-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 G79kU/Yi4CeYVRuVKHi9if8W34BRXgxcddqZkIKLUtswCpCj+kacRLTF09GIRubB
 p29s2je2BV9g9EUxngymIw==

<SEC-DOCUMENT>0001193125-03-037004.txt : 20030814
<SEC-HEADER>0001193125-03-037004.hdr.sgml : 20030814
<ACCEPTANCE-DATETIME>20030814095345
ACCESSION NUMBER:		0001193125-03-037004
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20030814

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:		03843699

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

	MAIL ADDRESS:	
		STREET 1:		2159 AVENIDA DE LA PLAYA
		CITY:			LA JOLLA
		STATE:			CA
		ZIP:			92037
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>d10qsb.htm
<DESCRIPTION>FORM 10-QSB
<TEXT>
<HTML><HEAD>
<TITLE>Form 10-QSB</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>
 <hr size="3" width="100%" color="black" noshade> <p align="center"><font style="font-size:18pt"><b>United States<br>Securities and Exchange Commission</b></font> <br><font style="font-size:12pt"><b>Washington D.C.
20549</b></font></p> <hr size="1" width="17%" color="#000000" align="center" noshade> <p align="center"><font style="font-size:18pt"><b>Form 10-QSB</b></font></p> <p><font style="font-size:12pt" face="Wingdings"><b>x</b></font>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</b></p> <p align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the Quarterly Period ended June 30, 2003</b></font></p> <p><font style="font-size:12pt" face="Wingdings"><b>o</b></font><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transition report pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934</b></p> <p align="center"><font style="font-size:10pt"><b>Commission file number: 000-27866</b></font></p> <hr size="1" width="17%" color="#000000" align="center" noshade> <p
align="center"><font style="font-size:24pt"><b>VYREX CORPORATION</b></font><br> <font style="font-size:8pt"><b>(Name of small business issuer as specified in its charter)</b></font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<TR valign="bottom">
<td width="38%" align="center"><font style="font-size:10pt"></font></td>
<td width="24%" align="center"><font style="font-size:10pt"></font></td>
<td width="38%" align="center"><font style="font-size:10pt"></font></td> </tr>
<TR valign="bottom">
<td align="center"><font style="font-size:10pt"><b>Nevada</b></font></td>
<td align="center"><font style="font-size:10pt">&nbsp;</font></td>
<td align="center"><font style="font-size:10pt"><b>88-0271109</b></font></td> </tr>
<tr valign="bottom">
<td align="center"><font style="font-size:8pt"><b>(State or other jurisdiction of incorporation or organization)</b></font></td>
<td align="center"><font style="font-size:8pt">&nbsp;</font></td>
<td align="center"><font style="font-size:8pt"><b>(IRS Employer Identification No.)</b></font></td> </tr> </table> <p align="center"><font style="font-size:10pt"><b>2159 Avenida de la Playa, La Jolla, California, 92037 </b></font><br> <font
style="font-size:8pt"><b>(Address of principal executive offices)</b></font></p> <p align="center"><font style="font-size:10pt"><b>(858) 454-4446</b></font><br> <font style="font-size:8pt"><b>(Issuer&#146;s telephone number including area
code)</b></font></p> <hr size="1" width="17%" color="#000000" align="center" noshade> <p><font style="font-size:10pt">Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</font></p> <p><font style="font-size:10pt">Yes&nbsp;&nbsp;</font><font
style="font-size:10pt" face="Wingdings">x</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font style="font-size:10pt"> No&nbsp;&nbsp;</font><font style="font-size:10pt" face="Wingdings">o</font></p> <p align="center"><font style="font-size:10pt">Applicable
Only to Issuers Involved in Bankruptcy <br> Proceedings During the Preceding Five Years</font></p> <p><font style="font-size:10pt">Check whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan by a court.</font></p> <p><font style="font-size:10pt">Yes&nbsp;&nbsp;</font><font style="font-size:10pt" face="Wingdings">o</font><font
style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;</font><font style="font-size:10pt" face="Wingdings">o</font></p> <p align="center"><font style="font-size:10pt">Applicable Only to Corporate Issuers</font></p> <p><font
style="font-size:10pt">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 style="font-size:10pt">As of June 30, 2003, there are 8,492,867 shares of common
stock, par value $.001, outstanding and warrants to purchase 325,000 shares of common stock outstanding.</font></p> <p><font style="font-size:10pt">Transitional Small Business Disclosure Format</font></p> <p><font
style="font-size:10pt">Yes&nbsp;&nbsp;</font><font style="font-size:10pt" face="Wingdings">o</font><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;</font><font style="font-size:10pt" face="Wingdings">x</font></p> <hr size="3"
width="100%" color="black" noshade>

<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>

<a name="toc"></a> <p align="center"><font style="font-size:10pt"><b>Vyrex Corporation <br>Index to Form 10-QSB</b></font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<TR valign="bottom">
<td width="7%" align="left"><font style="font-size:10pt"></font></td>
<td width="88%" align="left"><font style="font-size:10pt"></font></td>
<td width="5%" align="left"><font style="font-size:10pt"></font></td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>Part&nbsp;I&nbsp;Financial Information</b></font><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b>Item 1 - </font><font style="font-size:10pt">Financial Statements</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>
&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b>&nbsp;</font><font style="font-size:10pt">
<a href="#tx916_1">Condensed Balance Sheets</a></font></td>
<td align="left"> <div align="right"><font style="font-size:10pt">3</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>
&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b>&nbsp;</font><font style="font-size:10pt">
<a href="#tx916_2">Condensed Statements of Operations</a></font></td>
<td align="left"> <div align="right"><font style="font-size:10pt">4</font></div> </td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>
&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b>&nbsp;</font><font style="font-size:10pt">
<a href="#tx916_3">Condensed Statements of Cash Flows</a></font></td>
<td align="left"> <div align="right"><font style="font-size:10pt">5</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>
&nbsp;&nbsp;&nbsp;</b><b>&nbsp;&nbsp;</b><b>&nbsp;&nbsp;&nbsp;</b>&nbsp;</font><font style="font-size:10pt">
<a href="#tx916_4">Notes to Condensed Financial Statements</a></font></td>
<td align="left"> <div align="right"><font style="font-size:10pt">6</font></div> </td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_5"><font style="font-size:10pt">Item 2 - </font><font style="font-size:10pt">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">8</font></div> </td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_6"><font style="font-size:10pt">Item 3 &#150; </font><font style="font-size:10pt">Controls and Procedures</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">9</font></div> </td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>
<a href="#tx916_7">Part II Other Information</a></b></font><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_8"><font style="font-size:10pt">Item 1 - </font><font style="font-size:10pt">Legal Proceedings</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_9"><font style="font-size:10pt">Item 2 - </font><font style="font-size:10pt">Changes in Securities</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_10"><font style="font-size:10pt">Item 3 - </font><font style="font-size:10pt">Defaults upon Senior Securities</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_11"><font style="font-size:10pt">Item 4 - </font><font style="font-size:10pt">Submission of Matters to a Vote of Security Holders</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_12"><font style="font-size:10pt">Item 5 - </font><font style="font-size:10pt">Other Information</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt"><b>&nbsp;&nbsp;</b><b> &nbsp;&nbsp;&nbsp;</b></font>
<a href="#tx916_13"><font style="font-size:10pt">Item 6 - </font><font style="font-size:10pt">Exhibits and Reports on Form 8-K</font></a></td>
<td align="left"> <div align="right"><font style="font-size:10pt">10</font></div> </td> </tr>
<tr valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font></td>
<td> <div align="right"><font style="font-size:10pt">&nbsp;</font></div> </td> </tr>
<TR valign="bottom">
<td align="left" colspan="2"><font style="font-size:10pt">
<a href="#tx916_14">Signatures</a></font></td>
<td align="left"> <div align="right"><font style="font-size:10pt">11</font></div> </td> </tr> </table> <p align="center"><font style="font-size:10pt">2</font></p>

<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 style="font-size:10pt"><b> PART I Financial Information</b></font><br> </p> <p><font style="font-size:10pt"><b>Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements</b></font></p> <p
align="center"><font style="font-size:10pt"><b>
<a name="tx916_1"></a>Vyrex Corporation </b> <br> (a development stage enterprise) <br> <b> Condensed Balance Sheets</b></font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="82%" align="left"><font style="font-size:10pt"></font></td>
<td width="0%" align="left"><font style="font-size:10pt"></font></td>
<td width="0%" align="left"><font style="font-size:10pt"></font></td>
<td width="1%" align="right"><font style="font-size:10pt"></font></td>
<td width="6%" align="right"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="1%" align="right"><font style="font-size:10pt"></font></td>
<td width="6%" align="right"><font style="font-size:10pt"></font></td>
<td width="1%" align="left"><font style="font-size:10pt"></font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center"><font style="font-size:8pt"><b>&nbsp;</b></font></td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>Jun 30, 2003</b></font><hr width="100%" size="1" color="black" noshade></td>
<td valign="bottom" align="center">&nbsp;</td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>Dec 31, 2002</b></font><hr width="100%" size="1" color="black" noshade></td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<tr valign="bottom">
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right" colspan="2"> <div align="center"><font style="font-size:8pt">Unaudited</font></div> </td>
<td align="left">&nbsp;</td>
<td align="right" colspan="2"> <div align="center"><font style="font-size:8pt">(Note 1)</font></div> </td>
<td align="left">&nbsp;</td> </tr>
<tr valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt"><b>Assets</b></font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt"></font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt"></font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">49,964</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">3,026</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom" bgcolor="#cceeff">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Accounts receivable</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">22,500</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">80,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">72,464</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">83,026</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="3" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="3" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt"><b>Liabilities and stockholders&#146; deficiency</b></font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Current liabilities:</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">84,817</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">78,556</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">84,817</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">78,556</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Notes payable to related parties</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">5,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Notes payable, net</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">195,000</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">160,000</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">279,817</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">243,556</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Commitments and contingencies</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Stockholders&#146; deficiency:</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"> <div style="margin-left:20px; text-indent:-20px"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued</font></div></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><div style="margin-left:20px; text-indent:-20px"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Common stock, $.001 par value; 50,000,000 shares authorized; 8,492,867 issued and outstanding</font></div></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">8,493</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">8,493</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Additional paid-in capital</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">13,080,025</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">13,074,025</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Deficit accumulated during the development stage</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(13,295,871</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(13,243,048</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders&#146; deficiency</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(207,353</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(160,530</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders&#146; deficiency</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">72,464</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">83,026</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt"></font></td>
<td colspan="3"><font style="font-size:10pt"></font> <hr width="100%" size="3" color="black" noshade> </td>
<td colspan="2"><font style="font-size:10pt"></font> <hr width="100%" size="3" color="black" noshade> </td>
<td>&nbsp;</td> </tr> </table> <p align="left"><font style="font-size:10pt"><i>See accompanying notes.</i></font></p> <p align="center"><font style="font-size:10pt">3</font></p>

<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 style="font-size:10pt"><b>
<a name="tx916_2"></a>Vyrex Corporation</b></font><br> <font style="font-size:10pt">(a development stage enterprise)</font></p> <p align="center"><font style="font-size:10pt"><b>Condensed Statements of Operations</b></font><br> <font
style="font-size:10pt">(Unaudited)</font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="52 "align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="0%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="0%"align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="1%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="6%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="3%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="1%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="6%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="3%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="1%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="6%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="3%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="1%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="6%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="3%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="1%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="6%" align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td width="1%" align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="5" align="center"> <font style="font-size:8pt"><b>Three Months Ended<br>June 30,<br></b></font><hr size="1" width="100%" color="black" noshade> </td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="5" align="center"> <font style="font-size:8pt"><b>Six Months Ended<br> June 30,<br></b></font><hr size="1" width="100%" color="black" noshade> </td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="center"> <font style="font-size:8pt"><b>Cumulative<br>From<br></b></font> </td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center"><font style="font-size:8pt"><b>&nbsp;</b></font></td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>2003</b></font> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>2002</b></font> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>2003</b></font> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>2002</b></font> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>Inception</b></font> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="14" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Licensing and royalty revenue</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">22,500</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">12,500</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">45,000</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">17,500</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">620,699</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td COLSPAN="14" ALIGN="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="1" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Operating expenses:</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;Research and development</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">163</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">443</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">2,271</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">1,686</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,443,643</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;Marketing and selling</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff">&nbsp;</td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">118</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff">&nbsp;</td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"> <div align="right"><font style="font-size:10pt">&nbsp;376</font></div> </td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"> <div align="right"><font style="font-size:10pt">437,630</font></div> </td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;General and administrative</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">43,275</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">25,462</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">86,136</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">61,647</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,038,083</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="1" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Total operating expenses</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">43,438</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">26,023</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">88,407</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">63,709</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">12,919,356</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="1" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Loss from operations</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(20,938</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(13,523</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(43,407</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(46,209</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(12,298,657</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="1" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Other income (expense):</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;Interest income</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">128</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">80</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">245</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">257</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">475,299</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;&nbsp;Loss on disposal of fixed assets</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(13,664</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;Interest expense</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(5,430</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(3,316</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(9,661</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(6,595</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(108,949</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"> <div style="margin-left:20px;text-indent:-20px"><font style="font-size:10pt">&nbsp;&nbsp; Charge from issuance of stock options for arranging bridge financing costs</font></div> </td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&#151;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(1,349,900</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="1" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Total other income (expense)</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(5,302</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(3,236</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(9,416</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(6,338</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(997,214</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="1" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Net loss</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(26,240</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(16,759</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(52,823</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(52,547</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(13,295,871</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="3" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Net loss per share - basic and diluted</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(0.00</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">$</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(0.00</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(0.01</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"> <div align="left"><font style="font-size:10pt">$</font></div> </td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">(0.01</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">)</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="3" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">Weighted average number of common shares outstanding</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">8,492,867</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">8,492,867</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">8,492,867</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right" bgcolor="#cceeff"><font style="font-size:10pt">8,440,367</font></td>
<td align="left" bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td>
<td bgcolor="#cceeff"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign=bottom>
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="14" align="right"><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font>
<font style="font-size:10pt">&nbsp;</font><font style="font-size:10pt">&nbsp;</font> <font style="font-size:10pt">&nbsp;</font> <hr width="100%" size="3" color="black" noshade> <font style="font-size:10pt">&nbsp;</font> </td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr> </table> <p align="left"><font style="font-size:10pt"><i>See accompanying notes.</i></font></p> <p align="center"><font style="font-size:10pt">4</font></p>

<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 style="font-size:10pt"><b>
<a name="tx916_3"></a>Vyrex Corporation</b></font><br> <font style="font-size:10pt">(a development stage enterprise)</font></p> <p align="center"><font style="font-size:10pt">Condensed Statements of Cash Flows</font><br> <font
style="font-size:10pt">(Unaudited)</font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="72%" valign="bottom"></td>
<td width="0%" valign="bottom"></td>
<td width="0%" valign="bottom"></td>
<td width="1%" valign="bottom"></td>
<td width="6%" valign="bottom"></td>
<td width="3%" valign="bottom"></td>
<td width="1%" valign="bottom"></td>
<td width="6%" valign="bottom"></td>
<td width="3%" valign="bottom"></td>
<td width="1%" valign="bottom"></td>
<td width="6%" valign="bottom"></td>
<td width="1%" valign="bottom"></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="5" align="right"> <div align="center"><font style="font-size:8pt"><b>Six Months ended </b></font><hr size="1" width="100%" color="black" noshade></div> </td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"> <div align="center"><font style="font-size:8pt"><b>Cumulative<br>From<br></b></font></div> </td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>Jun 30, 2003</b></font></td>
<td valign="bottom" align="center">&nbsp;</td>
<td valign="bottom" colspan="2" align="center"><font style="font-size:8pt"><b>Jun 30, 2002</b></font></td>
<td valign="bottom" align="center">&nbsp;</td>
<td valign="bottom" colspan="2" align="center"> <font style="font-size:8pt"><b>Inception</b></font> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt"><b>Operating activities</b></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Net loss</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(52,823</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(52,547</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(13,295,871</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Adjustments to reconcile net loss to net cash provided by (used in) operating activities:</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Depreciation, amortization and impairment charges</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">336,329</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Accretion of debt discount</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">1,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">1,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Interest receivable</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">3,506</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Loss on disposal of fixed assets</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">13,664</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Issuance of compensatory notes, stock, stock options and warrants</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">4,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">2,302,512</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities:</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and other assets</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">57,500</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(5,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">77,500</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,261</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(4,706</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">648,358</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(100,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest on convertible debentures</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">9,041</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Net cash provided by (used in) operating activities</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">11,938</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(58,253</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(10,003,961</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt"><b>Investing activities</b></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Purchase of short-term investments</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(8,440,442</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Sale of short-term investments</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">8,467,931</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Purchases of fixed assets</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(209,595</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Proceeds on sale of fixed assets</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">10,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Patent, trademark and copyrights costs</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(133,519</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Other assets, including notes receivable from related parties</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(4,202</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Net cash used in investing activities</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(309,827</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt"><b>Financing activities</b></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Net proceeds from issuance of common stock</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">7,889,808</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Exercise of stock options and sale of options</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">975,100</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Exercise of warrants</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">15,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">25,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Proceeds from short-term loan</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">867,730</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Proceeds from note payable</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">200,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">791,114</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Repayment of note payable</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(165,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(185,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Advances from potential investors</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">100,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Repayment of advances</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(100,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Net cash provided by financing activities</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">35,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">15,000</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">10,363,752</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Net increase (decrease) in cash and cash equivalents</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">46,938</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(43,253</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">49,964</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Cash and cash equivalents, beginning of period</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">3,026</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">60,003</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&#151;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr>
<TR bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Cash and cash equivalents, end of period</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">49,964</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">16,750</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">49,964</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td valign="bottom" colspan="3" align="center">&nbsp;</td>
<td valign="bottom" colspan="8" align="center"> <hr width="100%" size="3" color="black" noshade> </td>
<td valign="bottom" align="center">&nbsp;</td> </tr> </table> <p align="left"><font style="font-size:10pt"><i>See accompanying notes.</i></font></p> <p align="center"><font style="font-size:10pt">5</font></p>

<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 style="font-size:10pt"><b>
<a name="tx916_4"></a>Vyrex Corporation</b></font><br> <font style="font-size:10pt">(A Development Stage Enterprise)</font></p> <p align="center"><font style="font-size:10pt"> Notes To Condensed Financial Statements </font><br> <font
style="font-size:10pt">(Unaudited)</font></p> <p align="left"><font style="font-size:10pt"><b><i>(1) Basis of Presentation</i></b></font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<TR valign="top">
<td width="5%"><font style="font-size:10pt">&nbsp;</font></td>
<td width="95%"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">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 Company&#146;s financial position as of June 30, 2003, and its results of operations and cash
flows for the three and six months ended June 30, 2003 and 2002. The results of operations for the three and six months ended June 30, 2003 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, 2002.</font></td> </tr>
<TR valign="top">
<td ><font style="font-size:10pt">&nbsp;</font></td>
<td ><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern. 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. As of June 30, 2003, the Company had an accumulated deficit of $13,295,871, a stockholders&#146; deficiency of $207,353 and negative working capital of $12,353. Due to the
Company&#146;s recurring losses and stockholders&#146; 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. 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></td> </tr>
<TR valign="top">
<td ><font style="font-size:10pt">&nbsp;</font></td>
<td ><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">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. 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. Accordingly, there can be no assurance that an agreement will arise in a timely manner, or at all, or that any agreement that may be reached will
successfully reduce the Company&#146;s short-term or long-term funding requirements.</font></td> </tr>
<TR valign="top">
<td ><font style="font-size:10pt">&nbsp;</font></td>
<td ><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">The Company&#146;s major activities through June 30, 2003 have been limited to raising funds for outsourcing research and development on its novel technology, seeking additional collaborative partners through
exclusive or non-exclusive licensing of its technology and continuing to work with its current partners to generate additional revenues based on existing licensing and royalty agreements. These activities have not generated any significant revenues;
accordingly, the Company has been in the development stage since its inception. 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. There can be no assurance that the Company will be successful in these areas. To
supplement its existing resources, the Company will require additional capital through the sale of debt or equity. 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></td> </tr> </table> <p align="center"><font style="font-size:10pt">6</font></p>

<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="left"><font style="font-size:10pt"><b>(2) Notes Payable</b></font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<TR valign="top">
<td width="5%"><font style="font-size:10pt">&nbsp;</font></td>
<td width="95%"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="top">
<td ><font style="font-size:10pt">&nbsp;</font></td>
<td ><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">On March 10, 2003, the Company obtained a commitment from a private investor to loan the Company $200,000 in exchange for the issuance of a convertible note with an interest rate of 10% per annum. Interest is to be
paid quarterly with the principal due and payable at the end of the third year. The investor has the option to convert the principal amount into common stock at a price of $0.25 per share during the first year, $0.50 the second year and $0.75 the
third year. The investor was issued warrants, exercisable within three years from the date of issuance, entitling the investor to purchase 100,000 shares of common stock at an exercise price of $0.11 per share. At March 31, 2003, $140,000 had been
received with an additional $60,000 received in April 2003. The funds were used to pay off a portion of the 8% notes payable which had a principal amount due of $160,000 at December 31, 2002, (see Note 9 in the Form 10-KSB) and was utilized for the
repayment of the $5,000 related party note with the remainder used for general operating purposes. The warrants had a fair value of $6,000 as of the date of issuance; accordingly, the Company discounted the note by $6,000 which was added to
additional paid-in capital. The Company is accreting the discount on a straight-line basis over the term of the note. The Company has recognized $1,000 additional interest expense related to the accretion of this debt discount for the period ended
June 30, 2003.</font></td> </tr> </table> <p align="left"><font style="font-size:10pt"><b>(3) Stock-Based Compensation</b></font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<TR valign="top">
<td width="5%"><font style="font-size:10pt">&nbsp;</font></td>
<td width="95%"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<TR valign="top">
<td ><font style="font-size:10pt">&nbsp;</font></td>
<td ><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">As explained in Note 8 in the Form 10-KSB, the Company accounts for stock options granted to employees based on their intrinsic values under the recognition and measurement principles of APB Opinion No. 25,
&#147;Accounting for Stock Issued to Employees, and Related Interpretations&#148;, and has adopted the disclosure-only provisions of Statement of Financial Accounting Standards (SFAS) No. 123, &#147;Accounting for Stock-Based Compensation&#148;, and
the provisions of Statement of Financial Accounting Standards No. 148, &#147;Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123&#148;. Since the exercise price of all of the options granted by
the Company to its employees has been equal to or greater than fair value, the Company has not recognized any earned or unearned compensation costs in its financial statements in connection with those options. The Company&#146;s historical net loss
and basic net loss per share, and pro forma net loss and basic net loss per share, for the three and six months ended June 30, 2003 and 2002 assuming compensation cost had been determined based on the fair value of all options at the respective
dates of grant determined using a pricing model consistent with the provisions of SFAS 123 are set forth below:</font></td> </tr> </table> <p align="center"><font style="font-size:10pt">7</font></p>

<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>

<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="62%" align="left"><font style="font-size:10pt"></font></td>
<td width="0%" align="left"><font style="font-size:10pt"></font></td>
<td width="0%" align="left"><font style="font-size:10pt"></font></td>
<td width="1%" align="right"><font style="font-size:10pt"></font></td>
<td width="6%" align="right"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="1%" align="right"><font style="font-size:10pt"></font></td>
<td width="6%" align="right"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="1%" align="right"><font style="font-size:10pt"></font></td>
<td width="6%" align="right"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="1%" align="right"><font style="font-size:10pt"></font></td>
<td width="6%" align="right"><font style="font-size:10pt"></font></td>
<td width="1%" align="left"><font style="font-size:10pt"></font></td> </tr>
<tr valign="bottom">
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="5" align="center"><font style="font-size:8pt"><b>Three Months Ended<br> June 30,<br></b></font><hr width="100%" size="1" color="black" noshade></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="5" align="center"><font style="font-size:8pt"><b>Six Months Ended<br> June 30,<br></b></font><hr width="100%" size="1" color="black" noshade></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td align="center" colspan="2"><font style="font-size:8pt"><b>2003</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td>
<td align="center" colspan="2"><font style="font-size:8pt"><b>2002</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td>
<td align="center" colspan="2"><font style="font-size:8pt"><b>2003</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td>
<td align="center" colspan="2"><font style="font-size:8pt"><b>2002</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td>&nbsp;</td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Net loss - as reported</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(26,240</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(16,759</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(52,823</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(52,547</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td align="left"> <div style=" margin-left:20px; text-indent:-20px"><font style="font-size:10pt">Stock-based employee compensation expense assuming a fair value based method had been used for all awards</font></div> </td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(9,875</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(9,500</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(19,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="right"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">(19,000</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Net loss &#150; pro forma</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(36,115</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(26,259</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(71,823</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(71,547</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="2"><hr width="100%" size="3" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"> <hr width="100%" size="3" color="black" noshade> <font style="font-size:10pt"></font></td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"> <hr width="100%" size="3" color="black" noshade> <font style="font-size:10pt"></font></td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Basic loss per share &#150; as reported</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td> </tr>
<tr bgcolor="#cceeff" valign="bottom">
<td align="left"><font style="font-size:10pt">Basic loss per share &#150; pro forma</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td>
<td align="left"><font style="font-size:10pt">$</font></td>
<td align="right"><font style="font-size:10pt">(.00</font></td>
<td align="left"><font style="font-size:10pt">)</font></td> </tr>
<tr valign="bottom">
<td colspan="3"><font style="font-size:10pt">&nbsp;</font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td>
<td colspan="2"><hr width="100%" size="1" color="black" noshade> </td>
<td><font style="font-size:10pt"></font></td> </tr> </table> <p><font style="font-size:10pt"><b>
<a name="tx916_5"></a>Item 2.&nbsp;&nbsp;&nbsp;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</b></font></p> <p><font style="font-size:10pt">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. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. This report should be
read in conjunction with the Company&#146;s annual report on Form 10-KSB for the year ended December 31, 2002.</font></p> <p><font style="font-size:10pt"><b><i>Results of Operations</i></b></font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="5%"><font style="font-size:10pt"></font></td>
<td width="95%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt"><b>Three months ended June 30, 2003 and June 30, 2002</b></font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Royalty income increased $10,000 to $23,000 in the three months ended June 30, 2003 compared to $13,000 in the same period of 2002. Royalty income is comprised of our boron and
carnochrome technology licensed by the FutureCeutical division of Van Drunen Farms.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">General and administrative expenses increased $18,000 to $43,000 in the current period, compared to $25,000 for the same period in 2002. Second quarter expenses were limited to
maintenance of patents and general office expenses such as accounting fees, utility expenses, telephone expenses, rent and postage.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Net loss increased $9,000 to $26,000, compared to $17,000 for the same period during 2002. Basic and diluted loss per share remained the same at $0.00 in the three months ended June 30,
2003 and 2002.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt"><b>Six months ended June 30, 2003 and June 30, 2002</b></font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Royalty income increased $27,000 to $45,000 in the six months ended June 30, 2003 compared to $18,000 in the same period of 2002. Royalty income is comprised of our boron and carnochrome
compounds licensed by the FutureCeutical division of Van Drunen Farms.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">General and administrative expenses increased $24,000 to $86,000 in the current period, compared to $62,000 for the same period in 2002. Expenses were limited to maintenance of patents
and general office expenses such as accounting fees, utility expenses, telephone expenses, rent and postage.</font></font></td> </tr> </table> <p align="center"><font style="font-size:10pt">8</font></p>

<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>

<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="5%"><font style="font-size:10pt"></font></td>
<td width="95%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Net loss remained the same at $53,000 for the same period during 2003 and 2002. Basic and diluted loss per share remained the same at $0.01 for the same period during 2003 and
2002.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">On June 11, 2003 the Company announced it was awarded U.S. Patent Number 6,541,613 entitled isoflavone derivatives. The patent covers several novel isoflavone derivatives. Isoflavones
are a group of naturally occurring plant compounds, the most well known of which are found in soy. Researchers have studied isoflavones extensively and have found they possess a number of important biological activities, including antioxidant,
anti-inflammatory, estrogenic and antiangiogenic activities. Clinical studies on plant-derived isoflavones have produced variable results attributed to their erratic absorption and bioavailability. The Company believes isoflavone derivatives based
on technology covered by this new patent will be stable. Isoflavone derivatives have marketplace applications in dietary supplements, cosmetic and drugs. There can be no assurance the Company will be able to develop this technology internally or
enter into a collaboration or license agreement to develop products externally.</font></font></td> </tr> </table> <br> <p><font style="font-size:10pt"><b><i>Liquidity and Capital Resources</i></b></font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="5%"><font style="font-size:10pt"></font></td>
<td width="95%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The Company has financed its operations since inception solely through the sales of debt and equity securities. As of June 30, 2003, the Company had negative working capital of $12,000.
Net cash provided by operating activities during the six months ended June 30, 2003 was $12,000, compared to net cash used in operating activities of $58,000 for the same period during 2002.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">On March 10, 2003, the Company obtained a commitment from a private investor to loan the Company $200,000 in exchange for the issuance of a convertible note with an interest rate of 10%
and warrants, exercisable within three years, entitling the lender to purchase 100,000 shares of common stock at an exercise price of $0.11 per share. The loan principal is due in March 2006. At March 31, 2003, $140,000 had been received; the
remaining $60,000 was received in April 2003. The proceeds were used to repay outstanding debt and for working capital purposes.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">There can be no assurance that any further revenues will be realized in 2003 or that they will be significant and therefore without additional financing the Company may be unable to
continue as a going concern. 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. At June
30, 2003, the Company does not have any commitments for additional financing other than the balance of the proceeds from the note payable discussed above. To date the Company has no prospects for merger or acquisition. The Company does not have any
lease or other commitments. The Company does not have an existing bank line of credit or other form of revolving or renewable credit facility. There can be no assurance the Company will generate significant revenues during 2003 to continue its
operations, or that funds will be available through the public or private markets.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The Company believes but cannot assure that its current cash reserves and other resources will fund the business through at least June 30, 2004. 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></font></td> </tr> </table> <p><font
style="font-size:10pt"><b>
<a name="tx916_6"></a>Item 3.&nbsp;&nbsp;&nbsp;Controls and Procedures</b></font></p> <p><font style="font-size:10pt">The Company carried out an evaluation, under the supervision and with the participation of the Company&#146;s management, including
the Company&#146;s Chief Executive Officer and President, of the effectiveness of the design and operation of the Company&#146;s disclosure controls and procedures as of June 30, 2003 pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.
Based upon that evaluation, the principal executive officer concluded that the Company&#146;s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company, required to be included in the
Company&#146;s periodic SEC filings. Such evaluation did not identify any change in the Company&#146;s internal control over financial reporting that occurred </font></p> <p align="center"><font style="font-size:10pt">9</font></p>

<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><font style="font-size:10pt">during the quarter ended June 30, 2003 that has materially affected, or is reasonably likely to materially affect, the Company&#146;s internal control over financial
reporting.</font></p> <p align="center"><font style="font-size:10pt"><b>
<a name="tx916_7"></a>PART II Other Information</b></font></p> <p><font style="font-size:10pt"><b>
<a name="tx916_8"></a>Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings</b></font></p> <p><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p> <p><font
style="font-size:10pt"><b>
<a name="tx916_9"></a>Item 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in Securities</b></font></p> <p><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p> <p><font
style="font-size:10pt"><b>
<a name="tx916_10"></a>Item 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defaults upon Senior Securities</b></font></p> <p><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p><font style="font-size:10pt"><b>
<a name="tx916_11"></a>Item 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders</b></font></p>
<table width="100%" cellpadding="0" cellspacing="0" border="0">
<tr valign="top">
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="94%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;(a)</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The annual meeting of shareholders was held June 9, 2003.</font></font></td> </tr>
<tr>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;(b)</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The following directors were elected at the meeting:</font></font></td> </tr> </table>
<table width="100%" cellpadding="0" cellspacing="0" border="0">
<tr valign="top">
<td width="9%"><font style="font-size:10pt"></font></td>
<td width="91%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Sheldon S. Hendler Ph.D., M.D</font></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">G. Dale Garlow</font></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Richard G. McKee, Jr.</font></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Tom K. Larson, Jr.</font></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">Michael L. Eagle</font></font></td> </tr> </table><br>
<table width="100%" cellpadding="0" cellspacing="0" border="0">
<tr valign="top">
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="94%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;(c)</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The following table reflects the voting in connection with each matter voted on at the meeting:</font></font></td> </tr> </table><br>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="38%" align="left"><font style="font-size:10pt"></font></td>
<td width="20%" align="left"><font style="font-size:10pt"></font></td>
<td width="12%" align="right"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="12%" align="right"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="12%" align="right"><font style="font-size:10pt"></font></td> </tr>
<tr valign="bottom">
<td valign="bottom" align="center"><font style="font-size:8pt"><b>Matter</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b>For</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b>Against</b></font> <hr width="100%" size="1" color="black" noshade> </td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b>Abstain</b></font> <hr width="100%" size="1" color="black" noshade> </td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">1.&nbsp;&nbsp;&nbsp;Election of Directors</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt"></font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sheldon S. Hendler Ph.D., M.D.</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,699,881</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">0</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">700</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Dale Garlow</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,699,881</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">0</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">700</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard G. McKee</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,699,881</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">0</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">700</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tom K. Larson, Jr.</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,696,881</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">0</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">3,700</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Michael L. Eagle</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,699,881</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">0</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">700</font></td> </tr>
<tr valign="bottom">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">2.&nbsp;&nbsp;&nbsp;Appointment of Auditor</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">6,688,581</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">0</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="right"><font style="font-size:10pt">12,000</font></td> </tr> </table> <p><font style="font-size:10pt"><b>
<a name="tx916_12"></a>Item 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Information</b></font></p> <p><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p> <p><font
style="font-size:10pt"><b>
<a name="tx916_13"></a>Item 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K</b></font></p>
<table width="100%" cellpadding="0" cellspacing="0" border="0">
<tr valign="top">
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="94%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;(a)</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The following exhibits are included as part of this report:</font></font></td> </tr> </table><br>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="7%" align="left"><font style="font-size:10pt"></font></td>
<td width="23%" align="left"><font style="font-size:10pt"></font></td>
<td width="70%" align="left"><font style="font-size:10pt"></font></td>
<td width="0%" align="left"><font style="font-size:10pt"></font></td></tr>
<tr valign="bottom">
<td valign="bottom" align="center"><font style="font-size:10pt"><b>Exhibit Number</b></font><hr width="100%" size="1" color="black" noshade></td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td>
<td valign="bottom" align="center"><font style="font-size:10pt"><b>Description of Document</b></font><hr width="100%" size="1" color="black" noshade></td>
<td valign="bottom" align="center"><font style="font-size:8pt"><b></b></font></td></tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt">31.1</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">Certification of the chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="bottom">
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td>
<td><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt">32.1</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">Certification of the chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr> </table> <br>
<table width="100%" cellpadding="0" cellspacing="0" border="0">
<tr valign="top">
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="94%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td align="left"><font style="font-size:10pt"></font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;(b)</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">The Company did not file any reports on Form 8-K during the three months ended June 30, 2003</font></font></td> </tr> </table> <p align="center"><font style="font-size:10pt">10
</font></p>

<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 style="font-size:10pt"><b>
<a name="tx916_14"></a>SIGNATURES</b></font></p> <p><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.</font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="60%" align="left"><font style="font-size:10pt"></font></td>
<td width="3%" align="left"><font style="font-size:10pt"></font></td>
<td width="37%" align="left"><font style="font-size:10pt"></font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" colspan="2"><font style="font-size:10pt">V<small>YREX</small> C<small>ORPORATION</small></font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left" colspan="2"><font style="font-size:10pt">Registrant</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">By:</font></td>
<td align="left"><font style="font-size:10pt">/s/&nbsp;&nbsp;G. D<small>ALE </small>G<small>ARLOW</small>/</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt"></font><hr width="100%" size="1" color="black" noshade></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:8pt">G. Dale Garlow,</font></font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:8pt">Chief Executive Officer</font></font></td></tr> </table> <p align="center"><font style="font-size:10pt">11</font></p>
</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>dex31.htm
<DESCRIPTION>EXHIBIT 31.1 - CEO CERTIFICATION (SECTION 302)
<TEXT>
<HTML><HEAD>
<TITLE>Exhibit 31.1 - CEO Certification (Section 302)</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align="right"><font style="font-size:10pt">Exhibit 31.1</font></p> <p align="center"><font style="font-size:10pt"><b>CERTIFICATION PURSUANT TO<br>18 USC, SECTION 1350, AS ADOPTED PURSUANT TO<br>SECTIONS 302 OF THE
SARBANES-OXLEY ACT OF 2002</b></font></p> <p><font style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of Vyrex Corporation (the &#147;Company&#148;) on Form 10-QSB for the period
ended June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, G. Dale Garlow, President and Chief Executive Officer 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 style="font-size:10pt">(1)&nbsp;&nbsp;I have reviewed the report;</font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="2%"><font style="font-size:10pt"></font></td>
<td width="98%"><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">(2)</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">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></font></td> </tr> </table> <p><font style="font-size:10pt">(3)&nbsp;&nbsp;To the best of my knowledge, the financial statements, and 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><font
style="font-size:10pt">(4)&nbsp;&nbsp;I:</font><br><font style="font-size:10pt">(a)&nbsp;&nbsp;am responsible for establishing internal controls;</font> <br><font style="font-size:10pt">(b)&nbsp;&nbsp;have designed such internal controls to ensure
that material information relating to the Company is made known to me, particularly during the period of April 1, 2003 through June 30, 2003;</font><br><font style="font-size:10pt">(c)&nbsp;&nbsp;have evaluated the effectiveness of the
Company&#146;s internal controls as of the end of the period covered by this report based on such evaluation; and</font><br><font style="font-size:10pt">(d)&nbsp;&nbsp;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 style="font-size:10pt">(5)&nbsp;&nbsp;I have disclosed to the Company&#146;s auditors and the board of directors:</font><br><font style="font-size:10pt">(a)&nbsp;&nbsp;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</font><br><font style="font-size:10pt">(b)&nbsp;&nbsp;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 style="font-size:10pt">(6)&nbsp;&nbsp;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 style="font-size:10pt">(7)&nbsp;&nbsp;The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934.</font></p>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="35%" align="left"><font style="font-size:10pt"></font></td>
<td width="20%" align="left"><font style="font-size:10pt"></font></td>
<td width="55%" align="left"><font style="font-size:10pt"></font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">Date:&nbsp;&nbsp;August 14, 2003</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">/s/&nbsp;&nbsp;G. D<small>ALE</small> G<small>ARLOW</small></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt">/s/&nbsp;&nbsp;G. D<small>ALE</small> G<small>ARLOW</small></font></td> </tr>
<tr valign="bottom">
<td align="left"> <hr width="100%" size="1" color="black" noshade> </td>
<td align="left">&nbsp;</td>
<td align="left"> <hr width="100%" size="1" color="black" noshade> </td> </tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt"><font style=" font-size:8pt">G. Dale Garlow, President</font></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td>
<td align="left"><font style="font-size:10pt"><font style=" font-size:8pt">G. Dale Garlow, Chief Executive Officer</font></font></td> </tr> </table>
</BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>dex32.htm
<DESCRIPTION>EXHIBIT 32.1 - CEO CERTIFICATION (SECTION 906)
<TEXT>
<HTML><HEAD>
<TITLE>Exhibit 32.1 - CEO Certification (Section 906)</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align="right"><font style="font-size:10pt">Exhibit 32.1</font></p> <p align="center"><font style="font-size:10pt">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 style="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of Vyrex Corporation (the &#147;Company&#148;) on Form 10-QSB for the period ending
June 30, 2003 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 U.S.C. &#167;1350, as adopted pursuant to &#167;906 of
the Sarbanes-Oxley Act of 2002, that:</font></p>
<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="3%"><font style="font-size:10pt"></font></td>
<td><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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></font></td> </tr> </table> <br>
<table width="100%" cellpadding="0" cellspacing="0">
<tr valign="top">
<td width="3%"><font style="font-size:10pt"></font></td>
<td><font style="font-size:10pt"></font></td> </tr>
<tr valign="top">
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;</font></font></td>
<td><font style="font-size:10pt"><font style=" font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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></font></td> </tr> </table> <br>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr valign="bottom">
<td width="30%" align="left"><font style="font-size:10pt"></font></td>
<td width="70%" align="left"><font style="font-size:10pt"></font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">/s/&nbsp;&nbsp;G. D<small>ALE</small> G<small>ARLOW</small></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt"></font><hr width="100%" size="1" color="black" noshade></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt"><font style=" font-size:8pt">G. Dale Garlow,</font></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt"><font style=" font-size:8pt">Chief Executive Officer</font></font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr>
<tr valign="bottom">
<td align="left"><font style="font-size:10pt">August 14, 2003</font></td>
<td align="left"><font style="font-size:10pt">&nbsp;</font></td></tr> </table>
</BODY></HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
