="1%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=top> <p align=center><font size=1 face="Times New Roman"><b>(IRS Employer Identification No.)</b></font></p> </td> </tr>
<tr>
<td width="49%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="49%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><font size=2 face="Times New Roman"><b>2159 Avenida de la Playa, La Jolla, California, 92037</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><font size=1 face="Times New Roman"><b>(Address of principal executive offices)</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><font size=2 face="Times New Roman"><b>(858) 454-4446</b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="3" valign=top> <p align=center><font size=1 face="Times New Roman"><b>(Issuer&#146;s telephone number including area code)</b></font></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>
<table border=0 cellspacing=0 cellpadding=0 width="13%">
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">Yes</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Wingdings">x</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Times New Roman">No</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Wingdings">o</font></p> </td> </tr> </table> <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>
<table border=0 cellspacing=0 cellpadding=0 width="13%">
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">Yes</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Wingdings">x</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Times New Roman">No</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Wingdings">o</font></p> </td> </tr> </table> <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 September 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>
<table border=0 cellspacing=0 cellpadding=0 width="13%">
<tr>
<td width="4%" valign=top> <p><font size=2 face="Times New Roman">Yes</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Wingdings">x</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Times New Roman">No</font></p> </td>
<td width="3%" valign=top> <p><font size=2 face="Wingdings">o</font></p> </td> </tr> </table> <br> <hr size=4 width="100%" noshade color=black align=center> <font size=2 face="Times New Roman"><BR> </font>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <font size=2 face="Times New Roman"> </font>
<a name="toc"> </a> <p align=center><font size=2 face="Times New Roman"><b>Vyrex Corporation<br> Index to Form 10-QSB</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="95%" colspan="4" valign=top> <p><font size=2 face="Times New Roman"><b>Part I
<a href="#tx335_1">Financial Information</a></b></font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 1-</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_2">Financial Statements</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="81%" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_3">Condensed Balance Sheets</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="81%" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_4">Condensed Statements of Operations</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">4</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="81%" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_5">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</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="2%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="81%" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_6">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</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 2 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_7">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</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 3 &#150;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_8">Controls and Procedures</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="95%" colspan="4" valign=top> <p><font size=2 face="Times New Roman"><b>Part II
<a href="#tx335_9">Other Information</a></b></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 1 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_10">Legal Proceedings</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 2 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_11">Changes in Securities</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 3 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_12">Defaults upon Senior Securities</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 4 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_13">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</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 5 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_14">Other Information</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font size=2 face="Times New Roman">9</font></p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="3%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="7%" valign=top> <p><font size=2 face="Times New Roman">Item 6 -</font></p> </td>
<td width="84%" colspan="2" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_15">Exhibits and Reports on Form 8-K</a></font></p> </td>
<td width="4%" valign=bottom> <p align=right><font face="Times New Roman, Times, serif" size="2">9</font></p> </td> </tr>
<tr>
<td width="95%" colspan="4" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr>
<tr>
<td width="95%" colspan="4" valign=top> <p><font size=2 face="Times New Roman">
<a href="#tx335_16">Signatures</a></font></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="95%" colspan="4" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=right>&nbsp;</p> </td> </tr> </table> <p align=center>&nbsp;</p> <font size=2 face="Times New Roman"><BR> </font>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <font size=2 face="Times New Roman"> </font> <center>
<a name="tx335_1"></a><font size=2 face="Times New Roman"><b>PART I&#160; Financial Information</b></font></center>
<a name="tx335_2"></a><font size=2 face="Times New Roman"><b>Item 1.&#160;&#160;&#160;&#160; Financial Statements </b></font> <p align=center><font size=2 face="Times New Roman"><b>Vyrex Corporation<br></b>(a development stage enterprise)<br>
<a name="tx335_3"></a><b>Condensed Balance Sheets</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="66%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="14%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Sep 30, 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="14%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Dec 31, 2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="66%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="14%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="14%" colspan="2" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="66%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="14%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Unaudited</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="14%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>(Note 1)</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman"><b>Assets</b></font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Cash</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">4,578</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" 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="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom> <p><font size=2 face="Times New Roman">Accounts receivable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7,500</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Prepaid assets</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total assets</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,078</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=2 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=2 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>
<td width="1%" valign=bottom> <hr size=2 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=2 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Liabilities and stockholders&#146; deficiency</b></font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Current liabilities:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accounts payable and accrued liabilities</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">71,982</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="12%" 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="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom> <p><font size=2 face="Times New Roman">Notes payable to related parties</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Notes payable</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">160,000</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total current liabilities</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">236,982</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Notes payable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total liabilities</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">236,982</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Commitments and contingencies</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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="66%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Stockholders&#146; deficiency:</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" 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="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" 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="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">8,493</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" 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="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Additional paid-in capital</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">13,073,725</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" 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="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="64%" valign=bottom> <p><font size=2 face="Times New Roman">Deficit accumulated during the development stage</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(13,307,122</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="12%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(13,239,285</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total stockholders&#146; deficiency</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(224,904</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(317,045</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="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=1 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="66%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total liabilities and stockholders&#146; deficiency</font></p> </td>
<td width="1%" 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="12%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,078</font></p> </td>
<td width="1%" 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="12%" 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="66%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="12%" valign=bottom> <hr size=3 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><font size=2 face="Times New Roman"><i>See accompanying notes.</i></font></p> <p align=center><font size=2
face="Times New Roman">3</font></p> <font size=2 face="Times New Roman"><BR> </font>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <font size=2 face="Times New Roman"> </font> <p align=center><font size=2 face="Times New Roman"><b>Vyrex Corporation<br></b>(a development stage enterprise)</font></p> <p align=center>
<a name="tx335_4"></a><font size=2 face="Times New Roman"><b>Condensed Statements of Operations<br></b>(Unaudited)</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="33%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="24%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Three Months Ended<br> September 30,</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="24%" colspan="5" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Nine Months Ended<br> September 30,</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="11%" colspan="2" rowspan="3" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Cumulative<br> From<br> Inception</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="33%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="24%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="24%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="33%" colspan="2" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="11%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="11%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="11%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="11%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Licensing and royalty revenue</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">15,000</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">1,322</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">32,500</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,171</font></p> </td>
<td width="1%" 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">485,699</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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Operating expenses:</font></p> </td>
<td width="1%" 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">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p><font size=2 face="Times New Roman">Research and development</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">694</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(23</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">2,380</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(37,223</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">6,440,723</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Marketing and selling</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">17</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">2,182</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">393</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">3,521</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">437,575</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p><font size=2 face="Times New Roman">General and administrative</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">26,245</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">41,475</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">87,892</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">144,522</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">5,931,050</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total operating expenses</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">26,956</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">43,634</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">90,665</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">110,820</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">12,809,348</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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Loss from operations</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(11,956</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(42,312</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(58,165</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(108,649</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(12,323,649</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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Other income (expense):</font></p> </td>
<td width="1%" 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">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p><font size=2 face="Times New Roman">Interest income</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">19</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">722</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">276</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">3,883</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">474,968</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Loss on disposal of fixed assets</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(12,605</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p><font size=2 face="Times New Roman">Interest expense</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(3,353</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(8,288</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(9,948</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(15,726</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="10%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(95,936</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Charge from issuance of stock options for arranging bridge financing costs</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">&#151;&nbsp;&nbsp;</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(1,349,900</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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Total other income (expense)</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(3,334</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(7,566</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(9,672</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(11,843</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(983,473</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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=1 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net loss</font></p> </td>
<td width="1%" 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">(15,290</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(49,878</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(67,837</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(120,492</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(13,307,122</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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net loss per share - basic and diluted</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(0.00</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</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="1%" 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">$</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(0.01</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</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="1%" 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">&nbsp;</font></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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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="33%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Weighted average number of common shares outstanding</font></p> </td>
<td width="1%" 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">&nbsp;</font></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="1%" 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">&nbsp;</font></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="1%" 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">&nbsp;</font></p> </td>
<td width="10%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">8,458,124</font></p> </td>
<td width="1%" 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">&nbsp;</font></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="1%" 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">&nbsp;</font></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="33%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="10%" valign=bottom> <hr size=3 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><font size=2 face="Times New Roman"><i>See accompanying notes.</i></font></p> <p align=center><font size=2
face="Times New Roman">4</font></p> <BR>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <p align=center><font size=2 face="Times New Roman"><b>Vyrex Corporation<br></b>(a development stage enterprise)</font></p> <p align=center>
<a name="tx335_5"></a><font size=2 face="Times New Roman">Condensed Statements of Cash Flows<br> (Unaudited)</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="54%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="26%" colspan="4" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Nine Months ended</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" rowspan="3" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Cumulative<br> From<br> Inception</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="28%" colspan="5" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Sep 30, 2002</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="13%" colspan="2" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>Sep 30, 2001</b></font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman"><b>Operating activities</b></font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net loss</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(67,837</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(120,492</font></p> </td>
<td width="1%" 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">(13,307,122</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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="52%" colspan="2" 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="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="52%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Depreciation, amortization and impairment charges</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">11,184</font></p> </td>
<td width="1%" 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">&nbsp;</font></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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="52%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Interest receivable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="52%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Loss on disposal of fixed assets</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="52%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Issuance of compensatory notes, stock, stock options and warrants</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">4,000</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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 bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="52%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Changes in operating assets and liabilities:</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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="3%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="50%" valign=bottom> <p><font size=2 face="Times New Roman">Other assets, accounts receivable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(6,971</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">92,500</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="3%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="50%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accounts payable and accrued liabilities</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">383</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(39,070</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">635,523</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="3%" colspan="2" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="50%" valign=bottom> <p><font size=2 face="Times New Roman">Deferred revenue</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(2,171</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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="3%" colspan="2" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="50%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Accrued interest on convertible debentures</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">9,041</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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net cash used in operating activities</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(70,425</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(150,549</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(10,014,347</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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Investing activities</b></font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Purchase of short-term investments</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(8,440,442</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Sale of short-term investments</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">8,467,931</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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Purchases of furniture and equipment</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(209,595</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Proceeds on sale of fixed assets</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">10,000</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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Patent, trademark and copyrights costs</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">(133,519</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">)</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Other assets, including notes receivable from related parties</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(4,202</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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net cash used in investing activities</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Financing activities</b></font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Net proceeds from issuance of common stock</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">7,889,808</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Exercise of stock options and sale of options</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">975,100</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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Exercise of warrants</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">15,000</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">25,000</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Proceeds from short-term loan</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">867,730</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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Proceeds from note payable</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">591,114</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Repayment of note payable</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(20,000</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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Advances from potential investors</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Repayment of advances</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" 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="1%" 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">&nbsp;</font></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="1%" 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">&nbsp;</font></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="1%" 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">&nbsp;</font></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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Net increase (decrease) in cash</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(55,425</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">(155,549</font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">4,578</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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Cash, beginning of period</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">60,003</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">238,817</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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>
<td width="1%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=1 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">Cash, end of period</font></p> </td>
<td width="1%" 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">4,578</font></p> </td>
<td width="1%" 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">$</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">83,268</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="11%" valign=bottom bgcolor="#cceeff"> <p align=right><font size=2 face="Times New Roman">4,578</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="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=3 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>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=3 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="54%" colspan="3" valign=bottom bgcolor="#cceeff"> <p><font size=2 face="Times New Roman"><b>Supplemental disclosure of noncash financing activity</b></font></p> </td>
<td width="1%" 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">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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>
<td width="1%" valign=bottom bgcolor="#cceeff"> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" 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="54%" colspan="3" valign=bottom> <p><font size=2 face="Times New Roman">Forgiveness of debt</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">140,978</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="11%" valign=bottom> <p align=right>&nbsp;</p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><font size=2 face="Times New Roman">$</font></p> </td>
<td width="11%" valign=bottom> <p align=right><font size=2 face="Times New Roman">563,537</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="54%" colspan="3" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="1%" valign=bottom> <hr size=3 width="100%" noshade color=black align=center> </td>
<td width="11%" valign=bottom> <hr size=3 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>
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<td width=10></td> </tr> </table> <p><font size=2 face="Times New Roman"><i>See accompanying notes.</i></font></p> <p align=center><font size=2 face="Times New Roman">5</font></p> <BR>

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 <p align=center><font size=2 face="Times New Roman"><b>Vyrex Corporation<br></b>(A Development Stage Enterprise)</font></p> <p align=center>
<a name="tx335_6"></a><font size=2 face="Times New Roman">Notes To Condensed Financial Statements<br> (Unaudited)</font></p> <p><font size=2 face="Times New Roman"><b><i>(1) Basis of Presentation</i></b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
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<td width="93%" valign=top> <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 September 30, 2002, and its results of
operations for the three and nine months ended September 30, 2002 and 2001 and cash flows for the nine months ended September 30, 2002 and 2001. The results of operations for the three and nine months ended September 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>
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<td width="93%" valign=top> <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 September 30, 2002, the Company had an accumulated deficit of $13,307,122, a net capital deficiency of $224,904 and a working
capital deficiency of $224,904.&#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>
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<td width="93%" valign=top> <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>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">The Company&#146;s major activities through September 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> <BR>

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<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b>(2) Common stock</b></font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">During the second quarter 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>
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<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b>(3) Warrants</b></font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">During the second quarter 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>
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<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b>(4) Notes Payable</b></font></p> </td> </tr>
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<td width="93%" valign=top> <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>
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<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b>(5) Forgiveness of debt</b></font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">During the nine month period ended September 30, 2002, two former employees forgave previously accrued compensation totaling $140,978.&#160; This amount has been treated as a
contribution to the Company and, accordingly, added to additional paid-in capital in the accompanying condensed financial statements.</font></p> </td> </tr>
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<td width="6%" valign=top> <p><font size=2 face="Times New Roman"><b>Item 2.
<a name="tx335_7"></a></b></font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman"><b>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</b></font></p> </td> </tr>
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<td width="100%" colspan="2" valign=top> <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>
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<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b><i>Results of Operations</i></b></font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman"><b>Three months ended September 30, 2002 and September 30, 2001</b></font></p> </td> </tr>
<tr>
<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman">The Company earned $15,000 in minimum guaranteed monthly royalty payments for two patented nutraceutical compounds licensed to FutureCeuticals, a division of Van Drunen Farms.&#160;
Based on the license agreement the Company will receive the greater of guaranteed monthly royalty payments or royalty payments of 30% of FutureCeuticals&#146; gross sales of these compounds. The Company earned $10,000 in royalty payments in
2001.&#160; The Company will receive a milestone license payment of $75,000 when FutureCeuticals reaches $75,000 in combined&#160; gross sales of the compounds.</font></p> </td> </tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">General and administrative expenses decreased $15,000 to $26,000 in the current period, compared to $41,000 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; Third 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> </table> <p align=center><font size=2 face="Times New Roman">7</font></p> <BR>

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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman">Net loss decreased $35,000 to $15,000, compared to $50,000 for the same period during 2001.&#160; Basic and diluted loss per share decreased $0.01 to $0.00 in the three months ended
September 30, 2002 compared to $0.01 loss in the same period of 2001.</font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman"><b>Nine months ended September 30, 2002 and September 30, 2001</b></font></p> </td> </tr>
<tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman">The Company earned $33,000 in minimum guaranteed monthly royalty payments for two patented nutraceutical compounds licensed to FutureCeuticals&#146;, a division of Van Drunen
Farms.&#160; Based on the license agreement the Company will receive the greater of guaranteed monthly royalty payments or royalty payments of 30% of FutureCeuticals gross sales of these compounds. The Company earned $10,000 in royalty payments in
2001.&#160; The Company will receive a milestone license payment of $75,000 when FutureCeuticals reaches $75,000 in combined gross sales of the compounds.</font></p> </td> </tr>
<tr>
<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">Research and development expenses increased $39,000 to $2,000 in the nine months ended September 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 $57,000 to $88,000 in the current period, compared to $145,000 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; Third 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>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman">Net loss decreased $52,000 to $68,000 compared to $120,000 for the same period during 2001.&#160; Basic and diluted loss per share remained the same at $0.01 for the nine months
ended September 30, 2002.</font></p> </td> </tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <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>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b><i>Liquidity and Capital Resources</i></b></font></p> </td> </tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <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 September 30, 2002, the Company had negative working capital of
$225,000.&#160; Net cash used in operating activities during the nine months ended September 30, 2002 was $70,000, compared to $151,000 for the same period during 2001.</font></p> </td> </tr>
<tr>
<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign=top> <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>
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<td width="6%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
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<td width="93%" valign=top> <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> <BR>

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<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" colspan="2" valign=top> <p><font size=2 face="Times New Roman"><b>New Accounting Pronouncements</b></font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">During 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 144, &#147;Accounting for the Impairment or Disposal of Long-Lived
Assets.&#148;&#160; The adoption of the new standard did not have any effect on the accompanying condensed financial statements.</font></p> </td> </tr>
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<td width="93%" valign=top> <p><font size=2 face="Times New Roman">In June 2002, the Financial Accounting Standards Board Issued Statement of Financial Accounting Standards No. 146, &#147;Accounting for Costs Associated with Exit or Disposal
Activities&#148; (&#147;Statement 146&#148;).&#160; Management does not believe that the adoption of Statement 146 will have a material impact on the Company&#146;s financial position or results of operations.</font></p> </td> </tr>
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<td width="6%" valign=top> <p><font size=2 face="Times New Roman"><b>Item 3.</b>
<a name="tx335_8"></a></font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman"><b>Controls and Procedures</b></font></p> </td> </tr>
<tr>
<td width="6%" valign=top> <p align=right>&nbsp;</p> </td>
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<td width="6%" valign=top> <p align=right><font size=2 face="Times New Roman">(a)&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman">Evaluation of disclosure controls and procedures.&#160; We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be
disclosed in the reports we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the rules of the SEC.&#160; Within 90 days prior to the filing of this Quarterly Report on Form 10-Q, we carried out
an evaluation, under the supervision and the participation of our management, including our Chief Executive Officer, of the design and operation of these disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.&#160; Based upon that
evaluation, our Chief Executive Officer concluded&#160; that our disclosure controls and procedures are effective in timely alerting them to material information relating to the company (including our consolidated subsidiaries) required to be
included in our periodic SEC filing.</font></p> </td> </tr>
<tr>
<td width="6%" valign=top> <p align=right>&nbsp;</p> </td>
<td width="93%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign=top> <p align=right><font size=2 face="Times New Roman">(b)&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </td>
<td width="93%" valign=top> <p><font size=2 face="Times New Roman">Changes in internal controls.&#160; There were no significant changes in internal controls or other factors that could significantly affect our internal controls subsequent to the
date of our evaluation.</font></p> </td> </tr> </table> <p align=center>
<a name="tx335_9"></a><font size=2 face="Times New Roman"><b>PART II&#160; Other Information</b></font></p> <p>
<a name="tx335_10"></a><font size=2 face="Times New Roman"><b>Item 1.&#160;&#160;&#160;&#160;&#160; Legal Proceedings</b></font></p> <p><font size=2 face="Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Not
applicable</font></p> <p>
<a name="tx335_11"></a><font size=2 face="Times New Roman"><b>Item 2.&#160;&#160;&#160;&#160; Changes in Securities</b></font></p> <p><font size=2 face="Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Not
applicable </font></p> <p>
<a name="tx335_12"></a><font size=2 face="Times New Roman"><b>Item 3.&#160;&#160;&#160;&#160; Defaults upon Senior Securities</b></font></p> <p><font size=2
face="Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Not applicable</font></p> <p>
<a name="tx335_13"></a><font size=2 face="Times New Roman"><b>Item 4.&#160;&#160;&#160;&#160; Submission of Matters to a Vote of Security Holders</b></font></p> <p><font size=2
face="Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Not applicable&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></p> <p>
<a name="tx335_14"></a><font size=2 face="Times New Roman"><b>Item 5.&#160;&#160;&#160;&#160; Other Information</b></font></p> <p><font size=2 face="Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Not
applicable</font></p> <p>
<a name="tx335_15"></a><font size=2 face="Times New Roman"><b>Item 6.&#160;&#160;&#160;&#160; Exhibits and Reports on Form 8-K</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="6%" valign=top> <p align=center><font size=2 face="Times New Roman">(a)</font></p> </td>
<td width="94%" valign=top> <p><font size=2 face="Times New Roman">The Company did not file any reports on Form 8-K during the nine months ended September 30, 2002.</font></p> </td> </tr> </table> <p align=center><font size=2
face="Times New Roman">9</font></p> <BR>

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<td width="6%" valign=top> <p align=center><font size=2 face="Times New Roman">(b)</font></p> </td>
<td width="94%" valign=top> <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>
<a name="tx335_16"></a><font size=2 face="Times New Roman"><b>SIGNATURES</b></font></p> <p><font size=2 face="Times New Roman">&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>
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<td width="36%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">VYREX CORPORATION</font></p> </td> </tr>
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<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="36%" colspan="2" valign=bottom> <p><font size=2 face="Times New Roman">Registrant</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p><font size=2 face="Times New Roman">By:</font></p> </td>
<td width="31%" valign=bottom> <p align=center><font size=2 face="Times New Roman"><i>/s/G. DALE GARLOW/</i></font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>G. Dale Garlow,<br> Chief Executive Officer</b></font></p> </td> </tr>
<tr>
<td width="63%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="31%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <font size=2 face="Times New Roman">CERTIFICATION PURSUANT TO</font><br> <center><font size=2 face="Times New Roman">18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO</font><br> <font size=2 face="Times New Roman">SECTIONS 302 AND 906 OF THE SARBANES-OXLEY ACT OF 2002</font></center> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection&#160; with the Quarterly
Report of Vyrex Corporation (the &#147;Company&#148;) on Form 10-QSB for the period ended September 30, 2002, as&#160; filed with&#160; the&#160; Securities&#160; and&#160; Exchange&#160; Commission&#160; on&#160; the&#160; date&#160; hereof&#160;
(the &#147;Report&#148;),&#160; I, G. Dale Garlow, President and Chief Executive Officer&#160; of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002,
that:</font></p> <p><font size=2 face="Times New Roman">(1)&#160; I have reviewed the report;</font></p> <p><font size=2 face="Times New Roman">(2)&#160; To the best of my knowledge, the Report does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading:</font></p> <p><font size=2 face="Times New Roman">(3)&#160; To&#160; the&#160;
best of my knowledge, the financial statements, and&#160; other financial information included in the Report, fairly present in all material respects the financial condition and results of operations of the Company as of, and for, the periods
presented in the Report;</font></p> <p align=center><font size=2 face="Times New Roman">10</font></p> <BR>

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 <p><font size=2 face="Times New Roman">(4)&#160; I:<br> (a)&#160; am responsible for establishing internal controls;<br> (b)&#160; have designed such internal controls to ensure that material information relating to
the Company is made known to me, particularly during the period of July 1, 2002 through September 30, 2002;<br> (c)&#160; have evaluated the effectiveness of the Company&#146;s internal controls as of a date within 90 days prior to the Report;
and<br> (d)&#160; have presented in the Report my conclusions about the effectiveness of my internal controls based on my evaluation of that date;</font></p> <p><font size=2 face="Times New Roman">(5)&#160; I have disclosed to the Company&#146;s
auditors and the board of directors:<br> (a)&#160; all significant deficiencies in the design or operation of internal controls which could adversely affect the Company&#146;s ability to record, process, summarize, and report financial data and have
identified for the Company&#146;s auditors any material weaknesses in internal controls; and<br> (b)&#160; any fraud, whether or not material, that involves management or other employees who have a significant role in the Company&#146;s internal
controls;</font></p> <p><font size=2 face="Times New Roman">(6)&#160; I have indicated in the Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent
to the date of my evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses; and</font></p> <p><font size=2 face="Times New Roman">(7)&#160; The Report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934.</font></p>
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<td width="35%" valign=bottom> <p><font size=2 face="Times New Roman">Date:&#160; November 14, 2002</font></p> </td>
<td width="29%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="35%" valign=bottom> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="35%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="29%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="35%" valign=bottom> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
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<td width="35%" valign=bottom> <p align=center><font size=2 face="Times New Roman">/s/ G. DALE GARLOW</font></p> </td>
<td width="29%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="35%" valign=bottom> <p align=center><font size=2 face="Times New Roman">/s/ G. DALE GARLOW</font></p> </td> </tr>
<tr>
<td width="35%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td>
<td width="29%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="35%" valign=bottom> <hr size=1 width="100%" noshade color=black align=center> </td> </tr>
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<td width="35%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>G. Dale Garlow, President</b></font></p> </td>
<td width="29%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td>
<td width="35%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>G. Dale Garlow, Chief Executive Officer</b></font></p> </td> </tr> </table> <p align=center><font size=2 face="Times New Roman">11</font><font size=2
face="Times New Roman"> </font> </p>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>dex991.htm
<DESCRIPTION>OFFICER'S CERTIFICATE
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  <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;In connection with the Quarterly Report of Vyrex Corporation (the &#147;Company&#148;) on
Form&nbsp;10-QSB for the period ended September&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>
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<td width="94%" valign=top> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;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>
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<td width="5%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td>
<td width="94%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="94%" valign=top> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;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 align=center><font size=2 face="Times New Roman">&nbsp;</font></p>
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<td width="26%" valign=bottom> <p align=center><font size=2 face="Times New Roman">/s/ <i>G. DALE GARLOW</i></font></p> </td>
<td width="73%" valign=top> <p><Font size="2" face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="73%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr>
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<td width="26%" valign=bottom> <p align=center><font size=1 face="Times New Roman"><b>G. Dale Garlow,<br> Chief Executive Officer <br> November 14, 2002</b></font></p> </td>
<td width="73%" valign=top> <p align=center><Font size="2" face="Times New Roman"> &nbsp;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman">&nbsp;</font></p>
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