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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As filed with the Securities and Exchange
Commission on August 8, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Registration Statement No. 333- </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM S-1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REGISTRATION STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>UNDER THE SECURITIES ACT OF 1933</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">INNOVUS PHARMACEUTICALS, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of registrant as specified
in its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%; border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Nevada</TD>
    <TD STYLE="width: 2%; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">2834</TD>
    <TD STYLE="width: 2%; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">87-0324697</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State&nbsp;or&nbsp;other&nbsp;jurisdiction</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">of&nbsp;incorporation&nbsp;or</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">organization)</P></TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Primary&nbsp;Standard</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Industrial&nbsp;Classification</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Code&nbsp;Number)</P></TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(I.R.S.&nbsp;Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Identification&nbsp;No.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border: white 1pt solid">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">80 W. Sierra Madre Blvd., #392</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Sierra Madre, CA 91024</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(626) 227-1630</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address, including zip code, and telephone
number,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">including area code,
of registrant&rsquo;s principal executive offices)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Vivian Liu.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Innovus Pharmaceuticals, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">80 W. Sierra Blvd., #392</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Sierra Madre, CA 91024</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(626) 227-1630</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code, and
telephone number,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">including area code, of agent for service)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>Copies to:</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Wallace T. Boyack, Esq.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">2290 East 4500 South, Suite 130</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">Salt Lake City, UT 84117</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">Telephone: (801) 278-9925</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Approximate date of commencement of proposed sale to the
public:</B> As promptly as practicable after the effective date of this Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the only securities being registered on this Form are to
be offered pursuant to dividend or interest reinvestment plans, please check the following box. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans, please check the following box. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If this Form is used to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following box. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of &ldquo;large accelerated
filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b-2 of the Exchange Act. (Check
one):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 56%; padding-left: 5.4pt">Large accelerated filer <FONT STYLE="font-family: Wingdings">o</FONT></TD>
    <TD STYLE="width: 44%; padding-left: 5.4pt">Accelerated filer <FONT STYLE="font-family: Wingdings">o</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 5.4pt">Non-accelerated filer <FONT STYLE="font-family: Wingdings">o</FONT> (Do not check if a smaller
    reporting company)</TD>
    <TD STYLE="padding-left: 5.4pt">Smaller reporting company <FONT STYLE="font-family: Wingdings">x</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CALCULATION OF REGISTRATION FEE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">Title&nbsp;Of&nbsp;Each&nbsp;Class&nbsp;Of <BR>Securities&nbsp;To&nbsp;Be
    <BR>Registered</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">Amount&nbsp;To <BR>Be&nbsp;Registered</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Proposed <BR>Maximum <BR>Offering <BR>Price&nbsp;Per <BR>Share&nbsp;(1)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Proposed <BR>Maximum <BR>Aggregate <BR>Offering&nbsp;Price<BR>(2)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Amount&nbsp;of <BR>Registration&nbsp;Fee<BR>(1)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 34%; text-align: left">Common Stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 14%; text-align: center; padding-left: 10pt">150,580 shares</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">2.25</TD><TD STYLE="width: 1%; text-align: left">(2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">338,805</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">38.68</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(1)&#9;We are registering the resale by
selling stockholders of 150,580 shares of common stock that we previously issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(2)&#9;Estimated solely for the purpose
of calculating the registration fee in accordance with Rule 457 of the Securities Act and based on the most recent closing price
on August 6, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant
to said Section 8(a) may determine. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The information in this prospectus is not complete and may
be changed. The selling security holders will not sell these securities until after the registration statement filed with the
Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Subject to Completion, dated August 8,
2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>150,580 Shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This prospectus relates to the offer for
sale of up to a total of 150,580 shares of our common stock that may be sold from time to time by certain existing stockholders
named in this prospectus and their successor and assigns. The shares of common stock to be sold by the selling stockholders were
acquired in June 2012 in connection with a private placement to accredited investors and a conversion of a debt instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The shares offered for resale by this prospectus
were issued to the applicable selling stockholders in private transactions completed prior to the filing of this registration
statement, of which this prospectus is a part. This offering is not being underwritten. We will not receive any proceeds from
the sale of shares in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The selling stockholder, to the extent
a public market exists at such time, may offer their common stock from time to time through public transactions at prevailing
market prices, at prices related to prevailing market prices, or through private transactions at privately negotiated prices.
We have agreed to pay all costs and expenses of registering this offering of securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our common stock is included for quotation
on the OTCBB under the symbol &quot;INNV&quot;. There is limited trading in our common stock. On August 6, 2012, the most recent
day that our stock traded, the last reported price per share of our common stock was $2.25. You are urged to obtain current market
quotations of our common stock before purchasing any of the shares being offered for sale pursuant to this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are an &quot;emerging growth company&quot;
as defined in the Jumpstart Our Business Startups Act (&quot;JOBS Act&quot;) and as such we will be subject to reduced public
company reporting requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Investing in our common stock involves
substantial risks. You should carefully consider the matters discussed under &quot;Risk Factors&quot; beginning on page 5 of this
prospectus.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Neither the Securities and Exchange
Commission (&quot;SEC&quot;) nor any state securities commission has approved or disapproved these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The date of this prospectus is August 8, 2012.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="width: 92%; vertical-align: top">PROSPECTUS SUMMARY</TD>
    <TD STYLE="width: 8%; vertical-align: bottom; text-align: right">1</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">SUMMARY FINANCIAL INFORMATION</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">RISK FACTORS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">DILUTION</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">12</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">MARKET FOR OUR COMMON STOCK</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">DIVIDEND POLICY</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">THE OFFERING</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">PLAN OF DISTRIBUTION</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">SELLING STOCKHOLDERS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">CAPITALIZATION</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">LEGAL PROCEEDINGS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">JOBS ACT</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">BUSINESS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">17</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">26</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">MANAGEMENT AND BOARD OF DIRECTORS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">28</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">29</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">DESCRIPTION OF SECURITIES</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">30</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">DISCLOSURES OF COMMISSION'S POSITION ON INDEMNIFACTION FOR SECURITIES ACT LIABILITIES</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">LEGAL MATTERS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">EXPERTS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">INTEREST OF NAMED EXPERTS AND COUNSEL</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">WHERE YOU CAN FIND MORE INFORMATION</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">FINANCIAL STATEMENTS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">F-1</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">You should rely only on the information
contained or incorporated by reference in this prospectus and any free-writing prospectus prepared by or on behalf of us or to
which we have referred you. We are an &quot;emerging growth company&quot; under the federal securities laws and will therefore
be subject to reduced public company reporting requirements. We have not authorized anyone to provide additional or different
information. The information contained in this prospectus is accurate as of the date of this prospectus regardless of the delivery
of this prospectus or any sale of securities contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For convenience trademarks, service marks
and trade names referred to in this prospectus may be without appropriate symbols, but such omissions are not intended to indicate
in any way that the owner will not assert under applicable law to the fullest extent such owner's rights to these trademarks,
service marks and trade names. This prospectus contains additional trade names, trademarks and service marks of other companies
which to our knowledge are the property of their respective owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROSPECTUS SUMMARY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>This summary highlights information
in this prospectus and is qualified in its entirety to the more detailed information and financial statements included elsewhere
herein. This summary may not contain all the information that may be important to you. Before making an investment decision, you
should read carefully the entire prospectus including the information under the &quot;Risk Factors&quot; section and our financial
statements and related notes. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In this Prospectus, references to Innovus
Pharmaceuticals, Inc.,&rdquo; Innovus Pharma,&rdquo; FasTrack&rdquo;,&rdquo; the Company,&rdquo; we,&rdquo; us,&rdquo; our,&rdquo;
and words of similar import and meaning refer to Innovus Pharmaceuticals, Inc., the Registrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">References to North Horizon&rdquo;, North
Horizon, Inc.&rdquo; refer to the pre-transaction public shell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In this report references to a major related
party of the Company - Apricus Biosciences, Inc (Nasdaq: APRI) (Apricus Bio&rdquo;), Bio-Quant, Inc. (Bio-Quant&rdquo;) and NexMed
(U.S.A.), Inc., (NexMed&rdquo;) may be used interchangeably, but shall represent the same entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Innovus Pharmaceuticals, Inc. (the &ldquo;<B><I>Company</I></B>&rdquo;,
&ldquo;<B><I>Innovus Pharma</I></B>&rdquo;, &ldquo;<B><I>FasTrack</I></B>&rdquo;, &ldquo;<B><I>we</I></B>&rdquo;, &ldquo;<B><I>us</I></B>&rdquo;
and &ldquo;<B><I>our</I></B>&rdquo;) is focused on near term revenue opportunities through the commercialization of its proprietary
product pipeline, currently consisting of therapies aimed at pain relief and bleeding of the gums. Additionally, the Company is
actively seeking to in-license and/or to acquire new and innovative pharmaceutical compounds&nbsp;that offer definable pathways
to regulatory approval, partnering and commercialization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 28pt">Our business model is to create multiple
opportunities for success while minimizing the risks associated with reliance on any single technology platform or product type,
and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions to place our product
candidates into larger organizations or with partners having existing commercialization, sales and marketing resources, and a
need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 28pt">In parallel, as our business strategy advances
and corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow.&nbsp; This strategy may include debt financing and/or
acquisitions of small revenue generating companies and products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Proprietary Product and Technology Portfolios</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The lead product in our pipeline is Apeaz<SUP>&trade;</SUP>,
a topical cream for pain relief. It is intended to deliver different ingredients to various layers of the skin and muscle, and
optimize effect. The product had previously been sold in the U.S. and internationally, and had cumulative sales of up to $500,000.
However, all sales for the product were abandoned in 2008, when the U.S. distributor went out of business, and the previous owner
of Apeaz<SUP>&trade;</SUP> decided to focus on another segment of its business. The Company needs approximately $30,000 to repackage
and relaunch the product in the U.S. and internationally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, we have Regia<SUP>&trade;</SUP>,
which is a plant-derived, anti-microbial agent for reducing the bleeding of gums when used in OTC products such as mouthwash.
The same active is currently included in a mouthwash commercialized in France. We have an issued US patent which expires in May
2028 and patent applications pending in selected international markets. Our intention is to out-license the patent portfolio for
Regia&trade; to potential development partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In our portfolio of Rx products, we have
a partial interest in the potential commercial value of PrevOnco<SUP>&trade;</SUP>, a Phase 2/3 second-line Orphan Drug therapy
for patients with hepatocellular carcinoma or liver cancer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Within our Rx portfolio is a development
platform based on SSAO inhibitors. SSAO is known as vascular adhesion protein-1 or VAP-1, and is a dual function molecule with
enzymatic and cell adhesion activities. These inhibitors are designed to reduce inflammation by blocking the white blood cells
and reducing the levels of inflammatory mediators.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Prior Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Innovus Pharma, formerly known as North
Horizon, Inc., was incorporated under the laws of the State of Utah on January 15, 1959. It changed the corporate domicile to
the State of Nevada in 2007. In December 2011, North Horizon changed its name to Innovus Pharmaceuticals, Inc., and subsequently
entered into a combination transaction with FasTrack Pharmaceuticals, Inc., whereby FasTrack became wholly-owned subsidiary of
North Horizon, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">FasTrack was organized by shareholders of Bio-Quant, which
was a Utah corporation founded in 2000 and operated as a contract research organization for the pharmaceutical industry. In late
2008, Bio-Quant decided to focus on its core business of pre-clinical testing services, and sold its pharmaceutical assets to
FasTrack and Sorrento Pharmaceuticals, Inc. (Sorrento&rdquo;), which focused on the development of Rx and OTC products, respectively.
The limited funding of both FasTrack and Sorrento severely limited their activities and operations. In March 2011, the shareholders
of FasTrack and Sorrento decided to combine operations in an effort to better position the combined entity for new investors.
Pursuant to an asset purchase agreement between the two companies. FasTrack acquired Sorrento&rsquo;s assets and liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Reverse Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On December 7, 2011, the North Horizon
completed a combination transaction with FasTrack Pharmaceuticals, Inc., a Delaware corporation, which became a wholly-owned subsidiary
of North Horizon, Inc. (subsequently Innovus Pharma). FasTrack was a specialty pharmaceutical company with a development pipeline
of Rx and OTC products. The combination caused the shareholders of FasTrack to have actual and effective operating control of
the combined entity. <FONT STYLE="font-family: Times New Roman, Times, Serif">The transaction has been accounted for as a reverse
merger, whereby North Horizon is the legal acquirer and FasTrack is the legal acquiree and the accounting acquirer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Immediately before the combination, North
Horizon&rsquo;s issued and outstanding shares in the amount of 13,251,250 were subject to a reverse split on the basis of ten
shares into one share (10:1) The reverse split was effective on December 6, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following is a summary of the changes
and actions that resulted from the closing of the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; font-weight: bold">Name Change:</TD>
    <TD STYLE="width: 76%">Innovus Pharmaceuticals, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Capitalization:</TD>
    <TD>150,000,000 shares of common stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Directors:</TD>
    <TD>Vivian Liu, Henry Esber, Ph.D. and Ziad Mirza, M.D.,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Reverse Split:</TD>
    <TD>A reverse split on the basis of ten shares into one share (10:1) of the issued and outstanding shares.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our business address is 80 West Sierra
Madre Blvd. #392, Sierra Madre, California 91024, telephone number 626-227-1630.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Plans and Business Model</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our business model is designed to create
multiple opportunities for growth while minimizing the risks associated with reliance on any single technology platform or product
type, and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions designed to place our
product candidates into larger organizations or with partners having existing commercialization, sales and marketing resources,
and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In parallel, as our business strategy advances
and corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow.&nbsp; This strategy may include debt financing and/or
acquisitions of small revenue generating companies and products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selling stockholders</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of the date of the prospectus we have
issued and outstanding 16,333,670 shares of common stock. Of those shares 9,959,168 are held by affiliates of the Company (approximately
60%).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The 150,580 shares being offered pursuant
to this prospectus represent approximately less than one per cent of the total outstanding shares. The selling shareholders are
not considered affiliates. They are listed under the caption &quot;Selling Stockholders&quot; section.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Shares of common stock offered by the Company - </I>None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Trading Market - </I>Our shares are traded from time to
time on the OTCBB under the symbol &quot;INNV.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Shares of common stock which may be sold by the selling
stockholders - 150,580</I> shares</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Use of proceeds</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We will not receive any proceeds from the
resale of shares offered by the selling stockholders. Any proceeds will be paid to the selling stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Risk factors </I>- The purchase of our common stock involves
a high degree of risk as highlighted herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Plan of distribution</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our expectation is that the selling stockholders
will sell their shares primarily through sales into the OTCBB market, made from time to time at prices the selling stockholders
consider and deem to be appropriate and adequate. (See &quot;Plan of Distribution.&quot;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Currently we have authorized capitalization
of 150,000,000 shares of common stock, par value of $.001 per share and there are 16,333,670 shares issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Summary Financial Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The December 7, 2011 combination between
North Horizon and FasTrack was accounted for as a reverse acquisition and recapitalization with FasTrack being the acquirer. Accordingly
the consolidated financial statements and the summary financial information set forth are in substance those of Fastrack as the
accounting acquirer, with the assets and liabilities and the revenues and expenses of North Horizon being included, effective
from the acquisition date. The historical financial statements for periods prior to the acquisition are those of FasTrack except
the equity section earnings per share have been retroactively restated to reflect the acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SUMMARY FINANCIAL INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The summary historical financial information
presented as of December 31, 2011 is derived from audited financial statements of Innovus Pharmaceuticals, Inc, that are included
elsewhere in this prospectus.&nbsp; The summary historical financial information presented as of December 31, 2010 is derived
from the audited financial statements of FasTrack Pharmaceuticals, Inc., the accounting acquirer, that are included elsewhere
in this prospectus. The summary historical financial information presented as of the three and six months ended June 30, 2012
are derived from the unaudited historical financial statements of Innovus Pharmaceuticals, Inc. included elsewhere in this prospectus.
The summary historical financial information presented as of the three and six months ended June 30, 2011 are derived from the
unaudited historical financial statements of FasTrack Pharmaceuticals, Inc., the accounting acquirer, that are included elsewhere
in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Statement of Operations Data</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the <BR>three <BR>months <BR>ended&nbsp;June
    <BR>30,&nbsp;2012 <BR>(unaudited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the <BR>three <BR>months <BR>ended&nbsp;June
    <BR>30,&nbsp;2011 <BR>(unaudited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the&nbsp;six <BR>months <BR>ended&nbsp;June
    <BR>30,&nbsp;2012 <BR>(unaudited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the&nbsp;six <BR>months <BR>ended&nbsp;June
    <BR>30,&nbsp;2011 <BR>(unaudited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the&nbsp;year <BR>ended <BR>December
    <BR>31,&nbsp;2011 <BR>(audited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the <BR>year&nbsp;ended <BR>December
    <BR>31,&nbsp;2010 <BR>(audited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">From <BR>October&nbsp;31, <BR>2008 <BR>(Inception)
    <BR>through&nbsp;June <BR>30,&nbsp;2012 <BR>(unaudited)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Revenue</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="width: 10%; font-weight: bold; text-align: left">Total operating expenses ($)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">49,849</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">50,994</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">106,126</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">71,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">2,188,535</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">53,601</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">2,765,264</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Net loss ($)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(54,321</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,724</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(114,581</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(80,250</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,256,252</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(69,923</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,865,004</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Basic loss per share ($)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.00</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.00</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.02</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.01</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.16</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.01</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Weighted average number of shares outstanding (#)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,764,648</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,722,077</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,593,514</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,609,764</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,785,487</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,681,876</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Balance Sheet Data</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 98%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">June&nbsp;30,&nbsp;2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">December&nbsp;31,&nbsp;2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid">December&nbsp;31,&nbsp;2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: left; padding-left: 9pt">Total Current Assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">105,726</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">25,014</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,650</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt">Total Assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">105,726</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,650</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY (DEFICIT)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Total Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">221,213</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">138,855</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">253,155</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Contingency liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">28,926</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">28,926</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,754</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Additional paid-in-capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,733,183</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,606,331</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,912</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Deficit accumulated during the development stage</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,865,004</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,750,423</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(494,171</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total stockholders&rsquo; equity (deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(115,487</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(142,767</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(251,505</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RISK FACTORS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Our business endeavors and our common stock involve a high
degree of risk. You should carefully consider the risks described below with all of the other information included in this Prospectus.
An investment in our common stock involves significant risks, and should not be made by anyone who cannot afford to lose his or
her entire investment. You should carefully consider the following risks together with all other information contained in this
prospectus before deciding to invest in our common stock. If any of the following risks actually occur, they may materially harm
our business and our financial condition and results of operations. In that event, the market price of our common stock could
decline, and investors could lose part or all of their investment.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to the Company</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We continue to require external financing to fund our
operations, which may not be available.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We will need a positive cash flow to fund
our ongoing operations, including the development of our products under development and the annual costs to remain a public company,
including legal, audit and listing fees.&nbsp;&nbsp;To date, we have been dependent on loans from our current and former management
and directors, and from Apricus Bio, a related party. We cannot continue to depend on these sources to continue our operations
in the long term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Given our current lack of cash resources,
we will not be able to implement our growth strategy unless we raise significant capital, enter into licensing and commercialization
agreements, or partnering agreements.&nbsp;&nbsp;If we are unable to accomplish these objectives, we would be unable to advance
certain programs and may have to curtail our operations.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Given the current market conditions, there
is no assurance that we will be successful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Based on the factors described above there
is substantial doubt as to the our ability to continue as a going concern, as further discussed in Footnote 2 &ldquo;Going Concern&rdquo;
to the Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We will continue to incur operating losses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have not marketed or generated sales
revenues from our product candidates under development. We have never been profitable and have incurred an accumulated deficit
of approximately $2,750,000 since our inception through December 31, 2011. Our ability to generate revenues and to achieve profitability
and positive cash flow will depend on the successful licensing and commercialization of our product candidates currently approved
or in human clinical trials and those earlier stage products and technology under development.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our ability to become profitable will depend,
among other things, on our (1) raising sufficient capital to implement our growth strategy, (2) obtaining of regulatory approvals
of our proposed product candidates, (3) success in licensing, manufacturing, distributing and marketing our proposed product candidates,
if approved, and (4) increasing profitability through acquisitions and growth and development of our operations.&nbsp;&nbsp;If
we are unable to accomplish these objectives, we may be unable to achieve profitability and would need to raise additional capital
to sustain and continue our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may have liability for shares of our common stock
issued in the reverse merger. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Questions arose as to whether as of the
record date the FasTrack shareholders received adequate information regarding the combination and merger with North Horizon. The
FasTrack shareholders reside in thirteen states and commonwealths. The securities statutes of these jurisdictions have exemptions
for an exchange or for a transaction that is termed an &quot;isolated transaction.&quot; We made a rescission offer and provided
detailed information to FasTrack shareholders. The offer expired and no FasTrack shareholder accepted the offer. Liability may
exist and will lapse when the applicable statute of limitation runs and expires. The FasTrack shareholders reside in different
jurisdictions and the statutes of limitations in these jurisdictions have different terms, the longest being four years . Until
a claim is made there will be no impact on the Company. We are unable to predict if any shareholder will make a claim and if pursued
what any outcome may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we fail to attract and keep senior management and
key scientific personnel, we may be unable to successfully operate our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our success depends in part on our continued
ability to attract, retain and motivate highly qualified management and scientific personnel and on our ability to develop and
maintain important relationships with healthcare providers, clinicians and scientists.&nbsp;&nbsp;We are highly dependent upon
our management, particularly Vivian Liu, our President and Chief Executive Officer.&nbsp;&nbsp;Although we have an employment
agreement with Ms. Liu, these types of agreements are generally terminable at will at any time, and, therefore, we may not be
able to retain her services as expected. The loss of the services of Ms. Liu could delay or prevent us from obtaining financing
and implementing our business strategy.&nbsp;&nbsp;Competition for qualified personnel in the biotechnology and pharmaceuticals
field is intense. We may need to hire additional personnel as we expand our commercial activities.&nbsp;&nbsp;We may not be able
to attract and retain qualified personnel on acceptable terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our ability to maintain, expand or renew
our business and to get business from new clients, particularly in the drug development sector, also depends on our ability to
subcontract and retain scientific staff with the skills and expertise necessary to keep pace with continuing changes in drug development
technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We do not have our own proprietary technology and will
have to license technology for our own product development programs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">To successfully develop new products based
on generic drugs currently on the market, we will need to license in a delivery technology, which would enable us to differentiate
our product from its generic counterparts. We may not be able to obtain the right to a suitable technology to develop our targeted
drug candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Consummation of licensing arrangements
is subject to the negotiation of complex contractual relationships and we may be unable to negotiate such agreements timely, if
at all, or on acceptable terms.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We face significant competition and have limited resources
compared to our competitors. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are engaged in a highly competitive
industry. We can expect competition from numerous companies, including large international enterprises, and others entering the
market for products similar to ours. Most of these companies have greater research and development, manufacturing, patent, legal,
marketing, financial, technological, personnel and managerial resources. Acquisitions of competing companies by large pharmaceutical
or healthcare companies could further enhance such competitors&rsquo; financial, marketing and other resources. Competitors may
complete clinical trials, obtain regulatory approvals and commence commercial sales of their products before we could enjoy a
significant competitive advantage. Products developed by our competitors may be more effective than our product candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We currently have no sales force or marketing organization
and will need, but may not be able, to attract marketing partners or afford qualified or experienced marketing and sales personnel
for our product candidates under development.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have no internal sales and marketing
capabilities.&nbsp;&nbsp;In order to market our OTC product candidate directly to customers, we will need to build a sales and
marketing infrastructure and/or attract marketing partners that will need to spend significant funds to inform potential customers,
including third-party distributors, of the distinctive characteristics and benefits of our product candidates. Our operating results
and long term success will depend, among other things, on our ability to establish (1) successful arrangements with domestic and
additional international distributors and marketing partners and (2) if we cannot find such partners or choose to market and sell
the product directly to customers, an effective internal marketing and sales organization.&nbsp;&nbsp;Consummation of partnering
arrangements is subject to the negotiation of complex contractual relationships, and we may not be able to negotiate such agreements
on a timely basis, if at all, or on terms acceptable to us.&nbsp;&nbsp;If we enter into third party arrangements, our revenues
would be lower as we would share the revenues with our licensing, commercialization and development partners.&nbsp;&nbsp;If we
are unable to launch a drug, we may realize little or no revenue from sales in the OTC market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are an &quot;emerging growth company&quot; and qualify
for reduced reporting requirements so long as we remain an emerging growth company. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The recently enacted JOBS Act reduces certain
disclosure requirements for &quot;emerging growth companies&quot; thereby decreasing related regulatory compliance costs. We qualify
as an emerging growth company as of the date of his offering and may continue to qualify as an &quot;emerging growth company&quot;
for up to five years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For as long as we continue to be an emerging
growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies. These exemptions include (1) not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in
our periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a non-binding advisory vote on
executive compensation and shareholder approval of any golden parachute payments not previously approved. However, we would cease
to qualify as an emerging growth company if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">-We have annual gross revenues of $1.0
billion or more in a fiscal year;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">-We have, during the previous three-year period issued
more than $1.0 billion in non-convertible debt; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">-We become a large accelerated filer&quot;, defined
by the SEC as a company with a world-wide public float of our common stock of $700 million or more.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Upon the occurrence of any of the above, we would not be able
to take advantage of the reduced regulatory requirements and any associated cost savings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Pre-clinical and clinical trials are inherently unpredictable.&nbsp;&nbsp;If
we or our partners do not successfully conduct these trials or gain regulatory approval, we or our partners may be unable to market
our product candidates.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Through pre-clinical studies and clinical
trials, our product candidates must be demonstrated to be safe and effective for the indicated uses. Results from pre-clinical
studies and early clinical trials may not be indicative of, or allow for prediction of results in later-stage testing.&nbsp;&nbsp;Many
of the pre-clinical studies that we have conducted are in animals with &ldquo;models&rdquo; of human disease states.&nbsp;&nbsp;Although
these tests are widely used as screening mechanisms for drug candidates before being advanced to human clinical studies, results
in animal studies are less reliable predictors of safety and efficacy than results of human clinical studies.&nbsp;&nbsp;Future
clinical trials may not demonstrate the safety and effectiveness of our product candidates or may not result in regulatory approval
to market our product candidates.&nbsp;&nbsp;Commercial sales in the United States of our product candidates cannot begin until
final FDA approval is received.&nbsp;&nbsp;The failure of the FDA to approve our product candidates for commercial sales will
have a material adverse effect on our prospects&nbsp;and could have a negative effect on the Company&rsquo;s stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Patents and intellectual property rights are important
to us but could be challenged.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Proprietary protection for our pharmaceutical
products and products under development is of material importance to our business in the U.S. and most other countries. We have
sought and will continue to seek proprietary protection for our product candidates to attempt to prevent others from commercializing
equivalent products in substantially less time and at substantially lower expense. Our success may depend on our ability to (1)
obtain effective patent protection within the U.S. and internationally for our proprietary technologies and products, (2) defend
patents we own, (3) preserve our trade secrets, and (4) operate without infringing upon the proprietary rights of others.&nbsp;&nbsp;In
addition, we have agreed to indemnify our partners for certain liabilities with respect to the defense, protection and/or validity
of our patents and would also be required to incur costs or forego revenue if it is necessary for our partners to acquire third
party patent licenses in order for them to exercise the licenses acquired from us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">While we have obtained patents and have
many patent applications pending, the extent of effective patent protection in the U.S. and other countries is highly uncertain
and involves complex legal and factual questions.&nbsp;&nbsp;No consistent policy addresses the breadth of claims allowed in or
the degree of protection afforded under patents of medical and pharmaceutical companies.&nbsp;&nbsp;Patents we currently own or
may obtain might not be sufficiently broad enough to protect us against competitors with similar technology.&nbsp;&nbsp;Any of
our patents could be invalidated or circumvented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">While we believe that our patents would
prevail in any potential litigation, the holders of competing patents could determine to commence a lawsuit against us and even
prevail in any such lawsuit.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are dependent upon third party contract research organizations
(&ldquo;CROs&rdquo;).</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We currently do not have our own research
and development infrastructure. To-date, our studies have been conducted by NexMed, a subsidiary of Apricus (a related party),
for a fee. <B><I> </I></B>Assuming we successfully raise sufficient capital to implement our product development programs, we
intend to contract the studies to third party CROs. If the CRO fails to conduct the contracted studies on a timely and satisfactory
basis, we would experience and encounter costs and delays in identifying new CROs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are dependent upon third party manufacturers for chemical
manufacturing supplies.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are dependent on third party chemical
manufacturers. Any products must be supplied on a timely basis and at satisfactory quality levels.&nbsp;&nbsp;If our validated
third party chemical manufacturers fail to produce quality products on time and in sufficient quantities, our results would suffer,
as we would encounter costs and delays in validating new third party suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may be subject to potential product liability and
other claims, creating risks and expense.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are also exposed to potential product
liability risks inherent in the development, testing, manufacturing, marketing and sale of human therapeutic products.&nbsp;&nbsp;Product
liability insurance for the pharmaceutical industry is extremely expensive, difficult to obtain and may not be available on acceptable
terms, if at all.&nbsp;We may need to acquire such insurance coverage prior to the commercial introduction of our product candidates.
If we obtain coverage, we have no guarantee that the coverage limits of such insurance policies will be adequate. A successful
claim against us if we are uninsured, or which is in excess of our insurance coverage, if any, could have a material adverse effect
upon us and on our financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Industry Risks</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are vulnerable to volatile stock market conditions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The market prices for securities of biopharmaceutical
and biotechnology companies, including ours, have been highly volatile. The market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of particular companies. In addition, future announcements,
such as the results of testing and clinical trials, the status of our relationships with third-party collaborators, technological
innovations or new therapeutic products, governmental regulation, developments in patent or other proprietary rights, litigation
or public concern as to the safety of products developed by us or others and general market conditions, concerning us, our competitors
or other biopharmaceutical companies, may have a significant effect on the market price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Instability and volatility in the financial markets and
the global economic recession are likely to have a negative impact on our ability to raise necessary funds and on our business,
financial condition, results of operations and cash flows.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">During the past several years, there has
been substantial volatility and a decline in financial markets due in part to the lethargic global economic environment.&nbsp;&nbsp;In
addition, there has been substantial uncertainty in the capital markets and access to financing is uncertain.&nbsp;&nbsp;These
conditions are likely to have an adverse effect on our industry, licensing partners, and business, including our financial condition,
results of operations and cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">To the extent that we do not generate sufficient
cash from operations, we may need to raise capital through equity sales and/or incur indebtedness, if available, to finance operations.&nbsp;&nbsp;However,
recent turmoil in the capital markets and the potential impact on the liquidity of major financial institutions may have an adverse
effect on our ability to fund our business strategy through sales of capital stock or through borrowings, under either existing
or newly created instruments in the public or private markets on terms that we believe to be reasonable, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Changes in trends in the pharmaceutical and biotechnology
industries, including difficult market conditions, could adversely affect our operating results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The biotechnology, pharmaceutical and medical
device industries generally and drug discovery and development more specifically are subject to increasingly rapid technological
changes.&nbsp;&nbsp;Our competitors and others might develop technologies or products that are more effective or commercially
attractive than our current or future technologies or products, or that render our technologies or products less competitive or
obsolete.&nbsp;&nbsp;If competitors introduce superior technologies or products and we cannot make enhancements to our technologies
or products to remain competitive, our competitive position, and in turn our business, revenue and financial condition, would
be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We and any potential licensees are subject to numerous
and complex government regulations which could result in delay and expense.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Governmental authorities in the U.S. and
other countries heavily regulate the testing, manufacture, labeling, distribution, advertising and marketing of our proposed product
candidates. Before any products we develop are marketed, FDA and comparable foreign agency approval must be obtained through an
extensive clinical study and approval process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The failure to obtain requisite governmental
approvals for our product candidates under development in a timely manner or at all would delay or preclude us and our licensees
from marketing our product candidates or limit the commercial use of our product candidates, which could adversely affect our
business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Any failure on our part to comply with
applicable regulations could result in the termination of on-going research, discovery and development activities or the disqualification
of data for submission to regulatory authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Because we intend that our product candidates
will be sold and marketed outside the U.S., we and/or our potential licensees will be subject to foreign regulatory requirements
governing the conduct of clinical trials, product licensing, pricing and reimbursements. These requirements vary widely from country
to country. The failure to meet each foreign country&rsquo;s requirements could delay the introduction of our proposed product
candidates in the respective foreign country and limit our revenues from sales of our proposed product candidates in foreign markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Successful commercialization of our product
candidates may depend on the availability of reimbursement to the consumer from third-party healthcare payers, such as government
and private insurance plans. Even if one or more products are successfully brought to market, reimbursement to consumers may not
be available or sufficient to allow the realization of an appropriate return on our investment in product development or to sell
our product candidates on a competitive basis. In addition, in certain foreign markets, pricing or profitability of prescription
pharmaceuticals is subject to governmental controls. In the U.S., federal and state agencies have proposed similar governmental
control and the U.S. Congress has recently adopted regulatory reforms that affect companies engaged in the healthcare industry.
Pricing constraints on our product candidates in foreign markets and possibly in the U.S. could adversely affect our business
and limit our revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We face uncertainty related to healthcare reform, pricing
and reimbursement which could reduce our revenue potential.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In 2009 and 2010, the U.S. Congress adopted
legislation regarding health insurance, which has been signed into law. As a result of this new legislation, substantial changes
could be made to the current system for paying for healthcare in the United States, including changes made in order to extend
medical benefits to those who currently lack insurance coverage. Extending coverage to a large population could substantially
change the structure of the health insurance system and the methodology for reimbursing medical services, drugs and devices. These
structural changes could entail modifications to the existing system of private payers and government programs, such as Medicare,
Medicaid and State Children&rsquo;s Health Insurance Program, creation of a government-sponsored healthcare insurance source,
or some combination of both, as well as other changes. Restructuring the coverage of medical care in the United States could impact
the reimbursement for prescribed drugs, biopharmaceuticals, medical devices, or our product candidates. If reimbursement for our
approved product candidates, if any, is substantially less than we expect in the future, or rebate obligations associated with
them are substantially increased, our business could be materially and adversely impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Recently, there have been efforts in the
U.S. Congress to defund the health insurance program described above.&nbsp;&nbsp;As a result of the political uncertainty surrounding
the implementation of the health care legislation, it is unclear as to what laws, regulations, procedures and funding will be
put into place in the near future.&nbsp;&nbsp;Such uncertainty may impact the reimbursement for certain prescribed drugs, biopharmaceuticals,
medical devices, or our product candidates. As described above, if reimbursement for our approved product candidates, if any,
is substantially less than we expect in the future, or rebate obligations associated with them are substantially increased, our
business could be materially and adversely impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Sales of our product candidates, if approved
for commercialization, will depend in part on the availability of coverage and reimbursement from third-party payers such as government
insurance programs, including Medicare and Medicaid, private health insurers, health maintenance organizations and other health
care related organizations.&nbsp;&nbsp;Both the federal and state governments in the United States and foreign governments continue
to propose and pass new legislation affecting coverage and reimbursement policies, which are designed to contain or reduce the
cost of health care. Further federal and state proposals and healthcare reforms are likely which could limit the prices that can
be charged for the product candidates that we develop and may further limit our commercial opportunity. There may be future changes
that result in reductions in current coverage and reimbursement levels for our products, if commercialized, and we cannot predict
the scope of any future changes or the impact that those changes would have on our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Adoption of our product candidates, if
approved, by the medical community may be limited if third-party payers will not offer coverage. Cost control initiatives may
decrease coverage and payment levels for drugs, which in turn would negatively affect the price that we will be able to charge.
We are unable to predict all changes to the coverage or reimbursement methodologies that will be applied by private or government
payers to any drug candidate we have in development. Any denial of private or government payer coverage or inadequate reimbursement
for procedures performed using our drug candidates, if commercialized, could harm our business and reduce our revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Owning our Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our stock could become ineligible to be listed on the
OTCBB.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Currently, our common stock trades on the
OTCBB.&nbsp;&nbsp;We have been informed of a &quot;three-strike rule&quot;. In the past two years we filed one periodic report
late. If we file a report untimely twice again any time before August 2013 we most likely will not have our shares quoted on the
OTCBB. It is possible that we could be out of compliance in the future.&nbsp;&nbsp;If we fail to maintain compliance with any
listing requirements, we could be ineligible for the OTCBB, and have to trade our stock on the Pink Sheets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have provided Ms. Liu with anti-dilution protection
with respect to her ownership in the Company, which will result in our issuing Ms. Liu additional shares over the next two years.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the employment agreement we
provided Ms. Liu, we agreed to grant Ms. Liu 6% of our outstanding common stock in the form of restricted stock that vested over
a period of 36 months. The employment agreement states that if additional shares of stock are issued during the vesting period
of 36 months since the grant date, Ms. Liu will be issued additional shares so that she would retain 2%, 4% and 6% ownership of
the Company at December 31, 2011, 2012 and 2013, respectively. No additional shares were issued through June 30, 2012 as Ms. Liu&rsquo;s
ownership as of June 30, 2012 exceeded 2%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>There are restrictions on resale of the Company&rsquo;s
Common Stock by many of our shareholders and there is no assurance that when these shares become available to sale into the market
that these shares will be assimilated without a substantial decline in the market price of our shares of common stock. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The restrictions on resale may be removed
through the provisions of Rule 144 under the Securities Act. We were a shell issuer until December 2011 (when the Form 10 information
was filed with the SEC), Rule 144 is not available until December 2012 at the earliest. When our shareholders are able to rely
on the provisions of Rule 144 their sales into the market may adversely affect the market price of our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>There has been a limited trading market for our Common
Stock to date.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Currently, our common stock is available
for quotation on the OTCBB under the symbol &ldquo;INNV.&rdquo; However, to date, there has been virtually no trading activity
in our common stock. It is anticipated that there will continue to be a limited trading market for the common stock in the near
future. The lack of an active market may impair your ability to sell your Common Stock at the time you wish to sell them or at
a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive
market may also impair our ability to raise capital by selling shares of common stock and may impair our ability to acquire other
companies by using common stock as consideration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our stock is considered a penny stock under SEC regulations
and may have limited market liquidity.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our stock is considered a penny stock under
regulations of the Securities and Exchange Commission and is subject to rules that impose additional sales practice requirements
on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements may discourage
broker-dealers from effecting transactions in our common stock, which may severely limit the market liquidity of the common stock
and the ability of our shareholders to sell our securities in the secondary market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>As an &quot;emerging growth company,&quot; (as described
earlier in this document) we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies
will make our common stock less attractive to investors. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are an &quot;emerging growth company,&quot;
as defined in the JOBS Act. Accordingly, we are eligible to take advantage of certain exemptions from various reporting requirements
applicable to other public companies that are not emerging growth companies. Additionally Section 107 of the JOBS Act provides
that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to take
advantage of the benefits of this extended transition period and, therefore, will be subject to the same new or revised accounting
standards as other public companies that are not emerging growth companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As long as we are an emerging growth company,
we cannot predict if investors will find our common stock less attractive because we may not rely on exemptions provided by the
JOBS Act. If some investors find our common stock less attractive, there may be a less active trading market for our common stock
and our stock price may be more volatile.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We do not expect to pay dividends on our common stock
in the foreseeable future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Although our stockholders may receive dividends
if, as and when declared by our board of directors, we do not intend to declare dividends on our common stock in the foreseeable
future. Therefore, investors may not purchase our common stock if they need immediate or future income by way of dividends from
their investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may issue additional shares of our capital stock that
could dilute the value of your shares of common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are authorized to issue 150,000,000
shares of our common stock. In light of our possible future need for additional financing, we may issue additional shares of common
stock below current market prices that could dilute the earnings per share and book value of our shares of our common stock.&nbsp;&nbsp;These
issuances would dilute existing stockholders and could depress the value of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition to provisions providing for
proportionate adjustments in the event of stock splits, stock dividends, reverse stock splits and similar events, outstanding
warrants representing the right to acquire shares of common stock may cause an adjustment of the exercise or conversion price
if we issue shares of common stock at prices lower than the then exercise or conversion price or the then prevailing market price.
This means that if we need to raise equity financing at a time when the market price for our common stock is lower than the exercise
or conversion price, or if we need to provide a new equity investor with a discount from the then prevailing market price, then
the exercise price will be reduced and the dilution to stockholders increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Due to our limited public float, a large influx of free
and tradable shares could negatively impact our stock price.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have limited public float in the trading
market for our shares of common stock. Previously the Company was designated as a shell company as defined by the SEC. Rule 144
states that the provisions of Rule 144 are unavailable to shareholders of a shell company until 12 months after a former shell
company files information that includes disclosures similar to information provided in a Form 10 filed with the SEC. On December
12, 2011, we filed a report on Form 8-K, which we believe included disclosures that would be included in a Form 10. Thus, on December
12, 2012, the provisions of Rule 144 should become available to shareholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Shares held by Apricus Bio and others holding
large positions influence the public float. These parties&rsquo; investment objectives may differ from other shareholders. If
large shareholders decide to sell all or part of their shares, the market price of our shares may decrease significantly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">DILUTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are not offering or selling any of the
shares of common stock in this offering. All of the offered shares are held by the selling stockholder and accordingly, no dilution
will result from the sale of the shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">MARKET FOR OUR COMMON STOCK</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our common stock is presently trading on
the OTCBB under the symbol &quot;INNV&quot;, although there has not been an active trading market for our shares. Accordingly
we are not including a history of reported trades in the public market. The most recent reported trade was on August 6, 2012 at
$2.25 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Inclusion on the OTCBB permits price quotations
for our shares to be published by that service. We cannot make any assurance that an active trading market for our shares will
develop in the future or, that if such a market does develop, that it can be sustained. Any secondary trading of our shares may
be subject to certain state imposed restrictions. We have no plans regarding the development of a trading market in any of our
shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The ability of individual stockholders
to trade theirs shares in a particular state may be subject to various rules and regulations of that state. A number of states
require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities
are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Penny Stock Rule</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">It is unlikely that our securities will
be listed on any national or regional exchange or The Nasdaq Stock Market in the foreseeable future. Most likely our shares will
be subject to the provisions of Section 15g-9 of the Exchange Act commonly referred to as the &quot;penny stock&quot; rule. Rule
15g-9 sets forth certain requirements for broker-dealer transactions in penny stocks and Rule 15g-9(d)(1) incorporate the definition
of penny stock as that used in Rule 3a5l-l of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The SEC defines a penny stock to be any
equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a5l-l provides that any
equity security be considered to be a penny stock unless that security is:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Registered and
                                                                                                              traded on a national
                                                                                                              securities exchange
                                                                                                              meeting specified
                                                                                                              criteria set by
                                                                                                              the SEC;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Authorized for
                                                                                                              quotation on The
                                                                                                              Nasdaq Stock market;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Issued by a
                                                                                                              registered investment
                                                                                                              company;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Excluded from
                                                                                                              the definition on
                                                                                                              the basis of price
                                                                                                              (at least $5.00
                                                                                                              per share) or the
                                                                                                              issuer's net tangible
                                                                                                              assets; or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Exempted from
                                                                                                              the definition by
                                                                                                              the SEC.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Broker-dealers who sell penny stocks to
persons other than established customers and accredited investors are subject to additional sales practice requirements. An accredited
investor is generally defined as a person with assets in excess of $1,000,000 not including the value of the personal residence
unless the equity in the residence has a negative value which is then deducted from the net assets or annual income exceeding
$200,000 or $300,000 together with their spouse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For transactions covered by these rules,
broker-dealers must make a special suitability determination for the purchase of such securities and must receive the purchaser's
written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt,
the rules require the delivery prior to the transaction of a risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations
for the securities. Finally, monthly statements must be sent to clients disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. Consequently these rules may restrict and impair the
ability of broker-dealers to trade and maintain a market in our common stock and may affect the ability of stockholders to sell
their shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">These requirements may be considered cumbersome
by broker-dealers and could impact the willingness of a particular broker-dealer to make a market in our shares, or they could
affect the value at which our shares trade. Classification of the shares as penny stocks increases the risk of any investment
in our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Rule 144</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">A total of 16,014,798 shares of the 16,333,670
shares of common stock presently outstanding and not being registered for resale under this prospectus are deemed to be &quot;restricted
securities&quot; as defined by Rule 144 under the Securities Act. Rule 144 is the common means used by a stockholder to resell
restricted securities and for affiliates to sell their securities, either restricted or non-restricted control shares. The SEC
amended Rule 144 effective February 15, 2008.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the amended Rule 144, an affiliate
of a company which filed periodic reports under the Exchange Act who has held their shares for more than six months, may sell
in any three month period the number of shares that does not exceed the greater of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The average weekly trading volume in the
common stock, as reported through the automated quotation system of a registered securities association during the four calendar
weeks preceding such sale, or 1% of the shares then issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Sales by affiliates under Rule 144 are
also subject to certain requirements as to the manner of sale, filing appropriate and proper notice and the availability of current
public information about the issuer of the securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Sales by a non-affiliate stockholder of
a reporting company who has held the shares for more than six months, may make unlimited resales under Rule 144 provided only
that the issuer has available current public information about itself. After a one-year holding period, a non-affiliate may make
unlimited sales with no other requirements or limitations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">An exception to the availability of the
provisions of amended Rule 144 is that Rule 144 is not available for either a reporting or a non-reporting shell company, unless
the company: has ceased to be a shell company; is subject to the Exchange Act reporting obligations; has filed all required Exchange
Act reports during the preceding twelve months; and at least one year has elapsed from the time the company filed with the SEC
current Form 10 type information reflecting the status of the entity that is not a shell company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We cannot predict the effect any future
sales under Rule 144 may have on the market price of our common stock, but such sales may have a substantial depressing effect
on any such market price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">DIVIDEND POLICY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have never declared cash dividends on
our common stock. We do not anticipate paying any dividends on our common stock in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">THE OFFERING</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Commencing on the date of this prospectus
the selling stockholders propose to offer shares of common stock in the over-the-counter market or otherwise, at market prices
prevailing at the time of sale, at prices related to the prevailing market price, or at negotiated prices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our shares are presently quoted on the
OTCBB. No assurance can be made that a more active market for our shares will develop.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PLAN OF DISTRIBUTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The selling stockholders identified in
this prospectus may offer and sell up to 150,580 shares of our common stock. The selling stockholders may sell all or a portion
of the shares of common stock through public or private transaction at prevailing market prices or at privately negotiated prices.
As used in this prospectus &quot;selling stockholders&quot; include pledges, transferees or other successors-in-interest selling
shares received from the selling stockholders, as pledges, assignees, borrowers or in connection with other non-sale-related transfers
after the date of this prospectus. This prospectus may also be used by transferees of the selling stockholders, including broker-dealers
or other transferees who borrow or purchase the shares to settle or close out short sales of shares of common stock. The selling
stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale or non-sale
related transfer. We will not receive any of the proceeds from sales by the selling stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We expect that the selling stockholders
will sell their shares primarily through the over-the-counter market made from time-to-time at prevailing market prices. The selling
stockholders may sell from time to time in one or more transactions at or on any stock exchange, market or trading facility on
which shares are traded in the future or in private transactions. Sales may be made a fixed or negotiated prices, and may be effected
by means of one or more of the following transactions which may involve cross or block transactions: (1) ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers; (2) block trades in which the broker-dealer will attempt to sell
the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; (3) purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; (4) an exchange distribution in accordance with
the rules of the applicable exchange; (5) privately negotiated transactions; (6) settlement of short sales; (7) transactions in
which broker-dealers may agree with the selling stockholder to sell a specified number of shares at a stipulated price per share;
(8) through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
or (9) a combination of any of the above or any other method permitted pursuant to applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The selling stockholders may sell shares
under available exemptions under the Securities Act, such as Rule 144, if available, rather than under this prospectus. The selling
stockholder will have the sole discretion not to accept any purchase offer or make any sale of his shares if he deems the purchase
price unsatisfactory at a particular time. To the extent required this prospectus may be amended and supplemented from time to
time to describe a specific plan of distribution, if appropriate or required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders or, if any broker-dealer acts as agent for the purchase of shares from the purchaser, in amounts to be negotiated.
Selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with sales of common stock
or interests therein the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales, puts and calls or other transactions in our securities or derivatives of our securities
and may sell and deliver shares in connection with these transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Selling stockholders and broker-dealers
or agents involved in an arrangement to sell any of the offered shares may, under certain circumstances, be deemed to be &quot;underwriters&quot;
within the meaning of the Securities Act. Any profit on such sales and any discount, commission, concession or other compensation
received by any such underwriter, broker-dealer or agent may be deemed an underwriting discount and commission under the Exchange
Act. The selling stockholders have not informed us that they have any agreement or understanding, directly or indirectly, with
any persons to distribute the common stock. If either of the selling stockholders should notify us that they have a material arrangement
with a broker-dealer for the resale of his shares, we may be required to amend the registration statement of which this prospectus
is a part, and file a prospectus supplement to describe the agreement between a selling stockholder and broker-dealer or agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have agreed to pay all fees and expenses
incurred by us incident to the registration of the common stock, including SEC filing fees. The selling stockholders will be responsible
for all costs and expenses in connection with the sale of their shares, including brokerage commissions or dealer discounts. We
will indemnify the selling stockholders against certain losses, claims, damages and liabilities including liabilities under the
Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Once sold under the registration statement
of which this prospectus is a part, the shares of common stock will be freely tradeable in the hands of persons other than our
affiliates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The selling stockholders will be subject
to applicable provisions of the Exchange Act and the rules and regulations thereunder which provisions may limit the time of purchases
and sales of common stock. The foregoing may affect the marketability of such securities. To comply with the securities laws of
certain jurisdiction, if applicable, the common stock will be offered or sold in such jurisdictions only through registered or
licensed brokers or dealers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The selling stockholders and other persons
participating in the sale or distribution of the shares offered hereby, will be subject to applicable provisions of the Exchange
Ace and rules and regulations promulgated thereunder, including without limitation Regulation M. With certain exceptions Regulation
M restricts certain activities of, and limits the time of purchases and sales of any of the shares by the selling stockholders,
affiliated purchasers and any broker-dealer or other person who participates in the sale or distribution. Under Regulation M these
persons are precluded from bidding for or purchasing or attempting to induce any person to bid for or purchase any security subject
to the distribution until the distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize
the price of a security in connection with the distribution of that security. All of these limitations may affect the marketability
of the shares offered by this prospectus. The selling stockholders are not broker-dealers or affiliates of any broker-dealer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SELLING STOCKHOLDERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are registering the shares of our common
stock offered for resale pursuant to this prospectus to afford the selling stockholders the opportunity to sell their shares in
a public transaction. The selling stockholders are offering hereby a total of 150,580 shares of our common stock. The following
table provides information regarding the beneficial ownership of our common stock being offered for resale by the selling stockholders.
Each selling stocker's percentage of ownership shown below is based on 16,333,670 shares of common stock issued and outstanding
as of the date of this prospectus. The table includes the number of shares owned beneficially by each selling stockholder, the
number of shares which may be offered for resale pursuant to this prospectus and the number of shares to be owned beneficially
by each selling stockholder after the offering. The table has been prepared based on the assumption that all the shares of common
stock offered under this prospectus will be sold. The selling stockholders are not affiliates of the Company. The selling stockholders
may retain all or part of the shares they own. No prediction can be made of the number of shares the will be held by the selling
stockholders upon termination of this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">Beneficial <BR>Ownership&nbsp;Name</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold">Number&nbsp;of&nbsp;shares <BR>owned</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold">Number&nbsp;of&nbsp;shares <BR>being&nbsp;registered</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold">Number&nbsp;of&nbsp;shares <BR>owned&nbsp;after&nbsp;offering</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold">Percentage&nbsp;after <BR>offering</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; text-align: left">Keith Cannon</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">162,563</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">134,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">28,563</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jibrayil Yusuf</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,909</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,580</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148,329</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CAPITALIZATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table sets forth our capitalization
as of June 30, 2012. This table should be read in conjunction with the financial statements and the notes thereto included elsewhere
in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 43%; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 57%; padding: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 30, 2012</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(unaudited)</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="padding: 0; text-indent: 0">Common Stock</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD NOWRAP STYLE="padding: 0; text-indent: 0">Additional paid in capital</TD>
    <TD STYLE="padding: 0; text-indent: 0">150,000,000 shares authorized, par value $0.001 per share; 16,333,670 shares issued
    and outstanding</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="padding: 0; text-indent: 0">Deficit accumulated during development stage</TD>
    <TD STYLE="padding: 0; text-indent: 0">$&nbsp; 2,733,183</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD NOWRAP STYLE="padding: 0; text-indent: 0">Total stockholders&rsquo; deficit</TD>
    <TD STYLE="padding: 0; text-indent: 0">$&nbsp; (2,865,004)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">LEGAL PROCEEDINGS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of the date of this prospectus we are
not aware of any material claims, lawsuits, disputes with third parties or regulatory proceedings that would have any material
affect on our company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">JOBS ACT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The JOBS Act provides that as long as a
company qualifies as an &quot;emerging growth company&quot; it will, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">-be exempt from the provisions of Section 404(b)
of the Sarbanes-Oxley Act reporting that its independent registered public accounting firm provide an attestation report on the
effectiveness of its internal control over financial reporting;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">-be exempt from the &quot;say on pay&quot; and &quot;say
on golden parachute&quot; advisory requirements of the Dodd-Frank Wall Street Reform and Customer Protection Act (the &quot;Dodd-Frank
Act&quot;), and certain disclosure requirements of the Dodd-Frank Act relating to compensation of its chief executive officer
and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities
Exchange Act of 1934; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">-instead provide a reduced level of disclosure concerning
executive compensation and be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring
mandatory audit firm rotations or a supplement to the auditor's report on the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">It should be noted that notwithstanding
our status as an emerging growth company, we would be eligible for these exemptions as a result of our status as a &quot;smaller
reporting company&quot; as defined in the Securities Exchange Act of 1934.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 107 of the JOBS Act provides that
an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to take
advantage of the benefits of this extended transition period and, therefore, will be subject to the same, new or revised accounting
standards as other public companies that are not emerging growth companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">BUSINESS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Innovus Pharmaceuticals, Inc. (the &ldquo;<B><I>Company</I></B>&rdquo;,
&ldquo;<B><I>Innovus Pharma</I></B>&rdquo;, &ldquo;<B><I>FasTrack</I></B>&rdquo;, &ldquo;<B><I>we</I></B>&rdquo;, &ldquo;<B><I>us</I></B>&rdquo;
and &ldquo;<B><I>our</I></B>&rdquo;) is focused on near term revenue opportunities through the commercialization of its proprietary
product pipeline, currently consisting of therapies aimed at pain relief and bleeding of the gums. Additionally, the Company is
actively seeking to in-license and/or acquire new and innovative pharmaceutical compounds&nbsp;that offer definable pathways to
regulatory approval, partnering and commercialization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our business model is designed to create
multiple opportunities for success while minimizing the risks associated with reliance on any single technology platform or product
type, and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions designed to place our
product candidates into larger organizations or with partners having existing commercialization, sales and marketing resources,
and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In parallel, as our business strategy advances
and corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow.&nbsp; This strategy may include debt financing and/or
acquisitions of small revenue generating companies and products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Proprietary Product and Technology Portfolios</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The lead product in our pipeline is Apeaz<SUP>&trade;</SUP>,
a topical cream that has been developed for pain relief. It is intended to deliver different ingredients to various layers of
the skin and muscle, and optimize effect. The product had previously been sold in the U.S. and internationally, and had sales
of approximately $500,000. However, all sales for the product were abandoned in 2008, when the U.S. distributor went out of business,
and the previous owner of Apeaz<SUP>&trade;</SUP> decided to focus on another segment of its business. The Company needs approximately
$30,000 to repackage and relaunch the product in the U.S. and internationally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, we have Regia<SUP>&trade;</SUP>,
which is a plant-derived, anti-microbial agent for reducing the bleeding of gums when used in OTC products such as mouthwash.
The same active is currently included in a mouthwash commercialized in France. We have an issued US patent which expires in May
2028 and patent applications pending in selected international markets. Our intention is to out-license the patent portfolio for
Regia&trade; to potential development partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In our portfolio of Rx products, we have
a partial interest in the potential commercial value of PrevOnco<SUP>&trade;</SUP>, a Phase 2/3 second-line Orphan Drug therapy
for patients with hepatocellular carcinoma or liver cancer. PrevOnco<SUP>&trade;</SUP> is based on lansoprazole, a drug widely
used to treat <FONT STYLE="color: #222222">gastro-esophageal reflux disease. Preclinical animal data have shown the drug to also
be effective in shrinking the tumors commonly associated with liver cancer. </FONT>In 2010, FasTrack sold the development rights
of the product to NexMed Holdings, Inc., (&ldquo;<B><I>NexMed</I></B>&rdquo;) a wholly-owned subsidiary of Apricus Biosciences,
Inc. (Nasdaq: APRI) (&ldquo;<B><I>Apricus Bio</I></B>&rdquo;). In exchange, we are entitled to receive up to 50% of the net commercial
value of the product in the event Apricus Bio successfully licenses the product to a commercialization partner. The potential
for any returns on PrevOnco<SUP>&trade;</SUP> is completely dependent on Apricus Bio&rsquo;s efforts. Apricus Bio completely controls
the future and progress of the PrevOnco<SUP>&trade;</SUP> program. There is no assurance that Apricus Bio will continue to develop
it, or be successful in its development or licensing efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">When we have sufficient resources, we intend
to explore and pursue new product opportunities based on drugs with expired or near-expired patents. Our strategy is to follow
the 505(b)(2) regulatory approval pathway, which typically has a shorter development cycle with less pre-clinical and clinical
studies required by the regulatory agencies. In June 2011, we conducted feasibility studies on two active drug ingredients identified
by us. One study, completed in September 2011, focused on a new minoxidil formulation for treating hair loss. Minoxidil is the
active ingredient in Rogaine<SUP>&reg;</SUP>, a widely marketed topical product for treating male and female hair loss. The study
results showed that our proprietary formulation significantly enabled the absorption of minoxidil into the human cadaver skin
model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Within our Rx portfolio is a development
platform based on SSAO inhibitors. SSAO is known as vascular adhesion protein-1 or VAP-1, and is a dual function molecule with
enzymatic and cell adhesion activities. These inhibitors are designed to reduce inflammation by blocking the white blood cells
and reducing the levels of inflammatory mediators. A prior owner had developed a treatment for Lupus based on the SSAO platform,
but that product failed in late-stage clinical studies. In 2009, FasTrack acquired the SSAO patent portfolio because of the possibility
that the SSAO platform had potential for other developers to identify the right medical indication. Because the SSAO platform
has unproven safety and efficacy profiles, to develop a product based on this platform would require significant resources and
longer development time. We do not have these resources presently and no assurance can be given that even if proper resources
were available, we would seek to develop or if development were pursued, a successful SSAO platform would be accomplished. To
facilitate the SSAO development we may seek a partnership relationship.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Prior Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Innovus Pharma, formerly known as North
Horizon, Inc., was incorporated under the laws of the State of Utah on January 15, 1959. It changed the corporate domicile to
the State of Nevada in 2007. Initially, North Horizon had authorized capital of 100,000,000 shares of common stock, par value
of $.001 per share. Years ago it sold 100,000 shares of common stock to the public. It entered the cosmetic business, but this
venture was unsuccessful. Other ventures ensued, but none were successful. For the past several years, there were no active business
ventures, however, the management maintained North Horizon as a corporate entity and filed requisite reports with the U.S. Securities
and Exchange Commission. Innovus Pharma has authorized capital of 150,000,000 shares of common stock, par value of $.001 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In October 2011, North Horizon changed
its name to Innovus Pharmaceuticals, Inc., and subsequently consummated a combination transaction with FasTrack Pharmaceuticals,
Inc., whereby FasTrack became our wholly-owned subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are obligated to file certain interim
and periodic reports including an annual report with audited financial statements. Our trading symbol is &quot;INNV.&quot; The
financial statements included in this prospectus are for the combined entity including FasTrack Pharma.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Manufacturing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">At the present time, we do not have any
customers or backlog.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We intend to contract with third parties
for the manufacture of our compounds for investigational purposes, for preclinical and clinical testing and for commercial sale
of any FDA-approved products. All of our compounds are small molecules, generally constructed using industry standard processes
and use readily accessible raw materials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Regulatory Requirements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On December 12, 2011, we filed a Report
on Form 8-K describing and reporting the closing of the Agreement between North Horizon and FasTrack. The report was filed within
four business days of the closing of the transaction. (See Item 5.01(a)(8) of Form 8-K.) Amendments to Rule 144 effective on February
15, 2008, limited the resale of most securities of a shell company until one year after the filing of the required information
about FasTrack. These requirements may be perceived as limiting or eliminating the advantages of using &quot;reverse&quot; reorganizations
or mergers of going public. In these transactions the management and shareholders of the acquired company become the controlling
shareholders of the public company. Pursuant to applicable regulations a shell company may not use Form S-8 until 60 days after
the company is no longer considered to be a shell company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Amendments to Rule 144 effective on February
15, 2008 limited the tradeability of the issued and outstanding securities of a shell company, including shares issued in any
transaction involving an acquisition of another business entity or prospect. Our shareholders are subject to these provisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our shares are also considered penny stocks.
Section 15g-2 of the regulations under the Exchange Act requires broker-dealers transacting trades in penny stocks to provide
potential investors with a disclosure statement detailing the risks of investing in penny stocks and to have the investor sign
a receipt of the disclosure statement before any transactions may occur in the investor&rsquo;s account. Also, broker-dealers
must approve the account of an investor purchasing penny stocks. Our shares of common stock are classified as a &ldquo;penny stock.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Government Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The U.S. Food and Drug Administration (&ldquo;<B><I>FDA</I></B>&rdquo;)
and other federal, state, local and foreign regulatory agencies impose substantial requirements upon the clinical development,
approval, labeling, manufacture, marketing and distribution of drug products. These agencies regulate, among other things, research
and development activities and the testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage,
record keeping, advertising and promotion of our product candidates. The regulatory approval process is generally lengthy and
expensive, with no guarantee of a positive result. Moreover, failure to comply with applicable FDA or other requirements may result
in civil or criminal penalties, recall or seizure of products, injunctive relief including partial or total suspension of production,
or withdrawal of a product from the market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The FDA regulates, among other things,
the research, manufacture, promotion and distribution of drugs in the United States under the Federal Food, Drug and Cosmetic
Act (&ldquo;<B><I>FFDCA</I></B>&rdquo;) and other statutes and implementing regulations. The process required by the FDA before
prescription drug product candidates may be marketed in the United States generally involves the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.4in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>completion of
                                                                                                              extensive nonclinical
                                                                                                              laboratory tests,
                                                                                                              animal studies and
                                                                                                              formulation studies,
                                                                                                              all performed in
                                                                                                              accordance with
                                                                                                              the FDA&rsquo;s
                                                                                                              Good Laboratory
                                                                                                              Practice regulations;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.4in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>submission to
                                                                                                              the FDA of an Investigational
                                                                                                              New Drug application
                                                                                                              (&ldquo;<B><I>IND</I></B>&rdquo;),
                                                                                                              which must become
                                                                                                              effective before
                                                                                                              human clinical trials
                                                                                                              may begin;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.4in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>for some products,
                                                                                                              performance of adequate
                                                                                                              and well-controlled
                                                                                                              human clinical trials
                                                                                                              in accordance with
                                                                                                              the FDA&rsquo;s
                                                                                                              regulations, including
                                                                                                              Good Clinical Practices,
                                                                                                              to establish the
                                                                                                              safety and efficacy
                                                                                                              of the product candidate
                                                                                                              for each proposed
                                                                                                              indication;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.4in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>submission to
                                                                                                              the FDA of a New
                                                                                                              Drug Application
                                                                                                              (&ldquo;<B><I>NDA</I></B>&rdquo;);</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.4in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>satisfactory
                                                                                                              completion of an
                                                                                                              FDA preapproval
                                                                                                              inspection of the
                                                                                                              manufacturing facilities
                                                                                                              at which the product
                                                                                                              is produced to assess
                                                                                                              compliance with
                                                                                                              current Good Manufacturing
                                                                                                              Practice, or cGMP,
                                                                                                              regulations; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.4in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>FDA review and
                                                                                                              approval of the
                                                                                                              NDA prior to any
                                                                                                              commercial marketing,
                                                                                                              sale or shipment
                                                                                                              of the drug.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The testing and approval process requires
substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will
be granted on a timely basis, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Nonclinical tests include laboratory evaluations
of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals and other animal studies.
The results of nonclinical tests, together with manufacturing information and analytical data, are submitted as part of an IND
to the FDA. Some nonclinical testing may continue even after an IND is submitted. The IND also includes one or more protocols
for the initial clinical trial or trials and an investigator&rsquo;s brochure. An IND automatically becomes effective 30&nbsp;days
after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to the proposed
clinical trials as outlined in the IND and places the clinical trial on a clinical hold. In such cases, the IND sponsor and the
FDA must resolve any outstanding concerns or questions before any clinical trials can begin. Clinical trial holds also may be
imposed at any time before or during studies due to safety concerns or non-compliance with regulatory requirements. An independent
institutional review board, or IRB, at each of the clinical centers proposing to conduct the clinical trial must review and approve
the plan for any clinical trial before it commences. An IRB considers, among other things, whether the risks to individuals participating
in the trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the consent form signed
by the trial participants and must monitor the study until completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our product pipeline is comprised of candidates
in various stages of development. On the Rx side, to develop a product to Phase 2 based on the 505b(2) regulatory path would cost
approximately $4 million and take 18 months per candidate. On the OTC side, we estimate that the cost and process to register
Apeaz with the FDA and build-out sufficient inventory for launch would cost approximately $30,000 and take 3 to 6 months. See
Clinical Trials and 505(b)(2) NDAs for further clarifications. No assurance can be given that the Company will be successful in
any of its development or licensing efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Clinical Trials</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Clinical trials involve the administration
of the product candidate to human subjects under the supervision of qualified medical investigators according to approved protocols
that detail the objectives of the study, dosing procedures, subject selection and exclusion criteria, and the parameters to be
used to monitor participant safety. Each protocol is submitted to the FDA as part of the IND.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Human clinical trials are typically conducted
in three sequential phases, but the phases may overlap, or be combined.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.6in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Phase 1 clinical
                                                                                                              trials typically
                                                                                                              involve the initial
                                                                                                              introduction of
                                                                                                              the product candidate
                                                                                                              into healthy human
                                                                                                              volunteers. In Phase
                                                                                                              1 clinical trials,
                                                                                                              the product candidate
                                                                                                              is typically tested
                                                                                                              for safety, dosage
                                                                                                              tolerance, absorption,
                                                                                                              metabolism, distribution,
                                                                                                              excretion and pharmacodynamics.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.6in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Phase
                                                                                                              2 clinical trials
                                                                                                              are conducted in
                                                                                                              a limited patient
                                                                                                              population to gather
                                                                                                              evidence about the
                                                                                                              efficacy of the
                                                                                                              product candidate
                                                                                                              for specific, targeted
                                                                                                              indications, to
                                                                                                              determine dosage
                                                                                                              tolerance and optimal
                                                                                                              dosage and to identify
                                                                                                              possible adverse
                                                                                                              effects and safety
                                                                                                              risks.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.6in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Phase
                                                                                                              3 clinical trials
                                                                                                              are undertaken to
                                                                                                              evaluate clinical
                                                                                                              efficacy and to
                                                                                                              test for safety
                                                                                                              in an expanded patient
                                                                                                              population at geographically
                                                                                                              dispersed clinical
                                                                                                              trial sites. The
                                                                                                              size of Phase 3
                                                                                                              clinical trials
                                                                                                              depends upon clinical
                                                                                                              and statistical
                                                                                                              considerations for
                                                                                                              the product candidate
                                                                                                              and disease, but
                                                                                                              sometimes can include
                                                                                                              several thousand
                                                                                                              patients. Phase
                                                                                                              3 clinical trials
                                                                                                              are intended to
                                                                                                              establish the overall
                                                                                                              risk-benefit ratio
                                                                                                              of the product candidate
                                                                                                              and provide an adequate
                                                                                                              basis for product
                                                                                                              labeling.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Clinical testing must satisfy extensive
FDA regulations. Reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety
reports must be submitted for serious and unexpected adverse events. Success in early stage clinical trials does not assure success
in later stage trials. The FDA, an IRB or our company may suspend a clinical trial at any time on various grounds, including a
finding that the research subjects or patients are being exposed to an unacceptable health risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>New Drug Applications</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Assuming successful completion of the required
clinical trials, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part
of an NDA. An NDA also must contain extensive manufacturing information, as well as proposed labeling for the finished product.
An NDA applicant must develop information about the chemistry and physical characteristics of the drug and finalize a process
for manufacturing the product in accordance with cGMP. The manufacturing process must be capable of consistently producing quality
products within specifications approved by the FDA. The manufacturer must develop methods for testing the quality, purity and
potency of the final product. In addition, appropriate packaging must be selected and tested and stability studies must be conducted
to demonstrate that the product does not undergo unacceptable deterioration over its shelf life. Prior to approval, the FDA will
conduct an inspection of the manufacturing facilities to assess compliance with cGMP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The FDA reviews all NDAs submitted before
it accepts them for filing. The FDA may request additional information rather than accept an NDA for filing. In this event, the
NDA must be resubmitted with the additional information and is subject to review before the FDA accepts it for filing. After an
application is filed, the FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether
the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee,
but it considers them carefully when making decisions. The FDA may deny approval of an NDA if the applicable regulatory criteria
are not satisfied. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than
we interpret the same data. The FDA may issue a complete response letter, which may require additional clinical or other data
or impose other conditions that must be met in order to secure final approval of the NDA. If a product receives regulatory approval,
the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited,
which could restrict the commercial value of the product. In addition, the FDA may require us to conduct Phase 4 testing which
involves clinical trials designed to further assess a drug&rsquo;s safety and effectiveness after NDA approval, and may require
surveillance programs to monitor the safety of approved products which have been commercialized. Once issued, the FDA may withdraw
product approval if ongoing regulatory requirements are not met or if safety or efficacy questions arise after the product reaches
the market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Section 505(b)(2) NDAs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There are two types of NDAs: the full NDA
and the Section&nbsp;505(b)(2) NDA. When possible, we intend to file Section&nbsp;505(b)(2) NDAs that might, if accepted by the
FDA, save time and expense in the development and testing of our product candidates. A full NDA is submitted under Section&nbsp;505(b)(1)
of the FFDCA, and must contain full reports of investigations conducted by the applicant to demonstrate the safety and effectiveness
of the drug. A Section&nbsp;505(b)(2) NDA may be submitted for a drug for which one or more of the investigations relied upon
by the applicant were not conducted by or for the applicant and for which the applicant has no right of reference from the person
by or for whom the investigations were conducted. A Section&nbsp;505(b)(2) NDA may be submitted based in whole or in part on published
literature or on the FDA&rsquo;s finding of safety and efficacy of one or more previously approved drugs, which are known as reference
drugs. Thus, the filing of a Section&nbsp;505(b)(2) NDA may result in approval of a drug based on fewer clinical or nonclinical
studies than would be required under a full NDA. The number and size of studies that need to be conducted by the sponsor depends
on the amount and quality of data pertaining to the reference drug that are publicly available, and on the similarity of and differences
between the applicant&rsquo;s drug and the reference drug. In some cases, extensive, time-consuming, and costly clinical and nonclinical
studies may still be required for approval of a Section&nbsp;505(b)(2) NDA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Because we may develop new formulations
of previously approved chemical entities, our drug approval strategy is to submit Section&nbsp;505(b)(2) NDAs to the FDA. The
FDA may not agree that our product candidates are approvable as Section&nbsp;505(b)(2) NDAs. If the FDA determines that Section&nbsp;505(b)(2)
NDAs are not appropriate and that full NDAs are required for our product candidates, the time and financial resources required
to obtain FDA approval for product candidates could substantially and materially increase, and our products might be less likely
to be approved. If the FDA requires full NDAs for product candidates, or requires more extensive testing and development for some
other reason, our ability to compete with alternative products that arrive on the market more quickly than the product candidates
would be adversely impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Patent Protections</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We currently have one patent issued for
Regia&trade; in Morocco and one issued in the U.S.A., and an application pending in Europe. We also have a series of patent applications
pending in the U.S.A. and internationally for our SSAO technology platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">An applicant submitting a Section&nbsp;505(b)(2)
NDA must certify to the FDA the patent status of the reference drug upon which the applicant relies in support of approval of
its drug. With respect to every patent listed in the FDA&rsquo;s Orange Book, which is the FDA&rsquo;s list of approved drug products,
as claiming the reference drug or an approved method of use of the reference drug, the Section&nbsp;505(b)(2) applicant must certify
that: (1)&nbsp;there is no patent information listed by the FDA for the reference drug; (2)&nbsp;the listed patent has expired;
(3)&nbsp;the listed patent has not expired, but will expire on a particular date; (4)&nbsp;the listed patent is invalid, unenforceable,
or will not be infringed by the manufacture, use, or sale of the product in the Section&nbsp;505(b)(2) NDA; or (5)&nbsp;if the
patent is a use patent, that the applicant does not seek approval for a use claimed by the patent. If the applicant files a certification
to the effect of clause (1), (2)&nbsp;or (5), FDA approval of the Section&nbsp;505(b)(2) NDA may be made effective immediately
upon successful FDA review of the application, in the absence of marketing exclusivity delays, which are discussed below. If the
applicant files a certification to the effect of clause (3), the Section&nbsp;505(b)(2) NDA approval may not be made effective
until the expiration of the relevant patent and the expiration of any marketing exclusivity delays.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If the Section&nbsp;505(b)(2) NDA applicant
provides a certification to the effect of clause (4), referred to as a paragraph IV certification, the applicant also must send
notice of the certification to the patent owner and the holder of the NDA for the reference drug. The filing of a patent infringement
lawsuit within 45&nbsp;days of the receipt of the notification may prevent the FDA from approving the Section&nbsp;505(b)(2) NDA
for 30&nbsp;months from the date of the receipt of the notification unless the court determines that a longer or shorter period
is appropriate because either party to the action failed to reasonably cooperate in expediting the action. However, the FDA may
approve the Section&nbsp;505(b)(2) NDA before the 30&nbsp;months have expired if a court decides that the patent is invalid, unenforceable,
or not infringed, or if a court enters a settlement order or consent decree stating the patent is invalid or not infringed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Notwithstanding the approval of many products
by the FDA pursuant to Section&nbsp;505(b)(2), over the last few years certain brand-name pharmaceutical companies and others
have objected to the FDA&rsquo;s interpretation of Section&nbsp;505(b)(2). If the FDA&rsquo;s interpretation of Section&nbsp;505(b)(2)
is successfully challenged in court, the FDA may be required to change its interpretation of Section&nbsp;505(b)(2) which could
delay or even prevent the FDA from approving any Section&nbsp;505(b)(2) NDA that we submit. The pharmaceutical industry is highly
competitive, and it is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking
to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions
can significantly delay, or even prevent, the approval of the new product. Moreover, even if the FDA ultimately denies such a
petition, the FDA may substantially delay approval while it considers and responds to the petition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Marketing Exclusivity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Market exclusivity provisions under the
FFDCA can delay the submission or the approval of Section&nbsp;505(b)(2) NDAs, thereby delaying a Section&nbsp;505(b)(2) product
from entering the market. The FFDCA provides five-year marketing exclusivity to the first applicant to gain approval of an NDA
for a new chemical entity, or NCE, meaning that the FDA has not previously approved any other drug containing the same active
moiety. This exclusivity prohibits the submission of a Section&nbsp;505(b)(2) NDA for any drug product containing the active ingredient
during the five-year exclusivity period. However, submission of a Section&nbsp;505(b)(2) NDA that certifies that a listed patent
is invalid, unenforceable, or will not be infringed, as discussed above, is permitted after four years, but if a patent infringement
lawsuit is brought within 45&nbsp;days after such certification, FDA approval of the Section&nbsp;505(b)(2) NDA may automatically
be stayed until 7 1/2&nbsp;years after the NCE approval date. The FFDCA also provides three years of marketing exclusivity for
the approval of new and supplemental NDAs for product changes, including, among other things, new indications, dosage forms, routes
of administration or strengths of an existing drug, or for a new use, if new clinical investigations, other than bioavailability
studies, that were conducted or sponsored by the applicant are deemed by FDA to be essential to the approval of the application.
Five-year and three-year exclusivity will not delay the submission or approval of another full NDA; however, as discussed above,
an applicant submitting a full NDA under Section&nbsp;505(b)(1) would be required to conduct or obtain a right of reference to
all of the preclinical and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Other types of exclusivity in the United
States include orphan drug exclusivity and pediatric exclusivity. The FDA may grant orphan drug designation to a drug intended
to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in
the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that
the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered
from sales in the United States for that drug. Seven-year orphan drug exclusivity is available to a product that has orphan drug
designation and that receives the first FDA approval for the indication for which the drug has such designation. Orphan drug exclusivity
prevents approval of another application for the same drug for the same orphan indication, for a period of seven years, regardless
of whether the application is a full NDA or a Section&nbsp;505(b)(2) NDA, except in limited circumstances, such as a showing of
clinical superiority to the product with orphan exclusivity. Pediatric exclusivity, if granted, provides an additional six months
to an existing exclusivity or statutory delay in approval resulting from a patent certification. This six-month exclusivity, which
runs from the end of other exclusivity protection or patent delay, may be granted based on the voluntary completion of a pediatric
study in accordance with an FDA-issued &ldquo;Written Request&rdquo; for such a study.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section&nbsp;505(b)(2) NDAs are similar
to full NDAs filed under Section&nbsp;505(b)(1) in that they are entitled to any of these forms of exclusivity if they meet the
qualifying criteria. They also are entitled to the patent protections described above, based on patents that are listed in the
FDA&rsquo;s Orange Book in the same manner as patents claiming drugs and uses approved for NDAs submitted as full NDAs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Other Regulatory Requirements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Maintaining substantial compliance with
appropriate federal, state and local statutes and regulations requires the expenditure of substantial time and financial resources.
Drug manufacturers are required to register their establishments with the FDA and certain state agencies, and after approval,
the FDA and these state agencies conduct periodic unannounced inspections to ensure continued compliance with ongoing regulatory
requirements, including cGMPs. In addition, after approval, some types of changes to the approved product, such as adding new
indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval. The FDA may
require post-approval testing and surveillance programs to monitor safety and the effectiveness of approved products that have
been commercialized. Any drug products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation
by the FDA, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>meeting record-keeping
                                                                                                              requirements;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>reporting of
                                                                                                              adverse experiences
                                                                                                              with the drug;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>providing the
                                                                                                              FDA with updated
                                                                                                              safety and efficacy
                                                                                                              information;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>reporting on
                                                                                                              advertisements and
                                                                                                              promotional labeling;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>drug sampling
                                                                                                              and distribution
                                                                                                              requirements; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>complying with
                                                                                                              electronic record
                                                                                                              and signature requirements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, the FDA strictly regulates
labeling, advertising, promotion and other types of information on products that are placed on the market. There are numerous
regulations and policies that govern various means for disseminating information to health-care professionals as well as consumers,
including to industry sponsored scientific and educational activities, information provided to the media and information provided
over the Internet. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved
label.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The FDA has very broad enforcement authority
and the failure to comply with applicable regulatory requirements can result in administrative or judicial sanctions being imposed
on us or on the manufacturers and distributors of our approved products, including warning letters, refusals of government contracts,
clinical holds, civil penalties, injunctions, restitution, and disgorgement of profits, recall or seizure of products, total or
partial suspension of production or distribution, withdrawal of approvals, refusal to approve pending applications, and criminal
prosecution resulting in fines and incarceration. The FDA and other agencies actively enforce the laws and regulations prohibiting
the promotion of off-label uses, and a company that is found to have improperly promoted off-label or unapproved uses may be subject
to significant liability. In addition, even after regulatory approval is obtained, later discovery of previously unknown problems
with a product may result in restrictions on the product or even complete withdrawal of the product from the market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Food and Drug Administration Amendments Act of 2007</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In September 2007, the Food and Drug Administration
Amendments Act of 2007, or FDAAA, became law. This legislation grants significant new powers to the FDA, many of which are aimed
at improving drug safety and assuring the safety of drug products after approval. In particular, the new law authorizes the FDA
to, among other things, require post-approval studies and clinical trials, mandate changes to drug labeling to reflect new safety
information, and require risk evaluation and mitigation strategies for certain drugs, including certain currently approved drugs.
In addition, the new law significantly expands the federal government&rsquo;s clinical trial registry and results databank and
creates new restrictions on the advertising and promotion of drug products. Under the FDAAA, companies that violate these and
other provisions of the new law are subject to substantial civil monetary penalties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The FDA has not yet implemented many of
the provisions of the FDAAA, so we cannot predict the impact of the new legislation on the pharmaceutical industry or our business.
However, the requirements and changes imposed by the FDAAA may make it more difficult, and more costly, to obtain and maintain
approval for new pharmaceutical products, or to produce, market and distribute existing products. In addition, the FDA&rsquo;s
regulations, policies and guidance are often revised or reinterpreted by the agency or the courts in ways that may significantly
affect our business and our products. It is impossible to predict whether additional legislative changes will be enacted, or FDA
regulations, guidance or interpretations changed, or what the impact of such changes, if any, may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our business activities are subject to
general governmental regulations. In addition, we are obligated to file periodic reports as required by the Exchange Act. We are
deemed to be a &ldquo;smaller reporting company&rdquo; as defined in Regulation S-K. The SEC adopted rules which phased out filings
under Regulation SB and smaller reporting companies are now required to file reports under the provisions of Regulation S-K. A
&ldquo;Smaller Reporting Company&rdquo; is defined as a company which has a public float held by non-affiliates of $75 million
or less. Companies without a calculable equity float will qualify if their revenues were below $50 million in the previous year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Principal Products or Services </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">See previous discussion on Our Business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are engaged in a highly competitive
business. We expect competition from numerous companies, including large international enterprises, and others entering the market
with product similar to ours. Most of these companies have superior research and development, manufacturing, patent, legal marketing,
financial, technological, personnel and managerial resources. Acquisition of competing companies by large pharmaceutical or healthcare
companies could further enhance our competitors' financial, marketing and other resources. Competitors may complete clinical trials,
obtain regulatory approvals and commence commercial sales of their products before we could enjoy significant competitive advantages.
Products developed by our competitors may be safer and more effective as compared to our products under development.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Facilities, Equipment and Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We currently have no corporate office.
Our one employee operates from her private residence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Effect of Governmental Regulations on Our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">See previous discussion on regulatory requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are a &quot;smaller reporting company&quot;
subject to reporting requirements of the SEC. We are subject to the provisions of the Sarbanes-Oxley Act of 2002. It created an
accounting oversight board to oversee the conduct of auditors of public companies and to ensure auditor independence. This Act
imposes the obligations on management for financial reporting and quality financial disclosures, and to expose possible conflicts
of interest. It also creates guidelines for audit committees, oversight of the audits performed by public auditing firms, and
requires management to make assessments of internal controls procedures and other matters. Compliance with the provisions of this
statute will increase our legal and accounting costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are subject to the rules regarding proxy
solicitations including the provisions of Regulation 14A. We may be required to provide to shareholders an information statement
complying with the provisions of Schedules 14A or 14C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jobs Act disclosures</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Research and Development Costs During the Past Two Years</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">During the years ended December 31, 2011
and 2010 the Company has incurred research and development costs totaling $58,960 and $0, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Cost and Effects of Compliance with Environmental Laws</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Currently we are not subject to material
environmental laws, rules, or regulations that would have an adverse impact on our business operations or financial conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Inflation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We believe that inflation has little impact
on our business affairs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We currently have one employee who serves
as our President and Chief Executive Officer. Our one employee is not represented by a labor union, and has good relations with
the Company. See &ldquo;<I>Management</I>&rdquo; for biographical information on our management team and directors. Subject to
the availability of financing our intention is to expand our staff to five employees within 12 months in order to implement our
growth strategy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Reports</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">You may locate reports on the SEC's Internet
site at www.sec.gov. The SEC's telephone number is 202-551-8090. Materials about us are available through the SEC Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">MANAGEMENT <FONT STYLE="color: black">DISCUSSION
</FONT>AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Included in this memorandum are financial
statements, audited and unaudited, of Innovus Pharma.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company&rsquo;s unaudited financial
statements for the three months and six months ended June 30, 2012 and 2011, and the audited financial statements for the years
ended December 31, 2011, and 2010, are included among the financial statements in this memorandum. The Company has not paid any
dividends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Innovus Pharma has not had changes in or
disagreements with its accountants on any accounting or financial matters. The following is the Company&rsquo;s management&rsquo;s
discussion and analysis of financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">At June 30, 2012, the Company had $105,726
in cash as compared to $25,014 at December 31, 2011. On January 13, 2012, the Board of Directors authorized to issue a total of
$174,668 in convertible promissory notes (the &quot;January Notes) to six individuals. One January Note for $74,668 was issued
to an accredited investor to settle liabilities assumed from North Horizon and therefore this did not result in any cash inflow
for us. Five January Notes for a total of $100,000 in a new cash infusion were issued to five individuals, three of who are members
of the Company's Board of Directors. The January Notes bear an annual interest rate of 8% and are payable in cash at the earlier
of January 13, 2013, or when the Company completes a financing of a minimum of $4 million (the &quot;Financing&quot;). The holders
of the January Notes have the option to convert their principal and interest accrued into the Company&rsquo;s securities (&ldquo;New
Financing Securities&rdquo;) that will be issued to the investors in a future financing. &nbsp;In the event the Company defaults
on repayment, or if the Company fails to complete a financing within one year of the note date, the annual interest rate would
increase to 13% and the holders of the January Notes would have the option to convert the note to the Company&rsquo;s common stock
at $0.05 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt">On June 26, 2012 the Company issued 134,000
shares of common stock to an unrelated investor at $0.75 per share for cash proceeds of $100,500. Also on June 26, 2012 the Company
and an unrelated noteholder reached a settlement on outstanding balance of $12,000, plus accrued interest of $435, of the convertible
debenture whereas the fair value of the 16,580 shares of common stock issued approximated the carrying value of the outstanding
convertible debenture at time of settlement. Accordingly, no gain or loss resulted from the settlement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For the three months ended June 30, 2012
and 2011, the Company earned no revenues, and consequently, had no cost of sales. Gross profits for the first three months in
2012 and 2011 were $0. Operating expenses for the three months ended June 30, 2012 and 2011 totaled $49,849 and $50,994, respectively,
marking a $1,145 decrease. This minor decrease was primarily the result of minor decreases in professional fees as a result of
the completion of the reverse merger transaction in December 2011 and the filing of our first Form 10K in March 2012. The Company
recognized interest expense of $4,472 and $4,730 for the three months ended June 30, 2012 and 2011, respectively, resulting in
a change of $(258). This change is primarily the result of decreased level of debt during 2012 compared to 2011. The Company recognized
net losses in the amount of $54,321 and $55,724, for the three-month periods ended June 30, 2012 and 2011, respectively. This
decreased net loss results primarily from minor decreases in operating expenses and interest expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For the six months ended June 30, 2012
and 2011, the Company earned no revenues, and consequently, no cost of sales. Operating expenses for the six months ended June
30, 2012 and 2011 totaled $106,126 and $71,200, respectively, marking a $34,926 increase. This increase was primarily the result
of increases in professional fees as a result of the completion of the reverse merger transaction in December 2011 and the filing
of our first Form 10K in March 2012. The Company recognized interest expense of $8,455 and $9,050 for the six months ended June
30, 2012 and 2011, respectively, resulting in a change of $(595). This change is primarily the result of decreased level of debt
during 2012 compared to 2011. The Company recognized net losses in the amount of $114,581 and $80,250, for the six-month periods
ended June 30, 2012 and 2011, respectively. This increased net loss results primarily from increases in operating expenses and
interest expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For the years ended December 31, 2011 and
2010, the Company earned no revenues, and consequently, had no cost of sales. Gross profits for the 2011 and 2010 years was $0.
The operating expenses for the years ended December 31, 2011 and 2010 totaled $2,188,535 and $53,601, respectively, marking a
$2,134,934 increase. This increase was primarily the result of increases in research and development costs ($58,960), professional
fees ($131,276), and compensation expense ($1,954,029), including fair value of warrants issued to an investment banker of $1,904,865.
The Company recognized interest expense of $67,717 and $16,322 for the years ended December 31, 2011 and 2010, respectively, resulting
in a change of $51,395. This change is primarily the result of increased level of debt during 2011 compared to 2010 and $48,920
discount recorded on the conversion of convertible notes. The Company recognized net losses in the amount of $2,256,252 and $69,923,
for the years ended December 31, 2011 and 2010, respectively. This increased net loss results primarily from increased operating
expenses and interest expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black">The Company
has experienced net losses and negative cash flows from operations each year since its inception.&nbsp;&nbsp;Through June 30,
2012, the Company had an accumulated deficit of approximately $2,865,004.&nbsp;&nbsp;The Company&rsquo;s operations have been
financed through advances from officers and directors and related parties.&nbsp;&nbsp;The Company has not yet had sufficient funds
to significantly develop its technologies.</FONT> <FONT STYLE="color: black">As a result of its losses to date, expected losses
in the future, limited capital resources and accumulated deficit, there is substantial doubt as to the Company&rsquo;s ability
to continue as a going concern. The Company&rsquo;s continuation is based on the Company&rsquo;s ability to generate or obtain
sufficient cash to meet our obligations on a timely basis and ultimately to attain profitable operations.&nbsp;&nbsp;&nbsp;The
Company anticipates that it will continue to incur significant losses at least until successful commercialization of one or more
of its products.</FONT> In light of management&rsquo;s efforts, there are no assurances that the Company will be successful in
this or any of its endeavors or become financially viable and continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Related Party Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On March 4, 2011, FasTrack issued a promissory
note to Baltimore Medical and Surgical Associates, PA, an entity controlled by Dr. Ziad Mirza, a director of FasTrack. On April
5, 2011, FasTrack paid the note&rsquo;s principal and accrued interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On January 13, 2012, the Board of Directors
authorized a total of $174,668 in promissory notes (the &quot;<B><I>January Notes</I></B>&quot;) to six individuals. One January
Note for $74,668 was issued to one accredited investor for the liabilities assumed from North Horizon, Inc. Five January Notes
for a total of $100,000 were issued to five individuals for cash consideration of $100,000, three of whom are members of the Company's
Board of Directors. The January Notes bear an annual interest rate of 8% and payable in cash at the earlier of January 13, 2012,
or when the Company completes a financing of a minimum of $4 million (the &quot;<B><I>Financing</I></B>&quot;). The holders of
the January Notes have the right to convert their principal and interest accrued into the Company's securities at the same terms
as the investors in the Financing. In the event the Company defaults on repayment, the annual interest rate would increase to
13% and the holders of the January Notes would have the right to convert at $0.05 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40.5pt">In January 2010, FasTrack&rsquo;s Board
of Directors approved $7,000 in payment to Dr. Bassam Damaj, our largest shareholder and the CEO of Apricus Bio. The payment was
for overhead expenses. The agreement included a provision that if FasTrack could not pay cash, Dr. Damaj would receive 1% of Fastrack&rsquo;s
outstanding equity based on its outstanding shares as of January 15, 2011. On February 7, 2011, FasTrack issued 134,364shares
(as converted post combination) of common stock to Dr. Damaj to satisfy the obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In January 2010, the Sorrento Board of
Directors approved a payment of $7,000 to Dr. Damaj for 2010 overhead expenses. The agreement had a similar provision as the FasTrack
agreement. Sorrento paid cash of $7,000 to satisfy the obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">From October 2009 to 2011, directors and
officers of the Company have advanced cash or incurred FasTrack&rsquo;s expenses. The amounts varied from $600 to $5,000. Substantially
all such advances have been repaid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Since October 2009 FasTrack and Sorrento
entered into agreements with others that are deemed to be related parties. In October 2009 FasTrack acquired the right to PrevOnco
from Bio-Quant for $276,020 paid for by 13,372,384 shares of FasTrack common stock (as converted post combination) and the issuance
of a promissory note in the amount of $250,000. In October 2009 Sorrento purchased from Bio-Quant the rights of Apeaz and Regia
for a purchase price of $120,858 paid for with 4,379 shares of Sorrento&rsquo;s common stock valued at $11,000 and a promissory
note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In March 2010, FasTrack entered into an
Agreement with NexMed in which FasTrack sold the development rights of PrevOnco&trade; to NexMed for cancellation of $204,896
of the FasTrack Promissory Note and a right to 50% of the net proceeds, defined as gross proceeds less 115% of the aggregate development
expenses incurred by NexMed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In March 2011, FasTrack acquired Sorrento&rsquo;s
over-the counter products. FasTrack assumed Sorrento&rsquo;s liabilities in the amount of $142,808.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Because the three foregoing transactions
are considered transaction with entities under common control, they have been recorded at historical carrying value (nil) and
as equity transactions - deemed contributions or distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In April 2011 FasTrack entered into an
Agreement with Apricus Bio described herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The notes and accrued interest at the date
of conversion (as described below) to Apricus Bio aggregated to $489,061, bore per annum interest of 4.25% and were due on April
4, 2013. These notes were secured by a first priority security interest in the assets of the Company. The notes are convertible
upon the happening of either financing of more than $2,000,000 or a merger or acquisition transaction prior to the maturity date.
Any outstanding amount will convert on the date of closing of the financing or the merger or acquisition at a price per share
equal to ninety per cent (90%) of the price of the shares sold in the financing or exchange in the merger or acquisition. On December
22, 2011, the notes were convertible into 135,888 shares of the Company&rsquo;s common stock, pursuant to the terms of the note
agreement. The shares which have trading restrictions until December 12, 2012, were physically delivered to Apricus Bio in March
2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In the past, the principal shareholder
of North Horizon, Inc., who was also one of its directors and its president advanced funds to pay in the amount of $26,601 for
expenses North Horizon incurred in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Off-balance Sheet Arrangements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have no off-balance sheet arrangements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recent Accounting Pronouncements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">See Footnote 2 to our consolidated financial
statements for the periods ended December 31, 2011 and 2010. The adoption of recently implemented accounting rules and policies
did not have any impact on the Company's financial position, results of operations or cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">MANAGEMENT AND BOARD OF DIRECTORS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company's directors are Vivian Liu,
Dr. Ziad Mirza, and Dr. Henry Esber<B>. </B>The following is biographical information about our directors. The Company anticipates
that in the near term new directors may be selected and appointed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Vivian Liu, 51, is a director, President
and Chief Executive Officer. Ms. Liu became President and Chief Executive Officer in January 2011. In 1995 Ms. Liu co-founded
NexMed, Inc., which in 2010 was renamed to Apricus BioSciences, Inc. Apricus Bio trades on NASDAQ with the symbol &ldquo;APRI.&rdquo;
Ms. Liu was NexMed&rsquo;s President and Chief Executive Officer from 2007 to 2009. Prior to her appointment as President, Ms.
Liu served in several executive capacities, including Executive Vice President, Chief Operating Officer, Chief Financial Officer,
and Vice President of Corporate Affairs. She was appointed as a director of NexMed in 2007 and served as Chairman of the Board
from 2009 to 2010. Ms. Liu has an M.P.A. from the University of Southern California, and has a B.A. from the University of California,
Berkeley.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">We agreed with
Ms. Liu that she would not be paid a salary until the Company raised at least $500,000 in cash, after which she would commence
to receive an annual salary of $150,000. Ms. Liu received <FONT STYLE="color: #030300">833,668 shares</FONT> of the Company's
common stock upon the closing of the reverse merger. The stock granted to Ms. Liu contains anti-dilution provision. Ms. Liu would
be issued additional shares in such a way, that she would retain 2%, 4% and 6% ownership of the Company at December 31, 2011,
2012 and 2013, respectively, assuming continuous and uninterrupted employment with the Company. <FONT STYLE="color: black">No
additional shares were issued or issuable through December 31, 2011 as her ownership percentage exceeds 2%.&nbsp;&nbsp;If additional
shares are to be issued, a compensatory charge will be recognized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Henry Esber, Ph.D, 73, has served as a
Director of FasTrack since January 2011. In 2000 Dr. Esber co-founded Bio-Quant, Inc., the largest pre-clinical discovery contract
research organization in San Diego, California. From 2000 to 2010 he served as its Senior Vice President and Chief Business Development
Officer. Dr. Esber has more than thirty-five years experience in the pharmaceutical service industry. Dr. Esber currently serves
on the Board of Directors of Apricus Bio and several private pharmaceutical companies. In the event that a potential conflict
of interest arises between FasTrack and Apricus Bio, Mr. Esber will abstain from participating in the decision involving the conflict.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Ziad Mirza, M.D., 49, is a director of
FasTrack and has served as Chairman of the Board of Directors since March 2010. He also served as FasTrack's Acting Chief Executive
Officer from March 2010 to December 2010. He is the President and co-founder of Baltimore Medical and Surgical Associates. He
is a Certified Medical Director of long term care through the American Medical Directors Association. He is as well a Certified
Physician Executive from the American College of Physician Executives. He consults for pharmaceutical companies on clinical trial
design. He has a medical degree from the American University of Beirut and completed his residency at Good Samaritan Hospital
in Baltimore. He received an MBA from the University of Massachusetts. Dr. Mirza is a relative of Dr. Damaj, our largest shareholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In the near term the Company's intends
to appoint three new independent directors, with at least one of the new appointees being an audit committee financial expert
as defined in Item 407(d)(5) of the SEC's Regulation S-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company is not involved in any legal
proceedings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recent Sales of Unregistered Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt">On June 26, 2012 the Company issued 134,000
shares of common stock to an unrelated investor at $0.75 per share for cash proceeds of $100,500. Also on June 26, 2012 the Company
and an unrelated noteholder reached a settlement on outstanding balance of $12,000, plus accrued interest of $435, of the convertible
debenture whereas the fair value of the 16,580 shares of common stock issued approximated the carrying value of the outstanding
convertible debenture at time of settlement. Accordingly, no gain or loss resulted from the settlement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Changes and Disagreements with Accountants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Neither the Company nor FasTrack has had
any disagreements with its accountants on accounting and financial disclosures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Stock ownership of Officers and Directors
and Major Shareholders (5% or more). The number of shares owned includes direct and beneficial ownership. The percentages are
based on 16,714,143 shares of common stock outstanding on a fully-diluted basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.1in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; text-align: left">Name</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Number&nbsp;of&nbsp;Shares<BR>Owned<BR>Beneficially</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Percentage&nbsp;of<BR>Company</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="width: 49%; text-align: left; vertical-align: top">Vivian Liu</TD><TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: right; vertical-align: top">833,669</TD><TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: right; vertical-align: top">5.02</TD><TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 20%; text-align: center; vertical-align: top">Officer and Director (1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">Henry Esber</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">2,252,126</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">13.5</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: top">Director (1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">Ziad Mirza</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">403,346</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">2.4</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: top">Director (1)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">Wallace Boyack</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">840,579</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">5.02</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">Ramon Jadra</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">980,147</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">5.91</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">Bassam Damaj &amp; Family (2)</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">4,649,301</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="text-align: right; vertical-align: top">28</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1) The officers and directors own 3,489,141 shares of common
stock which is 21% of the issued and outstanding shares. <B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2) Apricus Bio is now one of our shareholders through the
conversion of a convertible promissory note which converted into 135,888 shares of our Common Stock on December 21, 2011. The
Apricus Bio shares are included in the shares held beneficially by Bassam Damaj because he currently serves as a Director, President
&amp; Chief Executive Officer of Apricus Bio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Change in Status - No Longer a Shell Company</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Previously we were designated as a &ldquo;shell
company&rdquo; as that term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934.<B> </B>As a result
of the Closing of the reverse merger with FasTrack, FasTrack became our subsidiary and main operating business. FasTrack has assets
which it is seeking to develop and pursue. With an operating business we are no longer a &ldquo;shell company.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">More information about the Company is available
because we file annual, quarterly, and current reports and other information with the SEC that states additional information about
our company. These materials are available at the public reference facilities of the SEC&rsquo;s Washington, D.C. office, at 100
F Street, NE, Washington, D.C. 20549 and on the SEC Internet site at <U>http://www.sec.gov</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Innovus Pharma Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The audited financial statements of Innovus
Pharmaceuticals, Inc., as of December 31, 2011, and December 31, 2010, are attached. Unaudited financial statements as of June
30, 2012 and 2011, are attached.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">DESCRIPTION OF SECURITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are authorized to issue up to 150,000,000
shares of Common Stock, par value $0.001 per share. As of the date of this Memorandum, there are approximately 16,333,670 shares
of Common Stock issued and outstanding. The outstanding shares of Common Stock are validly issued, fully paid and nonassessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Holders of Common Stock are entitled to
one vote for each share on all matters submitted to a stockholder vote. Holders of Common Stock do not have cumulative voting
rights. Therefore, holders of a majority of the shares of Common Stock voting for the election of directors can elect all of the
directors. Holders of Common Stock representing a majority of the voting power of the Company&rsquo;s capital stock issued, outstanding
and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders.
A vote by the holders of a majority of the Company&rsquo;s outstanding shares is required to effectuate certain fundamental corporate
changes such as liquidation, merger or an amendment to the Company&rsquo;s certificate of incorporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Holders of Common Stock are entitled to
share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In the event of
a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that
remain after payment of liabilities and after providing for each class of stock, if any, having preference over the Common Stock.
The Common Stock has no pre-emptive, subscription or conversion rights and there are no redemption provisions applicable to the
Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">DISCLOSURES OF COMMISSION'S POSITION
ON INDEMNIFACTION FOR SECURITIES ACT LIABILITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our bylaws provide that directors, officers
and any person who acted at our request will be indemnified to the fullest extent authorized by the Nevada Revised Statutes against
all expenses and liabilities reasonably incurred in connection with services for us or on our behalf if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">- such person acted in good faith,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">- acted in an manner he or she reasonably believed
to be in or not opposed to the best interest of the corporation and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">- had no reason to believe in a criminal matter that
the conduct was unlawful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Insofar as indemnification for liabilities
arising under the Securities Act might be permitted to directors, officers or persons under the provisions described above, we
have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">LEGAL MATTERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Wallace T. Boyack, P.C. at 2290 East 4500
South, Suite 130, Salt Lake City, UT 84117, telephone (801) 278-9925, has acted as our legal counsel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">EXPERTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The financial statements of the Company
as of December 31, 2011 and 2010, and for each of the two years in the period ended December 31, 2011 and the period from inception
(October 31, 2008) through December 31, 2011 then ended included in this Prospectus have been so included in reliance on the report
of EisnerAmper LLP (which contains an explanatory paragraph relating to the Company&rsquo;s ability to continue as a going concern
as described in Note 2 to the financial statements), an independent registered public accounting firm, given on the authority
of said firm as experts in auditing and accounting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">INTEREST OF NAMED EXPERTS AND COUNSEL</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">No expert or counsel was hired on a contingency
basis. The auditing firm will not receive a direct or indirect interest in the company, nor will it act, or has acted as a promoter,
underwriter, voting trustee, director, officer or employee of the company. Mr. Boyack is a shareholder owning 840,579 shares of
common stock and prior to December 7, 2011, served as an officer and director of North Horizon for several years (prior to combination
with FasTrack).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WHERE YOU CAN FIND MORE INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This prospectus is part of a registration
statement that we filed with the SEC in accordance with its rules and regulations. This prospectus does not contain all of the
information in the registration statement. For further information regarding both the company and the securities in this offering,
we refer you to the registration statement including all exhibits and schedules. You may inspect our registration statement without
charge at the public reference facilities of the SEC's Washington, D.C. office, 100 F Street, NE, Washington, D.C. 20549 and on
its Internet site at <U>http://www.sec.gov.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">You may also request a copy of the registration
statement and these filings by contacting us electronically at <U>innovuspharma.com.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We file periodic reports with the SEC.
These reports and other information may also be inspected and copies obtain at the SEC's public reference facilities or at the
SEC's web site.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FINANCIAL STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Board of Directors and Stockholders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Innovus Pharmaceuticals, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of Innovus Pharmaceuticals, Inc. (the &ldquo;Company&rdquo;), Inc. as of December 31, 2011 and December 31, 2010
and the related consolidated statements of operations, changes in stockholders&rsquo; deficit and cash flows for the years then
ended and for period from inception (October 31, 2008) to December 31, 2011. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control
over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Innovus Pharmaceuticals, Inc.
(the &ldquo;Company&rdquo;) as of December 31, 2011 and 2010, and the results of their operations and their cash flows for the
years then ended and for period from inception (October 31, 2008) to December 31, 2011 in conformity with accounting principles
generally accepted in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses from operations and has limited liquidity, all of which have raised substantial
doubt about its ability to continue as a going concern. Management&rsquo;s plans regarding those matters are also described in
Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ EisnerAmper LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">March 30, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Edison, New Jersey</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">Consolidated Balance Sheets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">December 31</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: underline; text-align: center">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CURRENT ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; padding-bottom: 1pt; padding-left: 11pt">Cash</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right">25,014</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right">1,650</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 22pt">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,650</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">LIABILITIES AND STOCKHOLDERS&rsquo; EQUITY (DEFICIT)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CURRENT LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 11pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10,034</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 11pt">Convertible notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,952</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 11pt">Promissory notes - Dawson James</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 11pt">Accrued interest payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,569</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 11pt">Related-party payables</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">87,168</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22pt">Total Current Liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">138,855</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">253,155</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Contingent liability related to</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">common shares, subject to rescission rights, issuable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">to FasTrack shareholders arising from Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>(14,722,077 shares )</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,926</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">STOCKHOLDERS&rsquo; EQUITY (DEFICIT)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 11pt">Common stock; 150,000,000 shares authorized,</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 11pt">&nbsp;at $0.001 par value, 1,325,125 and 13,754,045</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 11pt">&nbsp;shares issued and outstanding, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,754</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 11pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,606,331</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,912</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 11pt">Deficit accumulated during the development stage</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,750,423</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(494,171</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22pt">Total Stockholders&rsquo; Equity (Deficit)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(142,767</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(251,505</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 22pt">TOTAL LIABILITIES AND STOCKHOLDERS&rsquo;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 22pt">&nbsp;EQUITY (DEFICIT)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,650</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.4pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these financial statements.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Consolidated Statements of Operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">From&nbsp;October&nbsp;31,&nbsp;2008</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">For&nbsp;the&nbsp;Years&nbsp;Ended</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(Inception)&nbsp;through</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">December&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt">December&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>REVENUES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">OPERATING EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 56%; text-align: left; padding-left: 11pt">Research and development</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">58,960</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">78,960</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 11pt">Professional fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131,276</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131,276</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 11pt">Investment banking fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,954,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,954,865</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 11pt">(including fair value of warrant - $1,904,865)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 11pt">General and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">43,434</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">53,601</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">97,159</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22pt">Total Operating Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,188,535</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">53,601</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,262,260</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">LOSS FROM OPERATIONS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,188,535</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(53,601</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,262,260</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">OTHER EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22pt">INTEREST EXPENSE</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(67,717</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16,322</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(91,285</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22pt">TOTAL INTEREST EXPENSE</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(67,717</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16,322</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(91,285</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">LOSS BEFORE INCOME TAXES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,256,252</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(69,923</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,353,545</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">PROVISION FOR INCOME TAXES</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">NET LOSS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,256,252</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(69,923</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,353,545</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">BASIC AND DILUTED</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;LOSS PER SHARE</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.16</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>WEIGHTED AVERAGE</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;NUMBER OF SHARES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;OUTSTANDING - BASIC AND DILUTED</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,785,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,681,876</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Statements of Stockholders&rsquo; Deficit</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Common <BR>Stock <BR>(Shares)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Common <BR>Stock <BR>(Amount)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Additional<BR>Paid-In&nbsp;Capital</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Deficit <BR>&nbsp;Accumulated<BR>During <BR>The <BR>Development<BR>Stage</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Total <BR>Stockholders&rsquo;<BR>Deficit</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 37%; padding-bottom: 1pt">Balance at October 31, 2008 (Inception)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 14%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Balance on December 31, 2008</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock - FasTrack asset purchase</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,372,284</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,648</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,020</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of common stock - Sorrento business combination</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Deemed distribution for the value of assets acquired from Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(396,878</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(396,878</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the year ended December 31, 2009</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Balance at December 31, 2009</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,372,284</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,372</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">23,648</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(424,248</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(387,228</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock for compensation of board members (Mirza and Nasser)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">381,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">382</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Deemed contribution for the value of assets sold to Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,896</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,896</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the year ended December 31, 2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(69,923</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(69,923</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Balance at December 31, 2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,754,045</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,754</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">228,912</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(494,171</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(251,505</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these financial statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Statements of Stockholders&rsquo; Deficit
(continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common<BR> Stock<BR> (Shares)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common<BR> Stock<BR> (Amount)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Additional<BR> Paid-In&nbsp;Capital</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Deficit<BR> Accumulated<BR> During<BR> The<BR> Development<BR> Stage</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total<BR> Stockholders&rsquo;<BR> Deficit</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; padding-bottom: 1pt">Balance at December 31, 2010</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">13,754,045</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">13,754</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">228,912</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">(494,171</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">(251,505</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of common stock for services rendered</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,364</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,866</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock for compensation of officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">833,668</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">834</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,638</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Forgiveness of interest&nbsp; by Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,021</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,021</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Contribution to capital arising from the conversion of the convertible promissory notes held by Apricus Bio at the date of the Merger and pursuant to the terms of the convertible note, which will result in the issuance of 135,888 shares of common stock in March 2012 to Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">538,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">538,117</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of shares for net liabilities assumed in the Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63,050</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(61,725</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of warrants to investment banker for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Reclassification of shares issuable to FasTrack shareholders pursuant to rescission offer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,722,077</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,722</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,204</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(28,926</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the year ended December 31, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,256,252</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,256,252</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Balance at December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,325,125</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,325</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,606,331</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,750,423</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(142,767</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">The accompanying
notes are an integral part of these financial statements</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Consolidated Statements of Cash Flows</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">From&nbsp;October&nbsp;31,<BR> 2008</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center">For the Year Ended</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(Inception)<BR> through</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">CASH FLOWS FROM OPERATING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; text-indent: -0.1in; padding-left: 18.2pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,256,252</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(69,923</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,353,545</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 18.2pt">Adjustments to reconcile net loss to net cash used by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Common stock issued for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,638</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,388</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Value of warrants granted to investment banker</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Non-cash interest expense (including a discount on conversion of Apricus Bio convertible notes of $48,920)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,717</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">91,461</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Promissory note issued for services rendered</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Research and development expense recognized upon purchase of SSAO inhibitor assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Expenses paid on behalf of the Company by Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,990</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,990</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 18.2pt">Changes in operating assets and liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Change in related-party payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,168</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,168</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 29.2pt">Accounts payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,172</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,034</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,687</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 40.2pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 40.2pt">Net Cash Used in Operating Activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(208,036</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16,826</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(224,986</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">CASH FLOWS FROM INVESTING ACTIVITIES</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">CASH FLOWS FROM FINANCING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Proceeds from issuance of loans from officers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,003</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,603</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">Repayments of loans from officers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(23,603</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(23,603</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 29.2pt">Proceeds from convertible notes payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 40.2pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 40.2pt">Net Cash Provided by&nbsp;Financing Activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">231,400</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">17,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 29.2pt">NET CHANGE IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,364</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">674</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,014</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 29.2pt">CASH AT BEGINNING OF PERIOD</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,650</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">976</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 29.2pt">CASH AT END OF PERIOD</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,650</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 40.2pt">Interest paid</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$&nbsp;</TD><TD STYLE="text-align: right">&nbsp;nil&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$&nbsp;</TD><TD STYLE="text-align: right">&nbsp;nil&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$&nbsp;</TD><TD STYLE="text-align: right">&nbsp;nil&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 40.2pt">Taxes paid</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$&nbsp;</TD><TD STYLE="text-align: right">&nbsp;nil&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$&nbsp;</TD><TD STYLE="text-align: right">&nbsp;nil&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$&nbsp;</TD><TD STYLE="text-align: right">&nbsp;nil&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>See note 9 for supplemental information on non-cash financing
activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of these financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-indent: -27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1. COMPANY INFORMATION AND HISTORY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt"><U>Nature of Business</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Innovus Pharmaceuticals, Inc.
(formerly North Horizon, Inc.) (&ldquo;the Company&rdquo;), a corporation organized under the laws of the State of Utah, entered
into a combination with FasTrack Pharmaceuticals, Inc. (&ldquo;FasTrack&rdquo;), a corporation organized under the laws of the
State of Delaware. The combination was effective on December 7, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Innovus Pharmaceuticals, Inc.
was organized as a Utah corporation in 1959. In 2007, it changed its domicile to Nevada, and from 2007 through September 30, 2011,
maintained the Company as a corporate entity and filed requisite reports with the U.S. Securities and Exchange Commission. Prior
to the business combination the Company was considered a non-operating public shell corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">FasTrack Pharmaceuticals, Inc.,
(&ldquo;FasTrack&rdquo;) was incorporated in the State of Delaware on October 31, 2008 and commenced operations on October 1, 2009.
FasTrack is a specialty pharmaceutical company focusing on the development of innovative pharmaceutical products. FasTrack develops
ethical therapeutic drugs based on its unique delivery platforms and knowhow. Upon its acquisition of the Sorrento Pharmaceuticals
Inc. (&ldquo;Sorrento&rdquo;) assets and liabilities in March 2011, the FasTrack also began to focus on OTC opportunities. Sorrento
was incorporated in the state of Delaware on October 31, 2008 and commenced operations on October&nbsp;1, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">FasTrack and Sorrento were formed
by the shareholders of Bio-Quant, Inc. (&ldquo;Bio-Quant&rdquo;), a contract research organization for the pharmaceutical industry
that has been in existence since 2000. In 2008, Bio-Quant decided to focus on its core business of pre-clinical testing services
and therefore formed FasTrack and Sorrento, and, in 2009, sold its pharmaceutical assets to the two companies, for FasTrack to
focus on the development of ethical therapeutic (&ldquo;Rx&rdquo;) and for Sorrento on Over-the Counter (&ldquo;OTC&rdquo;) products.
Both FasTrack and Sorrento had limited operations during 2009 and 2010, as their funding was severely limited. In March 2011, the
shareholders of FasTrack and Sorrento elected to combine operations in an effort to better position the combined entity for new
investors. Pursuant to an asset purchase agreement between the two companies, FasTrack acquired Sorrento&rsquo;s assets and liabilities.
All periods of the financial statements of FasTrack have been presented on a combined basis for the combination of FasTrack and
Sorrento given the two companies merged as entities under common control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Bio-Quant was acquired by Apricus
Biosciences, Inc. (Nasdaq: APRI) (&ldquo;Apricus Bio&rdquo;) in December 2009. NexMed (U.S.A.), Inc., (&ldquo;NexMed&rdquo;) is
a wholly owned subsidiary of Apricus Bio. As such, throughout the financial statements Bio-Quant, Apricus Bio and NexMed may be
used interchangeably, but shall represent the same entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Innovus Pharmaceuticals, Inc.
(&ldquo;Innovus Pharma&rdquo;) is focused on the development and in-licensing/acquisition of new and innovative pharmaceutical
product opportunities that offer definable pathways to regulatory approvals, partnering and commercialization. We have a three-pronged
approach in our business strategy:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon,
Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage
Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated
Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and
2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.38in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>To internally develop new, 505(b)(2) topical pharmaceutical; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.38in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>To in-license/acquire late stage revenue generating pharmaceutical products; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.38in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>To leverage near term revenue opportunities afforded by our proprietary pipeline comprised of ethical therapeutic (&ldquo;Rx&rdquo;)
and over-the-counter (&ldquo;OTC&rdquo;) products.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">Our business model is designed to create multiple
opportunities for success while minimizing the risks associated with reliance on any single technology platform or product type,
and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions designed to place our
product candidates into larger organizations or with partners having existing commercialization, sales and marketing resources,
and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">In parallel, as our business strategy advances and
corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow with minimal dilution to our shareholders.&nbsp; This
strategy may include debt financing and/or acquisitions of small revenue generating companies and products, which we believe would
accelerate our shareholders&rsquo; return on investment and provide us with additional cash flow to fund our own product development.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Our Proprietary Product and Technology Portfolios</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><FONT STYLE="color: black">In our portfolio of Rx
products, we have a partial interest in the potential commercial value of PrevOnco, a Phase 2/3 second-line Orphan Drug therapy
for patients with hepatocellular carcinoma or liver cancer. PrevOnco is based on lansoprazole, a drug widely used to treat</FONT><FONT STYLE="color: #222222">
gastro-esophageal reflux disease. Preclinical animal data have shown the drug to also be effective in shrinking the tumors commonly
associated with liver cancer.</FONT><FONT STYLE="color: black"> In 2010, FasTrack sold the development rights of the product to
NexMed. In exchange, we are entitled to receive up to 50% of the net commercial value of the product in the event Apricus Bio successfully
licenses the product to a commercialization partner.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">Pursuant to the overall terms of our PrevOnco agreements
with Apricus Bio, we have the right to develop two products based on their proprietary NexACT<SUP> R</SUP> multi-route drug delivery
technology. NexACT utilizes patented novel excipients or &ldquo;penetration enhancers&rdquo; that when incorporated into drug formulations,
may improve their absorption and bioavailability. The technology is incorporated in Vitaros<SUP> R</SUP> , a topical treatment
for erectile dysfunction approved for local marketing by Health Canada in October 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">We intend to pursue new product opportunities based
on drugs with expired patents. Our strategy is to follow a 505(b)(2) regulatory approval pathway, which typically has a significantly
shorter development cycle with less pre-clinical and clinical studies required by the regulatory agencies. We are actively exploring
possible topical product candidates in dermatology. In June 2011, we entered into two research agreements with NexMed to conduct
feasibility studies on two active drug ingredients identified by us. Assuming the availability of financing, we plan to conduct
additional studies to optimize our proprietary minoxidil formulation and take it into human clinical trials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">Within our Rx portfolio is a development platform
based on SSAO inhibitors. SSAO is known as vascular adhesion protein-1 or VAP-1, and is a dual function molecule with enzymatic
and cell adhesion activities. These inhibitors are designed to reduce inflammation by blocking the white blood cells and reducing
the levels of inflammatory mediators. A prior owner had developed a treatment for Lupus based on the SSAO platform, but that product
failed in late-stage clinical studies. In 2009, FasTrack acquired the SSAO patent portfolio because of the possibility that the
SSAO platform had potential for other developers to identify the right medical indication. Because the SSAO platform has unproven
safety and efficacy profiles, to develop a product based on this platform would require significant resources and longer development
time. We do not have these resources presently and no assurance can be given that even if proper resources were available, we would
seek to develop or if development were pursued a successful SSAO platform would be accomplished. To facilitate the SSAO development
we may seek a partnership relationship.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">In our portfolio of OTC products, we have two opportunities
for development and/or out-licensing. Apeaz is a potential treatment for pain relief. It is an arthritis cream intended to deliver
different ingredients to various layers of the skin and muscle.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">In addition, we have Regia,
which is a plant-derived, anti-microbial agent for reducing the bleeding of gums when used in OTC products such as mouthwash. We
have an issued US patent which expires on May 9, 2028 for Regia and applications pending in selected international markets. Our
intention is to out-license the patent portfolio for Regia to potential development partners in the OTC space.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>Merger between the Innovus
and FasTrack</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The merger agreement (the &ldquo;Agreement&rdquo;),
dated December 7, 2011, stipulated that Innovus and FasTrack would undergo a combination whereby both companies would survive as
legal entities, but FasTrack would become a wholly-owned subsidiary of Innovus. Pursuant to the Agreement, Innovus changed its
name from North Horizon, Inc. to Innovus Pharmaceuticals, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">As a result of the merger, the
shareholders of FasTrack have actual and effective operating control of the consolidated entity after the transaction and the shareholders
of former North Horizon continue as passive investors in the consolidated entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The transaction was accounted
as a reverse acquisition under provisions of ASC Topic 805 &ldquo;Business Combinations.&rdquo; As a result, the accompanying consolidated
financial statements are issued under the name of the &ldquo;legal acquirer&rdquo; - Innovus Pharmaceuticals, Inc. However, these
financial statements are continuation of the &ldquo;accounting acquirer&rdquo; - FasTrack for all periods presented. Due to the
fact that prior to the transaction Innovus Pharmaceuticals, Inc. had only nominal net assets and did not constitute a &ldquo;business,&rdquo;
the transaction was deemed an equivalent of issuance of stock by the private company (FasTrack) for the net assets of the shell
corporation (Innovus Pharmaceutical Inc.), accompanied by recapitalization. No goodwill or other intangible assets were recorded
under recapitalization accounting. As a result of recapitalization, the historical equity of the accounting acquirer (FasTrack)
prior to the transaction has been retroactively restated using the share exchange ratio determined in the transaction: 1 share
of FasTrack was exchanged for 3,054 shares of Innovus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">As a result of the combination
the shareholders of FasTrack received 15,238,938 shares of the combined entity&rsquo;s post-split common stock (representing 92%
ownership of Innovus on a fully diluted basis); the shareholders of North Horizon retained their holdings, totaling 1,325,125 shares
(representing 8% ownership of Innovus).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On February 29, 2012, the Company
made an offer for rescission to former FasTrack shareholders of the record date for the approval of the Reverse Merger. The Reverse
Merger had been approved by the written consent of FasTrack shareholders holding a majority of the shares outstanding. Because
FasTrack had not solicited any proxies from its shareholders for approval of the Reverse Merger, limited or no information had
been provided to the FasTrack shareholders who had not signed the written consent. The Company sent to the former FasTrack shareholders
the North Horizon Information Statement dated September 27, 2012 and a report on Form 8-K dated December 12, 2011, which provided
information about North Horizon and FasTrack including a description of the business, future plans, risk factors, financial information,
description of the transactions, biographical summaries of the new officer and directors, financial statements and pro-forma financial
statement for North Horizon and FasTrack as of September 30, 2011. Former holders of FasTrack shares prior to consummation of the
Reverse Merger must reject the rescission offer of $6 per share ($.002 after effect of conversion ratio) within thirty days of
the date of receipt of the information, or at the latest April 14, 2012. The rescission offer is limited to the FasTrack shareholders
who were shareholders as of the record date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">In addition, shares related
to the convertible note of Apricus Bio, which was converted on December 21, 2011 were not yet issued as of December 31, 2011 due
to administrative delays.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Shares subject to rescission
rights and shares issuable to Apricus Bio were issued as of the date of this filing. As of the date of this filing no shareholders
exercised their rescission rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The following table presents
selected information as of December 31, 2011 as if all shares under the rescission rights and shares to Apricus Bio upon conversion
of the notes payable were issued and outstanding as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.38in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">December&nbsp;31,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: left">Shares issued and outstanding</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">1,325,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Potential shares subject to rescission rights (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,722,077</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Shares issuable for conversion of Apricus Bio notes (1)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">135,888</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Shares, which would have been issued and outstanding, as if rescission rights were not granted and Apricus Bio shares were issued at the date of the Merger</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">16,183,090</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">(1) Issued in March 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41.8pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2. GOING CONCERN</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The accompanying financial statements
have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as
a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The Company has experienced
net losses and negative cash flows from operations each year since its inception.&nbsp;&nbsp;Through December 31, 2011, the Company
had an accumulated deficit of approximately $2,750,000.&nbsp;&nbsp;The Company&rsquo;s operations have been financed through advances
from officers and directors and related parties.&nbsp;&nbsp;The Company has not yet had sufficient funds to significantly develop
its technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">As a result of its losses to
date, expected losses in the future, limited capital resources and accumulated deficit, there is substantial doubt as to the Company&rsquo;s
ability to continue as a going concern. The Company&rsquo;s continuation is based on the Company&rsquo;s ability to generate or
obtain sufficient cash to meet our obligations on a timely basis and ultimately to attain profitable operations.&nbsp;&nbsp;&nbsp;The
Company anticipates that it will continue to incur significant losses at least until successful commercialization of one or more
of its products. In light of management&rsquo;s efforts, there are no assurances that the Company will be successful in this or
any of its endeavors or become financially viable and continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">As noted in Note 9 the company
received funding of $100,000 in January 2012 in the form of promissory notes, principally from related parties. The Company has
also engaged Dawson James Securities, an investment banking firm, to attempt to secure financing on behalf of the Company. The
timing, form and amount of financing, if any, is uncertain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Use of Estimates</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Basic Loss per Common Share</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Basic loss per share is calculated
by dividing the Company&rsquo;s net loss applicable to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Company&rsquo;s net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year. Due to net losses at December 31, 2011 and 2010,
the effect of the potential common shares resulting from warrants was excluded, as the effect would have been anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The diluted share amount for
2011 assumes that the shares issuable to Apricus Bio upon conversion of the notes payable are not outstanding, and that the shares
subject to rescission rights are not outstanding as of December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.38in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the<BR> &nbsp;Year&nbsp;Ended<BR> &nbsp;December&nbsp;31,<BR> &nbsp;2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the<BR> &nbsp;Year&nbsp;Ended<BR> &nbsp;December&nbsp;31,<BR> &nbsp;2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Net Loss (numerator)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(2,256,252</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(69,923</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Common Shares (denominator)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,785,487</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,681,876</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Net loss per share amount</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.16</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Revenue Recognition</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The Company will develop an
appropriate revenue recognition policy when planned principle operations commence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Advertising Costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The Company&rsquo;s policy regarding
advertising is to expense advertising costs when incurred. The Company did not incur any advertising expense during the years ended
December 31, 2011 and 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Cash and Cash Equivalents</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">For purposes of financial statement
presentation the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents
to the extent the funds are not being held for investment purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt"><U>Fair value measurements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The Company adopted the standard
issued by the FASB, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes
a fair value hierarchy to classify the inputs used in measuring fair value as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Level 1-Inputs are unadjusted
quoted prices in active markets for identical assets or liabilities available at the measurement date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Level 2-Inputs are unadjusted
quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities
in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by
observable market data.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Level 3-Inputs are unobservable
inputs which reflect the reporting entity&rsquo;s own assumptions on what assumptions the market participants would use in pricing
the asset or liability based on the best available information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Fair value measurements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">The carrying amounts reported in the balance sheets
for cash, notes payable, and accounts payable and accrued expenses, approximate their fair market value based on the short-term
maturity of these instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt"><U>Research and development</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Research and development costs
are charged to operations as they are incurred. Legal fees and other direct costs incurred in obtaining and protecting patents
are also expensed as incurred, due to the uncertainty with respect to future cash flows resulting from the patents. Such costs
also include the $20,000 purchase price of the acquired intellectual property assets for the SSAO inhibitor indication, which did
not meet the definition of an asset. Research and development costs totaled $58,960 and $-0- during the fiscal years ended December
31, 2011 and 2010, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt"><U>Income Taxes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Deferred taxes are provided
on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will
be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">At December 31, 2011, the Company
had net operating loss carry forwards of approximately $374,000 that may be offset against future taxable income through 2031.&nbsp;Deferred
tax assets amounted to approximately $1,167,000 have been fully reserved.&nbsp;No tax benefit has been reported in 2011 and 2010,
financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">The Company has undergone ownership change that will
significantly impair the Company&rsquo;s ability to utilize these losses before their expiration due to Section 382 of Internal
Revenue Code of 1986, as amended. Pursuant to Section 382 of the Internal Revenue Code of 1986, the annual utilization of a company&rsquo;s
net operating loss carryforwards may be limited if the Company experiences a change in ownership of more than 50 percentage points
within a three-year period. An ownership change occurs with respect to a corporation if it is a loss corporation on a testing date
and, immediately after the close of the testing date, the percentage of stock of the corporation owned by one or more five-percent
shareholders has increased by more than 50 percentage points over the lowest percentage of stock of such corporation owned by such
shareholders at any time during the testing period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">The Company adopted the provisions of ASC 740-10
and has analyzed its filing positions in all open tax years in jurisdictions where it may be obligated to file returns. The Company
believes that its income tax filing position and deductions will be sustained on audit and does not anticipate any adjustments
that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have
been recorded. The Company&rsquo;s policy is to recognize interest and/or penalties related to income tax matter in income tax
expense. The Company had no accrual for interest or penalties at December 31, 2011. In addition, future changes in unrecognized
tax benefits will have no impact on the effective tax rate due to the existence of the valuation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">A reconciliation of the statutory federal income
tax rate to the effective tax rate is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.38in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: left">Expected Federal Tax</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">34.0</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">State Tax (Net of Federal Benefit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.9</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Intangibles</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(-0.1</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Valuation Allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(-39.8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>Stock based compensation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">The Company&rsquo;s share-based compensation cost
is measured at grant date, based on the estimated fair value of the award, and is recognized as expense over the employee&rsquo;s
requisite service period on a straight-line basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>Recent Accounting Pronouncements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Management has considered all
recent accounting pronouncements issued since the last audit of our financial statements. The Company&rsquo;s management believes
that these recent pronouncements will not have a material effect on the Company&rsquo;s financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">4. ASSET PURCHASE AGREEMENTS WITH APRICUS
BIO</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">In 2009, FasTrack purchased
SSAO inhibitors compound technology from La Jolla Pharmaceutical Company (&ldquo;La Jolla&rdquo;) (a non-related entity) for approximately
$20,000. The purchase was paid for by Bio-Quant and thus FasTrack issued a demand note to Bio-Quant for the same face amount. The
purchase price was recorded as an expense pursuant to our accounting policy for research and development costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On October 1, 2009, FasTrack
entered into an Asset Purchase Agreement with Bio-Quant (&ldquo;the FasTrack-BQ Agreement&rdquo;). Pursuant to the terms of the
FasTrack-BQ Agreement, FasTrack acquired the rights to PrevOnco and another early stage cancer product candidate. The total purchase
price was $276,020, which was paid in 13,372,284 shares of FasTrack&rsquo;s common stock valued at $26,020 and the issuance of
the $250,000 FasTrack Promissory Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On October 1, 2009, Sorrento
entered into an Asset Purchase Agreement with Bio-Quant (the Sorrento-BQ Agreement&rdquo;). Pursuant to the terms of the Sorrento-BQ
Agreement, Sorrento acquired the rights of Apeaz and Regia. The total purchase price was $120,858, which was paid in 4,379 shares
of Sorrento&rsquo;s common stock, valued at $11,000 and the issuance of the Sorrento Promissory Note in the amount of $109,858.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The aggregate purchase price
of the October 1, 2009 transaction was $398,878 and is recorded as a deemed distribution for the value of the net assets acquired
from Apricus Bio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On March 10, 2010, FasTrack
entered into an Asset Purchase Agreement with NexMed (the &ldquo;FasTrack-NexMed Agreement&rdquo;). Pursuant to the terms of the
FasTrack-NexMed Agreement, FasTrack sold the development rights of PrevOncoTM to NexMed in exchange for cancellation of $204,896
of a FasTrack promissory note and in the event NexMed successfully licenses the product, 50% of the net proceeds, which is defined
as the gross proceeds less 115% of the aggregate development expenses incurred by NexMed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On March 16, 2011, FasTrack
and Sorrento entered into an Asset Purchase Agreement, (the &ldquo;FasTrack-Sorrento Agreement&rdquo;). According to the terms
of the FasTrack-Sorrento Agreement, the Company acquired the development and commercialization rights to ApeazT and Regia. In consideration
for these rights, FasTrack agreed to assume the liabilities of Sorrento, comprised of immediately payable expenses of $22,600 and
$120,208 for the interest and principal, respectively, due on Sorrento promissory notes. Since these two entities were considered
entities under common control, the combination was accounted for at historical costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On April 4, 2011, FasTrack entered
into an Asset Purchase Agreement with Apricus Bio (the FasTrack-Apricus Bio Agreement&rdquo;). According to the terms of the FasTrack-Apricus
Bio Agreement, FasTrack sold the patent rights for the backup compound for PrevOncoTM, in exchange for Apricus Bio providing FasTrack
with a) a fully funded loan of $250,000 evidenced by a secured convertible promissory note, b) a second secured convertible promissory
note in the amount of $224,520, which consolidated the $200,952 of various outstanding demand notes payable to Apricus Bio (see
Footnote 5) and related accrued interest in the amount of $23,568 (together the &ldquo;Apricus Bio Notes&rdquo;, and c) the right
to develop two products using the NexACT technology. The issuance of $224,520 note was considered debt restructuring. The restructuring
did not result in any material gains or losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">Since all of the above transactions are considered
transactions with entities under common control, they have been reflected at historical carrying value (nil) and as equity transactions
- deemed contributions or distributions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">5. NOTES PAYABLE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>Apricus Bio Note</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The following summarizes the
promissory note activities with Apricus Bio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.38in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: left">Borrowing from Bio-Quant pursuant to the FasTrack-BQ Agreement- October 2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">250,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Borrowing from Bio-Quant for purchase of SSAO inhibitors from an unrelated third party- October 2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Borrowing pursuant to Sorrento-Bio-Quant Agreement- October 2009</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">109,858</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Balance at December 31, 2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">379,858</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cancellation of note pursuant to FasTrack-NexMed Agreement- March 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(204,896</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Demand note issued for payment of certain legal expenses By Apricus Bio on behalf of FasTrack</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,990</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Balance at December 31, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">200,952</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of fully-funded convertible note to Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Conversion of convertible notes payable to Apricus Bio pursuant to reverse-merger with Innovus</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(450,952</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Balance, December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-0-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Interest expense recorded to
Apricus Bio amounted to $18,797 and $16,322, for the years ended December 31, 2011 and 2010, respectively.&nbsp;&nbsp;On April
4, 2011, pursuant to the terms of the FasTrack-Apricus Bio Agreement, the above demand notes payable to Apricus Bio were combined
into one secured convertible note plus accrued interest in the amount of $224,500.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Apricus Bio forgave FasTrack
interest charge on the $200,952 note outstanding for the duration of three month period ended March 31, 2011.&nbsp;&nbsp;The amount
of forgiven interest was $4,021.&nbsp;&nbsp;The Company considers the forgiveness a deemed contribution and recorded the forgiven
interest against additional paid in capital for the period ended December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On December 21, 2011 the total
balance due Apricus Bio of $489,197 comprising of $450,952 of principle and related accrued interest of $38,245 was convertible
into 135,888 shares of Innovus. As stipulated in a convertible note agreement conversion was automatic upon consummation of the
Merger Agreement and the conversion price was determined at a 10% discount to the fair value of the shares of stock of the Company.
The discount resulted in a $48,920 charge to interest expense in 2011. The price of the stock was determined based upon the over-the-counter
quotation system. The shares were issued in March 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>Dawson James Promissory Note</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On December 7, 2011 the Company
entered into a promissory note with Dawson James Securities, Inc. (&ldquo;DJS&rdquo;) whereby, as compensation for consulting services
rendered, the Company agreed to pay DJS a sum of $50,000. The principal is due by December 6, 2012 and accrues interest at a rate
of 8.0% per annum. The note is unsecured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">6. RECAPITALIZATION TRANSACTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On December 7, 2011 the Company
consummated a combination wherein FasTrack Pharmaceuticals, Inc. (&ldquo;FasTrack&rdquo;), a corporation organized under the laws
of the state of Delaware, merged with and into North Horizon, Inc., a Utah corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The combination (the &ldquo;Agreement&rdquo;)
stipulated that the companies would undergo a combination whereby the surviving entity would be North Horizon. FasTrack then became
a wholly-owned subsidiary of North Horizon. North Horizon then changed its name to Innovus Pharmaceuticals, Inc. The transaction
has been accounted for as a reverse merger, whereby North Horizon is the legal acquirer and FasTrack is the legal acquiree and
the accounting acquirer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">As consideration for the business,
the shareholders of FasTrack were allocated 15,238,938 shares (portion of which are subject to rescission election discussed in
Note 1) of the Company&rsquo;s post-split common stock (representing 92% ownership of Innovus on a fully diluted basis); the shareholders
of North Horizon held 1,325,125 shares (representing 8% ownership of Innovus). Included in the FasTrack shares are the 135,888
shares issuable to Apricus Bio upon conversion of their note (see Note 4), which were issued in March of 2012. The authorized number
of shares in the surviving entity was changed to 150,000,000. All shares were issued to the FasTrack shareholders in March of 2012,
due to the time required to gather signatures of each shareholder. See Note 1. As part of the recapitalization transaction, the
company assumed a liability of approximately $60,000 due to an officer of North Horizon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">7. STOCK-BASED COMPENSATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On March 8, 2010, Dr. Ziad Mirza
and Mr. Mohammed Nasser were appointed to serve on the Company&rsquo;s Board of Directors.&nbsp;&nbsp;In addition, Dr. Mirza was
appointed to serve as the acting Chief Executive Officer.&nbsp;&nbsp;In consideration for their services to the Company, the Board
of Directors approved the issuance of 305,409 and 76,352 shares of common stock to Dr. Mirza and Mr. Nasser, respectively, for
their services rendered to the Company. The shares were valued at $0.002 per share and the Company recorded expense of $750 for
such issuance of shares.&nbsp;&nbsp;Due to absence of contemporaneous third-party transactions and lack of objective business information
for an independent appraisal, the fair value per share was equal to the value at which the original issuance of shares to Bio-Quant
took place for the purchase of assets by FasTrack in accordance with the FasTrack-BQ agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On January 21, 2011, the Company
appointed Ms. Vivian Liu (appointment was updated on March 7, 2012) to serve on its Board of Directors, and also approved her appointment
as its President and Chief Executive Officer.&nbsp;&nbsp;Ms. Liu and the Board of Directors agreed that Ms. Liu would forego collecting
salary until the Company has raised an aggregate of $500,000 or more in cash, excluding the $250,000 cash infusion from Apricus
Bio, at which time her salary will commence at $150,000 per year, effective retroactively to January 1, 2012.As part of her compensation,
Ms. Liu received 6% of the Company&rsquo;s outstanding equity shares in the form of 833,668 shares of restricted stock (the &ldquo;Restricted
Stock&rdquo;). Due to absence of contemporaneous third-party transactions and lack of objective business information for an independent
appraisal, the fair value per share was equal to the value at which the original issuance of shares to Bio-Quant took place for
the purchase of assets by FasTrack in accordance with the FasTrack-BQ agreement ($0.002/per share). The remaining shares issued
to Ms. Liu fully vested on the date of the merger - December 7, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The stock granted to Ms. Liu
contains anti-dilution provision, as follows (as updated):&nbsp;&nbsp;if additional shares of stock will be issued during the period
ending December 31, 2012, Ms. Liu will also be issued additional shares in such a way, that she would retain at least 2%, 4% and
6% ownership of the Company at December 31, 2011, 2012 and 2013, respectively.&nbsp;&nbsp;No additional shares were issued or issuable
through December 31, 2011 as her ownership percentage exceeds 2%.&nbsp;&nbsp;If additional shares are to be issued, a compensatory
charge will be recognized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On December 7, 2011, as compensation
for service rendered, the Company granted to DJS warrants to purchase an aggregate of 380,973 shares of the Company&rsquo;s common
stock at a strike price of $0.10. The warrants expire on December 6, 2018. The Company performed an analysis of the warrants granted
using the Black-Scholes options pricing model, assuming an annual volatility of 563.19% with a value of common stock of $5 per
share based upon the quoted price on such day, and a risk-free rate of 0.93%. Pursuant to this analysis, the Company valued the
warrants granted at an aggregate value of $1,904,865. This amount is included as compensation expense for the year ended December
31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">8. RELATED-PARTY TRANSACTIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">At December 31, 2011 the Company
owed $87,168 to a related party. This amount represents advances made by a shareholder of North Horizon over time, including approximately
$60,000 assumed at the merger date, in order to help the Company meet its operating cash requirements. For the year ended December
31, 2011 the Company incurred expenses of approximately $27,000 to such related party for professional services rendered. The advances
are unsecured, non-interest bearing, and are due on demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">During the year ended 2011 the
Company paid approximately $59,000 to Apricus Bio for feasibility studies in relation to two compounds identified by the Company.
The amount was expended in research and development cost in the Consolidated Statement of Operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">In January 2010, the FasTrack
Board of Directors approved $7,000 in payment to Dr. Bassam Damaj, the Company&rsquo;s largest shareholder and the CEO of Apricus
Bio, to cover the Company&rsquo;s 2010 overhead expenses, which were being incurred by Dr. Damaj. The two parties agreed that in
the event the Company could not pay in cash, Dr. Damaj would be entitled to 1% of the Company&rsquo;s outstanding equity based
on its shares outstanding as of January 15, 2011. On February 7, 2011, FasTrack issued 134,364 shares to Dr. Damaj in lieu of the
$7,000 cash payment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">In January 2010, the Sorrento
Board of Directors approved $7,000 in payment to Dr. Damaj, to cover Sorrento&rsquo;s 2010 overhead expenses, which were being
incurred by Dr. Damaj. The two parties agreed that in the event the Company could not pay in cash, Dr. Damaj would be entitled
to 1% of the Company&rsquo;s outstanding equity based on its shares outstanding as of January 15, 2011. In March 2011, Sorrento
elected to pay Dr. Damaj in cash. The liability was paid in April 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">From October 1, 2009 until 2011
various Board members and officers of the Company either advanced cash loans to the Company or incurred expenses on behalf of the
Company. These transactions were necessary to pay for various administrative expenses. Such advances and expenses ranged from $600
to $5,000. Substantially all such advances for an aggregate amount of 23,603 were repaid in due course after receipt of cash raised
with April 4, 2011 convertible promissory note issued to Apricus Bio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">9. NON-CASH FINANCING ACTIVITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">Non-cash financing
activities can be summarized as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"><U>Year ended December
31, 2011:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">The Company issued 1,325,125
shares of common stock to settle the $61,725 net liabilities acquired in the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">Deemed contribution
from forgiveness of interest by Apricus Bio in the amount of $4,021</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Deemed contribution from the
conversion of Apricus Bio notes plus accrued interest (including interest resulting from conversion discount) in the amount of
$538,117</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"><U>Year ended December
31, 2010:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Cancellation of note payable
to Apricus Bio and recognition of deemed contribution for the value of cancelled note of $204,896.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>License</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Pursuant to the terms of the
FasTrack - Apricus Bio Agreement on April 4, 2011, upon approval by Apricus Bio of a one or both products to be combined with NexACT<SUP>
&reg;</SUP> drug delivery technology, the individual product Licenses will be granted to the Company. Upon grant of such product
License, the Company will:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">Make a $500,000 up-front payment per license to Apricus Bio in the form of cash or a Secured Convertible
Promissory Note.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify">Make Milestone and Royalty Payments:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">For sales of the Licensed Product directly or as a co-marketer:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.5pt; text-align: justify">(i) Milestone Payments:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">To be paid on a Licensed Product
by Licensed Product basis and payable within 10 days of achievement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$350,000 for dosing of first
patient in Phase I clinical trial;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$750,000 for dosing of first
patient in Phase II clinical trial;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$1,250,000 for dosing of first
patient in Phase III clinical trial;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$2,500,000 for regulatory approval
of Licensed Product;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$1.5 million upon first reaching
Net Sales of at least $0-$50 million;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$3 million upon first reaching
Net Sales of at least $50-$200 million;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$6 million upon first reaching
Net Sales of at least $200 million to $500 million; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">-$12 million upon first reaching
Net Sales of above $500 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify; text-indent: 44pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify; text-indent: -0.5pt">(ii) Royalties:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.1pt; text-align: justify">4.5% of net sales of Licensed
Products invoiced by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(b) For Licensed Products that will be
licensed by Licensee to third party sub-licensees:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Milestone Payments: The Company shall pay Apricus Bio 33 1/3% of all milestone payments it receives
from any third party sublicense relating to any Product, net of its development expenses.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Royalties: The Company shall pay Apricus Bio with the following royalties on its Net Sales received
by The Company from sales of the Licensed Products by third party sublicensees.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.38in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Annual&nbsp;Net&nbsp;Profits&nbsp;in&nbsp;$</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Royalty&nbsp;%</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: justify">$0 to $5 million</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">20</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">$5 to $10 million</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">$10 to 15 million</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">$15 to 20 million</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Greater than $20 million</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">Royalties in (a) and (b) above
will be payable on a country-by-country basis for the longer of (i)&nbsp;the time during which manufacture, use or sale of Licensed
Product would infringe any patent rights within the Patents and (ii)&nbsp;15 years from the first commercial sale of Licensed Product
in such country. Thereafter, Apricus Bio shall receive 50% of the royalty payments described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">As of December 31, 2011, no
products have been approved and no milestone payments were triggered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify"><U>Agreement with a Placement
Agent</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">On December 16, 2011, the Company engaged the services
of Dawson James Securities, Inc. to act as the Company&rsquo;s exclusive Placement Agent on a commercially reasonable best efforts
basis in connection with the a potential offering of equity or equity-linked securities of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27.35pt"></TD><TD STYLE="width: 9.35pt">a.</TD><TD STYLE="text-align: justify">The Company shall pay to Dawson James a cash fee payable upon each closing of the transaction contemplated
by this Agreement (&ldquo;Closing&rdquo;) equal to nine percent (9%) of the gross proceeds received by the Company (the &ldquo;Placement
Fee&rdquo;).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27.35pt"></TD><TD STYLE="width: 9.35pt">b.</TD><TD STYLE="text-align: justify">The Company shall also pay Dawson James a non-accountable expense allowance payable in cash upon
each Closing, equal to three percent (3%) of the gross proceeds received by the Company from Investors at each Closing. Upon execution
of the Agreement, the Company paid a non-refundable cash deposit of $25,000, which will be applied to the monies due hereunder
at the first closing. The amount was recorded in &ldquo;Professional Fees&rdquo; expense in the Consolidated Statement of Operations</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27.35pt"></TD><TD STYLE="width: 9.35pt">c.</TD><TD STYLE="text-align: justify">The Company shall deliver warrants to the Placement Agent or its designees (the &ldquo;Agent Warrants&rdquo;)
to purchase 8.75% of the maximum number of common stock underlying the securities sold in the potential offering.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27.35pt"></TD><TD STYLE="width: 9.35pt">d.</TD><TD STYLE="text-align: justify">The Company shall reimburse the Placement Agent for legal fees up to $50,000 and other expenses
incurred in connection with the Offering.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27.35pt"></TD><TD STYLE="width: 9.35pt">e.</TD><TD STYLE="text-align: justify">The Company shall pay a cash fee equal to five percent (5%) of the gross proceeds received by the
Company upon exercise of warrants, if any.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Formerly North Horizon, Inc.)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">December 31, 2011 and 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">11.</TD><TD STYLE="text-align: justify">SUBSEQUENT EVENTS</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">On January 13, 2012, the Board
of Directors authorized the issuance of a total of $174,667 in promissory notes (the &ldquo;January Notes&rdquo;) to six individuals.
&nbsp;One January Note for $74,667 was issued to one accredited investor for the liabilities assumed from North Horizon, Inc. &nbsp;The
five remaining January Notes for a total of $100,000 in new cash infusion were issued to five individuals, three of whom are members
of the Company&rsquo;s Board of Directors. &nbsp;&nbsp;The January Notes bear an annual interest rate of 8% and payable in cash
at the earlier of January 13, 2013 or when the Company completes a financing of a minimum of $4 million (the &ldquo;Financing&rdquo;).
&nbsp; The holders of the January Notes have the right to convert their principal and interest accrued into the Company&rsquo;s
securities at the same terms as the investors in the future financing. &nbsp;In the event the Company defaults on repayment, the
annual interest rate would increase to 13% and the holders of the January Notes would have the right to convert at $0.05 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27.5pt; text-align: justify">In accordance with ASC 855-10,
Company management reviewed all material events through the date of this report and there are no material subsequent events to
report, other than those listed in the previous paragraph.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Condensed Consolidated Balance Sheets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">June&nbsp;30,</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">December&nbsp;31,</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(Unaudited)</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: underline; text-align: center">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">CURRENT ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; padding-bottom: 1pt; padding-left: 9pt">Cash</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">105,726</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">25,014</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total Current Assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">105,726</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,014</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">105,726</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: underline; text-align: center">LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">CURRENT LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">525</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,687</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Convertible debentures - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">162,668</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Promissory notes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accrued interest payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,020</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Related-party payables</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">87,168</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total Current Liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">221,213</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">138,855</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Contigent liability related to common shares, subject to recsission rights, issuable to FasTrack shareholders arising from Merger (14,722,077 shares)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,926</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">STOCKHOLDERS' EQUITY (DEFICIT)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock; 150,000,000 shares authorized&nbsp; at $0.001 par value, 16,333,670 and 1,325,125 shares issued and outstanding, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,733,183</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,606,331</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Deficit accumulated during the development stage</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,865,004</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,750,423</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total Stockholders' Equity (Deficit)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(115,487</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(142,767</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">105,726</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">25,014</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Condensed Consolidated Statements of Operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the&nbsp;Three&nbsp;Months&nbsp;Ended&nbsp;<BR> June&nbsp;30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the&nbsp;Six&nbsp;Months&nbsp;Ended&nbsp;<BR> June&nbsp;30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; padding-bottom: 1pt">From&nbsp;October&nbsp;31,<BR> 2008<BR> (inception)<BR> through<BR> June&nbsp;30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>REVENUES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">OPERATING EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left; padding-left: 9pt">Research and development</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">78,960</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Professional fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,122</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,962</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,133</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">436,313</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Investment banking fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,954,865</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">General and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,414</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,872</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">23,164</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">21,067</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">295,126</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total Operating Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">49,849</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">50,994</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">106,126</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">71,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,765,264</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">LOSS FROM OPERATIONS</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(49,849</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(50,994</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(106,126</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(71,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,765,264</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">OTHER EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,472</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,730</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,455</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,050</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(99,740</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.25in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total Other Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,472</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,730</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,455</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,050</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(99,740</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">NET LOSS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(54,321</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(55,724</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(114,581</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(80,250</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,865,004</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">BASIC LOSS AND DILUTED LOSS PER SHARE</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.02</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,764,648</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">14,722,077</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,593,514</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">14,609,764</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Statements of Stockholders&rsquo; Deficit</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Common<BR> Stock<BR> (Shares)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Common<BR> Stock<BR> (Amount)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Additional<BR> Paid-In&nbsp;Capital</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Deficit<BR> &nbsp;Accumulated<BR> During&nbsp;The<BR> Development<BR> Stage</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Total<BR> Stockholders&rsquo;<BR> Deficit</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; padding-bottom: 1pt">Balance at October 31, 2008 (Inception)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Balance on December 31, 2008</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock - FasTrack asset purchase</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,372,284</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,648</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,020</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of common stock - Sorrento business combination</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Deemed distribution for the value of assets acquired from Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(396,878</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(396,878</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the year ended December 31, 2009</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Balance at December 31, 2009</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,372,284</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,372</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">23,648</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(424,248</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(387,228</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock for compensation of board members (Mirza and Nasser)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">381,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">382</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Deemed contribution for the value of assets sold to Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,896</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,896</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the year ended December 31, 2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(69,923</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(69,923</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Balance at December 31, 2010</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,754,045</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13,754</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">228,912</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(494,171</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(251,505</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Page; Sequence: 59; Value: 1 -->
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Statements of Stockholders&rsquo; Deficit
(continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common<BR> Stock<BR> (Shares)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common<BR> Stock<BR> (Amount)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Additional<BR> Paid-In&nbsp;Capital</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Deficit<BR> Accumulated<BR> During&nbsp;The<BR> Development<BR> Stage</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total<BR> Stockholders&rsquo;<BR>
Deficit</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; padding-bottom: 1pt">Balance at December 31, 2010</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">13,754,045</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">13,754</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">228,912</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">(494,171</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1pt solid; text-align: right">(251,505</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of common stock for services rendered</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,364</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,866</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock for compensation of officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">833,668</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">834</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,638</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Forgiveness of interest&nbsp; by Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,021</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,021</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Contribution to capital arising from the conversion of the convertible promissory notes held by Apricus Bio at the date of the Merger and pursuant to the terms of the convertible note, which will result in the issuance of 135,888 shares of common stock in March 2012 to Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">538,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">538,117</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of shares for net liabilities assumed in the Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,325</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63,050</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(61,725</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of warrants to investment banker for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Reclassification of shares issuable to FasTrack shareholders pursuant to rescission offer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,722,077</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,722</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,204</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(28,926</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the year ended December 31, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,256,252</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,256,252</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Balance at December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,325,125</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,325</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,606,331</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,750,423</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(142,767</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Statements of Stockholders&rsquo; Deficit
(continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Common<BR> Stock<BR> (Shares)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Common<BR> Stock<BR> (Amount)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Additional<BR> Paid-In<BR>
Capital</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Deficit<BR> Accumulated<BR> During&nbsp;The<BR> Development<BR> Stage</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Total<BR> Stockholders&rsquo;<BR>
Deficit</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%">Balance at December 31, 2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,325,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,325</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,606,331</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(2,750,423</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(142,767</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common stock issued on conversion of ApricusBio convertible note (see above)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135,888</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">136</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common stock issued for cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,366</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common stock issued in connection with settlement of $12,000 note payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,580</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,418</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,435</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Expiration of FasTrack rescission offer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,722,077</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,722</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,204</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,926</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Net loss for the six-months ended June 30, 2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(114,581</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(114,581</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">16,333,670</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">16,334</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,733,183</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,865,004</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(115,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Condensed Consolidated Statements of Cash
Flows</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">For&nbsp;the&nbsp;Six&nbsp;Months&nbsp;Ended&nbsp;<BR> June&nbsp;30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; padding-bottom: 1pt">From&nbsp;October&nbsp;31,<BR> 2008&nbsp;(inceptions)<BR> through&nbsp;June&nbsp;30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">CASH FLOWS FROM OPERATING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(114,581</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(80,250</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,865,004</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Adjustments to reconcile net loss to net cash used by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Common stock issued for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,638</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,388</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Value of warrants granted to investment banker</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,904,865</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt; text-indent: -9pt">Non-cash interest expense (including a discount on conversion of Apricus Bio convertible notes of $48,920)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,120</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">91,461</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Promissory note issued for services rendered</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt; text-indent: -9pt">Research and development expense recognized upon purchase of SSAO inhibitor assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Expenses paid on behalf of the Company by Apricus Bio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,990</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Changes in operating assets and liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Change in related-party payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,668</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,640</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Interest payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,455</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,930</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,455</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Income taxes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Accounts payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,162</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,883</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">525</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 27pt">Net Cash Used in Operating Activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(119,788</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(116,919</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(741,652</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">CASH FLOWS FROM INVESTING ACTIVITIES</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Proceeds from issuance of loans from officers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,003</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,603</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Repayment of loans from officers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,003</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(23,603</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Proceeds from stock issued for cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Proceeds from convertible debentures</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">350,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 27pt">Net Cash Provided by Financing Activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">200,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">250,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">450,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">NET CHANGE IN CASH</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,712</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">133,081</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(291,152</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0.25in">CASH AT BEGINNING OF PERIOD</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,014</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,650</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0.25in">CASH AT END OF PERIOD</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">105,726</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">134,731</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(291,152</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>SUPPLEMENTAL DISCLOSURES OF</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">CASH FLOW INFORMATION</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">CASH PAID FOR:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">Interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Income Taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>See Note 7 for disclosure of non-cash financing activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of these financial statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Condensed Consolidated Financial
Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 30, 2012 and December 31, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 1 - CONDENSED FINANCIAL STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.2pt">In the opinion of management, the accompanying
condensed financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present
fairly the Company's financial position, results of operations and cash flows. The condensed balance sheet as of December 31, 2011
has been derived from audited financial statements as of that date. The interim results of operations are not necessarily indicative
of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial
statements prepared in accordance with U.S. generally accepted accounting principles (&quot;U.S. GAAP&quot;) have been condensed
or omitted pursuant to instructions, rules and regulations prescribed by the U.S. Securities and Exchange Commission (the &quot;SEC&quot;).
The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these
condensed financial statements are read in conjunction with the financial statements and notes included in its Annual Report on
Form 10-K for the year ended December 31, 2011 filed with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.2pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 2 - GOING CONCERN</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's financial statements are prepared using generally
accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization
of assets and liquidation of liabilities in the normal course of business. As a result of its losses to date, expected losses in
the future, limited capital resources and accumulated deficit, there is substantial doubt as to the Company&rsquo;s ability to
continue as a going concern. The Company has not yet established a source of revenues sufficient to cover its operating costs and
allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company
obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital,
it could be forced to cease operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In order to continue as a going concern, the Company will need,
among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital
from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing
to finance the acquisition of product targets and the development of such targets. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the Company&rsquo;s annual report filed for the year ended
December 31, 2011, the Company&rsquo;s independent registered public accounting firm has included an explanatory paragraph in their
report dated March 30, 2012, expressing substantial doubt about the Company&rsquo;s ability to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Condensed Consolidated Financial
Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 30, 2012 and December 31, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 3 &ndash; SIGNIFICANT ACCOUNTING POLICIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Use of Estimates</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. &nbsp;Actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Recent Accounting Pronouncements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has evaluated recent accounting pronouncements and
their adoption has not had or is not expected to have a material impact on the Company&rsquo;s financial position or statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 4 &ndash; RELATED PARTY TRANSACTIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has recorded expenses paid on its behalf by shareholders
as a related party payable. At December 31, 2011, this payable totaled $87,168. &nbsp;During the six months ended June 30, 2012
the Company repaid $12,500 on this amount, and converted the remaining $74,668 into a convertible debenture (see Note 5).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 5 &ndash; CONVERTIBLE DEBENTURES &ndash; RELATED PARTIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On January 13, 2012, the Board of Directors authorized the issuance
of a total of $174,668 in promissory notes (the &ldquo;January Notes&rdquo;) to six individuals. &nbsp;One Note for $74,668 was
issued to one accredited investor in exchange for the liabilities assumed from North Horizon, Inc. &nbsp;The five remaining January
Notes for a total of $100,000 in new cash infusion were issued to five individuals, three of whom are members of the Company&rsquo;s
Board of Directors. &nbsp;&nbsp;The January Notes bear an annual interest rate of 8% and payable in cash at the earlier of January
13, 2013 or when the Company completes a financing of a minimum of $4 million (the &ldquo;Financing&rdquo;). &nbsp; The holders
of the January Notes have the right to convert their principal and interest accrued into the Company&rsquo;s securities (&ldquo;New
Financing Securities&rdquo;) that will be issued to the investors in the future Financing. &nbsp;In the event the Company defaults
on repayment, or if the Company fails to complete a Financing within one year of the note date, the annual interest rate would
increase to 13% and the holders of the January Notes would have the right to convert at $0.05 per share. Through June 30, 2012,
$12,000 of such notes were converted into shares of common stock (see Note 6), leaving a balance of $162,668 at June 30, 2012.
Interest expense recognized for the three and six months ended June 30, 2012 was $4,472 and $8,455, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The embedded conversion feature is contingent upon the occurrence
of the future Financing. The value of the contingent conversion feature, if beneficial, will be recognized when the contingencies
are resolved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Condensed Consolidated Financial
Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 30, 2012 and December 31, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 6 &ndash; STOCKHOLDERS&rsquo; EQUITY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Rescission Offer</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #222222">On February 29, 2012, the Company made an offer
for rescission to former FasTrack shareholders of the record date for the approval of the Reverse Merger.&nbsp;&nbsp;The Reverse
Merger had been approved by the written consent of FasTrack shareholders holding a majority of the shares outstanding.&nbsp;&nbsp;Because
FasTrack had not solicited any proxies from its shareholders for approval of the Reverse Merger, limited or no information had
been provided to the FasTrack shareholders who had not signed the written consent.&nbsp;&nbsp;The Company sent to the former FasTrack
shareholders the North Horizon Information Statement dated September 27, 2011 and a report on Form 8-K dated December 12, 2011,
which provided information about North Horizon and FasTrack including a description of the business, future plans, risk factors,
financial information, description of the transactions, biographical summaries of the new officer and directors, financial statements
and pro-forma financial statement for North Horizon and FasTrack as of September 30, 2011.&nbsp;&nbsp;Former shareholders of FasTrack
had thirty days to accept or reject the rescission offer of $6 per share ($.002 after effect of conversion ratio) from the date
of receipt of the information.&nbsp;&nbsp;The rescission offer was limited to the FasTrack shareholders who were shareholders as
of the record date of December 7, 2011. &nbsp;The Rescission Offer was not accepted by any parties, and expired on April 14, 2012.
Through the date of rescission offer expiration (April 14, 2012), the Company recognized the amounts potentially refundable under
this offer as a liability. On April 14, 2012, the amount of such liability was reclassified to stockholders&rsquo; equity since
the rescission period expired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Contingency related to shares of common stock issued in the
reverse merger</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of the date of the merger between FasTrack and North Horizon
(the record date), the FasTrack shareholders may not have received adequate information regarding the combination and merger. The
FasTrack shareholders reside in thirteen states and commonwealths. The securities statutes of these jurisdictions have exemptions
for an exchange or for a transaction that is termed an &quot;isolated transaction.&quot; Despite the fact, that none of FasTrack
shareholders chose to rescind the offer, as described above, the shareholders reside in different jurisdictions and the statutes
of limitations in these jurisdictions have different terms, the longest being four years . Until such statutes expire, a shareholder
may make a claim against the Company. Until such claim is made there will be no impact on the Company. At this time the Company
unable to determine if any shareholder will make a claim and if pursued what any outcome may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Issuances of Common Stock</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On June 26, 2012 the Company issued 134,000 shares of common
stock to an unrelated investor at $0.75 per share for cash proceeds of $100,500.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On June 26, 2012 the Company and an unrelated noteholder reached
a settlement on outstanding balance of $12,000, plus accrued interest of $435, of the convertible debenture whereas the fair value
of the 16,580 shares of common stock issued approximated the carrying value of the outstanding convertible debenture at time of
settlement. Accordingly, no gain or loss resulted from the settlement. (See Note 5)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE 7 &ndash; NON CASH FINANCING ACTIVITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Six-month period ended June 30, 2012:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>$74,668 payable to a related party was converted into a convertible note, as described in Note 5.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>The Company issued 135,888 shares of common stock related to the conversion of the Apricus Bio convertible promissory note
that was originally issued in December 2011 and deemed contributed to capital in March 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INNOVUS PHARMACEUTICALS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Formerly North Horizon, Inc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to the Condensed Consolidated Financial
Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 30, 2012 and December 31, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>A $12,000 note payable with accrued interest of $435 was converted into 16,580 shares of common stock, as described in Note
6.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Contingent liability in the amount of $28,926 was reclassified to equity due to expiration of the rescission rights, none of
which were exercised</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Six-month period ended June 30, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">The Company issued of 134,364 shares of common stock to Dr. Bassam
Damaj, our largest shareholder, for a settlement of $7,000 of accounts payable balance</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PART II INFORMATION NOT REQUIRED IN PROSPECTUS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item. 13. Other Expenses of Issuance and Distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The estimated expenses of the offering,
all of which are to be paid by us, are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-align: left">Filing fees under the Securities Act of 1933</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">30</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accountants&rsquo; fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Legal fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Blue Sky fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Printing expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Transfer agent fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Miscellaneous</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Total</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">14,230</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 14. Indemnification of Directors and Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Nevada corporate law provides that the Corporation
must indemnify any person who is or is threatened to be made a party to any pending or completed action suite or proceeding, whether
civil or criminal, administrative or investigative except an action by right of the corporation, by reason of the fact that the
person, is or was a director, officer, employee or agent of the corporation including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person
is not liable pursuant to Section 78.138 of the Nevada Revised Statutes or other applicable Nevada statute or law, or acted in
good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reason to believe the conduct was unlawful. The Corporation must indemnify
officers, directors, employees, agents and other persons to the maximum extent permitted by the Nevada Revised Statutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our bylaws provide that we must indemnify
our directors and officers to the fullest extent authorized by the Nevada Revised Statutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The foregoing indemnification right shall
not be exclusive of any other right which an indemnified person may have or hereafter acquire by statute, articles of incorporation,
bylaws, agreement, vote of stockholder or other means.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 15. Recent Sales of Unregistered Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In transactions we believed to be exempt
under provisions of the Securities Act we sold 134,000 shares of common stock for $100,500 and we issued 16,580 shares of common
stock to a note holder to satisfy an obligation of $12,435.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item. 16. Exhibits and Financial Statement Schedules..</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">3.1</TD><TD STYLE="text-align: justify">Articles of Incorporation and amendments thereto.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">3.2</TD><TD STYLE="text-align: justify">Bylaws and amendments thereto.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">5.1</TD><TD STYLE="text-align: justify">Opinion of Wallace T. Boyack regarding legality of securities
being registered.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">21.1</TD><TD STYLE="text-align: justify">Subsidiary list.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">23.1</TD><TD STYLE="text-align: justify">Consent of EisnerAmper LLC, Certified Public Accountants
and Consultants</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">23.2</TD><TD STYLE="text-align: justify">Consent of Wallace T. Boyack, Attorney at Law (Included
as part of Exhibit 5.1)</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 17. Undertakings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We hereby undertake:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and an deviation from the low or high end to the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the &quot;Calculation
of Registration Fee&quot; table in the effective Registration Statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(iii) To include any additional or changed
material information on the plan of distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">2. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the termination of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4. That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b)
as part of the registration statement relating to an offering, deemed to be part of and included in the registration as of the
date it is first used after effectiveness. Provided, however, that no statement made in a registration or prospectus that is part
of the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that
was part of the registration statement or made in any such document immediately prior to such date of first use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Signatures</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Sierra Madre, State of California, on August 8, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Innovus Pharmaceutical, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 3%">By</TD>
    <TD STYLE="width: 47%; font-style: italic">s/Vivian Liu</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 30%; font-style: italic; border-bottom: Black 1pt solid">s/Vivian Liu&nbsp;</TD>
    <TD STYLE="width: 35%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-style: italic; text-align: justify">&nbsp;</TD>
    <TD>President and Director</TD>
    <TD STYLE="font-style: italic; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>Date:&nbsp; August 8, 2012</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">s/Henry Esber</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>Director</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>Date:&nbsp; August 8, 2012</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">s/Ziad Mirza</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>Director</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Date:&nbsp; August 8, 2012</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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{"company-data": {"conformed-name": "INNOVUS PHARMACEUTICALS, INC.", "cik": "0001411879", "assigned-sic": "6770", "irs-number": "870324697", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-183141", "film-number": "121015600"}, "business-address": {"street1": "80 WEST SIERRA MADRE BLVD., #392", "city": "SIERRA MADRE", "state": "CA", "zip": "91024", "phone": "626-227-1630"}, "mail-address": {"street1": "80 WEST SIERRA MADRE BLVD., #392", "city": "SIERRA MADRE", "state": "CA", "zip": "91024"}, "former-company": {"former-conformed-name": "North Horizon, Inc.", "date-changed": "20070910"}}
As filed with the Securities and Exchange
Commission on August 8, 2012
Registration Statement No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INNOVUS PHARMACEUTICALS, INC.
(Exact name of registrant as specified
in its charter)
Nevada
2834
87-0324697
(State or other jurisdiction
of incorporation or
organization)
(Primary Standard
Industrial Classification
Code Number)
(I.R.S. Employer
Identification No.)
80 W. Sierra Madre Blvd., #392
Sierra Madre, CA 91024
(626) 227-1630
(Address, including zip code, and telephone
number,
including area code,
of registrant's principal executive offices)
Vivian Liu.
Chief Executive Officer
Innovus Pharmaceuticals, Inc.
80 W. Sierra Blvd., #392
Sierra Madre, CA 91024
(626) 227-1630
(Name, address, including zip code, and
telephone number,
including area code, of agent for service)
Copies to:
Wallace T. Boyack, Esq.
2290 East 4500 South, Suite 130
Salt Lake City, UT 84117
Telephone: (801) 278-9925
Approximate date of commencement of proposed sale to the
public:
As promptly as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are to
be offered pursuant to dividend or interest reinvestment plans, please check the following box.
o
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans, please check the following box.
o
If this Form is used to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following box.
o
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box.
o
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
(Do not check if a smaller
    reporting company)
Smaller reporting company
x
CALCULATION OF REGISTRATION FEE
Title Of Each Class Of
Securities To Be
Registered
Amount To
Be Registered
Proposed
Maximum
Offering
Price Per
Share (1)
Proposed
Maximum
Aggregate
Offering Price
(2)
Amount of
Registration Fee
(1)
Common Stock
150,580 shares
$
2.25
(2)
$
338,805
$
38.68
(1)	We are registering the resale by
selling stockholders of 150,580 shares of common stock that we previously issued.
(2)	Estimated solely for the purpose
of calculating the registration fee in accordance with Rule 457 of the Securities Act and based on the most recent closing price
on August 6, 2012.
i
The registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant
to said Section 8(a) may determine.
The information in this prospectus is not complete and may
be changed. The selling security holders will not sell these securities until after the registration statement filed with the
Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject to Completion, dated August 8,
2012
PROSPECTUS
INNOVUS PHARMACEUTICALS, INC.
150,580 Shares of Common Stock
This prospectus relates to the offer for
sale of up to a total of 150,580 shares of our common stock that may be sold from time to time by certain existing stockholders
named in this prospectus and their successor and assigns. The shares of common stock to be sold by the selling stockholders were
acquired in June 2012 in connection with a private placement to accredited investors and a conversion of a debt instrument.
The shares offered for resale by this prospectus
were issued to the applicable selling stockholders in private transactions completed prior to the filing of this registration
statement, of which this prospectus is a part. This offering is not being underwritten. We will not receive any proceeds from
the sale of shares in this offering.
The selling stockholder, to the extent
a public market exists at such time, may offer their common stock from time to time through public transactions at prevailing
market prices, at prices related to prevailing market prices, or through private transactions at privately negotiated prices.
We have agreed to pay all costs and expenses of registering this offering of securities.
Our common stock is included for quotation
on the OTCBB under the symbol "INNV". There is limited trading in our common stock. On August 6, 2012, the most recent
day that our stock traded, the last reported price per share of our common stock was $2.25. You are urged to obtain current market
quotations of our common stock before purchasing any of the shares being offered for sale pursuant to this prospectus.
We are an "emerging growth company"
as defined in the Jumpstart Our Business Startups Act ("JOBS Act") and as such we will be subject to reduced public
company reporting requirements.
Investing in our common stock involves
substantial risks. You should carefully consider the matters discussed under "Risk Factors" beginning on page 5 of this
prospectus.
Neither the Securities and Exchange
Commission ("SEC") nor any state securities commission has approved or disapproved these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 8, 2012.
ii
TABLE OF CONTENTS
PROSPECTUS SUMMARY
1
SUMMARY FINANCIAL INFORMATION
4
RISK FACTORS
5
DILUTION
12
MARKET FOR OUR COMMON STOCK
13
DIVIDEND POLICY
14
THE OFFERING
14
PLAN OF DISTRIBUTION
14
SELLING STOCKHOLDERS
16
CAPITALIZATION
16
LEGAL PROCEEDINGS
16
JOBS ACT
16
BUSINESS
17
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
26
MANAGEMENT AND BOARD OF DIRECTORS
28
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
29
DESCRIPTION OF SECURITIES
30
DISCLOSURES OF COMMISSION'S POSITION ON INDEMNIFACTION FOR SECURITIES ACT LIABILITIES
31
LEGAL MATTERS
31
EXPERTS
31
INTEREST OF NAMED EXPERTS AND COUNSEL
31
WHERE YOU CAN FIND MORE INFORMATION
31
FINANCIAL STATEMENTS
F-1
iii
You should rely only on the information
contained or incorporated by reference in this prospectus and any free-writing prospectus prepared by or on behalf of us or to
which we have referred you. We are an "emerging growth company" under the federal securities laws and will therefore
be subject to reduced public company reporting requirements. We have not authorized anyone to provide additional or different
information. The information contained in this prospectus is accurate as of the date of this prospectus regardless of the delivery
of this prospectus or any sale of securities contemplated hereby.
For convenience trademarks, service marks
and trade names referred to in this prospectus may be without appropriate symbols, but such omissions are not intended to indicate
in any way that the owner will not assert under applicable law to the fullest extent such owner's rights to these trademarks,
service marks and trade names. This prospectus contains additional trade names, trademarks and service marks of other companies
which to our knowledge are the property of their respective owners.
PROSPECTUS SUMMARY
This summary highlights information
in this prospectus and is qualified in its entirety to the more detailed information and financial statements included elsewhere
herein. This summary may not contain all the information that may be important to you. Before making an investment decision, you
should read carefully the entire prospectus including the information under the "Risk Factors" section and our financial
statements and related notes.
In this Prospectus, references to Innovus
Pharmaceuticals, Inc.," Innovus Pharma," FasTrack"," the Company," we," us," our,"
and words of similar import and meaning refer to Innovus Pharmaceuticals, Inc., the Registrant.
References to North Horizon", North
Horizon, Inc." refer to the pre-transaction public shell.
In this report references to a major related
party of the Company - Apricus Biosciences, Inc (Nasdaq: APRI) (Apricus Bio"), Bio-Quant, Inc. (Bio-Quant") and NexMed
(U.S.A.), Inc., (NexMed") may be used interchangeably, but shall represent the same entity.
Our Business
Innovus Pharmaceuticals, Inc. (the "
Company
",
"
Innovus Pharma
", "
FasTrack
", "
we
", "
us
"
and "
our
") is focused on near term revenue opportunities through the commercialization of its proprietary
product pipeline, currently consisting of therapies aimed at pain relief and bleeding of the gums. Additionally, the Company is
actively seeking to in-license and/or to acquire new and innovative pharmaceutical compounds that offer definable pathways
to regulatory approval, partnering and commercialization.
Our business model is to create multiple
opportunities for success while minimizing the risks associated with reliance on any single technology platform or product type,
and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions to place our product
candidates into larger organizations or with partners having existing commercialization, sales and marketing resources, and a
need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.
In parallel, as our business strategy advances
and corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow.  This strategy may include debt financing and/or
acquisitions of small revenue generating companies and products.
1
Our Proprietary Product and Technology Portfolios
The lead product in our pipeline is Apeaz
™
,
a topical cream for pain relief. It is intended to deliver different ingredients to various layers of the skin and muscle, and
optimize effect. The product had previously been sold in the U.S. and internationally, and had cumulative sales of up to $500,000.
However, all sales for the product were abandoned in 2008, when the U.S. distributor went out of business, and the previous owner
of Apeaz
™
decided to focus on another segment of its business. The Company needs approximately $30,000 to repackage
and relaunch the product in the U.S. and internationally.
In addition, we have Regia
™
,
which is a plant-derived, anti-microbial agent for reducing the bleeding of gums when used in OTC products such as mouthwash.
The same active is currently included in a mouthwash commercialized in France. We have an issued US patent which expires in May
2028 and patent applications pending in selected international markets. Our intention is to out-license the patent portfolio for
Regia™ to potential development partners.
In our portfolio of Rx products, we have
a partial interest in the potential commercial value of PrevOnco
™
, a Phase 2/3 second-line Orphan Drug therapy
for patients with hepatocellular carcinoma or liver cancer.
Within our Rx portfolio is a development
platform based on SSAO inhibitors. SSAO is known as vascular adhesion protein-1 or VAP-1, and is a dual function molecule with
enzymatic and cell adhesion activities. These inhibitors are designed to reduce inflammation by blocking the white blood cells
and reducing the levels of inflammatory mediators.
Prior Transactions
Innovus Pharma, formerly known as North
Horizon, Inc., was incorporated under the laws of the State of Utah on January 15, 1959. It changed the corporate domicile to
the State of Nevada in 2007. In December 2011, North Horizon changed its name to Innovus Pharmaceuticals, Inc., and subsequently
entered into a combination transaction with FasTrack Pharmaceuticals, Inc., whereby FasTrack became wholly-owned subsidiary of
North Horizon, Inc.
FasTrack was organized by shareholders of Bio-Quant, which
was a Utah corporation founded in 2000 and operated as a contract research organization for the pharmaceutical industry. In late
2008, Bio-Quant decided to focus on its core business of pre-clinical testing services, and sold its pharmaceutical assets to
FasTrack and Sorrento Pharmaceuticals, Inc. (Sorrento"), which focused on the development of Rx and OTC products, respectively.
The limited funding of both FasTrack and Sorrento severely limited their activities and operations. In March 2011, the shareholders
of FasTrack and Sorrento decided to combine operations in an effort to better position the combined entity for new investors.
Pursuant to an asset purchase agreement between the two companies. FasTrack acquired Sorrento's assets and liabilities.
Reverse Merger
On December 7, 2011, the North Horizon
completed a combination transaction with FasTrack Pharmaceuticals, Inc., a Delaware corporation, which became a wholly-owned subsidiary
of North Horizon, Inc. (subsequently Innovus Pharma). FasTrack was a specialty pharmaceutical company with a development pipeline
of Rx and OTC products. The combination caused the shareholders of FasTrack to have actual and effective operating control of
the combined entity.
The transaction has been accounted for as a reverse
merger, whereby North Horizon is the legal acquirer and FasTrack is the legal acquiree and the accounting acquirer.
Immediately before the combination, North
Horizon's issued and outstanding shares in the amount of 13,251,250 were subject to a reverse split on the basis of ten
shares into one share (10:1) The reverse split was effective on December 6, 2011.
The following is a summary of the changes
and actions that resulted from the closing of the Agreement.
Name Change:
Innovus Pharmaceuticals, Inc.
Capitalization:
150,000,000 shares of common stock.
Directors:
Vivian Liu, Henry Esber, Ph.D. and Ziad Mirza, M.D.,
Reverse Split:
A reverse split on the basis of ten shares into one share (10:1) of the issued and outstanding shares.
2
Our business address is 80 West Sierra
Madre Blvd. #392, Sierra Madre, California 91024, telephone number 626-227-1630.
Our Plans and Business Model
Our business model is designed to create
multiple opportunities for growth while minimizing the risks associated with reliance on any single technology platform or product
type, and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions designed to place our
product candidates into larger organizations or with partners having existing commercialization, sales and marketing resources,
and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.
In parallel, as our business strategy advances
and corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow.  This strategy may include debt financing and/or
acquisitions of small revenue generating companies and products.
The Offering
Selling stockholders
As of the date of the prospectus we have
issued and outstanding 16,333,670 shares of common stock. Of those shares 9,959,168 are held by affiliates of the Company (approximately
60%).
The 150,580 shares being offered pursuant
to this prospectus represent approximately less than one per cent of the total outstanding shares. The selling shareholders are
not considered affiliates. They are listed under the caption "Selling Stockholders" section.
Shares of common stock offered by the Company -
None.
Trading Market -
Our shares are traded from time to
time on the OTCBB under the symbol "INNV."
Shares of common stock which may be sold by the selling
stockholders - 150,580
shares
Use of proceeds
We will not receive any proceeds from the
resale of shares offered by the selling stockholders. Any proceeds will be paid to the selling stockholders.
Risk factors
- The purchase of our common stock involves
a high degree of risk as highlighted herein.
Plan of distribution
Our expectation is that the selling stockholders
will sell their shares primarily through sales into the OTCBB market, made from time to time at prices the selling stockholders
consider and deem to be appropriate and adequate. (See "Plan of Distribution.")
Our Common Stock
Currently we have authorized capitalization
of 150,000,000 shares of common stock, par value of $.001 per share and there are 16,333,670 shares issued and outstanding.
Summary Financial Information
The December 7, 2011 combination between
North Horizon and FasTrack was accounted for as a reverse acquisition and recapitalization with FasTrack being the acquirer. Accordingly
the consolidated financial statements and the summary financial information set forth are in substance those of Fastrack as the
accounting acquirer, with the assets and liabilities and the revenues and expenses of North Horizon being included, effective
from the acquisition date. The historical financial statements for periods prior to the acquisition are those of FasTrack except
the equity section earnings per share have been retroactively restated to reflect the acquisition.
3
SUMMARY FINANCIAL INFORMATION
The summary historical financial information
presented as of December 31, 2011 is derived from audited financial statements of Innovus Pharmaceuticals, Inc, that are included
elsewhere in this prospectus.  The summary historical financial information presented as of December 31, 2010 is derived
from the audited financial statements of FasTrack Pharmaceuticals, Inc., the accounting acquirer, that are included elsewhere
in this prospectus. The summary historical financial information presented as of the three and six months ended June 30, 2012
are derived from the unaudited historical financial statements of Innovus Pharmaceuticals, Inc. included elsewhere in this prospectus.
The summary historical financial information presented as of the three and six months ended June 30, 2011 are derived from the
unaudited historical financial statements of FasTrack Pharmaceuticals, Inc., the accounting acquirer, that are included elsewhere
in this prospectus.
Statement of Operations Data
For the
three
months
ended June
30, 2012
(unaudited)
For the
three
months
ended June
30, 2011
(unaudited)
For the six
months
ended June
30, 2012
(unaudited)
For the six
months
ended June
30, 2011
(unaudited)
For the year
ended
December
31, 2011
(audited)
For the
year ended
December
31, 2010
(audited)
From
October 31,
2008
(Inception)
through June
30, 2012
(unaudited)
Revenue
—
—
—
—
—
—
—
Total operating expenses ($)
49,849
50,994
106,126
71,200
2,188,535
53,601
2,765,264
Net loss ($)
(54,321
)
(55,724
)
(114,581
)
(80,250
)
(2,256,252
)
(69,923
)
2,865,004
Basic loss per share ($)
(0.00
)
(0.00
)
(0.02
)
(0.01
)
(0.16
)
(0.01
)
Weighted average number of shares outstanding (#)
13,764,648
14,722,077
7,593,514
14,609,764
13,785,487
13,681,876
Balance Sheet Data
June 30, 2012
December 31, 2011
December 31, 2010
ASSETS
Total Current Assets
$
105,726
$
25,014
$
1,650
Total Assets
$
105,726
$
25,014
$
1,650
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Total Current Liabilities
$
221,213
$
138,855
$
253,155
Contingency liability
—
$
28,926
$
28,926
Common stock
16,334
1,325
13,754
Additional paid-in-capital
2,733,183
2,606,331
228,912
Deficit accumulated during the development stage
(2,865,004
)
(2,750,423
)
(494,171
)
Total stockholders' equity (deficit)
(115,487
)
(142,767
)
(251,505
)
4
RISK FACTORS
Our business endeavors and our common stock involve a high
degree of risk. You should carefully consider the risks described below with all of the other information included in this Prospectus.
An investment in our common stock involves significant risks, and should not be made by anyone who cannot afford to lose his or
her entire investment. You should carefully consider the following risks together with all other information contained in this
prospectus before deciding to invest in our common stock. If any of the following risks actually occur, they may materially harm
our business and our financial condition and results of operations. In that event, the market price of our common stock could
decline, and investors could lose part or all of their investment.
Risks Related to the Company
We continue to require external financing to fund our
operations, which may not be available.
We will need a positive cash flow to fund
our ongoing operations, including the development of our products under development and the annual costs to remain a public company,
including legal, audit and listing fees.  To date, we have been dependent on loans from our current and former management
and directors, and from Apricus Bio, a related party. We cannot continue to depend on these sources to continue our operations
in the long term.
Given our current lack of cash resources,
we will not be able to implement our growth strategy unless we raise significant capital, enter into licensing and commercialization
agreements, or partnering agreements.  If we are unable to accomplish these objectives, we would be unable to advance
certain programs and may have to curtail our operations.
Given the current market conditions, there
is no assurance that we will be successful.
Based on the factors described above there
is substantial doubt as to the our ability to continue as a going concern, as further discussed in Footnote 2 "Going Concern"
to the Consolidated Financial Statements.
We will continue to incur operating losses.
We have not marketed or generated sales
revenues from our product candidates under development. We have never been profitable and have incurred an accumulated deficit
of approximately $2,750,000 since our inception through December 31, 2011. Our ability to generate revenues and to achieve profitability
and positive cash flow will depend on the successful licensing and commercialization of our product candidates currently approved
or in human clinical trials and those earlier stage products and technology under development.
Our ability to become profitable will depend,
among other things, on our (1) raising sufficient capital to implement our growth strategy, (2) obtaining of regulatory approvals
of our proposed product candidates, (3) success in licensing, manufacturing, distributing and marketing our proposed product candidates,
if approved, and (4) increasing profitability through acquisitions and growth and development of our operations.  If
we are unable to accomplish these objectives, we may be unable to achieve profitability and would need to raise additional capital
to sustain and continue our operations.
We may have liability for shares of our common stock
issued in the reverse merger.
Questions arose as to whether as of the
record date the FasTrack shareholders received adequate information regarding the combination and merger with North Horizon. The
FasTrack shareholders reside in thirteen states and commonwealths. The securities statutes of these jurisdictions have exemptions
for an exchange or for a transaction that is termed an "isolated transaction." We made a rescission offer and provided
detailed information to FasTrack shareholders. The offer expired and no FasTrack shareholder accepted the offer. Liability may
exist and will lapse when the applicable statute of limitation runs and expires. The FasTrack shareholders reside in different
jurisdictions and the statutes of limitations in these jurisdictions have different terms, the longest being four years . Until
a claim is made there will be no impact on the Company. We are unable to predict if any shareholder will make a claim and if pursued
what any outcome may be.
5
If we fail to attract and keep senior management and
key scientific personnel, we may be unable to successfully operate our business.
Our success depends in part on our continued
ability to attract, retain and motivate highly qualified management and scientific personnel and on our ability to develop and
maintain important relationships with healthcare providers, clinicians and scientists.  We are highly dependent upon
our management, particularly Vivian Liu, our President and Chief Executive Officer.  Although we have an employment
agreement with Ms. Liu, these types of agreements are generally terminable at will at any time, and, therefore, we may not be
able to retain her services as expected. The loss of the services of Ms. Liu could delay or prevent us from obtaining financing
and implementing our business strategy.  Competition for qualified personnel in the biotechnology and pharmaceuticals
field is intense. We may need to hire additional personnel as we expand our commercial activities.  We may not be able
to attract and retain qualified personnel on acceptable terms.
Our ability to maintain, expand or renew
our business and to get business from new clients, particularly in the drug development sector, also depends on our ability to
subcontract and retain scientific staff with the skills and expertise necessary to keep pace with continuing changes in drug development
technologies.
We do not have our own proprietary technology and will
have to license technology for our own product development programs.
To successfully develop new products based
on generic drugs currently on the market, we will need to license in a delivery technology, which would enable us to differentiate
our product from its generic counterparts. We may not be able to obtain the right to a suitable technology to develop our targeted
drug candidates.
Consummation of licensing arrangements
is subject to the negotiation of complex contractual relationships and we may be unable to negotiate such agreements timely, if
at all, or on acceptable terms.
We face significant competition and have limited resources
compared to our competitors.
We are engaged in a highly competitive
industry. We can expect competition from numerous companies, including large international enterprises, and others entering the
market for products similar to ours. Most of these companies have greater research and development, manufacturing, patent, legal,
marketing, financial, technological, personnel and managerial resources. Acquisitions of competing companies by large pharmaceutical
or healthcare companies could further enhance such competitors' financial, marketing and other resources. Competitors may
complete clinical trials, obtain regulatory approvals and commence commercial sales of their products before we could enjoy a
significant competitive advantage. Products developed by our competitors may be more effective than our product candidates.
6
We currently have no sales force or marketing organization
and will need, but may not be able, to attract marketing partners or afford qualified or experienced marketing and sales personnel
for our product candidates under development.
We have no internal sales and marketing
capabilities.  In order to market our OTC product candidate directly to customers, we will need to build a sales and
marketing infrastructure and/or attract marketing partners that will need to spend significant funds to inform potential customers,
including third-party distributors, of the distinctive characteristics and benefits of our product candidates. Our operating results
and long term success will depend, among other things, on our ability to establish (1) successful arrangements with domestic and
additional international distributors and marketing partners and (2) if we cannot find such partners or choose to market and sell
the product directly to customers, an effective internal marketing and sales organization.  Consummation of partnering
arrangements is subject to the negotiation of complex contractual relationships, and we may not be able to negotiate such agreements
on a timely basis, if at all, or on terms acceptable to us.  If we enter into third party arrangements, our revenues
would be lower as we would share the revenues with our licensing, commercialization and development partners.  If we
are unable to launch a drug, we may realize little or no revenue from sales in the OTC market.
We are an "emerging growth company" and qualify
for reduced reporting requirements so long as we remain an emerging growth company.
The recently enacted JOBS Act reduces certain
disclosure requirements for "emerging growth companies" thereby decreasing related regulatory compliance costs. We qualify
as an emerging growth company as of the date of his offering and may continue to qualify as an "emerging growth company"
for up to five years.
For as long as we continue to be an emerging
growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies. These exemptions include (1) not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in
our periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a non-binding advisory vote on
executive compensation and shareholder approval of any golden parachute payments not previously approved. However, we would cease
to qualify as an emerging growth company if:
-We have annual gross revenues of $1.0
billion or more in a fiscal year;
-We have, during the previous three-year period issued
more than $1.0 billion in non-convertible debt; or
-We become a large accelerated filer", defined
by the SEC as a company with a world-wide public float of our common stock of $700 million or more.
Upon the occurrence of any of the above, we would not be able
to take advantage of the reduced regulatory requirements and any associated cost savings.
Pre-clinical and clinical trials are inherently unpredictable.  If
we or our partners do not successfully conduct these trials or gain regulatory approval, we or our partners may be unable to market
our product candidates.
Through pre-clinical studies and clinical
trials, our product candidates must be demonstrated to be safe and effective for the indicated uses. Results from pre-clinical
studies and early clinical trials may not be indicative of, or allow for prediction of results in later-stage testing.  Many
of the pre-clinical studies that we have conducted are in animals with "models" of human disease states.  Although
these tests are widely used as screening mechanisms for drug candidates before being advanced to human clinical studies, results
in animal studies are less reliable predictors of safety and efficacy than results of human clinical studies.  Future
clinical trials may not demonstrate the safety and effectiveness of our product candidates or may not result in regulatory approval
to market our product candidates.  Commercial sales in the United States of our product candidates cannot begin until
final FDA approval is received.  The failure of the FDA to approve our product candidates for commercial sales will
have a material adverse effect on our prospects and could have a negative effect on the Company's stock price.
7
Patents and intellectual property rights are important
to us but could be challenged.
Proprietary protection for our pharmaceutical
products and products under development is of material importance to our business in the U.S. and most other countries. We have
sought and will continue to seek proprietary protection for our product candidates to attempt to prevent others from commercializing
equivalent products in substantially less time and at substantially lower expense. Our success may depend on our ability to (1)
obtain effective patent protection within the U.S. and internationally for our proprietary technologies and products, (2) defend
patents we own, (3) preserve our trade secrets, and (4) operate without infringing upon the proprietary rights of others.  In
addition, we have agreed to indemnify our partners for certain liabilities with respect to the defense, protection and/or validity
of our patents and would also be required to incur costs or forego revenue if it is necessary for our partners to acquire third
party patent licenses in order for them to exercise the licenses acquired from us.
While we have obtained patents and have
many patent applications pending, the extent of effective patent protection in the U.S. and other countries is highly uncertain
and involves complex legal and factual questions.  No consistent policy addresses the breadth of claims allowed in or
the degree of protection afforded under patents of medical and pharmaceutical companies.  Patents we currently own or
may obtain might not be sufficiently broad enough to protect us against competitors with similar technology.  Any of
our patents could be invalidated or circumvented.
While we believe that our patents would
prevail in any potential litigation, the holders of competing patents could determine to commence a lawsuit against us and even
prevail in any such lawsuit.
We are dependent upon third party contract research organizations
("CROs").
We currently do not have our own research
and development infrastructure. To-date, our studies have been conducted by NexMed, a subsidiary of Apricus (a related party),
for a fee.
Assuming we successfully raise sufficient capital to implement our product development programs, we
intend to contract the studies to third party CROs. If the CRO fails to conduct the contracted studies on a timely and satisfactory
basis, we would experience and encounter costs and delays in identifying new CROs.
We are dependent upon third party manufacturers for chemical
manufacturing supplies.
We are dependent on third party chemical
manufacturers. Any products must be supplied on a timely basis and at satisfactory quality levels.  If our validated
third party chemical manufacturers fail to produce quality products on time and in sufficient quantities, our results would suffer,
as we would encounter costs and delays in validating new third party suppliers.
We may be subject to potential product liability and
other claims, creating risks and expense.
We are also exposed to potential product
liability risks inherent in the development, testing, manufacturing, marketing and sale of human therapeutic products.  Product
liability insurance for the pharmaceutical industry is extremely expensive, difficult to obtain and may not be available on acceptable
terms, if at all. We may need to acquire such insurance coverage prior to the commercial introduction of our product candidates.
If we obtain coverage, we have no guarantee that the coverage limits of such insurance policies will be adequate. A successful
claim against us if we are uninsured, or which is in excess of our insurance coverage, if any, could have a material adverse effect
upon us and on our financial condition.
Industry Risks
We are vulnerable to volatile stock market conditions.
The market prices for securities of biopharmaceutical
and biotechnology companies, including ours, have been highly volatile. The market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of particular companies. In addition, future announcements,
such as the results of testing and clinical trials, the status of our relationships with third-party collaborators, technological
innovations or new therapeutic products, governmental regulation, developments in patent or other proprietary rights, litigation
or public concern as to the safety of products developed by us or others and general market conditions, concerning us, our competitors
or other biopharmaceutical companies, may have a significant effect on the market price of our common stock.
8
Instability and volatility in the financial markets and
the global economic recession are likely to have a negative impact on our ability to raise necessary funds and on our business,
financial condition, results of operations and cash flows.
During the past several years, there has
been substantial volatility and a decline in financial markets due in part to the lethargic global economic environment.  In
addition, there has been substantial uncertainty in the capital markets and access to financing is uncertain.  These
conditions are likely to have an adverse effect on our industry, licensing partners, and business, including our financial condition,
results of operations and cash flows.
To the extent that we do not generate sufficient
cash from operations, we may need to raise capital through equity sales and/or incur indebtedness, if available, to finance operations.  However,
recent turmoil in the capital markets and the potential impact on the liquidity of major financial institutions may have an adverse
effect on our ability to fund our business strategy through sales of capital stock or through borrowings, under either existing
or newly created instruments in the public or private markets on terms that we believe to be reasonable, if at all.
Changes in trends in the pharmaceutical and biotechnology
industries, including difficult market conditions, could adversely affect our operating results.
The biotechnology, pharmaceutical and medical
device industries generally and drug discovery and development more specifically are subject to increasingly rapid technological
changes.  Our competitors and others might develop technologies or products that are more effective or commercially
attractive than our current or future technologies or products, or that render our technologies or products less competitive or
obsolete.  If competitors introduce superior technologies or products and we cannot make enhancements to our technologies
or products to remain competitive, our competitive position, and in turn our business, revenue and financial condition, would
be materially and adversely affected.
We and any potential licensees are subject to numerous
and complex government regulations which could result in delay and expense.
Governmental authorities in the U.S. and
other countries heavily regulate the testing, manufacture, labeling, distribution, advertising and marketing of our proposed product
candidates. Before any products we develop are marketed, FDA and comparable foreign agency approval must be obtained through an
extensive clinical study and approval process.
The failure to obtain requisite governmental
approvals for our product candidates under development in a timely manner or at all would delay or preclude us and our licensees
from marketing our product candidates or limit the commercial use of our product candidates, which could adversely affect our
business, financial condition and results of operations.
Any failure on our part to comply with
applicable regulations could result in the termination of on-going research, discovery and development activities or the disqualification
of data for submission to regulatory authorities.
Because we intend that our product candidates
will be sold and marketed outside the U.S., we and/or our potential licensees will be subject to foreign regulatory requirements
governing the conduct of clinical trials, product licensing, pricing and reimbursements. These requirements vary widely from country
to country. The failure to meet each foreign country's requirements could delay the introduction of our proposed product
candidates in the respective foreign country and limit our revenues from sales of our proposed product candidates in foreign markets.
9
Successful commercialization of our product
candidates may depend on the availability of reimbursement to the consumer from third-party healthcare payers, such as government
and private insurance plans. Even if one or more products are successfully brought to market, reimbursement to consumers may not
be available or sufficient to allow the realization of an appropriate return on our investment in product development or to sell
our product candidates on a competitive basis. In addition, in certain foreign markets, pricing or profitability of prescription
pharmaceuticals is subject to governmental controls. In the U.S., federal and state agencies have proposed similar governmental
control and the U.S. Congress has recently adopted regulatory reforms that affect companies engaged in the healthcare industry.
Pricing constraints on our product candidates in foreign markets and possibly in the U.S. could adversely affect our business
and limit our revenues.
We face uncertainty related to healthcare reform, pricing
and reimbursement which could reduce our revenue potential.
In 2009 and 2010, the U.S. Congress adopted
legislation regarding health insurance, which has been signed into law. As a result of this new legislation, substantial changes
could be made to the current system for paying for healthcare in the United States, including changes made in order to extend
medical benefits to those who currently lack insurance coverage. Extending coverage to a large population could substantially
change the structure of the health insurance system and the methodology for reimbursing medical services, drugs and devices. These
structural changes could entail modifications to the existing system of private payers and government programs, such as Medicare,
Medicaid and State Children's Health Insurance Program, creation of a government-sponsored healthcare insurance source,
or some combination of both, as well as other changes. Restructuring the coverage of medical care in the United States could impact
the reimbursement for prescribed drugs, biopharmaceuticals, medical devices, or our product candidates. If reimbursement for our
approved product candidates, if any, is substantially less than we expect in the future, or rebate obligations associated with
them are substantially increased, our business could be materially and adversely impacted.
Recently, there have been efforts in the
U.S. Congress to defund the health insurance program described above.  As a result of the political uncertainty surrounding
the implementation of the health care legislation, it is unclear as to what laws, regulations, procedures and funding will be
put into place in the near future.  Such uncertainty may impact the reimbursement for certain prescribed drugs, biopharmaceuticals,
medical devices, or our product candidates. As described above, if reimbursement for our approved product candidates, if any,
is substantially less than we expect in the future, or rebate obligations associated with them are substantially increased, our
business could be materially and adversely impacted.
Sales of our product candidates, if approved
for commercialization, will depend in part on the availability of coverage and reimbursement from third-party payers such as government
insurance programs, including Medicare and Medicaid, private health insurers, health maintenance organizations and other health
care related organizations.  Both the federal and state governments in the United States and foreign governments continue
to propose and pass new legislation affecting coverage and reimbursement policies, which are designed to contain or reduce the
cost of health care. Further federal and state proposals and healthcare reforms are likely which could limit the prices that can
be charged for the product candidates that we develop and may further limit our commercial opportunity. There may be future changes
that result in reductions in current coverage and reimbursement levels for our products, if commercialized, and we cannot predict
the scope of any future changes or the impact that those changes would have on our operations.
Adoption of our product candidates, if
approved, by the medical community may be limited if third-party payers will not offer coverage. Cost control initiatives may
decrease coverage and payment levels for drugs, which in turn would negatively affect the price that we will be able to charge.
We are unable to predict all changes to the coverage or reimbursement methodologies that will be applied by private or government
payers to any drug candidate we have in development. Any denial of private or government payer coverage or inadequate reimbursement
for procedures performed using our drug candidates, if commercialized, could harm our business and reduce our revenue.
10
Risks Related to Owning our Common Stock
Our stock could become ineligible to be listed on the
OTCBB.
Currently, our common stock trades on the
OTCBB.  We have been informed of a "three-strike rule". In the past two years we filed one periodic report
late. If we file a report untimely twice again any time before August 2013 we most likely will not have our shares quoted on the
OTCBB. It is possible that we could be out of compliance in the future.  If we fail to maintain compliance with any
listing requirements, we could be ineligible for the OTCBB, and have to trade our stock on the Pink Sheets.
We have provided Ms. Liu with anti-dilution protection
with respect to her ownership in the Company, which will result in our issuing Ms. Liu additional shares over the next two years.
Pursuant to the employment agreement we
provided Ms. Liu, we agreed to grant Ms. Liu 6% of our outstanding common stock in the form of restricted stock that vested over
a period of 36 months. The employment agreement states that if additional shares of stock are issued during the vesting period
of 36 months since the grant date, Ms. Liu will be issued additional shares so that she would retain 2%, 4% and 6% ownership of
the Company at December 31, 2011, 2012 and 2013, respectively. No additional shares were issued through June 30, 2012 as Ms. Liu's
ownership as of June 30, 2012 exceeded 2%.
There are restrictions on resale of the Company's
Common Stock by many of our shareholders and there is no assurance that when these shares become available to sale into the market
that these shares will be assimilated without a substantial decline in the market price of our shares of common stock.
The restrictions on resale may be removed
through the provisions of Rule 144 under the Securities Act. We were a shell issuer until December 2011 (when the Form 10 information
was filed with the SEC), Rule 144 is not available until December 2012 at the earliest. When our shareholders are able to rely
on the provisions of Rule 144 their sales into the market may adversely affect the market price of our shares.
There has been a limited trading market for our Common
Stock to date.
Currently, our common stock is available
for quotation on the OTCBB under the symbol "INNV." However, to date, there has been virtually no trading activity
in our common stock. It is anticipated that there will continue to be a limited trading market for the common stock in the near
future. The lack of an active market may impair your ability to sell your Common Stock at the time you wish to sell them or at
a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive
market may also impair our ability to raise capital by selling shares of common stock and may impair our ability to acquire other
companies by using common stock as consideration.
Our stock is considered a penny stock under SEC regulations
and may have limited market liquidity.
Our stock is considered a penny stock under
regulations of the Securities and Exchange Commission and is subject to rules that impose additional sales practice requirements
on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements may discourage
broker-dealers from effecting transactions in our common stock, which may severely limit the market liquidity of the common stock
and the ability of our shareholders to sell our securities in the secondary market.
11
As an "emerging growth company," (as described
earlier in this document) we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies
will make our common stock less attractive to investors.
We are an "emerging growth company,"
as defined in the JOBS Act. Accordingly, we are eligible to take advantage of certain exemptions from various reporting requirements
applicable to other public companies that are not emerging growth companies. Additionally Section 107 of the JOBS Act provides
that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to take
advantage of the benefits of this extended transition period and, therefore, will be subject to the same new or revised accounting
standards as other public companies that are not emerging growth companies.
As long as we are an emerging growth company,
we cannot predict if investors will find our common stock less attractive because we may not rely on exemptions provided by the
JOBS Act. If some investors find our common stock less attractive, there may be a less active trading market for our common stock
and our stock price may be more volatile.
We do not expect to pay dividends on our common stock
in the foreseeable future.
Although our stockholders may receive dividends
if, as and when declared by our board of directors, we do not intend to declare dividends on our common stock in the foreseeable
future. Therefore, investors may not purchase our common stock if they need immediate or future income by way of dividends from
their investment.
We may issue additional shares of our capital stock that
could dilute the value of your shares of common stock.
We are authorized to issue 150,000,000
shares of our common stock. In light of our possible future need for additional financing, we may issue additional shares of common
stock below current market prices that could dilute the earnings per share and book value of our shares of our common stock.  These
issuances would dilute existing stockholders and could depress the value of our common stock.
In addition to provisions providing for
proportionate adjustments in the event of stock splits, stock dividends, reverse stock splits and similar events, outstanding
warrants representing the right to acquire shares of common stock may cause an adjustment of the exercise or conversion price
if we issue shares of common stock at prices lower than the then exercise or conversion price or the then prevailing market price.
This means that if we need to raise equity financing at a time when the market price for our common stock is lower than the exercise
or conversion price, or if we need to provide a new equity investor with a discount from the then prevailing market price, then
the exercise price will be reduced and the dilution to stockholders increased.
Due to our limited public float, a large influx of free
and tradable shares could negatively impact our stock price.
We have limited public float in the trading
market for our shares of common stock. Previously the Company was designated as a shell company as defined by the SEC. Rule 144
states that the provisions of Rule 144 are unavailable to shareholders of a shell company until 12 months after a former shell
company files information that includes disclosures similar to information provided in a Form 10 filed with the SEC. On December
12, 2011, we filed a report on Form 8-K, which we believe included disclosures that would be included in a Form 10. Thus, on December
12, 2012, the provisions of Rule 144 should become available to shareholders of the Company.
Shares held by Apricus Bio and others holding
large positions influence the public float. These parties' investment objectives may differ from other shareholders. If
large shareholders decide to sell all or part of their shares, the market price of our shares may decrease significantly.
DILUTION
We are not offering or selling any of the
shares of common stock in this offering. All of the offered shares are held by the selling stockholder and accordingly, no dilution
will result from the sale of the shares.
12
MARKET FOR OUR COMMON STOCK
Our common stock is presently trading on
the OTCBB under the symbol "INNV", although there has not been an active trading market for our shares. Accordingly
we are not including a history of reported trades in the public market. The most recent reported trade was on August 6, 2012 at
$2.25 per share.
Inclusion on the OTCBB permits price quotations
for our shares to be published by that service. We cannot make any assurance that an active trading market for our shares will
develop in the future or, that if such a market does develop, that it can be sustained. Any secondary trading of our shares may
be subject to certain state imposed restrictions. We have no plans regarding the development of a trading market in any of our
shares of common stock.
The ability of individual stockholders
to trade theirs shares in a particular state may be subject to various rules and regulations of that state. A number of states
require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities
are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state.
Penny Stock Rule
It is unlikely that our securities will
be listed on any national or regional exchange or The Nasdaq Stock Market in the foreseeable future. Most likely our shares will
be subject to the provisions of Section 15g-9 of the Exchange Act commonly referred to as the "penny stock" rule. Rule
15g-9 sets forth certain requirements for broker-dealer transactions in penny stocks and Rule 15g-9(d)(1) incorporate the definition
of penny stock as that used in Rule 3a5l-l of the Exchange Act.
The SEC defines a penny stock to be any
equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a5l-l provides that any
equity security be considered to be a penny stock unless that security is:
·
Registered and
                                                                                                              traded on a national
                                                                                                              securities exchange
                                                                                                              meeting specified
                                                                                                              criteria set by
                                                                                                              the SEC;
·
Authorized for
                                                                                                              quotation on The
                                                                                                              Nasdaq Stock market;
·
Issued by a
                                                                                                              registered investment
                                                                                                              company;
·
Excluded from
                                                                                                              the definition on
                                                                                                              the basis of price
                                                                                                              (at least $5.00
                                                                                                              per share) or the
                                                                                                              issuer's net tangible
                                                                                                              assets; or
·
Exempted from
                                                                                                              the definition by
                                                                                                              the SEC.
Broker-dealers who sell penny stocks to
persons other than established customers and accredited investors are subject to additional sales practice requirements. An accredited
investor is generally defined as a person with assets in excess of $1,000,000 not including the value of the personal residence
unless the equity in the residence has a negative value which is then deducted from the net assets or annual income exceeding
$200,000 or $300,000 together with their spouse.
For transactions covered by these rules,
broker-dealers must make a special suitability determination for the purchase of such securities and must receive the purchaser's
written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt,
the rules require the delivery prior to the transaction of a risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations
for the securities. Finally, monthly statements must be sent to clients disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. Consequently these rules may restrict and impair the
ability of broker-dealers to trade and maintain a market in our common stock and may affect the ability of stockholders to sell
their shares.
These requirements may be considered cumbersome
by broker-dealers and could impact the willingness of a particular broker-dealer to make a market in our shares, or they could
affect the value at which our shares trade. Classification of the shares as penny stocks increases the risk of any investment
in our shares.
13
Rule 144
A total of 16,014,798 shares of the 16,333,670
shares of common stock presently outstanding and not being registered for resale under this prospectus are deemed to be "restricted
securities" as defined by Rule 144 under the Securities Act. Rule 144 is the common means used by a stockholder to resell
restricted securities and for affiliates to sell their securities, either restricted or non-restricted control shares. The SEC
amended Rule 144 effective February 15, 2008.
Under the amended Rule 144, an affiliate
of a company which filed periodic reports under the Exchange Act who has held their shares for more than six months, may sell
in any three month period the number of shares that does not exceed the greater of:
The average weekly trading volume in the
common stock, as reported through the automated quotation system of a registered securities association during the four calendar
weeks preceding such sale, or 1% of the shares then issued and outstanding.
Sales by affiliates under Rule 144 are
also subject to certain requirements as to the manner of sale, filing appropriate and proper notice and the availability of current
public information about the issuer of the securities.
Sales by a non-affiliate stockholder of
a reporting company who has held the shares for more than six months, may make unlimited resales under Rule 144 provided only
that the issuer has available current public information about itself. After a one-year holding period, a non-affiliate may make
unlimited sales with no other requirements or limitations.
An exception to the availability of the
provisions of amended Rule 144 is that Rule 144 is not available for either a reporting or a non-reporting shell company, unless
the company: has ceased to be a shell company; is subject to the Exchange Act reporting obligations; has filed all required Exchange
Act reports during the preceding twelve months; and at least one year has elapsed from the time the company filed with the SEC
current Form 10 type information reflecting the status of the entity that is not a shell company.
We cannot predict the effect any future
sales under Rule 144 may have on the market price of our common stock, but such sales may have a substantial depressing effect
on any such market price.
DIVIDEND POLICY
We have never declared cash dividends on
our common stock. We do not anticipate paying any dividends on our common stock in the future.
THE OFFERING
Commencing on the date of this prospectus
the selling stockholders propose to offer shares of common stock in the over-the-counter market or otherwise, at market prices
prevailing at the time of sale, at prices related to the prevailing market price, or at negotiated prices.
Our shares are presently quoted on the
OTCBB. No assurance can be made that a more active market for our shares will develop.
PLAN OF DISTRIBUTION
The selling stockholders identified in
this prospectus may offer and sell up to 150,580 shares of our common stock. The selling stockholders may sell all or a portion
of the shares of common stock through public or private transaction at prevailing market prices or at privately negotiated prices.
As used in this prospectus "selling stockholders" include pledges, transferees or other successors-in-interest selling
shares received from the selling stockholders, as pledges, assignees, borrowers or in connection with other non-sale-related transfers
after the date of this prospectus. This prospectus may also be used by transferees of the selling stockholders, including broker-dealers
or other transferees who borrow or purchase the shares to settle or close out short sales of shares of common stock. The selling
stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale or non-sale
related transfer. We will not receive any of the proceeds from sales by the selling stockholders.
14
We expect that the selling stockholders
will sell their shares primarily through the over-the-counter market made from time-to-time at prevailing market prices. The selling
stockholders may sell from time to time in one or more transactions at or on any stock exchange, market or trading facility on
which shares are traded in the future or in private transactions. Sales may be made a fixed or negotiated prices, and may be effected
by means of one or more of the following transactions which may involve cross or block transactions: (1) ordinary brokerage transactions
and transactions in which the broker-dealer solicits purchasers; (2) block trades in which the broker-dealer will attempt to sell
the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; (3) purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; (4) an exchange distribution in accordance with
the rules of the applicable exchange; (5) privately negotiated transactions; (6) settlement of short sales; (7) transactions in
which broker-dealers may agree with the selling stockholder to sell a specified number of shares at a stipulated price per share;
(8) through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
or (9) a combination of any of the above or any other method permitted pursuant to applicable law.
The selling stockholders may sell shares
under available exemptions under the Securities Act, such as Rule 144, if available, rather than under this prospectus. The selling
stockholder will have the sole discretion not to accept any purchase offer or make any sale of his shares if he deems the purchase
price unsatisfactory at a particular time. To the extent required this prospectus may be amended and supplemented from time to
time to describe a specific plan of distribution, if appropriate or required.
Broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholders or, if any broker-dealer acts as agent for the purchase of shares from the purchaser, in amounts to be negotiated.
Selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.
In connection with sales of common stock
or interests therein the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales, puts and calls or other transactions in our securities or derivatives of our securities
and may sell and deliver shares in connection with these transactions.
Selling stockholders and broker-dealers
or agents involved in an arrangement to sell any of the offered shares may, under certain circumstances, be deemed to be "underwriters"
within the meaning of the Securities Act. Any profit on such sales and any discount, commission, concession or other compensation
received by any such underwriter, broker-dealer or agent may be deemed an underwriting discount and commission under the Exchange
Act. The selling stockholders have not informed us that they have any agreement or understanding, directly or indirectly, with
any persons to distribute the common stock. If either of the selling stockholders should notify us that they have a material arrangement
with a broker-dealer for the resale of his shares, we may be required to amend the registration statement of which this prospectus
is a part, and file a prospectus supplement to describe the agreement between a selling stockholder and broker-dealer or agent.
We have agreed to pay all fees and expenses
incurred by us incident to the registration of the common stock, including SEC filing fees. The selling stockholders will be responsible
for all costs and expenses in connection with the sale of their shares, including brokerage commissions or dealer discounts. We
will indemnify the selling stockholders against certain losses, claims, damages and liabilities including liabilities under the
Securities Act.
Once sold under the registration statement
of which this prospectus is a part, the shares of common stock will be freely tradeable in the hands of persons other than our
affiliates.
The selling stockholders will be subject
to applicable provisions of the Exchange Act and the rules and regulations thereunder which provisions may limit the time of purchases
and sales of common stock. The foregoing may affect the marketability of such securities. To comply with the securities laws of
certain jurisdiction, if applicable, the common stock will be offered or sold in such jurisdictions only through registered or
licensed brokers or dealers.
15
The selling stockholders and other persons
participating in the sale or distribution of the shares offered hereby, will be subject to applicable provisions of the Exchange
Ace and rules and regulations promulgated thereunder, including without limitation Regulation M. With certain exceptions Regulation
M restricts certain activities of, and limits the time of purchases and sales of any of the shares by the selling stockholders,
affiliated purchasers and any broker-dealer or other person who participates in the sale or distribution. Under Regulation M these
persons are precluded from bidding for or purchasing or attempting to induce any person to bid for or purchase any security subject
to the distribution until the distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize
the price of a security in connection with the distribution of that security. All of these limitations may affect the marketability
of the shares offered by this prospectus. The selling stockholders are not broker-dealers or affiliates of any broker-dealer.
SELLING STOCKHOLDERS
We are registering the shares of our common
stock offered for resale pursuant to this prospectus to afford the selling stockholders the opportunity to sell their shares in
a public transaction. The selling stockholders are offering hereby a total of 150,580 shares of our common stock. The following
table provides information regarding the beneficial ownership of our common stock being offered for resale by the selling stockholders.
Each selling stocker's percentage of ownership shown below is based on 16,333,670 shares of common stock issued and outstanding
as of the date of this prospectus. The table includes the number of shares owned beneficially by each selling stockholder, the
number of shares which may be offered for resale pursuant to this prospectus and the number of shares to be owned beneficially
by each selling stockholder after the offering. The table has been prepared based on the assumption that all the shares of common
stock offered under this prospectus will be sold. The selling stockholders are not affiliates of the Company. The selling stockholders
may retain all or part of the shares they own. No prediction can be made of the number of shares the will be held by the selling
stockholders upon termination of this offering.
Beneficial
Ownership Name
Number of shares
owned
Number of shares
being registered
Number of shares
owned after offering
Percentage after
offering
Keith Cannon
162,563
134,000
28,563
1.0
Jibrayil Yusuf
164,909
16,580
148,329
1.0
CAPITALIZATION
The following table sets forth our capitalization
as of June 30, 2012. This table should be read in conjunction with the financial statements and the notes thereto included elsewhere
in this prospectus.
June 30, 2012
(unaudited)
Common Stock
Additional paid in capital
150,000,000 shares authorized, par value $0.001 per share; 16,333,670 shares issued
    and outstanding
Deficit accumulated during development stage
$  2,733,183
Total stockholders' deficit
$  (2,865,004)
LEGAL PROCEEDINGS
As of the date of this prospectus we are
not aware of any material claims, lawsuits, disputes with third parties or regulatory proceedings that would have any material
affect on our company.
JOBS ACT
The JOBS Act provides that as long as a
company qualifies as an "emerging growth company" it will, among other things:
-be exempt from the provisions of Section 404(b)
of the Sarbanes-Oxley Act reporting that its independent registered public accounting firm provide an attestation report on the
effectiveness of its internal control over financial reporting;
-be exempt from the "say on pay" and "say
on golden parachute" advisory requirements of the Dodd-Frank Wall Street Reform and Customer Protection Act (the "Dodd-Frank
Act"), and certain disclosure requirements of the Dodd-Frank Act relating to compensation of its chief executive officer
and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities
Exchange Act of 1934; and
-instead provide a reduced level of disclosure concerning
executive compensation and be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring
mandatory audit firm rotations or a supplement to the auditor's report on the financial statements.
16
It should be noted that notwithstanding
our status as an emerging growth company, we would be eligible for these exemptions as a result of our status as a "smaller
reporting company" as defined in the Securities Exchange Act of 1934.
Section 107 of the JOBS Act provides that
an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to take
advantage of the benefits of this extended transition period and, therefore, will be subject to the same, new or revised accounting
standards as other public companies that are not emerging growth companies.
BUSINESS
Innovus Pharmaceuticals, Inc. (the "
Company
",
"
Innovus Pharma
", "
FasTrack
", "
we
", "
us
"
and "
our
") is focused on near term revenue opportunities through the commercialization of its proprietary
product pipeline, currently consisting of therapies aimed at pain relief and bleeding of the gums. Additionally, the Company is
actively seeking to in-license and/or acquire new and innovative pharmaceutical compounds that offer definable pathways to
regulatory approval, partnering and commercialization.
Our business model is designed to create
multiple opportunities for success while minimizing the risks associated with reliance on any single technology platform or product
type, and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions designed to place our
product candidates into larger organizations or with partners having existing commercialization, sales and marketing resources,
and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.
In parallel, as our business strategy advances
and corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow.  This strategy may include debt financing and/or
acquisitions of small revenue generating companies and products.
Our Proprietary Product and Technology Portfolios
The lead product in our pipeline is Apeaz
™
,
a topical cream that has been developed for pain relief. It is intended to deliver different ingredients to various layers of
the skin and muscle, and optimize effect. The product had previously been sold in the U.S. and internationally, and had sales
of approximately $500,000. However, all sales for the product were abandoned in 2008, when the U.S. distributor went out of business,
and the previous owner of Apeaz
™
decided to focus on another segment of its business. The Company needs approximately
$30,000 to repackage and relaunch the product in the U.S. and internationally.
In addition, we have Regia
™
,
which is a plant-derived, anti-microbial agent for reducing the bleeding of gums when used in OTC products such as mouthwash.
The same active is currently included in a mouthwash commercialized in France. We have an issued US patent which expires in May
2028 and patent applications pending in selected international markets. Our intention is to out-license the patent portfolio for
Regia™ to potential development partners.
In our portfolio of Rx products, we have
a partial interest in the potential commercial value of PrevOnco
™
, a Phase 2/3 second-line Orphan Drug therapy
for patients with hepatocellular carcinoma or liver cancer. PrevOnco
™
is based on lansoprazole, a drug widely
used to treat
gastro-esophageal reflux disease. Preclinical animal data have shown the drug to also
be effective in shrinking the tumors commonly associated with liver cancer.
In 2010, FasTrack sold the development rights
of the product to NexMed Holdings, Inc., ("
NexMed
") a wholly-owned subsidiary of Apricus Biosciences,
Inc. (Nasdaq: APRI) ("
Apricus Bio
"). In exchange, we are entitled to receive up to 50% of the net commercial
value of the product in the event Apricus Bio successfully licenses the product to a commercialization partner. The potential
for any returns on PrevOnco
™
is completely dependent on Apricus Bio's efforts. Apricus Bio completely controls
the future and progress of the PrevOnco
™
program. There is no assurance that Apricus Bio will continue to develop
it, or be successful in its development or licensing efforts.
17
When we have sufficient resources, we intend
to explore and pursue new product opportunities based on drugs with expired or near-expired patents. Our strategy is to follow
the 505(b)(2) regulatory approval pathway, which typically has a shorter development cycle with less pre-clinical and clinical
studies required by the regulatory agencies. In June 2011, we conducted feasibility studies on two active drug ingredients identified
by us. One study, completed in September 2011, focused on a new minoxidil formulation for treating hair loss. Minoxidil is the
active ingredient in Rogaine
®
, a widely marketed topical product for treating male and female hair loss. The study
results showed that our proprietary formulation significantly enabled the absorption of minoxidil into the human cadaver skin
model.
Within our Rx portfolio is a development
platform based on SSAO inhibitors. SSAO is known as vascular adhesion protein-1 or VAP-1, and is a dual function molecule with
enzymatic and cell adhesion activities. These inhibitors are designed to reduce inflammation by blocking the white blood cells
and reducing the levels of inflammatory mediators. A prior owner had developed a treatment for Lupus based on the SSAO platform,
but that product failed in late-stage clinical studies. In 2009, FasTrack acquired the SSAO patent portfolio because of the possibility
that the SSAO platform had potential for other developers to identify the right medical indication. Because the SSAO platform
has unproven safety and efficacy profiles, to develop a product based on this platform would require significant resources and
longer development time. We do not have these resources presently and no assurance can be given that even if proper resources
were available, we would seek to develop or if development were pursued, a successful SSAO platform would be accomplished. To
facilitate the SSAO development we may seek a partnership relationship.
Prior Transactions
Innovus Pharma, formerly known as North
Horizon, Inc., was incorporated under the laws of the State of Utah on January 15, 1959. It changed the corporate domicile to
the State of Nevada in 2007. Initially, North Horizon had authorized capital of 100,000,000 shares of common stock, par value
of $.001 per share. Years ago it sold 100,000 shares of common stock to the public. It entered the cosmetic business, but this
venture was unsuccessful. Other ventures ensued, but none were successful. For the past several years, there were no active business
ventures, however, the management maintained North Horizon as a corporate entity and filed requisite reports with the U.S. Securities
and Exchange Commission. Innovus Pharma has authorized capital of 150,000,000 shares of common stock, par value of $.001 per share.
In October 2011, North Horizon changed
its name to Innovus Pharmaceuticals, Inc., and subsequently consummated a combination transaction with FasTrack Pharmaceuticals,
Inc., whereby FasTrack became our wholly-owned subsidiary.
We are obligated to file certain interim
and periodic reports including an annual report with audited financial statements. Our trading symbol is "INNV." The
financial statements included in this prospectus are for the combined entity including FasTrack Pharma.
Manufacturing
At the present time, we do not have any
customers or backlog.
We intend to contract with third parties
for the manufacture of our compounds for investigational purposes, for preclinical and clinical testing and for commercial sale
of any FDA-approved products. All of our compounds are small molecules, generally constructed using industry standard processes
and use readily accessible raw materials.
18
Regulatory Requirements
On December 12, 2011, we filed a Report
on Form 8-K describing and reporting the closing of the Agreement between North Horizon and FasTrack. The report was filed within
four business days of the closing of the transaction. (See Item 5.01(a)(8) of Form 8-K.) Amendments to Rule 144 effective on February
15, 2008, limited the resale of most securities of a shell company until one year after the filing of the required information
about FasTrack. These requirements may be perceived as limiting or eliminating the advantages of using "reverse" reorganizations
or mergers of going public. In these transactions the management and shareholders of the acquired company become the controlling
shareholders of the public company. Pursuant to applicable regulations a shell company may not use Form S-8 until 60 days after
the company is no longer considered to be a shell company.
Amendments to Rule 144 effective on February
15, 2008 limited the tradeability of the issued and outstanding securities of a shell company, including shares issued in any
transaction involving an acquisition of another business entity or prospect. Our shareholders are subject to these provisions.
Our shares are also considered penny stocks.
Section 15g-2 of the regulations under the Exchange Act requires broker-dealers transacting trades in penny stocks to provide
potential investors with a disclosure statement detailing the risks of investing in penny stocks and to have the investor sign
a receipt of the disclosure statement before any transactions may occur in the investor's account. Also, broker-dealers
must approve the account of an investor purchasing penny stocks. Our shares of common stock are classified as a "penny stock."
Government Regulation
The U.S. Food and Drug Administration ("
FDA
")
and other federal, state, local and foreign regulatory agencies impose substantial requirements upon the clinical development,
approval, labeling, manufacture, marketing and distribution of drug products. These agencies regulate, among other things, research
and development activities and the testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage,
record keeping, advertising and promotion of our product candidates. The regulatory approval process is generally lengthy and
expensive, with no guarantee of a positive result. Moreover, failure to comply with applicable FDA or other requirements may result
in civil or criminal penalties, recall or seizure of products, injunctive relief including partial or total suspension of production,
or withdrawal of a product from the market.
The FDA regulates, among other things,
the research, manufacture, promotion and distribution of drugs in the United States under the Federal Food, Drug and Cosmetic
Act ("
FFDCA
") and other statutes and implementing regulations. The process required by the FDA before
prescription drug product candidates may be marketed in the United States generally involves the following:
·
completion of
                                                                                                              extensive nonclinical
                                                                                                              laboratory tests,
                                                                                                              animal studies and
                                                                                                              formulation studies,
                                                                                                              all performed in
                                                                                                              accordance with
                                                                                                              the FDA's
                                                                                                              Good Laboratory
                                                                                                              Practice regulations;
·
submission to
                                                                                                              the FDA of an Investigational
                                                                                                              New Drug application
                                                                                                              ("
IND
"),
                                                                                                              which must become
                                                                                                              effective before
                                                                                                              human clinical trials
                                                                                                              may begin;
·
for some products,
                                                                                                              performance of adequate
                                                                                                              and well-controlled
                                                                                                              human clinical trials
                                                                                                              in accordance with
                                                                                                              the FDA's
                                                                                                              regulations, including
                                                                                                              Good Clinical Practices,
                                                                                                              to establish the
                                                                                                              safety and efficacy
                                                                                                              of the product candidate
                                                                                                              for each proposed
                                                                                                              indication;
·
submission to
                                                                                                              the FDA of a New
                                                                                                              Drug Application
                                                                                                              ("
NDA
");
·
satisfactory
                                                                                                              completion of an
                                                                                                              FDA preapproval
                                                                                                              inspection of the
                                                                                                              manufacturing facilities
                                                                                                              at which the product
                                                                                                              is produced to assess
                                                                                                              compliance with
                                                                                                              current Good Manufacturing
                                                                                                              Practice, or cGMP,
                                                                                                              regulations; and
·
FDA review and
                                                                                                              approval of the
                                                                                                              NDA prior to any
                                                                                                              commercial marketing,
                                                                                                              sale or shipment
                                                                                                              of the drug.
The testing and approval process requires
substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will
be granted on a timely basis, if at all.
19
Nonclinical tests include laboratory evaluations
of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals and other animal studies.
The results of nonclinical tests, together with manufacturing information and analytical data, are submitted as part of an IND
to the FDA. Some nonclinical testing may continue even after an IND is submitted. The IND also includes one or more protocols
for the initial clinical trial or trials and an investigator's brochure. An IND automatically becomes effective 30 days
after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to the proposed
clinical trials as outlined in the IND and places the clinical trial on a clinical hold. In such cases, the IND sponsor and the
FDA must resolve any outstanding concerns or questions before any clinical trials can begin. Clinical trial holds also may be
imposed at any time before or during studies due to safety concerns or non-compliance with regulatory requirements. An independent
institutional review board, or IRB, at each of the clinical centers proposing to conduct the clinical trial must review and approve
the plan for any clinical trial before it commences. An IRB considers, among other things, whether the risks to individuals participating
in the trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the consent form signed
by the trial participants and must monitor the study until completed.
Our product pipeline is comprised of candidates
in various stages of development. On the Rx side, to develop a product to Phase 2 based on the 505b(2) regulatory path would cost
approximately $4 million and take 18 months per candidate. On the OTC side, we estimate that the cost and process to register
Apeaz with the FDA and build-out sufficient inventory for launch would cost approximately $30,000 and take 3 to 6 months. See
Clinical Trials and 505(b)(2) NDAs for further clarifications. No assurance can be given that the Company will be successful in
any of its development or licensing efforts.
Clinical Trials
Clinical trials involve the administration
of the product candidate to human subjects under the supervision of qualified medical investigators according to approved protocols
that detail the objectives of the study, dosing procedures, subject selection and exclusion criteria, and the parameters to be
used to monitor participant safety. Each protocol is submitted to the FDA as part of the IND.
Human clinical trials are typically conducted
in three sequential phases, but the phases may overlap, or be combined.
·
Phase 1 clinical
                                                                                                              trials typically
                                                                                                              involve the initial
                                                                                                              introduction of
                                                                                                              the product candidate
                                                                                                              into healthy human
                                                                                                              volunteers. In Phase
                                                                                                              1 clinical trials,
                                                                                                              the product candidate
                                                                                                              is typically tested
                                                                                                              for safety, dosage
                                                                                                              tolerance, absorption,
                                                                                                              metabolism, distribution,
                                                                                                              excretion and pharmacodynamics.
·
Phase
                                                                                                              2 clinical trials
                                                                                                              are conducted in
                                                                                                              a limited patient
                                                                                                              population to gather
                                                                                                              evidence about the
                                                                                                              efficacy of the
                                                                                                              product candidate
                                                                                                              for specific, targeted
                                                                                                              indications, to
                                                                                                              determine dosage
                                                                                                              tolerance and optimal
                                                                                                              dosage and to identify
                                                                                                              possible adverse
                                                                                                              effects and safety
                                                                                                              risks.
·
Phase
                                                                                                              3 clinical trials
                                                                                                              are undertaken to
                                                                                                              evaluate clinical
                                                                                                              efficacy and to
                                                                                                              test for safety
                                                                                                              in an expanded patient
                                                                                                              population at geographically
                                                                                                              dispersed clinical
                                                                                                              trial sites. The
                                                                                                              size of Phase 3
                                                                                                              clinical trials
                                                                                                              depends upon clinical
                                                                                                              and statistical
                                                                                                              considerations for
                                                                                                              the product candidate
                                                                                                              and disease, but
                                                                                                              sometimes can include
                                                                                                              several thousand
                                                                                                              patients. Phase
                                                                                                              3 clinical trials
                                                                                                              are intended to
                                                                                                              establish the overall
                                                                                                              risk-benefit ratio
                                                                                                              of the product candidate
                                                                                                              and provide an adequate
                                                                                                              basis for product
                                                                                                              labeling.
Clinical testing must satisfy extensive
FDA regulations. Reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety
reports must be submitted for serious and unexpected adverse events. Success in early stage clinical trials does not assure success
in later stage trials. The FDA, an IRB or our company may suspend a clinical trial at any time on various grounds, including a
finding that the research subjects or patients are being exposed to an unacceptable health risk.
20
New Drug Applications
Assuming successful completion of the required
clinical trials, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part
of an NDA. An NDA also must contain extensive manufacturing information, as well as proposed labeling for the finished product.
An NDA applicant must develop information about the chemistry and physical characteristics of the drug and finalize a process
for manufacturing the product in accordance with cGMP. The manufacturing process must be capable of consistently producing quality
products within specifications approved by the FDA. The manufacturer must develop methods for testing the quality, purity and
potency of the final product. In addition, appropriate packaging must be selected and tested and stability studies must be conducted
to demonstrate that the product does not undergo unacceptable deterioration over its shelf life. Prior to approval, the FDA will
conduct an inspection of the manufacturing facilities to assess compliance with cGMP.
The FDA reviews all NDAs submitted before
it accepts them for filing. The FDA may request additional information rather than accept an NDA for filing. In this event, the
NDA must be resubmitted with the additional information and is subject to review before the FDA accepts it for filing. After an
application is filed, the FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether
the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee,
but it considers them carefully when making decisions. The FDA may deny approval of an NDA if the applicable regulatory criteria
are not satisfied. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than
we interpret the same data. The FDA may issue a complete response letter, which may require additional clinical or other data
or impose other conditions that must be met in order to secure final approval of the NDA. If a product receives regulatory approval,
the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited,
which could restrict the commercial value of the product. In addition, the FDA may require us to conduct Phase 4 testing which
involves clinical trials designed to further assess a drug's safety and effectiveness after NDA approval, and may require
surveillance programs to monitor the safety of approved products which have been commercialized. Once issued, the FDA may withdraw
product approval if ongoing regulatory requirements are not met or if safety or efficacy questions arise after the product reaches
the market.
Section 505(b)(2) NDAs
There are two types of NDAs: the full NDA
and the Section 505(b)(2) NDA. When possible, we intend to file Section 505(b)(2) NDAs that might, if accepted by the
FDA, save time and expense in the development and testing of our product candidates. A full NDA is submitted under Section 505(b)(1)
of the FFDCA, and must contain full reports of investigations conducted by the applicant to demonstrate the safety and effectiveness
of the drug. A Section 505(b)(2) NDA may be submitted for a drug for which one or more of the investigations relied upon
by the applicant were not conducted by or for the applicant and for which the applicant has no right of reference from the person
by or for whom the investigations were conducted. A Section 505(b)(2) NDA may be submitted based in whole or in part on published
literature or on the FDA's finding of safety and efficacy of one or more previously approved drugs, which are known as reference
drugs. Thus, the filing of a Section 505(b)(2) NDA may result in approval of a drug based on fewer clinical or nonclinical
studies than would be required under a full NDA. The number and size of studies that need to be conducted by the sponsor depends
on the amount and quality of data pertaining to the reference drug that are publicly available, and on the similarity of and differences
between the applicant's drug and the reference drug. In some cases, extensive, time-consuming, and costly clinical and nonclinical
studies may still be required for approval of a Section 505(b)(2) NDA.
Because we may develop new formulations
of previously approved chemical entities, our drug approval strategy is to submit Section 505(b)(2) NDAs to the FDA. The
FDA may not agree that our product candidates are approvable as Section 505(b)(2) NDAs. If the FDA determines that Section 505(b)(2)
NDAs are not appropriate and that full NDAs are required for our product candidates, the time and financial resources required
to obtain FDA approval for product candidates could substantially and materially increase, and our products might be less likely
to be approved. If the FDA requires full NDAs for product candidates, or requires more extensive testing and development for some
other reason, our ability to compete with alternative products that arrive on the market more quickly than the product candidates
would be adversely impacted.
21
Patent Protections
We currently have one patent issued for
Regia™ in Morocco and one issued in the U.S.A., and an application pending in Europe. We also have a series of patent applications
pending in the U.S.A. and internationally for our SSAO technology platform.
An applicant submitting a Section 505(b)(2)
NDA must certify to the FDA the patent status of the reference drug upon which the applicant relies in support of approval of
its drug. With respect to every patent listed in the FDA's Orange Book, which is the FDA's list of approved drug products,
as claiming the reference drug or an approved method of use of the reference drug, the Section 505(b)(2) applicant must certify
that: (1) there is no patent information listed by the FDA for the reference drug; (2) the listed patent has expired;
(3) the listed patent has not expired, but will expire on a particular date; (4) the listed patent is invalid, unenforceable,
or will not be infringed by the manufacture, use, or sale of the product in the Section 505(b)(2) NDA; or (5) if the
patent is a use patent, that the applicant does not seek approval for a use claimed by the patent. If the applicant files a certification
to the effect of clause (1), (2) or (5), FDA approval of the Section 505(b)(2) NDA may be made effective immediately
upon successful FDA review of the application, in the absence of marketing exclusivity delays, which are discussed below. If the
applicant files a certification to the effect of clause (3), the Section 505(b)(2) NDA approval may not be made effective
until the expiration of the relevant patent and the expiration of any marketing exclusivity delays.
If the Section 505(b)(2) NDA applicant
provides a certification to the effect of clause (4), referred to as a paragraph IV certification, the applicant also must send
notice of the certification to the patent owner and the holder of the NDA for the reference drug. The filing of a patent infringement
lawsuit within 45 days of the receipt of the notification may prevent the FDA from approving the Section 505(b)(2) NDA
for 30 months from the date of the receipt of the notification unless the court determines that a longer or shorter period
is appropriate because either party to the action failed to reasonably cooperate in expediting the action. However, the FDA may
approve the Section 505(b)(2) NDA before the 30 months have expired if a court decides that the patent is invalid, unenforceable,
or not infringed, or if a court enters a settlement order or consent decree stating the patent is invalid or not infringed.
Notwithstanding the approval of many products
by the FDA pursuant to Section 505(b)(2), over the last few years certain brand-name pharmaceutical companies and others
have objected to the FDA's interpretation of Section 505(b)(2). If the FDA's interpretation of Section 505(b)(2)
is successfully challenged in court, the FDA may be required to change its interpretation of Section 505(b)(2) which could
delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit. The pharmaceutical industry is highly
competitive, and it is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking
to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions
can significantly delay, or even prevent, the approval of the new product. Moreover, even if the FDA ultimately denies such a
petition, the FDA may substantially delay approval while it considers and responds to the petition.
22
Marketing Exclusivity
Market exclusivity provisions under the
FFDCA can delay the submission or the approval of Section 505(b)(2) NDAs, thereby delaying a Section 505(b)(2) product
from entering the market. The FFDCA provides five-year marketing exclusivity to the first applicant to gain approval of an NDA
for a new chemical entity, or NCE, meaning that the FDA has not previously approved any other drug containing the same active
moiety. This exclusivity prohibits the submission of a Section 505(b)(2) NDA for any drug product containing the active ingredient
during the five-year exclusivity period. However, submission of a Section 505(b)(2) NDA that certifies that a listed patent
is invalid, unenforceable, or will not be infringed, as discussed above, is permitted after four years, but if a patent infringement
lawsuit is brought within 45 days after such certification, FDA approval of the Section 505(b)(2) NDA may automatically
be stayed until 7 1/2 years after the NCE approval date. The FFDCA also provides three years of marketing exclusivity for
the approval of new and supplemental NDAs for product changes, including, among other things, new indications, dosage forms, routes
of administration or strengths of an existing drug, or for a new use, if new clinical investigations, other than bioavailability
studies, that were conducted or sponsored by the applicant are deemed by FDA to be essential to the approval of the application.
Five-year and three-year exclusivity will not delay the submission or approval of another full NDA; however, as discussed above,
an applicant submitting a full NDA under Section 505(b)(1) would be required to conduct or obtain a right of reference to
all of the preclinical and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
Other types of exclusivity in the United
States include orphan drug exclusivity and pediatric exclusivity. The FDA may grant orphan drug designation to a drug intended
to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in
the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that
the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered
from sales in the United States for that drug. Seven-year orphan drug exclusivity is available to a product that has orphan drug
designation and that receives the first FDA approval for the indication for which the drug has such designation. Orphan drug exclusivity
prevents approval of another application for the same drug for the same orphan indication, for a period of seven years, regardless
of whether the application is a full NDA or a Section 505(b)(2) NDA, except in limited circumstances, such as a showing of
clinical superiority to the product with orphan exclusivity. Pediatric exclusivity, if granted, provides an additional six months
to an existing exclusivity or statutory delay in approval resulting from a patent certification. This six-month exclusivity, which
runs from the end of other exclusivity protection or patent delay, may be granted based on the voluntary completion of a pediatric
study in accordance with an FDA-issued "Written Request" for such a study.
Section 505(b)(2) NDAs are similar
to full NDAs filed under Section 505(b)(1) in that they are entitled to any of these forms of exclusivity if they meet the
qualifying criteria. They also are entitled to the patent protections described above, based on patents that are listed in the
FDA's Orange Book in the same manner as patents claiming drugs and uses approved for NDAs submitted as full NDAs.
Other Regulatory Requirements
Maintaining substantial compliance with
appropriate federal, state and local statutes and regulations requires the expenditure of substantial time and financial resources.
Drug manufacturers are required to register their establishments with the FDA and certain state agencies, and after approval,
the FDA and these state agencies conduct periodic unannounced inspections to ensure continued compliance with ongoing regulatory
requirements, including cGMPs. In addition, after approval, some types of changes to the approved product, such as adding new
indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval. The FDA may
require post-approval testing and surveillance programs to monitor safety and the effectiveness of approved products that have
been commercialized. Any drug products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation
by the FDA, including:
·
meeting record-keeping
                                                                                                              requirements;
·
reporting of
                                                                                                              adverse experiences
                                                                                                              with the drug;
·
providing the
                                                                                                              FDA with updated
                                                                                                              safety and efficacy
                                                                                                              information;
·
reporting on
                                                                                                              advertisements and
                                                                                                              promotional labeling;
·
drug sampling
                                                                                                              and distribution
                                                                                                              requirements; and
·
complying with
                                                                                                              electronic record
                                                                                                              and signature requirements.
In addition, the FDA strictly regulates
labeling, advertising, promotion and other types of information on products that are placed on the market. There are numerous
regulations and policies that govern various means for disseminating information to health-care professionals as well as consumers,
including to industry sponsored scientific and educational activities, information provided to the media and information provided
over the Internet. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved
label.
23
The FDA has very broad enforcement authority
and the failure to comply with applicable regulatory requirements can result in administrative or judicial sanctions being imposed
on us or on the manufacturers and distributors of our approved products, including warning letters, refusals of government contracts,
clinical holds, civil penalties, injunctions, restitution, and disgorgement of profits, recall or seizure of products, total or
partial suspension of production or distribution, withdrawal of approvals, refusal to approve pending applications, and criminal
prosecution resulting in fines and incarceration. The FDA and other agencies actively enforce the laws and regulations prohibiting
the promotion of off-label uses, and a company that is found to have improperly promoted off-label or unapproved uses may be subject
to significant liability. In addition, even after regulatory approval is obtained, later discovery of previously unknown problems
with a product may result in restrictions on the product or even complete withdrawal of the product from the market.
Food and Drug Administration Amendments Act of 2007
In September 2007, the Food and Drug Administration
Amendments Act of 2007, or FDAAA, became law. This legislation grants significant new powers to the FDA, many of which are aimed
at improving drug safety and assuring the safety of drug products after approval. In particular, the new law authorizes the FDA
to, among other things, require post-approval studies and clinical trials, mandate changes to drug labeling to reflect new safety
information, and require risk evaluation and mitigation strategies for certain drugs, including certain currently approved drugs.
In addition, the new law significantly expands the federal government's clinical trial registry and results databank and
creates new restrictions on the advertising and promotion of drug products. Under the FDAAA, companies that violate these and
other provisions of the new law are subject to substantial civil monetary penalties.
The FDA has not yet implemented many of
the provisions of the FDAAA, so we cannot predict the impact of the new legislation on the pharmaceutical industry or our business.
However, the requirements and changes imposed by the FDAAA may make it more difficult, and more costly, to obtain and maintain
approval for new pharmaceutical products, or to produce, market and distribute existing products. In addition, the FDA's
regulations, policies and guidance are often revised or reinterpreted by the agency or the courts in ways that may significantly
affect our business and our products. It is impossible to predict whether additional legislative changes will be enacted, or FDA
regulations, guidance or interpretations changed, or what the impact of such changes, if any, may be.
Our business activities are subject to
general governmental regulations. In addition, we are obligated to file periodic reports as required by the Exchange Act. We are
deemed to be a "smaller reporting company" as defined in Regulation S-K. The SEC adopted rules which phased out filings
under Regulation SB and smaller reporting companies are now required to file reports under the provisions of Regulation S-K. A
"Smaller Reporting Company" is defined as a company which has a public float held by non-affiliates of $75 million
or less. Companies without a calculable equity float will qualify if their revenues were below $50 million in the previous year.
Principal Products or Services
See previous discussion on Our Business.
Competition
We are engaged in a highly competitive
business. We expect competition from numerous companies, including large international enterprises, and others entering the market
with product similar to ours. Most of these companies have superior research and development, manufacturing, patent, legal marketing,
financial, technological, personnel and managerial resources. Acquisition of competing companies by large pharmaceutical or healthcare
companies could further enhance our competitors' financial, marketing and other resources. Competitors may complete clinical trials,
obtain regulatory approvals and commence commercial sales of their products before we could enjoy significant competitive advantages.
Products developed by our competitors may be safer and more effective as compared to our products under development.
24
Facilities, Equipment and Employees
We currently have no corporate office.
Our one employee operates from her private residence.
Effect of Governmental Regulations on Our Business
See previous discussion on regulatory requirements.
We are a "smaller reporting company"
subject to reporting requirements of the SEC. We are subject to the provisions of the Sarbanes-Oxley Act of 2002. It created an
accounting oversight board to oversee the conduct of auditors of public companies and to ensure auditor independence. This Act
imposes the obligations on management for financial reporting and quality financial disclosures, and to expose possible conflicts
of interest. It also creates guidelines for audit committees, oversight of the audits performed by public auditing firms, and
requires management to make assessments of internal controls procedures and other matters. Compliance with the provisions of this
statute will increase our legal and accounting costs.
We are subject to the rules regarding proxy
solicitations including the provisions of Regulation 14A. We may be required to provide to shareholders an information statement
complying with the provisions of Schedules 14A or 14C.
Jobs Act disclosures
Research and Development Costs During the Past Two Years
During the years ended December 31, 2011
and 2010 the Company has incurred research and development costs totaling $58,960 and $0, respectively.
Cost and Effects of Compliance with Environmental Laws
Currently we are not subject to material
environmental laws, rules, or regulations that would have an adverse impact on our business operations or financial conditions.
Inflation
We believe that inflation has little impact
on our business affairs.
Employees
We currently have one employee who serves
as our President and Chief Executive Officer. Our one employee is not represented by a labor union, and has good relations with
the Company. See "
Management
" for biographical information on our management team and directors. Subject to
the availability of financing our intention is to expand our staff to five employees within 12 months in order to implement our
growth strategy.
Reports
You may locate reports on the SEC's Internet
site at www.sec.gov. The SEC's telephone number is 202-551-8090. Materials about us are available through the SEC Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549.
25
MANAGEMENT
DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Included in this memorandum are financial
statements, audited and unaudited, of Innovus Pharma.
The Company's unaudited financial
statements for the three months and six months ended June 30, 2012 and 2011, and the audited financial statements for the years
ended December 31, 2011, and 2010, are included among the financial statements in this memorandum. The Company has not paid any
dividends.
Innovus Pharma has not had changes in or
disagreements with its accountants on any accounting or financial matters. The following is the Company's management's
discussion and analysis of financial condition and results of operations.
At June 30, 2012, the Company had $105,726
in cash as compared to $25,014 at December 31, 2011. On January 13, 2012, the Board of Directors authorized to issue a total of
$174,668 in convertible promissory notes (the "January Notes) to six individuals. One January Note for $74,668 was issued
to an accredited investor to settle liabilities assumed from North Horizon and therefore this did not result in any cash inflow
for us. Five January Notes for a total of $100,000 in a new cash infusion were issued to five individuals, three of who are members
of the Company's Board of Directors. The January Notes bear an annual interest rate of 8% and are payable in cash at the earlier
of January 13, 2013, or when the Company completes a financing of a minimum of $4 million (the "Financing"). The holders
of the January Notes have the option to convert their principal and interest accrued into the Company's securities ("New
Financing Securities") that will be issued to the investors in a future financing.  In the event the Company defaults
on repayment, or if the Company fails to complete a financing within one year of the note date, the annual interest rate would
increase to 13% and the holders of the January Notes would have the option to convert the note to the Company's common stock
at $0.05 per share.
On June 26, 2012 the Company issued 134,000
shares of common stock to an unrelated investor at $0.75 per share for cash proceeds of $100,500. Also on June 26, 2012 the Company
and an unrelated noteholder reached a settlement on outstanding balance of $12,000, plus accrued interest of $435, of the convertible
debenture whereas the fair value of the 16,580 shares of common stock issued approximated the carrying value of the outstanding
convertible debenture at time of settlement. Accordingly, no gain or loss resulted from the settlement.
For the three months ended June 30, 2012
and 2011, the Company earned no revenues, and consequently, had no cost of sales. Gross profits for the first three months in
2012 and 2011 were $0. Operating expenses for the three months ended June 30, 2012 and 2011 totaled $49,849 and $50,994, respectively,
marking a $1,145 decrease. This minor decrease was primarily the result of minor decreases in professional fees as a result of
the completion of the reverse merger transaction in December 2011 and the filing of our first Form 10K in March 2012. The Company
recognized interest expense of $4,472 and $4,730 for the three months ended June 30, 2012 and 2011, respectively, resulting in
a change of $(258). This change is primarily the result of decreased level of debt during 2012 compared to 2011. The Company recognized
net losses in the amount of $54,321 and $55,724, for the three-month periods ended June 30, 2012 and 2011, respectively. This
decreased net loss results primarily from minor decreases in operating expenses and interest expense.
For the six months ended June 30, 2012
and 2011, the Company earned no revenues, and consequently, no cost of sales. Operating expenses for the six months ended June
30, 2012 and 2011 totaled $106,126 and $71,200, respectively, marking a $34,926 increase. This increase was primarily the result
of increases in professional fees as a result of the completion of the reverse merger transaction in December 2011 and the filing
of our first Form 10K in March 2012. The Company recognized interest expense of $8,455 and $9,050 for the six months ended June
30, 2012 and 2011, respectively, resulting in a change of $(595). This change is primarily the result of decreased level of debt
during 2012 compared to 2011. The Company recognized net losses in the amount of $114,581 and $80,250, for the six-month periods
ended June 30, 2012 and 2011, respectively. This increased net loss results primarily from increases in operating expenses and
interest expense.
26
For the years ended December 31, 2011 and
2010, the Company earned no revenues, and consequently, had no cost of sales. Gross profits for the 2011 and 2010 years was $0.
The operating expenses for the years ended December 31, 2011 and 2010 totaled $2,188,535 and $53,601, respectively, marking a
$2,134,934 increase. This increase was primarily the result of increases in research and development costs ($58,960), professional
fees ($131,276), and compensation expense ($1,954,029), including fair value of warrants issued to an investment banker of $1,904,865.
The Company recognized interest expense of $67,717 and $16,322 for the years ended December 31, 2011 and 2010, respectively, resulting
in a change of $51,395. This change is primarily the result of increased level of debt during 2011 compared to 2010 and $48,920
discount recorded on the conversion of convertible notes. The Company recognized net losses in the amount of $2,256,252 and $69,923,
for the years ended December 31, 2011 and 2010, respectively. This increased net loss results primarily from increased operating
expenses and interest expense.
The Company
has experienced net losses and negative cash flows from operations each year since its inception.  Through June 30,
2012, the Company had an accumulated deficit of approximately $2,865,004.  The Company's operations have been
financed through advances from officers and directors and related parties.  The Company has not yet had sufficient funds
to significantly develop its technologies.
As a result of its losses to date, expected losses
in the future, limited capital resources and accumulated deficit, there is substantial doubt as to the Company's ability
to continue as a going concern. The Company's continuation is based on the Company's ability to generate or obtain
sufficient cash to meet our obligations on a timely basis and ultimately to attain profitable operations.   The
Company anticipates that it will continue to incur significant losses at least until successful commercialization of one or more
of its products.
In light of management's efforts, there are no assurances that the Company will be successful in
this or any of its endeavors or become financially viable and continue as a going concern.
Related Party Transactions
On March 4, 2011, FasTrack issued a promissory
note to Baltimore Medical and Surgical Associates, PA, an entity controlled by Dr. Ziad Mirza, a director of FasTrack. On April
5, 2011, FasTrack paid the note's principal and accrued interest.
On January 13, 2012, the Board of Directors
authorized a total of $174,668 in promissory notes (the "
January Notes
") to six individuals. One January
Note for $74,668 was issued to one accredited investor for the liabilities assumed from North Horizon, Inc. Five January Notes
for a total of $100,000 were issued to five individuals for cash consideration of $100,000, three of whom are members of the Company's
Board of Directors. The January Notes bear an annual interest rate of 8% and payable in cash at the earlier of January 13, 2012,
or when the Company completes a financing of a minimum of $4 million (the "
Financing
"). The holders of
the January Notes have the right to convert their principal and interest accrued into the Company's securities at the same terms
as the investors in the Financing. In the event the Company defaults on repayment, the annual interest rate would increase to
13% and the holders of the January Notes would have the right to convert at $0.05 per share.
In January 2010, FasTrack's Board
of Directors approved $7,000 in payment to Dr. Bassam Damaj, our largest shareholder and the CEO of Apricus Bio. The payment was
for overhead expenses. The agreement included a provision that if FasTrack could not pay cash, Dr. Damaj would receive 1% of Fastrack's
outstanding equity based on its outstanding shares as of January 15, 2011. On February 7, 2011, FasTrack issued 134,364shares
(as converted post combination) of common stock to Dr. Damaj to satisfy the obligation.
In January 2010, the Sorrento Board of
Directors approved a payment of $7,000 to Dr. Damaj for 2010 overhead expenses. The agreement had a similar provision as the FasTrack
agreement. Sorrento paid cash of $7,000 to satisfy the obligation.
From October 2009 to 2011, directors and
officers of the Company have advanced cash or incurred FasTrack's expenses. The amounts varied from $600 to $5,000. Substantially
all such advances have been repaid.
27
Since October 2009 FasTrack and Sorrento
entered into agreements with others that are deemed to be related parties. In October 2009 FasTrack acquired the right to PrevOnco
from Bio-Quant for $276,020 paid for by 13,372,384 shares of FasTrack common stock (as converted post combination) and the issuance
of a promissory note in the amount of $250,000. In October 2009 Sorrento purchased from Bio-Quant the rights of Apeaz and Regia
for a purchase price of $120,858 paid for with 4,379 shares of Sorrento's common stock valued at $11,000 and a promissory
note.
In March 2010, FasTrack entered into an
Agreement with NexMed in which FasTrack sold the development rights of PrevOnco™ to NexMed for cancellation of $204,896
of the FasTrack Promissory Note and a right to 50% of the net proceeds, defined as gross proceeds less 115% of the aggregate development
expenses incurred by NexMed.
In March 2011, FasTrack acquired Sorrento's
over-the counter products. FasTrack assumed Sorrento's liabilities in the amount of $142,808.
Because the three foregoing transactions
are considered transaction with entities under common control, they have been recorded at historical carrying value (nil) and
as equity transactions - deemed contributions or distribution.
In April 2011 FasTrack entered into an
Agreement with Apricus Bio described herein.
The notes and accrued interest at the date
of conversion (as described below) to Apricus Bio aggregated to $489,061, bore per annum interest of 4.25% and were due on April
4, 2013. These notes were secured by a first priority security interest in the assets of the Company. The notes are convertible
upon the happening of either financing of more than $2,000,000 or a merger or acquisition transaction prior to the maturity date.
Any outstanding amount will convert on the date of closing of the financing or the merger or acquisition at a price per share
equal to ninety per cent (90%) of the price of the shares sold in the financing or exchange in the merger or acquisition. On December
22, 2011, the notes were convertible into 135,888 shares of the Company's common stock, pursuant to the terms of the note
agreement. The shares which have trading restrictions until December 12, 2012, were physically delivered to Apricus Bio in March
2012.
In the past, the principal shareholder
of North Horizon, Inc., who was also one of its directors and its president advanced funds to pay in the amount of $26,601 for
expenses North Horizon incurred in 2011.
Off-balance Sheet Arrangements
We have no off-balance sheet arrangements.
Recent Accounting Pronouncements
See Footnote 2 to our consolidated financial
statements for the periods ended December 31, 2011 and 2010. The adoption of recently implemented accounting rules and policies
did not have any impact on the Company's financial position, results of operations or cash flows.
MANAGEMENT AND BOARD OF DIRECTORS
The Company's directors are Vivian Liu,
Dr. Ziad Mirza, and Dr. Henry Esber
.
The following is biographical information about our directors. The Company anticipates
that in the near term new directors may be selected and appointed.
Vivian Liu, 51, is a director, President
and Chief Executive Officer. Ms. Liu became President and Chief Executive Officer in January 2011. In 1995 Ms. Liu co-founded
NexMed, Inc., which in 2010 was renamed to Apricus BioSciences, Inc. Apricus Bio trades on NASDAQ with the symbol "APRI."
Ms. Liu was NexMed's President and Chief Executive Officer from 2007 to 2009. Prior to her appointment as President, Ms.
Liu served in several executive capacities, including Executive Vice President, Chief Operating Officer, Chief Financial Officer,
and Vice President of Corporate Affairs. She was appointed as a director of NexMed in 2007 and served as Chairman of the Board
from 2009 to 2010. Ms. Liu has an M.P.A. from the University of Southern California, and has a B.A. from the University of California,
Berkeley.
28
We agreed with
Ms. Liu that she would not be paid a salary until the Company raised at least $500,000 in cash, after which she would commence
to receive an annual salary of $150,000. Ms. Liu received
833,668 shares
of the Company's
common stock upon the closing of the reverse merger. The stock granted to Ms. Liu contains anti-dilution provision. Ms. Liu would
be issued additional shares in such a way, that she would retain 2%, 4% and 6% ownership of the Company at December 31, 2011,
2012 and 2013, respectively, assuming continuous and uninterrupted employment with the Company.
No
additional shares were issued or issuable through December 31, 2011 as her ownership percentage exceeds 2%.  If additional
shares are to be issued, a compensatory charge will be recognized.
Henry Esber, Ph.D, 73, has served as a
Director of FasTrack since January 2011. In 2000 Dr. Esber co-founded Bio-Quant, Inc., the largest pre-clinical discovery contract
research organization in San Diego, California. From 2000 to 2010 he served as its Senior Vice President and Chief Business Development
Officer. Dr. Esber has more than thirty-five years experience in the pharmaceutical service industry. Dr. Esber currently serves
on the Board of Directors of Apricus Bio and several private pharmaceutical companies. In the event that a potential conflict
of interest arises between FasTrack and Apricus Bio, Mr. Esber will abstain from participating in the decision involving the conflict.
Ziad Mirza, M.D., 49, is a director of
FasTrack and has served as Chairman of the Board of Directors since March 2010. He also served as FasTrack's Acting Chief Executive
Officer from March 2010 to December 2010. He is the President and co-founder of Baltimore Medical and Surgical Associates. He
is a Certified Medical Director of long term care through the American Medical Directors Association. He is as well a Certified
Physician Executive from the American College of Physician Executives. He consults for pharmaceutical companies on clinical trial
design. He has a medical degree from the American University of Beirut and completed his residency at Good Samaritan Hospital
in Baltimore. He received an MBA from the University of Massachusetts. Dr. Mirza is a relative of Dr. Damaj, our largest shareholder.
In the near term the Company's intends
to appoint three new independent directors, with at least one of the new appointees being an audit committee financial expert
as defined in Item 407(d)(5) of the SEC's Regulation S-K.
Legal Proceedings
The Company is not involved in any legal
proceedings.
Recent Sales of Unregistered Shares
On June 26, 2012 the Company issued 134,000
shares of common stock to an unrelated investor at $0.75 per share for cash proceeds of $100,500. Also on June 26, 2012 the Company
and an unrelated noteholder reached a settlement on outstanding balance of $12,000, plus accrued interest of $435, of the convertible
debenture whereas the fair value of the 16,580 shares of common stock issued approximated the carrying value of the outstanding
convertible debenture at time of settlement. Accordingly, no gain or loss resulted from the settlement.
Changes and Disagreements with Accountants
Neither the Company nor FasTrack has had
any disagreements with its accountants on accounting and financial disclosures.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Stock ownership of Officers and Directors
and Major Shareholders (5% or more). The number of shares owned includes direct and beneficial ownership. The percentages are
based on 16,714,143 shares of common stock outstanding on a fully-diluted basis.
29
Name
Number of Shares
Owned
Beneficially
Percentage of
Company
Vivian Liu
833,669
5.02
Officer and Director (1)
Henry Esber
2,252,126
13.5
Director (1)
Ziad Mirza
403,346
2.4
Director (1)
Wallace Boyack
840,579
5.02
Ramon Jadra
980,147
5.91
Bassam Damaj & Family (2)
4,649,301
28
(1) The officers and directors own 3,489,141 shares of common
stock which is 21% of the issued and outstanding shares.
(2) Apricus Bio is now one of our shareholders through the
conversion of a convertible promissory note which converted into 135,888 shares of our Common Stock on December 21, 2011. The
Apricus Bio shares are included in the shares held beneficially by Bassam Damaj because he currently serves as a Director, President
& Chief Executive Officer of Apricus Bio.
Change in Status - No Longer a Shell Company
Previously we were designated as a "shell
company" as that term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934.
As a result
of the Closing of the reverse merger with FasTrack, FasTrack became our subsidiary and main operating business. FasTrack has assets
which it is seeking to develop and pursue. With an operating business we are no longer a "shell company."
More information about the Company is available
because we file annual, quarterly, and current reports and other information with the SEC that states additional information about
our company. These materials are available at the public reference facilities of the SEC's Washington, D.C. office, at 100
F Street, NE, Washington, D.C. 20549 and on the SEC Internet site at
http://www.sec.gov
.
Innovus Pharma Financial Statements
The audited financial statements of Innovus
Pharmaceuticals, Inc., as of December 31, 2011, and December 31, 2010, are attached. Unaudited financial statements as of June
30, 2012 and 2011, are attached.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue up to 150,000,000
shares of Common Stock, par value $0.001 per share. As of the date of this Memorandum, there are approximately 16,333,670 shares
of Common Stock issued and outstanding. The outstanding shares of Common Stock are validly issued, fully paid and nonassessable.
Holders of Common Stock are entitled to
one vote for each share on all matters submitted to a stockholder vote. Holders of Common Stock do not have cumulative voting
rights. Therefore, holders of a majority of the shares of Common Stock voting for the election of directors can elect all of the
directors. Holders of Common Stock representing a majority of the voting power of the Company's capital stock issued, outstanding
and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders.
A vote by the holders of a majority of the Company's outstanding shares is required to effectuate certain fundamental corporate
changes such as liquidation, merger or an amendment to the Company's certificate of incorporation.
Holders of Common Stock are entitled to
share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In the event of
a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that
remain after payment of liabilities and after providing for each class of stock, if any, having preference over the Common Stock.
The Common Stock has no pre-emptive, subscription or conversion rights and there are no redemption provisions applicable to the
Common Stock.
30
DISCLOSURES OF COMMISSION'S POSITION
ON INDEMNIFACTION FOR SECURITIES ACT LIABILITIES
Our bylaws provide that directors, officers
and any person who acted at our request will be indemnified to the fullest extent authorized by the Nevada Revised Statutes against
all expenses and liabilities reasonably incurred in connection with services for us or on our behalf if:
- such person acted in good faith,
- acted in an manner he or she reasonably believed
to be in or not opposed to the best interest of the corporation and
- had no reason to believe in a criminal matter that
the conduct was unlawful.
Insofar as indemnification for liabilities
arising under the Securities Act might be permitted to directors, officers or persons under the provisions described above, we
have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
LEGAL MATTERS
Wallace T. Boyack, P.C. at 2290 East 4500
South, Suite 130, Salt Lake City, UT 84117, telephone (801) 278-9925, has acted as our legal counsel.
EXPERTS
The financial statements of the Company
as of December 31, 2011 and 2010, and for each of the two years in the period ended December 31, 2011 and the period from inception
(October 31, 2008) through December 31, 2011 then ended included in this Prospectus have been so included in reliance on the report
of EisnerAmper LLP (which contains an explanatory paragraph relating to the Company's ability to continue as a going concern
as described in Note 2 to the financial statements), an independent registered public accounting firm, given on the authority
of said firm as experts in auditing and accounting.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel was hired on a contingency
basis. The auditing firm will not receive a direct or indirect interest in the company, nor will it act, or has acted as a promoter,
underwriter, voting trustee, director, officer or employee of the company. Mr. Boyack is a shareholder owning 840,579 shares of
common stock and prior to December 7, 2011, served as an officer and director of North Horizon for several years (prior to combination
with FasTrack).
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration
statement that we filed with the SEC in accordance with its rules and regulations. This prospectus does not contain all of the
information in the registration statement. For further information regarding both the company and the securities in this offering,
we refer you to the registration statement including all exhibits and schedules. You may inspect our registration statement without
charge at the public reference facilities of the SEC's Washington, D.C. office, 100 F Street, NE, Washington, D.C. 20549 and on
its Internet site at
http://www.sec.gov.
You may also request a copy of the registration
statement and these filings by contacting us electronically at
innovuspharma.com.
We file periodic reports with the SEC.
These reports and other information may also be inspected and copies obtain at the SEC's public reference facilities or at the
SEC's web site.
31
FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Innovus Pharmaceuticals, Inc.
We have audited the accompanying consolidated
balance sheets of Innovus Pharmaceuticals, Inc. (the "Company"), Inc. as of December 31, 2011 and December 31, 2010
and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the years then
ended and for period from inception (October 31, 2008) to December 31, 2011. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Innovus Pharmaceuticals, Inc.
(the "Company") as of December 31, 2011 and 2010, and the results of their operations and their cash flows for the
years then ended and for period from inception (October 31, 2008) to December 31, 2011 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses from operations and has limited liquidity, all of which have raised substantial
doubt about its ability to continue as a going concern. Management's plans regarding those matters are also described in
Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ EisnerAmper LLP
March 30, 2012
Edison, New Jersey
F-
1
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets
December 31
2011
2010
ASSETS
CURRENT ASSETS
Cash
$
25,014
$
1,650
TOTAL ASSETS
$
25,014
$
1,650
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
$
1,687
$
10,034
Convertible notes payable
-
200,952
Promissory notes - Dawson James
50,000
-
Accrued interest payable
-
23,569
Related-party payables
87,168
18,600
Total Current Liabilities
138,855
253,155
Contingent liability related to
common shares, subject to rescission rights, issuable
to FasTrack shareholders arising from Merger
(14,722,077 shares )
28,926
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; 150,000,000 shares authorized,
at $0.001 par value, 1,325,125 and 13,754,045
shares issued and outstanding, respectively
1,325
13,754
Additional paid-in capital
2,606,331
228,912
Deficit accumulated during the development stage
(2,750,423
)
(494,171
)
Total Stockholders' Equity (Deficit)
(142,767
)
(251,505
)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
$
25,014
$
1,650
The accompanying notes are an integral
part of these financial statements.
F-
2
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
From October 31, 2008
For the Years Ended
(Inception) through
December 31,
December 31,
2011
2010
2011
REVENUES
$
-
$
-
$
-
OPERATING EXPENSES
Research and development
58,960
-
78,960
Professional fees
131,276
-
131,276
Investment banking fees
1,954,865
-
1,954,865
(including fair value of warrant - $1,904,865)
General and administrative
43,434
53,601
97,159
Total Operating Expenses
2,188,535
53,601
2,262,260
LOSS FROM OPERATIONS
(2,188,535
)
(53,601
)
(2,262,260
)
OTHER EXPENSES
INTEREST EXPENSE
(67,717
)
(16,322
)
(91,285
)
TOTAL INTEREST EXPENSE
(67,717
)
(16,322
)
(91,285
)
LOSS BEFORE INCOME TAXES
(2,256,252
)
(69,923
)
(2,353,545
)
PROVISION FOR INCOME TAXES
-
-
-
NET LOSS
$
(2,256,252
)
$
(69,923
)
$
(2,353,545
)
BASIC AND DILUTED
LOSS PER SHARE
$
(0.16
)
$
(0.01
)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING - BASIC AND DILUTED
13,785,487
13,681,876
The accompanying notes are an integral
part of these financial statements.
F-
3
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Statements of Stockholders' Deficit
Common
Stock
(Shares)
Common
Stock
(Amount)
Additional
Paid-In Capital
Deficit
Accumulated
During
The
Development
Stage
Total
Stockholders'
Deficit
Balance at October 31, 2008 (Inception)
-
$
0
$
0
$
0
$
0
Balance on December 31, 2008
-
-
-
-
-
Issuance of common stock - FasTrack asset purchase
13,372,284
13,372
12,648
-
26,020
Issuance of common stock - Sorrento business combination
-
-
11,000
-
11,000
Deemed distribution for the value of assets acquired from Apricus Bio
-
-
-
(396,878
)
(396,878
)
Net loss for the year ended December 31, 2009
-
-
-
(27,370
)
(27,370
)
Balance at December 31, 2009
13,372,284
$
13,372
$
23,648
$
(424,248
)
$
(387,228
)
Issuance of common stock for compensation of board members (Mirza and Nasser)
381,761
382
368
-
750
Deemed contribution for the value of assets sold to Apricus Bio
-
-
204,896
-
204,896
Net loss for the year ended December 31, 2010
-
-
-
(69,923
)
(69,923
)
Balance at December 31, 2010
13,754,045
$
13,754
$
228,912
$
(494,171
)
$
(251,505
The accompanying notes are an integral
part of these financial statements
F-
4
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Statements of Stockholders' Deficit
(continued)
Common
Stock
(Shares)
Common
Stock
(Amount)
Additional
Paid-In Capital
Deficit
Accumulated
During
The
Development
Stage
Total
Stockholders'
Deficit
Balance at December 31, 2010
13,754,045
$
13,754
$
228,912
$
(494,171
)
$
(251,505
)
Issuance of common stock for services rendered
134,364
134
6,866
-
7,000
Issuance of common stock for compensation of officer
833,668
834
804
-
1,638
Forgiveness of interest  by Apricus Bio
-
-
4,021
-
4,021
Contribution to capital arising from the conversion of the convertible promissory notes held by Apricus Bio at the date of the Merger and pursuant to the terms of the convertible note, which will result in the issuance of 135,888 shares of common stock in March 2012 to Apricus Bio
-
-
538,117
-
538,117
Issuance of shares for net liabilities assumed in the Merger
1,325,125
1,325
(63,050
)
-
(61,725
)
Issuance of warrants to investment banker for services
-
-
1,904,865
-
1,904,865
Reclassification of shares issuable to FasTrack shareholders pursuant to rescission offer
(14,722,077
)
(14,722
)
(14,204
)
-
(28,926
)
Net loss for the year ended December 31, 2011
-
-
-
(2,256,252
)
(2,256,252
)
Balance at December 31, 2011
1,325,125
$
1,325
$
2,606,331
$
(2,750,423
)
$
(142,767
)
The accompanying
notes are an integral part of these financial statements
.
F-
5
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company
Consolidated Statements of Cash Flows
From October 31,
2008
For the Year Ended
(Inception)
through
December 31,
December 31,
2011
2010
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(2,256,252
)
$
(69,923
)
$
(2,353,545
)
Adjustments to reconcile net loss to net cash used by operating activities:
Common stock issued for services
8,638
750
9,388
Value of warrants granted to investment banker
1,904,865
-
1,904,865
Non-cash interest expense (including a discount on conversion of Apricus Bio convertible notes of $48,920)
67,717
16,323
91,461
Promissory note issued for services rendered
50,000
-
50,000
Research and development expense recognized upon purchase of SSAO inhibitor assets
-
-
20,000
Expenses paid on behalf of the Company by Apricus Bio
-
25,990
25,990
Changes in operating assets and liabilities
Change in related-party payable
25,168
-
25,168
Accounts payable
(8,172
)
10,034
1,687
Net Cash Used in Operating Activities
(208,036
)
(16,826
)
(224,986
)
CASH FLOWS FROM INVESTING ACTIVITIES
-
-
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of loans from officers
5,003
17,500
23,603
Repayments of loans from officers
(23,603
)
-
(23,603
)
Proceeds from convertible notes payable
250,000
-
250,000
Net Cash Provided by Financing Activities
231,400
17,500
250,000
NET CHANGE IN CASH
23,364
674
25,014
CASH AT BEGINNING OF PERIOD
1,650
976
-
CASH AT END OF PERIOD
$
25,014
$
1,650
$
25,014
Interest paid
$
nil
$
nil
$
nil
Taxes paid
$
nil
$
nil
$
nil
See note 9 for supplemental information on non-cash financing
activities
The accompanying notes are an integral part
of these financial statements.
F-
6
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
1. COMPANY INFORMATION AND HISTORY
Nature of Business
Innovus Pharmaceuticals, Inc.
(formerly North Horizon, Inc.) ("the Company"), a corporation organized under the laws of the State of Utah, entered
into a combination with FasTrack Pharmaceuticals, Inc. ("FasTrack"), a corporation organized under the laws of the
State of Delaware. The combination was effective on December 7, 2011.
Innovus Pharmaceuticals, Inc.
was organized as a Utah corporation in 1959. In 2007, it changed its domicile to Nevada, and from 2007 through September 30, 2011,
maintained the Company as a corporate entity and filed requisite reports with the U.S. Securities and Exchange Commission. Prior
to the business combination the Company was considered a non-operating public shell corporation.
FasTrack Pharmaceuticals, Inc.,
("FasTrack") was incorporated in the State of Delaware on October 31, 2008 and commenced operations on October 1, 2009.
FasTrack is a specialty pharmaceutical company focusing on the development of innovative pharmaceutical products. FasTrack develops
ethical therapeutic drugs based on its unique delivery platforms and knowhow. Upon its acquisition of the Sorrento Pharmaceuticals
Inc. ("Sorrento") assets and liabilities in March 2011, the FasTrack also began to focus on OTC opportunities. Sorrento
was incorporated in the state of Delaware on October 31, 2008 and commenced operations on October 1, 2009.
FasTrack and Sorrento were formed
by the shareholders of Bio-Quant, Inc. ("Bio-Quant"), a contract research organization for the pharmaceutical industry
that has been in existence since 2000. In 2008, Bio-Quant decided to focus on its core business of pre-clinical testing services
and therefore formed FasTrack and Sorrento, and, in 2009, sold its pharmaceutical assets to the two companies, for FasTrack to
focus on the development of ethical therapeutic ("Rx") and for Sorrento on Over-the Counter ("OTC") products.
Both FasTrack and Sorrento had limited operations during 2009 and 2010, as their funding was severely limited. In March 2011, the
shareholders of FasTrack and Sorrento elected to combine operations in an effort to better position the combined entity for new
investors. Pursuant to an asset purchase agreement between the two companies, FasTrack acquired Sorrento's assets and liabilities.
All periods of the financial statements of FasTrack have been presented on a combined basis for the combination of FasTrack and
Sorrento given the two companies merged as entities under common control.
Bio-Quant was acquired by Apricus
Biosciences, Inc. (Nasdaq: APRI) ("Apricus Bio") in December 2009. NexMed (U.S.A.), Inc., ("NexMed") is
a wholly owned subsidiary of Apricus Bio. As such, throughout the financial statements Bio-Quant, Apricus Bio and NexMed may be
used interchangeably, but shall represent the same entity.
Innovus Pharmaceuticals, Inc.
("Innovus Pharma") is focused on the development and in-licensing/acquisition of new and innovative pharmaceutical
product opportunities that offer definable pathways to regulatory approvals, partnering and commercialization. We have a three-pronged
approach in our business strategy:
F-
7
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon,
Inc.)
(A Development Stage
Company)
Notes to the Consolidated
Financial Statements
December 31, 2011 and
2010
·
To internally develop new, 505(b)(2) topical pharmaceutical; and
·
To in-license/acquire late stage revenue generating pharmaceutical products; and
·
To leverage near term revenue opportunities afforded by our proprietary pipeline comprised of ethical therapeutic ("Rx")
and over-the-counter ("OTC") products.
Our business model is designed to create multiple
opportunities for success while minimizing the risks associated with reliance on any single technology platform or product type,
and to bridge the critical gap between promising new product candidates and product opportunities that are ready for commercialization.
Consistent with our long-term strategy, we intend to consider various corporate development transactions designed to place our
product candidates into larger organizations or with partners having existing commercialization, sales and marketing resources,
and a need for innovative products. Such transactions could involve the sale, partnering or other monetization of particular product
opportunities or businesses.
In parallel, as our business strategy advances and
corresponding valuations are established, we plan to pursue new product opportunities and acquisitions with strong value enhancement
potential. Our long-term goal is to improve our balance sheet and cash flow with minimal dilution to our shareholders.  This
strategy may include debt financing and/or acquisitions of small revenue generating companies and products, which we believe would
accelerate our shareholders' return on investment and provide us with additional cash flow to fund our own product development.
Our Proprietary Product and Technology Portfolios
In our portfolio of Rx
products, we have a partial interest in the potential commercial value of PrevOnco, a Phase 2/3 second-line Orphan Drug therapy
for patients with hepatocellular carcinoma or liver cancer. PrevOnco is based on lansoprazole, a drug widely used to treat
gastro-esophageal reflux disease. Preclinical animal data have shown the drug to also be effective in shrinking the tumors commonly
associated with liver cancer.
In 2010, FasTrack sold the development rights of the product to
NexMed. In exchange, we are entitled to receive up to 50% of the net commercial value of the product in the event Apricus Bio successfully
licenses the product to a commercialization partner.
Pursuant to the overall terms of our PrevOnco agreements
with Apricus Bio, we have the right to develop two products based on their proprietary NexACT
R
multi-route drug delivery
technology. NexACT utilizes patented novel excipients or "penetration enhancers" that when incorporated into drug formulations,
may improve their absorption and bioavailability. The technology is incorporated in Vitaros
R
, a topical treatment
for erectile dysfunction approved for local marketing by Health Canada in October 2010.
We intend to pursue new product opportunities based
on drugs with expired patents. Our strategy is to follow a 505(b)(2) regulatory approval pathway, which typically has a significantly
shorter development cycle with less pre-clinical and clinical studies required by the regulatory agencies. We are actively exploring
possible topical product candidates in dermatology. In June 2011, we entered into two research agreements with NexMed to conduct
feasibility studies on two active drug ingredients identified by us. Assuming the availability of financing, we plan to conduct
additional studies to optimize our proprietary minoxidil formulation and take it into human clinical trials.
F-
8
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
Within our Rx portfolio is a development platform
based on SSAO inhibitors. SSAO is known as vascular adhesion protein-1 or VAP-1, and is a dual function molecule with enzymatic
and cell adhesion activities. These inhibitors are designed to reduce inflammation by blocking the white blood cells and reducing
the levels of inflammatory mediators. A prior owner had developed a treatment for Lupus based on the SSAO platform, but that product
failed in late-stage clinical studies. In 2009, FasTrack acquired the SSAO patent portfolio because of the possibility that the
SSAO platform had potential for other developers to identify the right medical indication. Because the SSAO platform has unproven
safety and efficacy profiles, to develop a product based on this platform would require significant resources and longer development
time. We do not have these resources presently and no assurance can be given that even if proper resources were available, we would
seek to develop or if development were pursued a successful SSAO platform would be accomplished. To facilitate the SSAO development
we may seek a partnership relationship.
In our portfolio of OTC products, we have two opportunities
for development and/or out-licensing. Apeaz is a potential treatment for pain relief. It is an arthritis cream intended to deliver
different ingredients to various layers of the skin and muscle.
In addition, we have Regia,
which is a plant-derived, anti-microbial agent for reducing the bleeding of gums when used in OTC products such as mouthwash. We
have an issued US patent which expires on May 9, 2028 for Regia and applications pending in selected international markets. Our
intention is to out-license the patent portfolio for Regia to potential development partners in the OTC space.
Merger between the Innovus
and FasTrack
The merger agreement (the "Agreement"),
dated December 7, 2011, stipulated that Innovus and FasTrack would undergo a combination whereby both companies would survive as
legal entities, but FasTrack would become a wholly-owned subsidiary of Innovus. Pursuant to the Agreement, Innovus changed its
name from North Horizon, Inc. to Innovus Pharmaceuticals, Inc.
As a result of the merger, the
shareholders of FasTrack have actual and effective operating control of the consolidated entity after the transaction and the shareholders
of former North Horizon continue as passive investors in the consolidated entity.
The transaction was accounted
as a reverse acquisition under provisions of ASC Topic 805 "Business Combinations." As a result, the accompanying consolidated
financial statements are issued under the name of the "legal acquirer" - Innovus Pharmaceuticals, Inc. However, these
financial statements are continuation of the "accounting acquirer" - FasTrack for all periods presented. Due to the
fact that prior to the transaction Innovus Pharmaceuticals, Inc. had only nominal net assets and did not constitute a "business,"
the transaction was deemed an equivalent of issuance of stock by the private company (FasTrack) for the net assets of the shell
corporation (Innovus Pharmaceutical Inc.), accompanied by recapitalization. No goodwill or other intangible assets were recorded
under recapitalization accounting. As a result of recapitalization, the historical equity of the accounting acquirer (FasTrack)
prior to the transaction has been retroactively restated using the share exchange ratio determined in the transaction: 1 share
of FasTrack was exchanged for 3,054 shares of Innovus.
As a result of the combination
the shareholders of FasTrack received 15,238,938 shares of the combined entity's post-split common stock (representing 92%
ownership of Innovus on a fully diluted basis); the shareholders of North Horizon retained their holdings, totaling 1,325,125 shares
(representing 8% ownership of Innovus).
F-
9
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
On February 29, 2012, the Company
made an offer for rescission to former FasTrack shareholders of the record date for the approval of the Reverse Merger. The Reverse
Merger had been approved by the written consent of FasTrack shareholders holding a majority of the shares outstanding. Because
FasTrack had not solicited any proxies from its shareholders for approval of the Reverse Merger, limited or no information had
been provided to the FasTrack shareholders who had not signed the written consent. The Company sent to the former FasTrack shareholders
the North Horizon Information Statement dated September 27, 2012 and a report on Form 8-K dated December 12, 2011, which provided
information about North Horizon and FasTrack including a description of the business, future plans, risk factors, financial information,
description of the transactions, biographical summaries of the new officer and directors, financial statements and pro-forma financial
statement for North Horizon and FasTrack as of September 30, 2011. Former holders of FasTrack shares prior to consummation of the
Reverse Merger must reject the rescission offer of $6 per share ($.002 after effect of conversion ratio) within thirty days of
the date of receipt of the information, or at the latest April 14, 2012. The rescission offer is limited to the FasTrack shareholders
who were shareholders as of the record date.
In addition, shares related
to the convertible note of Apricus Bio, which was converted on December 21, 2011 were not yet issued as of December 31, 2011 due
to administrative delays.
Shares subject to rescission
rights and shares issuable to Apricus Bio were issued as of the date of this filing. As of the date of this filing no shareholders
exercised their rescission rights.
The following table presents
selected information as of December 31, 2011 as if all shares under the rescission rights and shares to Apricus Bio upon conversion
of the notes payable were issued and outstanding as of December 31, 2011:
December 31, 2011
Shares issued and outstanding
1,325,125
Potential shares subject to rescission rights (1)
14,722,077
Shares issuable for conversion of Apricus Bio notes (1)
135,888
Shares, which would have been issued and outstanding, as if rescission rights were not granted and Apricus Bio shares were issued at the date of the Merger
16,183,090
(1) Issued in March 2012
2. GOING CONCERN
The accompanying financial statements
have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as
a going concern.
The Company has experienced
net losses and negative cash flows from operations each year since its inception.  Through December 31, 2011, the Company
had an accumulated deficit of approximately $2,750,000.  The Company's operations have been financed through advances
from officers and directors and related parties.  The Company has not yet had sufficient funds to significantly develop
its technologies.
F-
10
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
As a result of its losses to
date, expected losses in the future, limited capital resources and accumulated deficit, there is substantial doubt as to the Company's
ability to continue as a going concern. The Company's continuation is based on the Company's ability to generate or
obtain sufficient cash to meet our obligations on a timely basis and ultimately to attain profitable operations.   The
Company anticipates that it will continue to incur significant losses at least until successful commercialization of one or more
of its products. In light of management's efforts, there are no assurances that the Company will be successful in this or
any of its endeavors or become financially viable and continue as a going concern.
As noted in Note 9 the company
received funding of $100,000 in January 2012 in the form of promissory notes, principally from related parties. The Company has
also engaged Dawson James Securities, an investment banking firm, to attempt to secure financing on behalf of the Company. The
timing, form and amount of financing, if any, is uncertain.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Basic Loss per Common Share
Basic loss per share is calculated
by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year. Due to net losses at December 31, 2011 and 2010,
the effect of the potential common shares resulting from warrants was excluded, as the effect would have been anti-dilutive.
The diluted share amount for
2011 assumes that the shares issuable to Apricus Bio upon conversion of the notes payable are not outstanding, and that the shares
subject to rescission rights are not outstanding as of December 31, 2011.
For the
Year Ended
December 31,
2011
For the
Year Ended
December 31,
2010
Net Loss (numerator)
$
(2,256,252
)
$
(69,923
)
Common Shares (denominator)
13,785,487
13,681,876
Net loss per share amount
$
(0.16
)
$
(0.01
)
Revenue Recognition
The Company will develop an
appropriate revenue recognition policy when planned principle operations commence.
F-
11
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
Advertising Costs
The Company's policy regarding
advertising is to expense advertising costs when incurred. The Company did not incur any advertising expense during the years ended
December 31, 2011 and 2010.
Cash and Cash Equivalents
For purposes of financial statement
presentation the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents
to the extent the funds are not being held for investment purposes.
Fair value measurements
The Company adopted the standard
issued by the FASB, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes
a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted
quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2-Inputs are unadjusted
quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities
in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by
observable market data.
Level 3-Inputs are unobservable
inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing
the asset or liability based on the best available information.
Fair value measurements
The carrying amounts reported in the balance sheets
for cash, notes payable, and accounts payable and accrued expenses, approximate their fair market value based on the short-term
maturity of these instruments.
Research and development
Research and development costs
are charged to operations as they are incurred. Legal fees and other direct costs incurred in obtaining and protecting patents
are also expensed as incurred, due to the uncertainty with respect to future cash flows resulting from the patents. Such costs
also include the $20,000 purchase price of the acquired intellectual property assets for the SSAO inhibitor indication, which did
not meet the definition of an asset. Research and development costs totaled $58,960 and $-0- during the fiscal years ended December
31, 2011 and 2010, respectively.
Income Taxes
Deferred taxes are provided
on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will
be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates.
F-
12
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
At December 31, 2011, the Company
had net operating loss carry forwards of approximately $374,000 that may be offset against future taxable income through 2031. Deferred
tax assets amounted to approximately $1,167,000 have been fully reserved. No tax benefit has been reported in 2011 and 2010,
financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
The Company has undergone ownership change that will
significantly impair the Company's ability to utilize these losses before their expiration due to Section 382 of Internal
Revenue Code of 1986, as amended. Pursuant to Section 382 of the Internal Revenue Code of 1986, the annual utilization of a company's
net operating loss carryforwards may be limited if the Company experiences a change in ownership of more than 50 percentage points
within a three-year period. An ownership change occurs with respect to a corporation if it is a loss corporation on a testing date
and, immediately after the close of the testing date, the percentage of stock of the corporation owned by one or more five-percent
shareholders has increased by more than 50 percentage points over the lowest percentage of stock of such corporation owned by such
shareholders at any time during the testing period.
The Company adopted the provisions of ASC 740-10
and has analyzed its filing positions in all open tax years in jurisdictions where it may be obligated to file returns. The Company
believes that its income tax filing position and deductions will be sustained on audit and does not anticipate any adjustments
that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have
been recorded. The Company's policy is to recognize interest and/or penalties related to income tax matter in income tax
expense. The Company had no accrual for interest or penalties at December 31, 2011. In addition, future changes in unrecognized
tax benefits will have no impact on the effective tax rate due to the existence of the valuation.
A reconciliation of the statutory federal income
tax rate to the effective tax rate is as follows:
Expected Federal Tax
34.0
%
State Tax (Net of Federal Benefit)
5.9
%
Intangibles
(-0.1
)%
Valuation Allowance
(-39.8
)%
Total
0.0
%
Stock based compensation
The Company's share-based compensation cost
is measured at grant date, based on the estimated fair value of the award, and is recognized as expense over the employee's
requisite service period on a straight-line basis.
Recent Accounting Pronouncements
Management has considered all
recent accounting pronouncements issued since the last audit of our financial statements. The Company's management believes
that these recent pronouncements will not have a material effect on the Company's financial statements.
F-
13
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
4. ASSET PURCHASE AGREEMENTS WITH APRICUS
BIO
In 2009, FasTrack purchased
SSAO inhibitors compound technology from La Jolla Pharmaceutical Company ("La Jolla") (a non-related entity) for approximately
$20,000. The purchase was paid for by Bio-Quant and thus FasTrack issued a demand note to Bio-Quant for the same face amount. The
purchase price was recorded as an expense pursuant to our accounting policy for research and development costs.
On October 1, 2009, FasTrack
entered into an Asset Purchase Agreement with Bio-Quant ("the FasTrack-BQ Agreement"). Pursuant to the terms of the
FasTrack-BQ Agreement, FasTrack acquired the rights to PrevOnco and another early stage cancer product candidate. The total purchase
price was $276,020, which was paid in 13,372,284 shares of FasTrack's common stock valued at $26,020 and the issuance of
the $250,000 FasTrack Promissory Note.
On October 1, 2009, Sorrento
entered into an Asset Purchase Agreement with Bio-Quant (the Sorrento-BQ Agreement"). Pursuant to the terms of the Sorrento-BQ
Agreement, Sorrento acquired the rights of Apeaz and Regia. The total purchase price was $120,858, which was paid in 4,379 shares
of Sorrento's common stock, valued at $11,000 and the issuance of the Sorrento Promissory Note in the amount of $109,858.
The aggregate purchase price
of the October 1, 2009 transaction was $398,878 and is recorded as a deemed distribution for the value of the net assets acquired
from Apricus Bio.
On March 10, 2010, FasTrack
entered into an Asset Purchase Agreement with NexMed (the "FasTrack-NexMed Agreement"). Pursuant to the terms of the
FasTrack-NexMed Agreement, FasTrack sold the development rights of PrevOncoTM to NexMed in exchange for cancellation of $204,896
of a FasTrack promissory note and in the event NexMed successfully licenses the product, 50% of the net proceeds, which is defined
as the gross proceeds less 115% of the aggregate development expenses incurred by NexMed.
On March 16, 2011, FasTrack
and Sorrento entered into an Asset Purchase Agreement, (the "FasTrack-Sorrento Agreement"). According to the terms
of the FasTrack-Sorrento Agreement, the Company acquired the development and commercialization rights to ApeazT and Regia. In consideration
for these rights, FasTrack agreed to assume the liabilities of Sorrento, comprised of immediately payable expenses of $22,600 and
$120,208 for the interest and principal, respectively, due on Sorrento promissory notes. Since these two entities were considered
entities under common control, the combination was accounted for at historical costs.
On April 4, 2011, FasTrack entered
into an Asset Purchase Agreement with Apricus Bio (the FasTrack-Apricus Bio Agreement"). According to the terms of the FasTrack-Apricus
Bio Agreement, FasTrack sold the patent rights for the backup compound for PrevOncoTM, in exchange for Apricus Bio providing FasTrack
with a) a fully funded loan of $250,000 evidenced by a secured convertible promissory note, b) a second secured convertible promissory
note in the amount of $224,520, which consolidated the $200,952 of various outstanding demand notes payable to Apricus Bio (see
Footnote 5) and related accrued interest in the amount of $23,568 (together the "Apricus Bio Notes", and c) the right
to develop two products using the NexACT technology. The issuance of $224,520 note was considered debt restructuring. The restructuring
did not result in any material gains or losses.
F-
14
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
Since all of the above transactions are considered
transactions with entities under common control, they have been reflected at historical carrying value (nil) and as equity transactions
- deemed contributions or distributions.
5. NOTES PAYABLE
Apricus Bio Note
The following summarizes the
promissory note activities with Apricus Bio.
Borrowing from Bio-Quant pursuant to the FasTrack-BQ Agreement- October 2009
$
250,000
Borrowing from Bio-Quant for purchase of SSAO inhibitors from an unrelated third party- October 2009
20,000
Borrowing pursuant to Sorrento-Bio-Quant Agreement- October 2009
109,858
Balance at December 31, 2009
$
379,858
Cancellation of note pursuant to FasTrack-NexMed Agreement- March 2010
(204,896
)
Demand note issued for payment of certain legal expenses By Apricus Bio on behalf of FasTrack
25,990
Balance at December 31, 2010
$
200,952
Issuance of fully-funded convertible note to Apricus Bio
250,000
Conversion of convertible notes payable to Apricus Bio pursuant to reverse-merger with Innovus
(450,952
)
Balance, December 31, 2011
$
-0-
Interest expense recorded to
Apricus Bio amounted to $18,797 and $16,322, for the years ended December 31, 2011 and 2010, respectively.  On April
4, 2011, pursuant to the terms of the FasTrack-Apricus Bio Agreement, the above demand notes payable to Apricus Bio were combined
into one secured convertible note plus accrued interest in the amount of $224,500.
Apricus Bio forgave FasTrack
interest charge on the $200,952 note outstanding for the duration of three month period ended March 31, 2011.  The amount
of forgiven interest was $4,021.  The Company considers the forgiveness a deemed contribution and recorded the forgiven
interest against additional paid in capital for the period ended December 31, 2011.
On December 21, 2011 the total
balance due Apricus Bio of $489,197 comprising of $450,952 of principle and related accrued interest of $38,245 was convertible
into 135,888 shares of Innovus. As stipulated in a convertible note agreement conversion was automatic upon consummation of the
Merger Agreement and the conversion price was determined at a 10% discount to the fair value of the shares of stock of the Company.
The discount resulted in a $48,920 charge to interest expense in 2011. The price of the stock was determined based upon the over-the-counter
quotation system. The shares were issued in March 2012.
F-
15
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
Dawson James Promissory Note
On December 7, 2011 the Company
entered into a promissory note with Dawson James Securities, Inc. ("DJS") whereby, as compensation for consulting services
rendered, the Company agreed to pay DJS a sum of $50,000. The principal is due by December 6, 2012 and accrues interest at a rate
of 8.0% per annum. The note is unsecured.
6. RECAPITALIZATION TRANSACTION
On December 7, 2011 the Company
consummated a combination wherein FasTrack Pharmaceuticals, Inc. ("FasTrack"), a corporation organized under the laws
of the state of Delaware, merged with and into North Horizon, Inc., a Utah corporation.
The combination (the "Agreement")
stipulated that the companies would undergo a combination whereby the surviving entity would be North Horizon. FasTrack then became
a wholly-owned subsidiary of North Horizon. North Horizon then changed its name to Innovus Pharmaceuticals, Inc. The transaction
has been accounted for as a reverse merger, whereby North Horizon is the legal acquirer and FasTrack is the legal acquiree and
the accounting acquirer.
As consideration for the business,
the shareholders of FasTrack were allocated 15,238,938 shares (portion of which are subject to rescission election discussed in
Note 1) of the Company's post-split common stock (representing 92% ownership of Innovus on a fully diluted basis); the shareholders
of North Horizon held 1,325,125 shares (representing 8% ownership of Innovus). Included in the FasTrack shares are the 135,888
shares issuable to Apricus Bio upon conversion of their note (see Note 4), which were issued in March of 2012. The authorized number
of shares in the surviving entity was changed to 150,000,000. All shares were issued to the FasTrack shareholders in March of 2012,
due to the time required to gather signatures of each shareholder. See Note 1. As part of the recapitalization transaction, the
company assumed a liability of approximately $60,000 due to an officer of North Horizon.
7. STOCK-BASED COMPENSATION
On March 8, 2010, Dr. Ziad Mirza
and Mr. Mohammed Nasser were appointed to serve on the Company's Board of Directors.  In addition, Dr. Mirza was
appointed to serve as the acting Chief Executive Officer.  In consideration for their services to the Company, the Board
of Directors approved the issuance of 305,409 and 76,352 shares of common stock to Dr. Mirza and Mr. Nasser, respectively, for
their services rendered to the Company. The shares were valued at $0.002 per share and the Company recorded expense of $750 for
such issuance of shares.  Due to absence of contemporaneous third-party transactions and lack of objective business information
for an independent appraisal, the fair value per share was equal to the value at which the original issuance of shares to Bio-Quant
took place for the purchase of assets by FasTrack in accordance with the FasTrack-BQ agreement.
F-
16
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
On January 21, 2011, the Company
appointed Ms. Vivian Liu (appointment was updated on March 7, 2012) to serve on its Board of Directors, and also approved her appointment
as its President and Chief Executive Officer.  Ms. Liu and the Board of Directors agreed that Ms. Liu would forego collecting
salary until the Company has raised an aggregate of $500,000 or more in cash, excluding the $250,000 cash infusion from Apricus
Bio, at which time her salary will commence at $150,000 per year, effective retroactively to January 1, 2012.As part of her compensation,
Ms. Liu received 6% of the Company's outstanding equity shares in the form of 833,668 shares of restricted stock (the "Restricted
Stock"). Due to absence of contemporaneous third-party transactions and lack of objective business information for an independent
appraisal, the fair value per share was equal to the value at which the original issuance of shares to Bio-Quant took place for
the purchase of assets by FasTrack in accordance with the FasTrack-BQ agreement ($0.002/per share). The remaining shares issued
to Ms. Liu fully vested on the date of the merger - December 7, 2011.
The stock granted to Ms. Liu
contains anti-dilution provision, as follows (as updated):  if additional shares of stock will be issued during the period
ending December 31, 2012, Ms. Liu will also be issued additional shares in such a way, that she would retain at least 2%, 4% and
6% ownership of the Company at December 31, 2011, 2012 and 2013, respectively.  No additional shares were issued or issuable
through December 31, 2011 as her ownership percentage exceeds 2%.  If additional shares are to be issued, a compensatory
charge will be recognized.
On December 7, 2011, as compensation
for service rendered, the Company granted to DJS warrants to purchase an aggregate of 380,973 shares of the Company's common
stock at a strike price of $0.10. The warrants expire on December 6, 2018. The Company performed an analysis of the warrants granted
using the Black-Scholes options pricing model, assuming an annual volatility of 563.19% with a value of common stock of $5 per
share based upon the quoted price on such day, and a risk-free rate of 0.93%. Pursuant to this analysis, the Company valued the
warrants granted at an aggregate value of $1,904,865. This amount is included as compensation expense for the year ended December
31, 2011.
8. RELATED-PARTY TRANSACTIONS
At December 31, 2011 the Company
owed $87,168 to a related party. This amount represents advances made by a shareholder of North Horizon over time, including approximately
$60,000 assumed at the merger date, in order to help the Company meet its operating cash requirements. For the year ended December
31, 2011 the Company incurred expenses of approximately $27,000 to such related party for professional services rendered. The advances
are unsecured, non-interest bearing, and are due on demand.
During the year ended 2011 the
Company paid approximately $59,000 to Apricus Bio for feasibility studies in relation to two compounds identified by the Company.
The amount was expended in research and development cost in the Consolidated Statement of Operations.
F-
17
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
In January 2010, the FasTrack
Board of Directors approved $7,000 in payment to Dr. Bassam Damaj, the Company's largest shareholder and the CEO of Apricus
Bio, to cover the Company's 2010 overhead expenses, which were being incurred by Dr. Damaj. The two parties agreed that in
the event the Company could not pay in cash, Dr. Damaj would be entitled to 1% of the Company's outstanding equity based
on its shares outstanding as of January 15, 2011. On February 7, 2011, FasTrack issued 134,364 shares to Dr. Damaj in lieu of the
$7,000 cash payment.
In January 2010, the Sorrento
Board of Directors approved $7,000 in payment to Dr. Damaj, to cover Sorrento's 2010 overhead expenses, which were being
incurred by Dr. Damaj. The two parties agreed that in the event the Company could not pay in cash, Dr. Damaj would be entitled
to 1% of the Company's outstanding equity based on its shares outstanding as of January 15, 2011. In March 2011, Sorrento
elected to pay Dr. Damaj in cash. The liability was paid in April 2011.
From October 1, 2009 until 2011
various Board members and officers of the Company either advanced cash loans to the Company or incurred expenses on behalf of the
Company. These transactions were necessary to pay for various administrative expenses. Such advances and expenses ranged from $600
to $5,000. Substantially all such advances for an aggregate amount of 23,603 were repaid in due course after receipt of cash raised
with April 4, 2011 convertible promissory note issued to Apricus Bio.
9. NON-CASH FINANCING ACTIVITIES
Non-cash financing
activities can be summarized as follows:
Year ended December
31, 2011:
The Company issued 1,325,125
shares of common stock to settle the $61,725 net liabilities acquired in the Merger
Deemed contribution
from forgiveness of interest by Apricus Bio in the amount of $4,021
Deemed contribution from the
conversion of Apricus Bio notes plus accrued interest (including interest resulting from conversion discount) in the amount of
$538,117
Year ended December
31, 2010:
Cancellation of note payable
to Apricus Bio and recognition of deemed contribution for the value of cancelled note of $204,896.
F-
18
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
License
Pursuant to the terms of the
FasTrack - Apricus Bio Agreement on April 4, 2011, upon approval by Apricus Bio of a one or both products to be combined with NexACT
®
drug delivery technology, the individual product Licenses will be granted to the Company. Upon grant of such product
License, the Company will:
1.
Make a $500,000 up-front payment per license to Apricus Bio in the form of cash or a Secured Convertible
Promissory Note.
2.
Make Milestone and Royalty Payments:
(a)
For sales of the Licensed Product directly or as a co-marketer:
(i) Milestone Payments:
To be paid on a Licensed Product
by Licensed Product basis and payable within 10 days of achievement:
-$350,000 for dosing of first
patient in Phase I clinical trial;
-$750,000 for dosing of first
patient in Phase II clinical trial;
-$1,250,000 for dosing of first
patient in Phase III clinical trial;
-$2,500,000 for regulatory approval
of Licensed Product;
-$1.5 million upon first reaching
Net Sales of at least $0-$50 million;
-$3 million upon first reaching
Net Sales of at least $50-$200 million;
-$6 million upon first reaching
Net Sales of at least $200 million to $500 million; and
-$12 million upon first reaching
Net Sales of above $500 million.
(ii) Royalties:
4.5% of net sales of Licensed
Products invoiced by the Company.
(b) For Licensed Products that will be
licensed by Licensee to third party sub-licensees:
(i)
Milestone Payments: The Company shall pay Apricus Bio 33 1/3% of all milestone payments it receives
from any third party sublicense relating to any Product, net of its development expenses.
(ii)
Royalties: The Company shall pay Apricus Bio with the following royalties on its Net Sales received
by The Company from sales of the Licensed Products by third party sublicensees.
F-
19
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
Annual Net Profits in $
Royalty %
$0 to $5 million
20
%
$5 to $10 million
25
%
$10 to 15 million
30
%
$15 to 20 million
35
%
Greater than $20 million
40
%
Royalties in (a) and (b) above
will be payable on a country-by-country basis for the longer of (i) the time during which manufacture, use or sale of Licensed
Product would infringe any patent rights within the Patents and (ii) 15 years from the first commercial sale of Licensed Product
in such country. Thereafter, Apricus Bio shall receive 50% of the royalty payments described above.
As of December 31, 2011, no
products have been approved and no milestone payments were triggered.
Agreement with a Placement
Agent
On December 16, 2011, the Company engaged the services
of Dawson James Securities, Inc. to act as the Company's exclusive Placement Agent on a commercially reasonable best efforts
basis in connection with the a potential offering of equity or equity-linked securities of the Company.
a.
The Company shall pay to Dawson James a cash fee payable upon each closing of the transaction contemplated
by this Agreement ("Closing") equal to nine percent (9%) of the gross proceeds received by the Company (the "Placement
Fee").
b.
The Company shall also pay Dawson James a non-accountable expense allowance payable in cash upon
each Closing, equal to three percent (3%) of the gross proceeds received by the Company from Investors at each Closing. Upon execution
of the Agreement, the Company paid a non-refundable cash deposit of $25,000, which will be applied to the monies due hereunder
at the first closing. The amount was recorded in "Professional Fees" expense in the Consolidated Statement of Operations
c.
The Company shall deliver warrants to the Placement Agent or its designees (the "Agent Warrants")
to purchase 8.75% of the maximum number of common stock underlying the securities sold in the potential offering.
d.
The Company shall reimburse the Placement Agent for legal fees up to $50,000 and other expenses
incurred in connection with the Offering.
e.
The Company shall pay a cash fee equal to five percent (5%) of the gross proceeds received by the
Company upon exercise of warrants, if any.
F-
20
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011 and 2010
11.
SUBSEQUENT EVENTS
On January 13, 2012, the Board
of Directors authorized the issuance of a total of $174,667 in promissory notes (the "January Notes") to six individuals.
 One January Note for $74,667 was issued to one accredited investor for the liabilities assumed from North Horizon, Inc.  The
five remaining January Notes for a total of $100,000 in new cash infusion were issued to five individuals, three of whom are members
of the Company's Board of Directors.   The January Notes bear an annual interest rate of 8% and payable in cash
at the earlier of January 13, 2013 or when the Company completes a financing of a minimum of $4 million (the "Financing").
  The holders of the January Notes have the right to convert their principal and interest accrued into the Company's
securities at the same terms as the investors in the future financing.  In the event the Company defaults on repayment, the
annual interest rate would increase to 13% and the holders of the January Notes would have the right to convert at $0.05 per share.
In accordance with ASC 855-10,
Company management reviewed all material events through the date of this report and there are no material subsequent events to
report, other than those listed in the previous paragraph.
F-
21
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Condensed Consolidated Balance Sheets
June 30,
December 31,
2012
2011
(Unaudited)
ASSETS
CURRENT ASSETS
Cash
$
105,726
$
25,014
Total Current Assets
105,726
25,014
TOTAL ASSETS
$
105,726
$
25,014
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
$
525
$
1,687
Convertible debentures - related party
162,668
-
Promissory notes
50,000
50,000
Accrued interest payable
8,020
-
Related-party payables
-
87,168
Total Current Liabilities
221,213
138,855
Contigent liability related to common shares, subject to recsission rights, issuable to FasTrack shareholders arising from Merger (14,722,077 shares)
-
28,926
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; 150,000,000 shares authorized  at $0.001 par value, 16,333,670 and 1,325,125 shares issued and outstanding, respectively
16,334
1,325
Additional paid-in capital
2,733,183
2,606,331
Deficit accumulated during the development stage
(2,865,004
)
(2,750,423
)
Total Stockholders' Equity (Deficit)
(115,487
)
(142,767
)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
$
105,726
$
25,014
The accompanying notes are an integral part
of these consolidated financial statements.
F-
22
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
From October 31,
2008
(inception)
through
June 30,
2012
2011
2012
2011
2012
REVENUES
$
-
$
-
$
-
$
-
$
-
OPERATING EXPENSES
Research and development
-
-
-
-
78,960
Professional fees
39,435
41,122
82,962
50,133
436,313
Investment banking fees
-
-
-
-
1,954,865
General and administrative
10,414
9,872
23,164
21,067
295,126
Total Operating Expenses
49,849
50,994
106,126
71,200
2,765,264
LOSS FROM OPERATIONS
(49,849
)
(50,994
)
(106,126
)
(71,200
)
(2,765,264
)
OTHER EXPENSES
Interest expense
(4,472
)
(4,730
)
(8,455
)
(9,050
)
(99,740
)
Total Other Expenses
(4,472
)
(4,730
)
(8,455
)
(9,050
)
(99,740
)
NET LOSS
$
(54,321
)
$
(55,724
)
$
(114,581
)
$
(80,250
)
$
(2,865,004
)
BASIC LOSS AND DILUTED LOSS PER SHARE
$
(0.00
)
$
(0.00
)
$
(0.02
)
$
(0.01
)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
13,764,648
14,722,077
7,593,514
14,609,764
The accompanying notes are an integral part
of these consolidated financial statements.
F-
23
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Statements of Stockholders' Deficit
Common
Stock
(Shares)
Common
Stock
(Amount)
Additional
Paid-In Capital
Deficit
Accumulated
During The
Development
Stage
Total
Stockholders'
Deficit
Balance at October 31, 2008 (Inception)
-
$
0
$
0
$
0
$
0
Balance on December 31, 2008
-
-
-
-
-
Issuance of common stock - FasTrack asset purchase
13,372,284
13,372
12,648
-
26,020
Issuance of common stock - Sorrento business combination
-
-
11,000
-
11,000
Deemed distribution for the value of assets acquired from Apricus Bio
-
-
-
(396,878
)
(396,878
)
Net loss for the year ended December 31, 2009
-
-
-
(27,370
)
(27,370
)
Balance at December 31, 2009
13,372,284
$
13,372
$
23,648
$
(424,248
)
$
(387,228
)
Issuance of common stock for compensation of board members (Mirza and Nasser)
381,761
382
368
-
750
Deemed contribution for the value of assets sold to Apricus Bio
-
-
204,896
-
204,896
Net loss for the year ended December 31, 2010
-
-
-
(69,923
)
(69,923
)
Balance at December 31, 2010
13,754,045
$
13,754
$
228,912
$
(494,171
)
$
(251,505
)
F-
24
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Statements of Stockholders' Deficit
(continued)
Common
Stock
(Shares)
Common
Stock
(Amount)
Additional
Paid-In Capital
Deficit
Accumulated
During The
Development
Stage
Total
Stockholders'
Deficit
Balance at December 31, 2010
13,754,045
$
13,754
$
228,912
$
(494,171
)
$
(251,505
)
Issuance of common stock for services rendered
134,364
134
6,866
-
7,000
Issuance of common stock for compensation of officer
833,668
834
804
-
1,638
Forgiveness of interest  by Apricus Bio
-
-
4,021
-
4,021
Contribution to capital arising from the conversion of the convertible promissory notes held by Apricus Bio at the date of the Merger and pursuant to the terms of the convertible note, which will result in the issuance of 135,888 shares of common stock in March 2012 to Apricus Bio
-
-
538,117
-
538,117
Issuance of shares for net liabilities assumed in the Merger
1,325,125
1,325
(63,050
)
-
(61,725
)
Issuance of warrants to investment banker for services
-
-
1,904,865
-
1,904,865
Reclassification of shares issuable to FasTrack shareholders pursuant to rescission offer
(14,722,077
)
(14,722
)
(14,204
)
-
(28,926
)
Net loss for the year ended December 31, 2011
-
-
-
(2,256,252
)
(2,256,252
)
Balance at December 31, 2011
1,325,125
$
1,325
$
2,606,331
$
(2,750,423
)
$
(142,767
)
F-
25
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Statements of Stockholders' Deficit
(continued)
Common
Stock
(Shares)
Common
Stock
(Amount)
Additional
Paid-In
Capital
Deficit
Accumulated
During The
Development
Stage
Total
Stockholders'
Deficit
Balance at December 31, 2011
1,325,125
1,325
2,606,331
(2,750,423
)
(142,767
)
Common stock issued on conversion of ApricusBio convertible note (see above)
135,888
136
(136
)
-
-
Common stock issued for cash
134,000
134
100,366
-
100,500
Common stock issued in connection with settlement of $12,000 note payable
16,580
17
12,418
-
12,435
Expiration of FasTrack rescission offer
14,722,077
14,722
14,204
-
28,926
Net loss for the six-months ended June 30, 2012
-
-
-
(114,581
)
(114,581
)
16,333,670
$
16,334
$
2,733,183
$
(2,865,004
)
$
(115,487
)
F-
26
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Condensed Consolidated Statements of Cash
Flows
(Unaudited)
For the Six Months Ended
June 30,
From October 31,
2008 (inceptions)
through June 30,
2012
2011
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(114,581
)
$
(80,250
)
$
(2,865,004
)
Adjustments to reconcile net loss to net cash used by operating activities:
Common stock issued for services
-
8,638
9,388
Value of warrants granted to investment banker
-
-
1,904,865
Non-cash interest expense (including a discount on conversion of Apricus Bio convertible notes of $48,920)
-
4,120
91,461
Promissory note issued for services rendered
-
-
50,000
Research and development expense recognized upon purchase of SSAO inhibitor assets
-
-
20,000
Expenses paid on behalf of the Company by Apricus Bio
-
-
25,990
Changes in operating assets and liabilities
Change in related-party payable
(12,500
)
(18,600
)
12,668
Prepaid expenses
-
(37,640
)
-
Interest payable
8,455
4,930
8,455
Income taxes payable
-
-
-
Accounts payable
(1,162
)
1,883
525
Net Cash Used in Operating Activities
(119,788
)
(116,919
)
(741,652
)
CASH FLOWS FROM INVESTING ACTIVITIES
-
-
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of loans from officers
-
20,003
23,603
Repayment of loans from officers
-
(20,003
)
(23,603
)
Proceeds from stock issued for cash
100,500
-
100,500
Proceeds from convertible debentures
100,000
250,000
350,000
Net Cash Provided by Financing Activities
200,500
250,000
450,500
NET CHANGE IN CASH
80,712
133,081
(291,152
)
CASH AT BEGINNING OF PERIOD
25,014
1,650
-
CASH AT END OF PERIOD
$
105,726
$
134,731
$
(291,152
)
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
CASH PAID FOR:
Interest
$
-
$
-
$
-
Income Taxes
$
-
$
-
$
-
See Note 7 for disclosure of non-cash financing activities
The accompanying notes are an integral part
of these financial statements
F-
27
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial
Statements
June 30, 2012 and December 31, 2011
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
In the opinion of management, the accompanying
condensed financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present
fairly the Company's financial position, results of operations and cash flows. The condensed balance sheet as of December 31, 2011
has been derived from audited financial statements as of that date. The interim results of operations are not necessarily indicative
of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial
statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been condensed
or omitted pursuant to instructions, rules and regulations prescribed by the U.S. Securities and Exchange Commission (the "SEC").
The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these
condensed financial statements are read in conjunction with the financial statements and notes included in its Annual Report on
Form 10-K for the year ended December 31, 2011 filed with the SEC.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization
of assets and liquidation of liabilities in the normal course of business. As a result of its losses to date, expected losses in
the future, limited capital resources and accumulated deficit, there is substantial doubt as to the Company's ability to
continue as a going concern. The Company has not yet established a source of revenues sufficient to cover its operating costs and
allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company
obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital,
it could be forced to cease operations.
In order to continue as a going concern, the Company will need,
among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital
from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing
to finance the acquisition of product targets and the development of such targets. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.
In the Company's annual report filed for the year ended
December 31, 2011, the Company's independent registered public accounting firm has included an explanatory paragraph in their
report dated March 30, 2012, expressing substantial doubt about the Company's ability to continue as a going concern.
F-
28
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial
Statements
June 30, 2012 and December 31, 2011
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and
their adoption has not had or is not expected to have a material impact on the Company's financial position or statements.
NOTE 4 – RELATED PARTY TRANSACTIONS
The Company has recorded expenses paid on its behalf by shareholders
as a related party payable. At December 31, 2011, this payable totaled $87,168.  During the six months ended June 30, 2012
the Company repaid $12,500 on this amount, and converted the remaining $74,668 into a convertible debenture (see Note 5).
NOTE 5 – CONVERTIBLE DEBENTURES – RELATED PARTIES
On January 13, 2012, the Board of Directors authorized the issuance
of a total of $174,668 in promissory notes (the "January Notes") to six individuals.  One Note for $74,668 was
issued to one accredited investor in exchange for the liabilities assumed from North Horizon, Inc.  The five remaining January
Notes for a total of $100,000 in new cash infusion were issued to five individuals, three of whom are members of the Company's
Board of Directors.   The January Notes bear an annual interest rate of 8% and payable in cash at the earlier of January
13, 2013 or when the Company completes a financing of a minimum of $4 million (the "Financing").   The holders
of the January Notes have the right to convert their principal and interest accrued into the Company's securities ("New
Financing Securities") that will be issued to the investors in the future Financing.  In the event the Company defaults
on repayment, or if the Company fails to complete a Financing within one year of the note date, the annual interest rate would
increase to 13% and the holders of the January Notes would have the right to convert at $0.05 per share. Through June 30, 2012,
$12,000 of such notes were converted into shares of common stock (see Note 6), leaving a balance of $162,668 at June 30, 2012.
Interest expense recognized for the three and six months ended June 30, 2012 was $4,472 and $8,455, respectively.
The embedded conversion feature is contingent upon the occurrence
of the future Financing. The value of the contingent conversion feature, if beneficial, will be recognized when the contingencies
are resolved.
F-
29
INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial
Statements
June 30, 2012 and December 31, 2011
NOTE 6 – STOCKHOLDERS' EQUITY
Rescission Offer
On February 29, 2012, the Company made an offer
for rescission to former FasTrack shareholders of the record date for the approval of the Reverse Merger.  The Reverse
Merger had been approved by the written consent of FasTrack shareholders holding a majority of the shares outstanding.  Because
FasTrack had not solicited any proxies from its shareholders for approval of the Reverse Merger, limited or no information had
been provided to the FasTrack shareholders who had not signed the written consent.  The Company sent to the former FasTrack
shareholders the North Horizon Information Statement dated September 27, 2011 and a report on Form 8-K dated December 12, 2011,
which provided information about North Horizon and FasTrack including a description of the business, future plans, risk factors,
financial information, description of the transactions, biographical summaries of the new officer and directors, financial statements
and pro-forma financial statement for North Horizon and FasTrack as of September 30, 2011.  Former shareholders of FasTrack
had thirty days to accept or reject the rescission offer of $6 per share ($.002 after effect of conversion ratio) from the date
of receipt of the information.  The rescission offer was limited to the FasTrack shareholders who were shareholders as
of the record date of December 7, 2011.  The Rescission Offer was not accepted by any parties, and expired on April 14, 2012.
Through the date of rescission offer expiration (April 14, 2012), the Company recognized the amounts potentially refundable under
this offer as a liability. On April 14, 2012, the amount of such liability was reclassified to stockholders' equity since
the rescission period expired.
Contingency related to shares of common stock issued in the
reverse merger
As of the date of the merger between FasTrack and North Horizon
(the record date), the FasTrack shareholders may not have received adequate information regarding the combination and merger. The
FasTrack shareholders reside in thirteen states and commonwealths. The securities statutes of these jurisdictions have exemptions
for an exchange or for a transaction that is termed an "isolated transaction." Despite the fact, that none of FasTrack
shareholders chose to rescind the offer, as described above, the shareholders reside in different jurisdictions and the statutes
of limitations in these jurisdictions have different terms, the longest being four years . Until such statutes expire, a shareholder
may make a claim against the Company. Until such claim is made there will be no impact on the Company. At this time the Company
unable to determine if any shareholder will make a claim and if pursued what any outcome may be.
Issuances of Common Stock
On June 26, 2012 the Company issued 134,000 shares of common
stock to an unrelated investor at $0.75 per share for cash proceeds of $100,500.
On June 26, 2012 the Company and an unrelated noteholder reached
a settlement on outstanding balance of $12,000, plus accrued interest of $435, of the convertible debenture whereas the fair value
of the 16,580 shares of common stock issued approximated the carrying value of the outstanding convertible debenture at time of
settlement. Accordingly, no gain or loss resulted from the settlement. (See Note 5)
NOTE 7 – NON CASH FINANCING ACTIVITIES
Six-month period ended June 30, 2012:
·
$74,668 payable to a related party was converted into a convertible note, as described in Note 5.
·
The Company issued 135,888 shares of common stock related to the conversion of the Apricus Bio convertible promissory note
that was originally issued in December 2011 and deemed contributed to capital in March 2012.
F-
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INNOVUS PHARMACEUTICALS, INC.
(Formerly North Horizon, Inc.)
(A Development Stage Company)
Notes to the Condensed Consolidated Financial
Statements
June 30, 2012 and December 31, 2011
·
A $12,000 note payable with accrued interest of $435 was converted into 16,580 shares of common stock, as described in Note
6.
·
Contingent liability in the amount of $28,926 was reclassified to equity due to expiration of the rescission rights, none of
which were exercised
Six-month period ended June 30, 2011:
·
The Company issued of 134,364 shares of common stock to Dr. Bassam
Damaj, our largest shareholder, for a settlement of $7,000 of accounts payable balance
F-
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PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item. 13. Other Expenses of Issuance and Distribution.
The estimated expenses of the offering,
all of which are to be paid by us, are as follows:
Filing fees under the Securities Act of 1933
$
30
Accountants' fees and expenses
10,000
Legal fees and expenses
15,000
Blue Sky fees and expenses
2,500
Printing expenses
300
Transfer agent fees
400
Miscellaneous
1,000
Total
$
14,230
Item 14. Indemnification of Directors and Officers.
Nevada corporate law provides that the Corporation
must indemnify any person who is or is threatened to be made a party to any pending or completed action suite or proceeding, whether
civil or criminal, administrative or investigative except an action by right of the corporation, by reason of the fact that the
person, is or was a director, officer, employee or agent of the corporation including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if the person
is not liable pursuant to Section 78.138 of the Nevada Revised Statutes or other applicable Nevada statute or law, or acted in
good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reason to believe the conduct was unlawful. The Corporation must indemnify
officers, directors, employees, agents and other persons to the maximum extent permitted by the Nevada Revised Statutes.
Our bylaws provide that we must indemnify
our directors and officers to the fullest extent authorized by the Nevada Revised Statutes.
The foregoing indemnification right shall
not be exclusive of any other right which an indemnified person may have or hereafter acquire by statute, articles of incorporation,
bylaws, agreement, vote of stockholder or other means.
Item 15. Recent Sales of Unregistered Securities.
In transactions we believed to be exempt
under provisions of the Securities Act we sold 134,000 shares of common stock for $100,500 and we issued 16,580 shares of common
stock to a note holder to satisfy an obligation of $12,435.
Item. 16. Exhibits and Financial Statement Schedules..
3.1
Articles of Incorporation and amendments thereto.
3.2
Bylaws and amendments thereto.
5.1
Opinion of Wallace T. Boyack regarding legality of securities
being registered.
21.1
Subsidiary list.
23.1
Consent of EisnerAmper LLC, Certified Public Accountants
and Consultants
23.2
Consent of Wallace T. Boyack, Attorney at Law (Included
as part of Exhibit 5.1)
Item 17. Undertakings.
We hereby undertake:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
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(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and an deviation from the low or high end to the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement; and
(iii) To include any additional or changed
material information on the plan of distribution.
2. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the termination of the offering.
4. That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b)
as part of the registration statement relating to an offering, deemed to be part of and included in the registration as of the
date it is first used after effectiveness. Provided, however, that no statement made in a registration or prospectus that is part
of the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract
of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that
was part of the registration statement or made in any such document immediately prior to such date of first use.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Signatures
Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Sierra Madre, State of California, on August 8, 2012.
Innovus Pharmaceutical, Inc.
By
s/Vivian Liu
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
s/Vivian Liu
President and Director
Date:  August 8, 2012
s/Henry Esber
Director
Date:  August 8, 2012
s/Ziad Mirza
Director
Date:  August 8, 2012
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