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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">As filed with the Securities and Exchange Commission November
<FONT STYLE="background-color: yellow">__</FONT>, 2012/Registration No. _________</P>

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

<P STYLE="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>UNITED STATES SECURITIES AND EXCHANGE
COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Washington D.C. 20549</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>FORM S-1</B></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>UNDER</B></P>

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

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Arrayit Diagnostics, Inc.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name or 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: top; font-size: 10pt">
    <TD STYLE="width: 33%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; font-size: 10pt">Nevada</TD>
    <TD STYLE="width: 1%; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; font-size: 10pt">8093</TD>
    <TD STYLE="width: 1%; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 33%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; font-size: 10pt">27-1062556</TD></TR>
<TR STYLE="vertical-align: top; font-size: 10pt">
    <TD STYLE="font-size: 10pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or Other Jurisdiction of</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Incorporation or Organization)</P></TD>
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Primary Standard Industrial</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Classification Number)</P></TD>
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="text-align: center; font-size: 10pt">(IRS Employer Identification Number)</TD></TR>
<TR STYLE="vertical-align: top; font-size: 10pt">
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="text-align: center; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; font-size: 10pt">
    <TD STYLE="font-size: 10pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>John Howell</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>President and Chief Executive Officer</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arrayit Diagnostics, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>1950 Cinnamon Teal Drive</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Redmond, Oregon 97756</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Telephone 916-599-3138</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code,
and telephone number, including area code, of agent for service<B>)</B></P></TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>1950 Cinnamon Teal Dr</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Redmond, Oregon 97756</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Telephone 916-599-3138</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address, including zip code, and
telephone number, including area code, of registrant&rsquo;s principal executive offices)</P></TD>
    <TD STYLE="font-style: italic; font-weight: bold; text-align: center; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>Copies to:</I></B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Robert L. Sonfield, Jr., Esq.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Sonfield &amp; Sonfield</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>770 South Post Oak Lane</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Houston, Texas 77056</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Tel: (713) 877-8333 Fax: (713) 877-1547</B></P></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"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Approximate date of commencement of proposed sale to the
public: </B>From time to time after this Registration Statement becomes effective, as determined by the selling stockholders named
in the prospectus contained 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">If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">x</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 filed 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</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(d) 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</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.&nbsp;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="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 22%; text-align: center">Large accelerated filer <FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 22%; text-align: center">Accelerated filer <FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 31%; text-align: center">Non-accelerated filer <FONT STYLE="font-family: Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 25%; text-align: center">Smaller reporting company <FONT STYLE="font-family: Wingdings">x</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="text-align: center">(Do not check if a smaller reporting company)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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"><B>CALCULATION OF REGISTRATION FEE</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; text-align: center; border-bottom: Black 1pt solid">Title&nbsp;of&nbsp;Each&nbsp;Class&nbsp;of&nbsp;Securities&nbsp;To <BR>Be&nbsp;Registered</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount&nbsp;To&nbsp;Be <BR>Registered(1)(2)(3)</TD><TD NOWRAP 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">Proposed&nbsp;Maximum <BR>Offering&nbsp;Price <BR>Per&nbsp;Share</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: center; border-bottom: Black 1pt solid">Proposed&nbsp;Maximum <BR>Total <BR>Offering&nbsp;Price(4)</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: center; border-bottom: Black 1pt solid">Total <BR>Amount&nbsp;of <BR>Registration&nbsp;Fee</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="width: 42%">Common stock, par value $0.001 per share</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; text-align: center">30,141,400 Shares</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">30,141,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">4,111.29</TD><TD STYLE="width: 1%; 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">(1) In accordance with Rule 416(a) of the Securities Act of
1933, as amended, this registration statement shall be deemed to cover an indeterminate number of shares that may become issuable
as a result of stock splits, stock dividends, rounding up or similar transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2) Includes 19,350,000 shares of Arrayit Diagnostics, Inc.
owned by its parent, Arrayit Corporation, as of December 31, 2011, representing 60% of the total number of shares outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(3) Includes (i) 8,000,000 shares of common stock which may
be issued under the investment agreement between Arrayit Diagnostics, Inc. and AEF Master SPV LP, having a total value of $8,000,000,
based on an assumed price per share of $1.00, (ii) 125,000 shares issued to AEF Master SPV, LP as payment of commitment and expense
fees in connection with the transaction and (iii) 2,666,400 shares as 1/3<SUP>rd</SUP> of the number of shares which may be issued
for purchase from time to time under the investment agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(4) Estimated solely for purposes of calculating the registration
fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based on management&rsquo;s estimate of future bid and
asked price in the over-the-counter market.</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>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 an 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 Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #8B3F4E"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #8B3F4E"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #8B3F4E"><B>The information in this preliminary prospectus
is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #8B3F4E"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #8B3F4E"><B>Subject to completion,
dated November <FONT STYLE="background-color: yellow">__</FONT>, 2012</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>Preliminary prospectus</B></P>

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

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img src="tlogo.jpg"></P>

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

<P STYLE="font-family: Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DISTRIBUTION OF 19,350,000 SHARES
OF COMMON STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OFFERING
UP TO 10,791,400 SHARES OF COMMON STOCK</B></P>

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<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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are furnishing this prospectus to the shareholders of Arrayit
Corporation, a Nevada corporation (&ldquo;Arrayit&rdquo;). Shareholders of Arrayit will receive one (1) share of Arrayit Diagnostics,
Inc. (the &ldquo;company,&rdquo; &ldquo;Diagnostics,&rdquo; &ldquo;we,&rdquo; &ldquo;our,&rdquo; and &ldquo;us&rdquo;) for approximately
every 3.34 shares of Arrayit which they own on the Record Date, which will be established when this S-1 is deemed effective (the
&ldquo;Record Date&rdquo; and the &ldquo;Distribution&rdquo;). Any fractional shares as a result of the Distribution will be rounded
up to the nearest whole share. The Distribution is expected to be effected as soon as practicable after the date the registration
statement, of which this prospectus is a part, is declared effective. Proof of issuance of the shares of company common stock will
be mailed to the Arrayit stockholders on that date or as soon thereafter as practicable. No fractional shares of company common
stock will be issued.</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">This prospectus also relates to the resale
of up to 10,791,400 shares of our common stock, par value $0.001 per share, by the selling stockholder, AEF Master SPV, Ltd, (&ldquo;AEF
Master&rdquo;) 10,666,400 of which AEF Master has agreed to purchase and 125,000 has been issued as a commitment fee pursuant to
the investment agreement we entered into with AEF Master on November 2, 2012. Subject to the terms and conditions of the investment
agreement, which we refer to in this prospectus as the &ldquo;Investment Agreement,&rdquo; we have the right to &ldquo;put,&rdquo;
or sell, up to $8.0 million of shares of our common stock to AEF Master. This arrangement is sometimes referred to as an &ldquo;Equity
Line.&rdquo;</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 will not receive any proceeds from the
resale of these shares of common stock offered by AEF Master. We will, however, receive proceeds from the sale of shares to AEF
Master pursuant to the Equity Line. When we put an amount of shares to AEF Master, the per share purchase price that AEF Master
will pay to us in respect of such put will be determined in accordance with a formula set forth in the Investment Agreement. Generally,
in respect of each put, AEF Master will pay us a per share purchase price equal to 100% of the volume weighted average price, or
&ldquo;VWAP,&rdquo; of our common stock during the 15 consecutive trading days immediately prior and 5 days immediately after the
date AEF Master receives our put notice. In addition, we will issue to AEF Master the number of additional shares equal to 1/3<SUP>rd</SUP>
of the number of Shares to be issued for purchase as a placement fee.</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">AEF Master may sell the shares of common
stock from time to time at the prevailing market price on the Over-the-Counter (OTC) Bulletin Board, or OTCBB, or on an exchange
if our shares of common stock become listed for trading on such an exchange, or in negotiated 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">Before this offering, there has been no public market for our
common stock and our common stock is not listed on any stock exchange or on the over-the-counter market. This Distribution of our
common shares is the first public distribution of our shares. It is our intention to seek a market maker to publish quotations
for our shares on the OTC Electronic Bulletin Board; however, we have no agreement or understanding with any potential market maker.
Accordingly, we can provide no assurance to you that a public market for our shares will develop and if so, what the market price
of our shares may be. The shares registered in this registration statement will be sold at prevailing market prices or privately
negotiated prices.</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>SHARES OF ARRAYIT DIAGNOSTICS, INC. INVOLVE A HIGH
DEGREE OF RISK. WE URGE YOU TO READ THE &ldquo;RISK FACTORS&rdquo; SECTION BEGINNING ON PAGE 5, ALONG WITH THE REST OF THIS
PROSPECTUS RELATING TO RISKS ASSOCIATED WITH THE SECURITIES REGISTERED HEREIN.</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>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus.
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>No shares of our common stock will be issued to any holder
of shares of our parent in any jurisdiction which such issuance would not comply with the laws of that jurisdiction.</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"><B>THE DATE OF THIS PROSPECTUS IS NOVEMBER
__, 2012.</B></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; text-align: center"><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-top: 0pt; margin-bottom: 0pt; text-align: left"><B>&nbsp;</B></P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 92%; border-bottom: windowtext 1pt solid; font-weight: bold"><B>Descriptive Title</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: right"><B>Page</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">PROSPECTUS SUMMARY</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">SUMMARY FINANCIAL DATA</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">RISK FACTORS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">DESCRIPTION OF BUSINESS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">15</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">THE SPIN-OFF</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">23</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">THE EQUITY LINE</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">27</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">SELLING STOCKHOLDER</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">27</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">PLAN OF DISTRIBUTION</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">28</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">DIVIDEND POLICY</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">29</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">RELATED PARTY TRANSACTIONS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">30</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">SELECTED FINANCIAL DATA</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">UNAUDITED, AUDITED AND SUMMARY FINANCIAL INFORMATION</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">32</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">APPLICATION OF PROCEEDS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">40</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">MARKET PRICE OF COMMON STOCK AND RELATED MATTERS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">40</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">PRINCIPAL STOCKHOLDERS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">40</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">ARRAYIT&rsquo;S RELATIONSHIP WITH DIAGNOSTICS FOLLOWING THE SPIN-OFF</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">41</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">ABSENCE OF PUBLIC MARKET AND DIVIDEND POLICY</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">42</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">CAPITALIZATION</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">43</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">DILUTION</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">43</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">DESCRIPTION OF CAPITAL STOCK</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">43</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">DEFENSES AGAINST HOSTILE TAKEOVERS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">46</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">SHARES ELIGIBLE FOR FUTURE SALES</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">48</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">LEGAL MATTERS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">49</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">EXPERTS</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">49</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">INTERESTS OF NAMED EXPERTS AND COUNSEL</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">49</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">COMMISSION&rsquo;S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">49</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">WHERE YOU CAN FIND MORE INFORMATION</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">50</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">INDUSTRY AND MARKET DATA</TD>
    <TD STYLE="vertical-align: top; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">50</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&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"><B>We have not authorized anyone to provide any information
other than that contained in this prospectus or to which we have referred you herein. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer to sell these securities and are not soliciting
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
we have included in this prospectus is accurate only as of the date of this prospectus and that any information we have incorporated
by reference is accurate only as of the date of the document incorporated by reference.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt"><B>Market and industry data</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: 23pt">The market data and certain other statistical
information used throughout this prospectus are based on independent industry publications, government publications, reports by
market research firms or other published independent sources. Some data is also based on our good faith estimates, which are derived
from management&rsquo;s review of internal data and information, as well as the independent sources listed above.</P>

<P STYLE="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 11.5pt; text-indent: -11.5pt"><B>Trademarks</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: 23pt">This prospectus also includes trademarks,
service marks and trade names of other companies. Our use or display of other companies&rsquo; trademarks, service marks or trade
names is not intended to and does not imply a relationship with or endorsement or sponsorship of us by such other companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
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: 23pt">This prospectus contains &ldquo;forward-looking
statements&rdquo; based on management&rsquo;s current belief, based on currently available information, as to the outcome and timing
of future events. Pursuant to Section&nbsp;27A(b)(2)(D) of the Securities Act of 1933, as amended, the safe harbor for forward-looking
statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to statements made in connection with
an initial public offering such as this. Forward-looking statements may include statements that relate to, among other things,
our:</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: 10pt Symbol">&middot;</FONT></TD><TD>future financial and operating performance and results;</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: 10pt Symbol">&middot;</FONT></TD><TD>business strategy and budgets;</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: 10pt Symbol">&middot;</FONT></TD><TD>technology;</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: 10pt Symbol">&middot;</FONT></TD><TD>financial strategy;</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: 10pt Symbol">&middot;</FONT></TD><TD>amount, nature and timing of capital expenditures;</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: 10pt Symbol">&middot;</FONT></TD><TD>competition and government 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>operating costs and other 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>cash flow and anticipated liquidity;</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: 10pt Symbol">&middot;</FONT></TD><TD>property acquisitions and sales; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>plans, forecasts, objectives, expectations and intentions.</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: 23pt">All statements, other than statements of
historical fact included in this prospectus regarding our strategy, future operations, financial position, estimated revenues and
losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this prospectus,
the words &ldquo;could,&rdquo; &ldquo;believe,&rdquo; &ldquo;anticipate,&rdquo; &ldquo;intend,&rdquo; &ldquo;estimate,&rdquo; &ldquo;expect,&rdquo;
&ldquo;project&rdquo; and similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions
about future events and are based on currently available information as to the outcome and timing of future events. When considering
forward looking statements, please keep in mind the risk factors and other cautionary statements described under the heading &ldquo;<I>Risk
Factors</I>&rdquo; 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; text-indent: 23pt">Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially
different from the anticipated future results or financial condition expressed or implied by the forward-looking statements. These
risks, uncertainties and other factors include but are not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&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: 10pt Symbol">&middot;</FONT></TD><TD>concentration of our customer base and fulfillment of existing customer contracts;</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: 10pt Symbol">&middot;</FONT></TD><TD>our ability to maintain pricing;</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: 10pt Symbol">&middot;</FONT></TD><TD>the cyclical nature of the health care industry;</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: 10pt Symbol">&middot;</FONT></TD><TD>deterioration of the credit markets;</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: 10pt Symbol">&middot;</FONT></TD><TD>delays in obtaining required regulatory approvals;</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: 10pt Symbol">&middot;</FONT></TD><TD>our ability to raise additional capital to fund future capital expenditures;</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: 10pt Symbol">&middot;</FONT></TD><TD>increased vulnerability to adverse economic conditions due to indebtedness;</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: 10pt Symbol">&middot;</FONT></TD><TD>competition within the health care industry;</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: 10pt Symbol">&middot;</FONT></TD><TD>asset impairment and other charges;</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: 10pt Symbol">&middot;</FONT></TD><TD>our limited operating history on which investors will evaluate our business and prospects;</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: 10pt Symbol">&middot;</FONT></TD><TD>our identifying, making and integrating acquisitions;</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: 10pt Symbol">&middot;</FONT></TD><TD>our ability to obtain raw materials and specialized equipment;</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: 10pt Symbol">&middot;</FONT></TD><TD>technological developments or enhancements;</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: 10pt Symbol">&middot;</FONT></TD><TD>loss of key executives;</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: 10pt Symbol">&middot;</FONT></TD><TD>management control over stockholder voting;</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: 10pt Symbol">&middot;</FONT></TD><TD>the ability to employ skilled and qualified workers;</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: 10pt Symbol">&middot;</FONT></TD><TD>work stoppages and other labor matters;</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: 10pt Symbol">&middot;</FONT></TD><TD>hazards inherent to the health care industry;</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: 10pt Symbol">&middot;</FONT></TD><TD>inadequacy of insurance coverage for certain losses or liabilities;</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: 10pt Symbol">&middot;</FONT></TD><TD>regulations affecting the health care industry;</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: 10pt Symbol">&middot;</FONT></TD><TD>federal legislation and state legislative and regulatory initiatives relating to health care;</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: 10pt Symbol">&middot;</FONT></TD><TD>costs and liabilities associated with environmental, health and safety laws, including any changes in the interpretation or
enforcement thereof; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>future legislative and regulatory developments.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">We believe that it is important to communicate
our expectations of future performance to our investors. However, events may occur in the future that we are unable to accurately
predict, or over which we have no control. We caution you against putting undue reliance on forward-looking statements or projecting
any future results based on such statements. When considering our forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this prospectus which provide examples of risks, uncertainties and events that may cause
our actual results to differ materially from those contained in any forward-looking statement. Please review the &ldquo;<I>Risk
Factors</I>&rdquo; included in this prospectus so that you are aware of the various risks associated with your 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; text-indent: 23pt">All subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section and any other cautionary statements that may accompany such forward-looking statements.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect events or circumstances after the date of 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: 23pt">You should not place undue reliance on forward-looking
statements. Each forward-looking statement speaks only as of the date of the particular statement.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&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">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: 0.25in"><I>This summary highlights certain information
appearing elsewhere in this prospectus concerning our business and this offering. Because this is a summary, it may not contain
all of the information that may be important to you and to your investment decision. In addition, certain statements contained
in this prospectus include forward-looking information that involve many risks and uncertainties, including but not limited to
those discussed under &ldquo;Cautionary Statements Regarding Forward-Looking Statements&rdquo; on page i. We urge you to read the
entire prospectus carefully, including the risks of owning our common stock discussed under &ldquo;</I>Risk Factors&rdquo;<I> beginning
on page 4</I></P>

<P STYLE="margin: 0pt 0">, &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations<I>&rdquo;
and Diagnostics&rsquo; financial statements and the notes thereto included in this prospectus. As used in this prospectus, references
to &ldquo;Arrayit&rdquo; refer to Arrayit Corporation and references to &ldquo;Diagnostics&rdquo; refer to Arrayit Diagnostics,
Inc.</I></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>About us</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: 0.25in">Arrayit Diagnostics, Inc. (&ldquo;Diagnostics&rdquo;)
is a Nevada corporation located at 1950 Cinnamon Teal Dr, Redmond, Oregon 97756,<B> </B>Telephone: 916-599-3138. Diagnostics is
presently a majority-owned subsidiary of Arrayit Corporation (&ldquo;Arrayit&rdquo;). Our business is based upon the completion
of the human genome sequencing project. Genetic research is increasingly focused on identifying the variations of the specific
genes in the genome. These variations are what define individual characteristics, including disease states or a statistical propensity
for disease. The implications are far-reaching and impact not only the research community, but also the individual patients and
the medical providers. Diagnostic tests that detect diseases very early in their progression will provide options for earlier treatments
that may improve the patient&rsquo;s quality of life and prognosis by delaying or preventing disease progression or even death.
Medical providers will incur major cost savings by avoiding costly late stage disease treatments.</P>

<P STYLE="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>Relationship between Arrayit and Diagnostics before the spin-off</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: 0.25in">Diagnostics is a majority-owned subsidiary
of Arrayit. After the spin-off, Diagnostics will be an independent public company, any relationship thereafter is limited to the
terms of the Agreement and Plan of Distribution summarized below and Arrayit&rsquo;s continuing business relationship. For a more
detailed description of these relationships, see the section entitled &ldquo;<I>Relationship between Diagnostics and Arrayit following
the Spin-Off.</I>&rdquo;</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>The spin-off</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: justify">See <I>&ldquo;The Spin-Off,&rdquo; </I>beginning
on page 22, for a more detailed description of the matters described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&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: 33%; font-weight: bold"><B>Reasons for the spin-off</B></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 65%">See &ldquo;<I>The Spin-Off</I>&rdquo; describing in detail the spin-off<B>,</B> impact on price/market capitalization, spin-off ratio, results of the spin-off, reason for the prospectus and related considerations. No stockholder approval of the spin-off is required, and none is being sought. Neither Arrayit nor Diagnostics are asking you for a proxy.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Reason for furnishing this prospectus</TD>
    <TD>&nbsp;</TD>
    <TD>We are furnishing this prospectus to provide information to holders of Arrayit who will be issued Diagnostics&rsquo; shares in the spin-off.&nbsp; It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of Diagnostics&rsquo; securities or those of Arrayit.&nbsp; The information contained in this prospectus is believed by us to be accurate as of the date set forth on its cover.&nbsp; Changes may occur after that date, and neither Diagnostics nor Arrayit are required to update the information except in the normal course of our public disclosure obligations and practices.</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>

<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: 33%; font-weight: bold"><B>Shares to be issued</B></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 65%">Diagnostics will issue to all holders of Arrayit capital stock or the right to acquire capital stock on the effective date of the spin-off a pro rata distribution of 19,350,000 shares of our common stock based on the 64,655,424 issuable or issued and outstanding common shares of Arrayit.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Spin-off date</B></TD>
    <TD>&nbsp;</TD>
    <TD>The spin-off date is expected to occur on or about January 15, 2013. Holders of record of Arrayit on the Record Date to be selected will become entitled to receive the our common shares as described above. In addition, their rights as holders of capital stock of Arrayit will continue.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Spin-off ratio</B></TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to our common stock spin-off and associated distributions described above, there will be a dividend to Arrayit holders of our capital stock based on 1 for 3.34 outstanding options and warrants, common and preferred shares of Arrayit. In the case of anyone entitled to receive a fractional share, the number of our shares to be issued shall be rounded up the nearest higher whole number of shares.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Securities to be distributed</B></TD>
    <TD>&nbsp;</TD>
    <TD>Based on the information available to us as of December 31, 2011, we believe that 28,027,934 shares of Arrayit common stock will be issued and outstanding on the Record Date. The exact number of shares of our common stock, to be received by Arrayit shareholders in connection with this spin-off will be determined based on the number of shares of Arrayit outstanding on the spin-off date.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Our transfer agent will mail an account statement to each registered holder stating the number of shares of our common stock credited to such holder&rsquo;s account. After the distribution, such holders may request that their shares of our common stock be transferred to a brokerage or other account at any time without charge. For stockholders who own Arrayit shares through a broker or other nominee, their shares of our common stock will be credited to their account by the broker or other nominee.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Certain U.S. federal income tax consequences of the spin-off</B></TD>
    <TD>&nbsp;</TD>
    <TD>The value of the Diagnostics shares received from the spin-off is taxable to the recipient as a dividend.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Secondary market</B></TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There is a limited public market for common shares of Arrayit
        and trades are reported by the OTC Bulletin Board., however, there is currently no public market for our common stock. Diagnostics
        intends to apply to qualify its common stock for quotation on the OTCBB or other secondary market for which it qualifies under
        a symbol yet to be determined. Diagnostics expects that quotation by OTCBB of our common stock will begin on the effective date
        of the spin-off.</P>
        <P STYLE="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 have not applied to register the shares in any state. An
        exemption from registration will be relied upon in the states where the shares are distributed and may only be traded in such jurisdictions
        after compliance with applicable securities laws. There can be no assurances that the shares will be eligible for sale or resale
        in such jurisdictions. We may apply to register the shares in several states for secondary trading; however we are under no requirement
        to do so. Rather, we anticipate that we will distribute restricted Diagnostics&rsquo; shares to holders of Arrayit common stock
        that reside in states which do not provide for an exemption from registration for this distribution.</P></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>

<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: 33%; font-weight: bold"><B>Relationship between Diagnostics and Arrayit following the spin-off</B></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 65%">Diagnostics and Arrayit have entered into an Agreement and Plan of Distribution in connection with the spin-off. This agreement provides for completion of the spin-off, and will govern the relationship between Diagnostics and Arrayit after the spin-off. For a more detailed description of the agreement, see the section entitled &ldquo;<I>Relationship between Diagnostics and Arrayit Following the Spin-Off.</I>&rdquo;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Equity Line</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">See <I>&ldquo;The Equity Line&rdquo; </I>beginning
on page 27, for a more detailed description of the matters described below.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Shares to be issued</TD>
    <TD>&nbsp;</TD>
    <TD>This prospectus relates to the resale of up to 10,791,400 shares of our common stock by AEF Master SPV LP.&nbsp; AEF Master will acquire our common stock pursuant to the terms and conditions of the Investment Agreement.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">The Investment Agreement</TD>
    <TD>&nbsp;</TD>
    <TD>The Investment Agreement with AEF Master provides that AEF Master is committed to purchase from us, from time to time, up to $8,000,000 of our common stock over the course of 36 months.&nbsp; We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement.&nbsp; The amount that we are entitled to put in any one notice will be determined in accordance with a formula set forth in the Investment Agreement.&nbsp; Generally, in respect to each put, AEF Master will pay us a per share purchase price equal to 100% of the volume weighted average price, or VWAP, of our common stock during the 15 consecutive trading days immediately prior and five days after our put notice.&nbsp; The initial number of shares issuable by us and purchasable by AEF Master under the Investment Agreement is 8,000,000 shares.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Selling stockholder</TD>
    <TD>&nbsp;</TD>
    <TD>AEF Master is the investor under the Investment Agreement.&nbsp; All investment decisions and control of AEF Master are made and held by its managing member.&nbsp; As a result, Mr. Robert C. Rhodes, the managing member of Rhodes Holdings, makes the investment decisions on behalf of and control American Equity Fund.&nbsp; American Equity Fund has informed us that it is an &ldquo;underwriter&rdquo; within the meaning of the Securities Act, and to the best of our knowledge, no other underwriter or person has been engaged to facilitate the sale of shares of the common stock in this offering.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Plan of distribution</TD>
    <TD>&nbsp;</TD>
    <TD>AEF Master, as selling stockholder of our common stock and any of their donees, pledgees, transferees, assignees and other successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock on the OTC Bulletin Board or any other stock exchange, market or trading facility on which the shares are traded or in private transactions.&nbsp;&nbsp; These sales may be at fixed or negotiated prices. (See &ldquo;Plan of Distribution&rdquo;).</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Dividend policy</B></TD>
    <TD>&nbsp;</TD>
    <TD>Following this share distribution, neither Arrayit nor Diagnostics anticipate paying any dividends on their respective common stock in the foreseeable future.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>No appraisal rights</B></TD>
    <TD>&nbsp;</TD>
    <TD>Holders of Arrayit common or preferred shares have no dissenters&rsquo; rights or appraisal rights in connection with this distribution of our common 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>

<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: 33%; font-weight: bold"><B>Transfer agent and registrar</B></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 65%">VStock Transfer, LLC, 77 Spruce Street, Suite 201, Cedarhurst, New York 11516, is our stock transfer company and registrar. Phone: (212) 828-8436, Facsimile: (646) 536-3179.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><B>Risk factors</B></TD>
    <TD>&nbsp;</TD>
    <TD>See the section entitled &ldquo;<I>Risk Factors</I>&rdquo; beginning on page 4 for a discussion of some of the factors you should carefully consider in connection with this spin-off, including detailed risks related respectively to the spin-off proper, our common stock and our business.</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">SUMMARY FINANCIAL DATA</P>

<P STYLE="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: 0.25in">The Summary Financial Information, all
of which has been derived from audited and unaudited financial statements included elsewhere in this prospectus, reflects the operations
of Arrayit Diagnostics for its limited operating history as of and for the period from inception to June 30, 2012. You should read
this summary financial information in conjunction with our plan of operation, financial statements and related notes to the financial
statements, each appearing elsewhere in this prospectus and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition
and Results of Operation.&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-align: justify"><B>Consolidated Balance Sheets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>For the Six Months Ended June 30, 2012
(unaudited) and Years Ended December 31, 2011 and 2010</B></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"></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="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">06/30/2012 <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">12/31/2011</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">12/31/&nbsp;2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: left">Total Assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">24,339</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">9,716</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">32,807</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,188,662</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,075,194</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">803,311</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">Total Stockholder's Equity (Deficit)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(1,164,323</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(1,065,478</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD><TD STYLE="color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; color: black; text-align: right">(770,504</TD><TD STYLE="padding-bottom: 1pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total Liabilities and Stockholder's Equity (Deficit)</TD><TD STYLE="color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: right">24,339</TD><TD STYLE="padding-bottom: 2.5pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: right">9,716</TD><TD STYLE="padding-bottom: 2.5pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; color: black; text-align: right">32,807</TD><TD STYLE="padding-bottom: 2.5pt; color: black; 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; text-align: justify"><B>Consolidated Statement of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>For the Six Months Ended June 30, 2012
and 2011 (unaudited) and the Years Ended December 31, 2011 and 2010, and the Period from June 2, 2009 (Inception) to June 30, 2012
(unaudited)</B></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"></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="text-align: justify">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">06/30/2012 <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">06/30/2011 <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">12/31/2011</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">12/31/2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: justify; border-bottom: Black 1pt solid">06/02/2009 <BR>(inception) <BR>to <BR>06/30/2012 <BR>(unaudited)</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">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 40%; text-align: left">Total Operating Expenses</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,167,286</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">157,107</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">274,090</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">631,361</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,458,379</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">Operating Loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,167,286</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(157,107</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(274,090</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(631,361</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,458,379</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Interest Expense (Income)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">14,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">20,884</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">49,804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">76,987</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">Net Loss Attributable to Non-Controlling 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">3,604</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,604</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">61,694</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">72,445</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Loss Per Share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.01</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.01</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.03</TD><TD STYLE="text-align: left">)</TD><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>Weighted Average Shares Outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,659,435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,875,611</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,111,890</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,508,356</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: justify">&nbsp;</P>

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

<P STYLE="font: bold 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: 11.5pt"><I>The securities offered herein are highly
speculative. You should carefully consider the following risk factors and other information in this prospectus. If any of the following
risks actually occur, our business and financial results could be negatively affected to a significant extent.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 11.5pt"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 11.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 11.5pt"><I>Our business is subject to many risk
factors; including the following (references to &ldquo;our,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;company&rdquo; and
words of similar meaning in these Risk Factors refer to Diagnostics):</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: 11.5pt"><I>The occurrence of any of the risks or
uncertainties described below could significantly and adversely affect our business, prospects, financial condition and operating
results. In any event, the trading price of Arrayit&rsquo;s common stock (and Diagnostics, once the market expected to develop,
occurs) could decline, and the investor could lose part or all of his investment.</I></P>

<P STYLE="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 11.5pt; text-indent: -11.5pt"><B>Risks related to this offering
and ownership of our common stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 11.5pt">The market price of our common stock is
likely to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including
the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>technological innovations or new products and services by us or our competitors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>additions or departures of key personnel;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>limited availability of freely-tradable &ldquo;unrestricted&rdquo; shares of our common stock to satisfy purchase orders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our ability to execute our business plan;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>operating results that fall below expectations;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>industry developments;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>we have issued warrants and options that may have a dilutive effect for our stockholders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>economic and other external factors; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>period-to-period fluctuations in our financial results.</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: 0.25in">In addition, the securities markets have
from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular
companies. These market fluctuations may also significantly affect the market price 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: 0.25in"><B><I>There may be a limited market for
our securities and we may fail to qualify for an exchange listing. </I></B>Although we plan on applying for listing of our common
stock on the NYSE Amex or a different national exchange if we meet the qualifications, there can be no assurance that we will meet
the qualifications or our initial listing application will be granted, when the required listing criteria will be met or when,
or if, our application will be granted. Thereafter, there can be no assurance that trading of our common stock on such market will
be sustained or desirable. At the present time, we do not qualify for certain of the initial listing requirements of the NYSE Amex
or other national exchanges. In the event that our common stock fails to qualify for initial or continued inclusion, our common
stock could thereafter only be quoted on the OTC Bulletin Board or in what are commonly referred to as the &ldquo;pink sheets.&rdquo;
Under such circumstances, you may find it more difficult to dispose of, or to obtain accurate quotations, for our common stock,
and our common stock would become substantially less attractive to certain purchasers, such as financial institutions, hedge funds,
and large investors.</P>

<P STYLE="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: 0.25in"><B><I>Offers or availability for sale of
a substantial number of shares of our common stock may cause the price of our common stock to decline. </I></B>If our stockholders
sell substantial amounts of our common stock in the public market, including shares covered by the registration statement of which
this prospectus forms a part, upon the expiration of any regulatory holding period, under Rule 144, or issued upon the exercise
of outstanding options or warrants, could create a circumstance commonly referred to as an &ldquo;overhang&rdquo; and in anticipation
of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are
occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related
securities in the future at a time and price that we deem reasonable or appropriate.</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-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>We do not expect to pay dividends
in the future. As a result, any return on investment may be limited to the value of our common stock. </I></B>We do not anticipate
paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on
our earnings, financial condition and other business and economic factors as our board of directors may consider relevant. If we
do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price
appreciates.</P>

<P STYLE="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: 0.25in"><B><I>We lack a significant operating history
focusing on our current business strategy which you can use to evaluate us, making share ownership in our company risky. </I></B>We
lack a long standing operating history focusing on our current business strategy which you can use to evaluate our previous earnings.
Therefore, ownership in Diagnostics is risky because we have no significant business history and it is hard to predict what the
outcome of our business operations will be in the future.</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; text-indent: 0.25in"><B><I>Our quarterly results may fluctuate
significantly. Failure to meet financial expectations may disappoint securities analysts or investors and result in a decline in
our stock price. </I></B>Our revenues and operating results may fluctuate significantly due in part to factors that are beyond
our control and which we cannot predict. The timing of our customers&rsquo; orders may fluctuate from quarter to quarter. License
revenue may also be unpredictable and may fluctuate due to the timing of payments of non-recurring licensing fees. Because our
expenses are largely fixed in the short to medium term, any material shortfall in revenues may cause us to experience material
losses.</P>

<P STYLE="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: 0.25in">Because of this difficulty in predicting
future performance, our operating results may fall below our own expectations and the expectations of securities analysts or investors
in some future quarter or quarters.</P>

<P STYLE="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: 0.25in">In addition to factors that affect the
spending levels of our customers, additional factors could cause our operating results to fluctuate, 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>competition;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our inability to produce products in sufficient quantities and with appropriate quality;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the frequency of experiments conducted by our customers;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our customers&rsquo; inventory of products;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the receipt of relatively large orders with short lead times; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our customers&rsquo; expectations as to how long it takes us to fill future orders.</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: 0.25in"><B><I>Anti-takeover provisions could deter
takeover attempts of Diagnostics and limit appreciation</I></B>. Our articles of incorporation, bylaws and Nevada law contain provisions
that may have the impact of delaying or precluding our acquisition without the approval of our board of directors. These provisions
may limit the price that investors otherwise might be willing to pay in the future for shares of our common stock. In addition
to any stockholder rights plan instituted in the future, these provisions include advance notice procedures for stockholder proposals
and director nominations and a provision in our bylaws that does not afford stockholders the right to call a special meeting of
stockholders. In addition, there are provisions of Nevada law that may also have the effect of precluding an acquisition of Diagnostics
without the approval of our board of directors. For more information regarding these provisions, see the sections entitled &ldquo;<I>Description
of Capital Sock&mdash;Anti-Takeover Effects of Certain Provisions of our Charter and bylaws.</I>&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 0pt 4.5pt; text-indent: 13.5pt"><B><I>The market price and trading
volume of our common stock may be volatile and may face negative pressure. </I></B><I> </I>Before the spin-off, there was a trading
market for Arrayit&rsquo;s common stock but not for the shares of our common stock. Arrayit&rsquo;s common stock will continue
to be traded publicly while our shares issued in the spin-off will trade publicly for the first time following the spin-off. Until
and possibly even after, orderly trading markets develop for our stock, there may be significant fluctuations in price. Investors&rsquo;
interest may not lead to a liquid trading market and the market price of our common stock may be volatile. This may result in short-
or long-term negative pressure on the trading price of shares of our common stock&mdash;or that of Arrayit. The market price of
our common stock may be volatile due to the risks and uncertainties described in this &ldquo;Risk Factors&rdquo; section, as well
as other factors that may affect the market price, such as:</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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;changes
in general economic or market conditions or trends in the health care industry generally;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;changes
in key personnel;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;entry
into new markets;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;changes
in operating performance and stock market valuations of other companies in the industry, including customers and suppliers;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investors&rsquo;
perceptions of our prospects and the prospects of the health care industry;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;fluctuations
in quarterly operating results, as well as differences between our actual financial and operating results and those expected by
investors;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;price
and volume fluctuations in the stock market at large which do not relate to our operating performance; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;comments
by securities analysts or government officials, including those with regard to the viability or profitability of the biotechnology
sector generally or with regard to our ability to meet market expectations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">The stock market has from time to time
experienced extreme price and volume fluctuations that are unrelated to the operating performance of particular companies.</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; text-indent: 0.25in">Furthermore, because our common stock is
expected to be traded on the Over-The-Counter Bulletin Board, our stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions,
such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
Additionally, immediately after the effective date of the spin-off, we will have a limited number of shares in our public float,
and as a result, there could be extreme fluctuations in the price of our common stock.</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; text-indent: 0.25in">Further, because of the limited volume
of our shares which trade and our limited public float, we believe that our stock prices (bid, ask and closing prices) will be
entirely arbitrary, not related to the actual value of Diagnostics, and not reflect the actual value of our common stock (and in
fact reflect a value that is much higher than the actual value of our common stock). Shareholders and potential investors in our
common stock should exercise caution before making an investment in Diagnostics, and should not rely on the publicly quoted or
traded stock prices in determining our common stock value, but should instead determine the value of our common stock based on
the information contained in our public reports, industry information, and those business valuation methods commonly used to value
private companies.</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; text-indent: 0.25in"><B><I>The market value of a share of our
common stock received in the spin-off might be less than the market value of a share of Arrayit before the spin-off.</I></B><I>
</I>If the spin-off is completed as currently contemplated, holders of Arrayit shares will, after the spin-off, hold common stock
of both Arrayit and Diagnostics. Because the two companies will be independent of each other, thereafter, we cannot assure you
that the public market for our common stock will be similar to the public market for that of Arrayit. Ultimately, the value of
each share of our common stock will be principally determined in trading markets and could be influenced by many factors, including
our operations, the growth and expansion of our business, investors&rsquo; expectations of our prospects, our credit worthiness,
trends and uncertainties affecting the industries in which we compete, future issuances and repurchases of our common stock and
general economic and other conditions. The market value of our common stock could be less than the market value before the spin-off
or that of Arrayit&rsquo;s market value added to that of Diagnostics. In addition, the trading price of our common stock may decline
following the spin-off.</P>

<P STYLE="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: 0.25in"><B><I>Investors may face significant restrictions
on the resale of our common stock due to federal regulations of penny stocks. </I></B>Our common stock will be subject to the requirements
of Rule 15(g) 9, promulgated under the Securities Exchange Act as long as the price of our common stock is below $5.00 per share.
Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited
investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability
determination for the purchaser and receive the purchaser's consent prior to the transaction. The Securities Enforcement Remedies
and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined
as a penny 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; text-indent: 0.25in">Generally, the Commission defines a penny
stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share.
The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the penny
stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and
the ability of purchasers to sell their securities in the secondary 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: 0.25in">In addition, various state securities laws
impose restrictions on transferring &ldquo;penny stocks&rdquo; and as a result, investors in the common stock may have their ability
to sell their shares of the common stock impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 13.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Failure to meet previously announced
financial expectations could have an adverse impact on the market price of our common stock. </I></B>Our ability to achieve announced
financial targets is subject to a number of risks, uncertainties and other factors affecting its business and the health care industry
generally, many of which are beyond our control. These factors may cause actual results to differ materially. We describe a number
of these factors throughout this document, including in these Risk Factors. We cannot assure you that we will meet the targets
when announced. If we are not able to meet these targets, it could harm the market price 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: 0.25in"><B><I>Future sales of our stock could adversely
affect our stock price and our ability to raise capital in the future. </I></B>Sales of substantial amounts of our common stock
could harm the market price of our stock. This also could harm our ability to raise capital in the future. The shares issued in
the spin-off are freely tradable without restriction under the Securities Act of 1933 (the &ldquo;Securities Act&rdquo;) by persons
other than &ldquo;affiliates,&rdquo; as defined under the Securities Act. Any sales of substantial amounts of our common stock
in the public market, or the perception that those sales might occur, could harm the market price 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: 0.25in">Neither Diagnostics nor Arrayit will solicit
the approval of its stockholders for the issuance of authorized but unissued shares of our common stock unless this approval is
deemed advisable by our board of directors or is required by applicable law, regulation or any applicable stock exchange listing
requirements. The issuance of those shares could dilute the value of our outstanding 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: 0.25in"><B><I>State securities laws may limit secondary
trading that will restrict the states in which you can sell shares. </I></B>Secondary trading in our common stock will not be possible
in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation
that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If
we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular
state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant
number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly
impacted.</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>Risk factors relating to 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: 0.25in"><B><I>We are a development stage company
and have engaged only in organizational and regulatory compliance-related activities and have not realized any revenues from our
operations. </I></B>We may not currently have the capital required to execute our plan of operation. Therefore, we will require
additional funding and/or a development partner in order to go forward. We cannot assure our investors that we will be able to
raise the necessary capital or find the development partners necessary to launch 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: 0.25in"><B><I>Acquisitions, investments or other
strategic relationships or alliances, may consume significant resources. </I></B>Acquisitions, investments and other strategic
relationships and alliances, if pursued, may involve significant cash expenditures, debt incurrence, additional operating losses,
and expenses that could have a material adverse effect on our financial condition and operating results. Acquisitions involve numerous
other risks, 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>diversion of management time and attention from daily operations;</TD></TR></TABLE>

<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>difficulties integrating acquired businesses, technologies and personnel into our business;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&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" 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>inability to obtain required regulatory approvals and/or required financing on favorable terms;</TD></TR></TABLE>

<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>entry into new markets in which we have little previous experience;</TD></TR></TABLE>

<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>potential loss of key employees, key contractual relationships or key customers of acquired companies or of Diagnostics; and</TD></TR></TABLE>

<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>assumption of the liabilities and exposure to unforeseen liabilities of acquired companies.</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: 0.25in">If these types of transactions are pursued,
it may be difficult for us to complete these transactions quickly and to integrate these acquired operations efficiently into our
current business operations. Any acquisitions, investments or other strategic relationships and alliances by Diagnostics may ultimately
harm our business and financial condition. In addition, future acquisitions may not be as successful as originally anticipated
and may result in impairment charges.</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: 0.25in"><B><I>Principal stockholders will retain
approximately 37% of our voting shares. </I></B>Prior to the date of this prospectus, Arrayit owned approximately 60% of our shares.
After the spin-off, individual officers, directors and shareholders of Arrayit will own 31% of our shares. (See &ldquo;<I>Security
Ownership of Certain Beneficial Owners and Management.</I>&rdquo;). Upon completion of the spin-off, the principal stockholders&rsquo;
and their affiliates&rsquo; total ownership shares in Diagnostics will permit them to retain approximately 37% of the shares. However,
voting control of Diagnostics will remain with the present management of Diagnostics because John Howell owns the Series B Preferred
Stock that casts the number of votes equal to the total votes of all other shareholders multiplied by two. As a result the holder
or holders of the Series B Preferred Stock is entitled to two thirds of the voting power of Diagnostics. Consequently, John Howell
will be able to effectively control the outcome on all matters submitted for a vote to our stockholders. Specifically, at least
initially, Mr. Howell will be able to elect all of our directors. Such control by Mr. Howell may have the effect of discouraging
certain types of transactions involving an actual or potential change of control, including transactions in which holders of shares
might otherwise receive a premium for their shares over then current market 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: 0.25in"><B><I>We may require additional financing
to implement our business plan and continue developing and marking our environmental compliance systems. </I></B>We have not generated
any revenues since our incorporation in June 2009. We currently believe that we will be able to continue our business operations
for approximately the next three months with our current cash on hand. We anticipate the need for approximately $3,000,000 to $5,000,000
in additional funding to support the planned expansion of our operations over the next approximately 12 months. We may choose to
raise additional funds in the future through sales of debt and/or equity securities to support our ongoing operations and for expansion.
If we are unable to raise additional financing in the future, we may be forced to abandon or curtail our business plan, which would
cause the value of our securities, if any, to decrease in value and/or become worthless.</P>

<P STYLE="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: 0.25in"><B><I>Our auditors have expressed an opinion
that there is substantial doubt about our ability to continue as a going concern. </I></B>Our auditors have expressed an opinion
that there is substantial doubt about our ability to continue as a going concern primarily because we had a net loss of $1,173,885
and $291,370 and cash used in operations of $78,871 and $0 for the six months ended June 30, 2012 and the year ended December 31,
2011, respectively. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going
concern. The financial statements do not include any adjustments that might result from our inability to continue as a going concern.
If we are unable to continue as a going concern, our securities will become worthless.</P>

<P STYLE="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: 0.25in"><B><I>We may have difficulty obtaining
future funding sources, if needed, and we may have to accept terms that would adversely affect shareholders. </I></B>We will need
to raise funds from additional financing. We have no commitments for any financing and any financing commitments may result in
dilution to our existing stockholders. We may have difficulty obtaining additional funding, and we may have to accept terms that
would adversely affect our stockholders. For example, the terms of any future financings may impose restrictions on our right to
declare dividends or on the manner in which we conduct our business. Additionally, we may raise funding by issuing convertible
notes, which if converted into shares of our common stock would dilute our then shareholders interests. Lending institutions or
private investors may impose restrictions on a future decision by us to make capital expenditures, acquisitions or significant
asset sales. If we are unable to raise additional funds, we may be forced to curtail or even abandon our business plan.</P>

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

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<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; text-indent: 0.25in"><B><I>We will need to make substantive
changes to operate as an entity independent of Arrayit. </I></B>We were incorporated in Nevada June 2, 2009, to operate as a business
unit of Arrayit. However, following the spin-off, Arrayit will have no obligation (beyond that provided in the Agreement and Plan
of Distribution) to provide financial, operational or organizational assistance to us. As a consequence, we may not be able to
successfully implement the changes necessary to operate independently. We may also incur additional costs relating to operating
independently that would cause its available funds to decline materially. We cannot assure that once we become a stand-alone company,
we will be profitable.</P>

<P STYLE="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: 0.25in"><B><I>Spin-off is taxable. </I></B>The
spin-off is taxable to the recipient, as with any dividend. However, since the taxability is dependent, in part, upon our earnings
and profits, accumulated or during the current taxable year, it cannot be determined, at this time, whether and to what extent
the dividend would be taxable to the recipient. For more information, see the section entitled &ldquo;<I>The Spin-Off&mdash;Certain
U.S. Federal Income Tax Consequences of the Spin-Off.</I>&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: 0.25in">Because the spin-off is not a tax-free
transaction, Arrayit is subject to tax as if it had sold our common stock in a taxable sale at fair market value and our initial
public stockholders&mdash;the holders of Arrayit, who receive stock to be issued as a dividend in the spin-off will recognize a
taxable dividend related to their Arrayit 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: 0.25in">For a more detailed discussion, see the
section entitled &ldquo;<I>Relationship between Diagnostics and Arrayit Following the Spin-Off&mdash;Agreement between Diagnostics
and Arrayit Relating to the Spin-Off.&rdquo;</I></P>

<P STYLE="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: 0.25in"><B><I>Our accounting and management systems
and resources may be inadequate. </I></B>Our accounting and other management systems and resources may not be adequate to meet
the financial reporting and other requirements to which we will be subject following the spin-off. If we are unable to achieve
and maintain effective internal controls, our operating results and financial condition could be harmed.</P>

<P STYLE="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: 0.25in">Prior to the spin-off, we were not directly
subject to reporting and other requirements of the Securities Exchange Act of 1934 (the &ldquo;Exchange Act&rdquo;). As a result
of the spin-off, we will be directly subject to reporting and other obligations under the Exchange Act, including the requirements
of the Sarbanes-Oxley Act of 2002 (&ldquo;Sarbanes-Oxley&rdquo;). Sarbanes-Oxley&rsquo;s reporting and other obligations will place
significant demands on its management and administrative and operational resources, including accounting resources.</P>

<P STYLE="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: 0.25in">To comply with these requirements, we may
need to upgrade our systems, including information technology, implement additional financial and management controls, reporting
systems and procedures and hire additional legal, accounting and finance staff. If we are unable to upgrade our systems and procedures
in a timely and effective fashion, we may not be able to comply with our financial reporting requirements and other rules that
apply to public companies. In addition, if we are unable to conclude that our internal controls over financial reporting are effective,
we could lose investor confidence in the accuracy and completeness of our financial reports. Any failure to achieve and maintain
effective internal controls could harm our operating results and financial condition.</P>

<P STYLE="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: 0.25in"><B><I>Our success will depend on our ability
to retain our key managers and recruit additional employees</I>. </B>We will rely heavily on two knowledgeable and highly-skilled
full-time employee managers, who are currently the full-time employee managers of Arrayit. Either or both of these key employees
could leave us and so deprive us of the skill and knowledge essential for performance of our existing and new businesses. Our employees
may have additional or different responsibilities following the spin-off as a result of the fact that we will be an independent
public company subject to the reporting requirements of the Securities Exchange Act of 1934, as amended and other rules and regulations
of the SEC, including the Sarbanes-Oxley Act of 2002. If any of our key employees leave for any reason(s), it could harm our operating
results and financial condition. Additionally, we cannot assure our investors that we will be able to offer prospective managers
and other key employees&rsquo; competitive opportunities with the compensation and benefits packages necessary to attract talented
and experienced people to fill key management, professional and technical positions.</P>

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

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<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; text-indent: 0.25in"><B><I>The spin-off agreements require us
to assume liabilities and other terms that may be less favorable to registrant. </I></B>We negotiated and entered into the spin-off
agreements as a subsidiary of Arrayit. Had these agreements been negotiated with unaffiliated third parties, their terms might
have been more favorable to us. These agreements require Diagnostics to assume and/or indemnify Arrayit for, among other things,
all past, present and future liabilities related to our business. The allocation of assets and liabilities between Diagnostics
and Arrayit may not reflect the allocation that would have been reached between two unaffiliated parties.</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 relating to our organization</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: 0.25in"><B><I>Our certificate of incorporation
authorizes our board to create new series of preferred stock without further approval by our stockholders, which could adversely
affect the rights of the holders of our common stock. </I></B>Our board of directors has the authority to fix and determine the
relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without
further stockholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that
would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends
are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to
the redemption of our common stock. In addition, our board of directors could authorize the issuance of a series of preferred stock
that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative
voting power of our common stock or result in dilution to our existing stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 13.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 13.5pt"><B><I>Limitations of liability; indemnification.
</I></B>Our articles of incorporation and bylaws contain provisions that limit the liability of directors for monetary damages
and provides for indemnification of officers and directors under certain circumstances. Such provisions may discourage stockholders
from bringing a lawsuit against directors for breaches of fiduciary duty and may also have the effect of reducing the likelihood
of derivative litigation against directors and officers even though such action, if successful, might otherwise have benefited
our stockholders. In addition, a stockholder&rsquo;s investment in the company may be adversely affected to the extent that costs
of settlement and damage awards against our officers or directors are paid by the company pursuant to such 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: 0.25in"><B><I>If we fail to develop and maintain
an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a
result, our current and potential stockholders could lose confidence in our financial reports, which could harm our business and
the trading price of our common stock. </I></B>Effective internal controls are necessary for us to provide reliable financial reports
and effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal
controls over financial reporting and may in the future require our independent registered public accounting firm to annually attest
to our evaluation, as well as issue their own opinion on our internal controls over financial reporting. The process of implementing
and maintaining proper internal controls and complying with Section 404 is expensive and time consuming. We cannot be certain that
we can attract and retain a sufficient number of independent directors that includes independent members of our audit committee
and accomplish the other measures that ensure we will maintain adequate controls over our financial processes and reporting in
the future. Furthermore, if we are able to rapidly grow our business, the internal controls that we will need may become more complex,
and significantly more resources and independent officers and directors may be required to ensure our internal controls remain
effective. Failure to implement required controls, or difficulties encountered in their implementation, could harm our operating
results or cause us to fail to meet our reporting obligations. If we or our auditors discover a material weakness in our internal
controls, the disclosure of that fact, even if the weakness is quickly remedied, could diminish investors&rsquo; confidence in
our financial statements and harm our stock price. In addition, non-compliance with Section 404 could subject us to a variety of
administrative sanctions, including the suspension of trading, ineligibility for future listing on NYSE Amex or another national
securities exchange, and the inability of registered broker-dealers to make a market in our common stock, which may reduce our
stock price.</P>

<P STYLE="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: 0.25in"><B><I>Because we became public by means
of a spin-off, we may not be able to attract the attention of major brokerage firms. </I></B>There may be risks associated with
us becoming public through a spin-off. Securities analysts of major brokerage firms may not provide coverage of us since there
is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms
will, in the future, want to conduct any public or private offerings on our behalf.</P>

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

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<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; text-indent: 0.25in"><B><I>Our growth will place significant
strains on our resources. </I></B>Our growth, if any, is expected to place a significant strain on our managerial, operational
and financial resources. Furthermore, assuming we receive additional contracts, and obtains additional partners, we will be required
to manage multiple relationships with other third parties. These requirements will be exacerbated in the event of further growth
of the company or in the number of our contracts, partnerships and employees. There can be no assurance that our systems, procedures
or controls will be adequate to support our operations or that we will be able to achieve the rapid execution necessary to successfully
offer our services and continue our business plan. Our future operating results, if any, will also depend on our ability to add
additional personnel commensurate with the growth of our business, if any. If we are unable to manage growth effectively, our business,
results of operations and financial condition will be 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>Risks related to government regulation and litigation</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: 0.25in"><B><I>We and our customers are subject
to various government regulations, and we may incur significant expenses to comply with, and experience delays in our product commercialization
as a result of, these regulations. </I></B>The FDA must approve certain in-vitro diagnostic products before they can be marketed
in the United States. Certain in-vitro diagnostic products must also be approved by the regulatory agencies of foreign governments
or jurisdictions before the product can be sold outside the United States. Commercialization of our and our collaborative partners&rsquo;
in-vitro diagnostic products outside of the research environment may depend upon successful completion of clinical trials. Clinical
development is a long, expensive and uncertain process and we do not know whether we, or any of our collaborative partners, will
be permitted to undertake clinical trials of any potential in-vitro diagnostic products. It may take us or our collaborative partners
many years to complete any such testing, and failure can occur at any stage. Delays or rejections of potential products may be
encountered based on changes in regulatory policy for product approval during the period of product development and regulatory
agency review. Moreover, if and when our projects reach clinical trials, we, or our collaborative partners, may decide to discontinue
development of any or all of these projects at any time for commercial, scientific or other reasons. Any of the foregoing matters
could have a material adverse effect on 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: 0.25in">Many of our products are labeled for research
only. Even when a product is exempted from FDA clearance or approval, the FDA may impose restrictions as to the types of customers
to which we can market and sell our products. Such restrictions may materially and 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: 0.25in">The FDA, the U.S. Department of Health
and Human Services and foreign government regulators are increasingly focused on genetic analysis tools, including the use of arrays
that are labeled for research use only by cytogenetics labs, including labs certified under the Clinical Laboratory Improvement
Amendments (&ldquo;CLIA&rdquo;). We cannot predict the extent of the FDA&rsquo;s future efforts in regulation and policies with
respect to the sale and use of arrays for the development of assays by CLIA laboratories, which are referred to as laboratory developed
tests (&ldquo;LDTs&rdquo;). If new regulations restrict our customers&rsquo; development of LDTs using our products labeled for
research use only, or if we otherwise are required to obtain FDA premarket clearance or approval prior to commercializing these
products, our ability to generate revenue from the sale of our products may be delayed or otherwise adversely affected. Moreover,
our failure to comply with governmental rules and regulations related to our products could cause us to incur significant adverse
publicity, subject us to investigations and notices of non-compliance or lead to fines or restrictions upon our ability to sell
our 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; text-indent: 0.25in">Medical device laws and regulations are
also in effect in many countries, ranging from comprehensive device approval requirements to requests for product data or certifications.
The number and scope of these requirements are increasing. We may not be able to obtain regulatory approvals in such countries
or may incur significant costs in obtaining or maintaining our foreign regulatory approvals. In addition, the export by us of certain
of our products which have not yet been cleared for domestic commercial distribution may be subject to FDA or other export restrictions.</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: 0.25in">We may enter into agreements relating to
the sale of our products to government entities and, as a result, we are subject to various statutes and regulations that apply
to companies doing business with the government. A failure to comply with these regulations might result in suspension of these
contracts or administrative penalties, and could have a material adverse effect on our ability to compete for future government
grants, contracts and programs.</P>

<P STYLE="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: 0.25in"><B><I>Healthcare reform and restrictions
on reimbursements may limit our returns on molecular diagnostic products that we may develop with our collaborators. </I></B>We
are currently collaborating with our partners to develop diagnostic and therapeutic products. The ability of our collaborators
to commercialize such products may depend, in part, on the extent to which reimbursement for the cost of these products will be
available under U.S. and foreign regulations that govern reimbursement for clinical testing services by government authorities,
private health insurers and other organizations. In the United States, third-party payer price resistance, the trend towards managed
health care and legislative proposals to reform health care or government insurance programs could reduce prices for health care
products and services, adversely affecting the profits of our customers and collaborative partners and reduce our future royalties.</P>

<P STYLE="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: 0.25in"><B><I>Risks related to handling of hazardous
materials and other regulations governing environmental safety. </I></B>Our operations are subject to complex and stringent environmental,
health, safety and other governmental laws and regulations that both public officials and private individuals may seek to enforce.
Our activities that are subject to these regulations include, among other things, our use of hazardous materials and the generation,
transportation and storage of waste. We could discover that we or an acquired business is not in material compliance. Existing
laws and regulations may also be revised or reinterpreted, or new laws and regulations may become applicable to us, whether retroactively
or prospectively, that may have a negative effect on our business and results of operations. It is also impossible to eliminate
completely the risk of accidental environmental contamination or injury to individuals. In such an event, we could be liable for
any damages that result, which could adversely affect 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; text-indent: 0.25in"><B><I>We may be exposed to liability due
to product defects. </I></B>The risk of product liability claims is inherent in the testing, manufacturing, marketing and sale
of human diagnostic and therapeutic products and we may be subjected to such claims. We may seek to acquire additional insurance
for clinical or product liability risks. We may not be able to obtain such insurance or general product liability insurance on
acceptable terms or in sufficient amounts. A product liability claim or recall could have a serious adverse effect on 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: 0.25in"><B><I>Ethical, legal and social concerns
surrounding the use of genetic information could reduce demand for our products. </I></B>Genetic testing has raised ethical issues
regarding privacy and the appropriate uses of the resulting information. For these reasons, governmental authorities may call for
limits on or regulation of the use of genetic testing or prohibit testing for genetic predisposition to certain conditions, particularly
for those that have no known cure. Similarly, such concerns may lead individuals to refuse to use genetics tests even if permissible.
Any of these scenarios could reduce the potential markets for our molecular diagnostic products, which could have a material adverse
effect on 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"><B>Risks related to our intellectual property</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: 0.25in"><B><I>We may be unable to effectively protect
or enforce our intellectual property, which could harm our competitive position. </I></B>Maintaining a strong patent position is
critical to our business. Patent law relating to the scope of claims in the technology fields in which we operate is uncertain,
so we cannot be assured the patent rights we have or may obtain will be valuable. Others have filed, and in the future are likely
to file, patent applications that are similar or identical to ours or those of our licensors. To determine the priority of inventions,
we may have to participate in interference proceedings declared by the United States Patent and Trademark Office that could result
in substantial costs in legal fees and could substantially affect the scope of our patent protection. We cannot be assured our
patent applications will have priority over those filed by others. Also, our intellectual property may be subject to significant
administrative and litigation proceedings such as opposition proceedings against our patents in Europe, Asia and other jurisdictions.</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; text-indent: 0.25in">Legal actions to enforce our patent rights
can be expensive and may involve the diversion of significant management time. In addition, these legal actions could be unsuccessful
and could also result in the invalidation of our patents or a finding that they are unenforceable. We may or may not choose to
pursue litigation or interferences against those that have infringed on our patents, or used them without authorization, due to
the associated expense and time commitment of monitoring these activities. If we fail to protect or to enforce our intellectual
property rights successfully, our competitive position could suffer, which could harm our results of operations.</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: 0.25in">In addition to patent protection, we also
rely upon copyright and trade secret protection, as well as non-disclosure agreements with our employees, consultants and third-parties,
to protect our confidential and proprietary information. Such measures may not provide adequate protection for our proprietary
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: 0.25in"><B><I>Litigation or other proceedings or
third party claims of intellectual property infringement could require us to spend significant time and money and could prevent
us from selling our products or services or impact our stock price. </I></B>Third parties may in the future assert that we are
employing their proprietary technology without authorization. In addition, we are aware of third-party patents that may relate
to our technology.</P>

<P STYLE="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: 0.25in">As we enter new markets, we expect that
competitors may claim that our products infringe their intellectual property rights as part of business strategies designed to
impede our successful entry into those markets. In addition, third parties may have obtained, and may in the future obtain, patents
allowing them to claim that the use of our technologies infringes these patents. We could incur substantial costs and divert the
attention of our management and technical personnel in defending ourselves against any of these claims. Any adverse ruling or perception
of an adverse ruling in defending ourselves against these claims could have a material adverse impact on our stock price, which
may be disproportionate to the actual import of the ruling itself. Furthermore, parties making claims against us may be able to
obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products, and could result
in the award of substantial damages against us. In the event of a successful claim of infringement against us, we may be required
to pay damages and obtain one or more licenses from third parties, or be prohibited from selling certain products. In addition,
we may be unable to obtain these licenses at a reasonable cost, if at all. We could therefore incur substantial costs related to
royalty payments for licenses obtained from third parties, which could negatively affect our gross margins. In addition, we could
encounter delays in product introductions while we attempt to develop alternative methods or products. Defense of any lawsuit or
failure to obtain any of these licenses on favorable terms could prevent us from commercializing products, and the prohibition
of sale of any of our products could materially affect our ability to grow and maintain profitability.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>We will incur significant costs as
a result of operating as a fully reporting company in connection with Section 404 of The Sarbanes Oxley Act, and our management
is required to devote substantial time to compliance initiatives. </I></B>We anticipate incurring significant legal, accounting
and other expenses in connection with our status as a fully reporting public company. The Sarbanes-Oxley Act of 2002 (the &ldquo;Sarbanes-Oxley
Act&rdquo;) and new rules subsequently implemented by the SEC have imposed various new requirements on public companies, including
requiring changes in corporate governance practices. As such, our management and other personnel will need to devote a substantial
amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial
compliance costs and will make some activities more time-consuming and costly. In addition, the Sarbanes-Oxley Act requires, among
other things, that we maintain effective internal controls for financial reporting and disclosure of controls and procedures. In
particular, Section 404 will require us to obtain a report from our independent registered public accounting firm attesting to
the assessment made by management. Our testing, or the subsequent testing by our independent registered public accounting firm,
may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Our compliance
with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We currently
do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public
company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section
404 in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal controls
over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline, and we could be
subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and
management resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</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-indent: 0.25in"><B><I>We have no history as a public company
upon which you can assess our prospects and we are subject to the risks associated with any new public 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: 0.25in">As a result of our short history of operations
as a public company, there is little historical information regarding our operations upon which you can base your investment decision.
In addition, we are subject to all of the business risks and uncertainties associated with any newly public business enterprise.
&nbsp;Additionally, our management has limited experience operating a public company. &nbsp;As such, our company may not be able
to continue to meet its continued filing requirements and may be late in its periodic filings, which late filings may cause the
company to be delisted from the Over-The-Counter Bulletin Board. If this were to happen, any investment in the company could become
devalued or worthless.</P>

<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">DESCRIPTION OF BUSINESS</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>Arrayit Corporation</B></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; text-indent: 0.25in">Arrayit Corporation owns 19,350,000 of
our shares, which represents 60% of the 28,027,934 shares presently outstanding. Arrayit is a Nevada corporation that entered into
the life sciences industry in 1996. Arrayit is a leading edge developer, manufacturer and marketer of next-generation life science
tools and integrated systems for the large scale analysis of genetic variation, biological function and diagnostics. Using Arrayit&rsquo;s
proprietary technologies, the company provides a comprehensive line of products and services that currently serve the sequencing,
genotyping, gene expression and protein analysis markets, and the company expects to enter the market for molecular diagnostics.</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; text-indent: 0.25in">Arrayit is a leader in the health care
and life sciences industries with its expertise in three key areas: the development and support of microarray tools and components,
custom printing and analysis of microarrays for research, and the identification and development of diagnostic microarrays and
tools for early detection of treatable disease states. As a result, Arrayit has provided tools and services to thousands of the
leading genomic research centers, pharmaceutical companies, academic institutions, clinical research organizations, government
agencies and biotechnology companies worldwide.</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; text-indent: 0.25in">The company&rsquo;s patented tools and
trade secrets provide researchers around the world with the performance, throughput, cost effectiveness and flexibility necessary
to perform the billions of genetic tests needed to extract valuable medical information. The company believes this information
will enable researchers to correlate genetic variation and biological function, which will enhance drug discovery, drug development
and clinical research, allowing diseases to be detected earlier and permitting better choices of drugs for individual patients.</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>Arrayit Diagnostics, Inc.</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Strategic relationships and licensing
arrangements. </I></B>We have a license with Wayne State University (WSU) that provides for an exclusive right to use patented
methods of discovery on a worldwide basis, which patented methods have led to discovery of unique biomarkers for ovarian cancer.
These specific markers are included in this license. Additional work has been done related to prostate cancer using the licensed
technology. The ovarian cancer and prostate cancer tests for diagnostics use will be marketed upon FDA approval. We are exploring
strategic partnership opportunities for diagnostic tests with corporations that have a strong customer base, and a significant
sales and marketing presence in the diagnostics industry worldwide.</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; text-indent: 0.25in">The resulting diagnostic tests created
by the patented methods are sophisticated microarray-based tests that measure the activation of the immune system in response to
early stage tumor cell development. Serum is applied to the microarray to allow binding between proteomic biomarkers in the sample
and capture agents on the microarray. The microarray is washed and scanned to produce a digital readout for each serum sample,
and the data are quantified and analyzed in software to generate the test results. This technology will identify different tumor
types and stages, the effectiveness of chemotherapies, biomarker profiles in breast cancer, prostate cancer and other epithelial
cancers, the effectiveness of cancer drugs for treatment and prevention, and to benchmark existing tests including CA-125 and PSA.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Regulatory matters. </I></B>We and
our customers are subject to various government regulations, and we may incur significant expenses to comply with, and experience
delays in our product commercialization as a result of, these regulations.</P>

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

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<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; text-indent: 0.25in">The FDA must approve certain in-vitro diagnostic
products before they can be marketed in the U.S. Certain in-vitro diagnostic products must also be approved by the regulatory agencies
of foreign governments or jurisdictions before the product can be sold outside the U.S. Commercialization of our and our collaborative
partners&rsquo; in-vitro diagnostic products outside of the research environment may depend upon successful completion of clinical
trials. Clinical development is a long, expensive and uncertain process and we do not know whether we, or any of our collaborative
partners, will be permitted to undertake clinical trials of any potential in-vitro diagnostic products. It may take us or our collaborative
partners years to complete any such testing, and failure can occur at any stage. Delays or rejections of potential products may
be encountered based on changes in regulatory policy for product approval during the period of product development and regulatory
agency review. Moreover, if and when our projects reach clinical trials, we or our collaborative partners may decide to discontinue
development of any or all of these projects at any time for commercial, scientific or other reasons. Any of the foregoing matters
could have a material adverse effect on our business, financial condition and results of operations.</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; text-indent: 0.25in">Our products may be labeled for research
only. Even where a product is exempted from FDA clearance or approval, the FDA may impose restrictions as to the types of customers
to which we can market and sell our products. Such restrictions may materially and adversely affect our business, financial condition
and results of operations.</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; text-indent: 0.25in">The FDA, the U.S. Department of Health
and Human Services and foreign government regulators are increasingly focused on genetic analysis tools, including the use of arrays
that are labeled for research use only by cytogenetics labs, including labs certified under the Clinical Laboratory Improvement
Amendments (&ldquo;CLIA&rdquo;). We cannot predict the extent of the FDA&rsquo;s future efforts in regulation and policies with
respect to the sale and use of arrays for the development of assays by CLIA laboratories, which are referred to as laboratory developed
tests (&ldquo;LDTs&rdquo;). If new regulations restrict our customers&rsquo; development of LDTs using our products labeled for
research use only, or if we otherwise are required to obtain FDA premarket clearance or approval prior to commercializing these
products, our ability to generate revenue from the sale of our products may be delayed or otherwise adversely affected. Moreover,
our failure to comply with governmental rules and regulations related to our products could cause us to incur significant adverse
publicity, or subject us to investigations and notices of non-compliance or lead to fines or restrictions upon our ability to sell
our products.</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; text-indent: 0.25in">Medical device laws and regulations are
also in effect in many countries, ranging from comprehensive device approval requirements to requests for product data or certifications.
The number and scope of these requirements are increasing. We may not be able to obtain regulatory approvals in such countries
or may incur significant costs in obtaining or maintaining our foreign regulatory approvals. In addition, the export by us of certain
of our products which have not yet been cleared for domestic commercial distribution may be subject to FDA or other export restrictions.</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; text-indent: 0.25in">We may obtain agreements relating to the
sale of our products to government entities and, as a result, we would be subject to various statutes and regulations that apply
to companies doing business with the government. A failure to comply with these regulations might result in suspension of these
contracts or administrative penalties, and could have a material adverse effect on our ability to compete for future government
grants, contracts and programs.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Healthcare reform and restrictions
on reimbursement.</I></B><I> </I>We are currently collaborating with our partners to develop diagnostic and therapeutic products.
The ability of our collaborators to commercialize such products may depend, in part, on the extent to which reimbursement for the
cost of these products will be available under U.S. and foreign regulations that govern reimbursement for clinical testing services
by government authorities, private health insurers and other organizations. In the U.S., third-party payer price resistance, the
trend towards managed health care and legislative proposals to reform health care or reduce government insurance programs could
reduce prices for health care products and services adversely affect the profits of our customers and collaborative partners and
reduce our future royalties.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Handling of hazardous materials and
other regulations governing environmental safety. </I></B>Our operations are subject to complex and stringent environmental, health,
safety and other governmental laws and regulations that both public officials and private individuals may seek to enforce. Our
activities that are subject to these regulations include, among other things, our use of hazardous materials and the generation,
transportation and storage of waste. We could discover that we or an acquired business is not in material compliance. Existing
laws and regulations may also be revised or reinterpreted, or new laws and regulations may become applicable to us, whether retroactively
or prospectively, that may have a negative effect on our business and results of operations. It is also impossible to eliminate
completely the risk of accidental environmental contamination or injury to individuals. In such an event, we could be liable for
any damages that result, which could adversely affect our business.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B>Our market opportunity. </B>According
to Quest Diagnostics, the largest clinical testing laboratory in the U.S., the laboratory testing market in the United States is
a $50 billion dollar market that is 60% controlled by testing performed by hospital-based laboratories. The remaining portion of
this market is divided between independent clinical laboratories (35%) and physician office laboratories (POLs) that perform 5%
of overall testing. Within the independent clinical laboratory segment, Quest Diagnostics and LabCorp are the two largest national
reference labs and control approximately $12.5 billion of this $17.5 billion market segment.</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; text-indent: 0.25in">The remaining $5 billion is controlled
by other national laboratories and smaller independent regional laboratories. Within this $50 billion market, most of the testing
that is performed is for routine lab tests and anatomic pathology tests and services. However, recently there has been a dramatic
increase in gene-based and esoteric testing. Esoteric tests include procedures in the areas of molecular diagnostics, protein chemistry,
cellular immunology, and advanced microbiology. Commonly ordered esoteric tests include viral and bacterial detection tests, drug
therapy monitoring tests, autoimmune panels, and complex cancer evaluations.</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; text-indent: 0.25in">The growth of these specialized tests has
been made possible through new molecular diagnostic technologies that make it possible to detect diseases earlier, utilize genetic
testing for disease predisposition, and advance the use of personalized medicine, such as the tailoring of cancer therapies to
those individuals most likely to respond. Esoteric tests typically require highly-skilled technical personnel and generally require
more sophisticated technology, equipment or materials. As a result, esoteric tests are generally reimbursed at higher levels than
routine tests.</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; text-indent: 0.25in">This increase in specialized testing is
evidenced by the shift in Quest Diagnostics&rsquo; esoteric testing revenues from less than 10% of total revenues to their current
level of 20% over the past 9 years. In the case of LabCorp, the second largest clinical testing laboratory in the country, in 2009
esoteric testing accounted for 36% of their annual consolidated revenue, which they expect to grow to 40% within three to five
years. In addition to Quest Diagnostics and LabCorp, there are approximately 60 commercial laboratories that control the independent
clinical laboratory market segment in the United States. There are also approximately 300 genetic testing laboratories in the U.S.,
with 80% of them affiliated with academic institutions. As a result of these new trends, molecular diagnostic testing that supports
personalized medicine is now the fastest growing segment within the overall laboratory testing market.</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; text-indent: 0.25in">In addition to the laboratory testing market,
there is another market that is comprised of diagnostic instrumentation and test kits that are marketed for the purpose of performing
diagnostic testing on human samples, which normally uses blood, urine, or other body fluid specimens.</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; text-indent: 0.25in">This market is referred to as the in vitro
diagnostic (IVD) market and literally means &ldquo;within the glass&rdquo;, as in a test tube. A test that is performed <I>in vitro</I>
is one that is done in glass or plastic vessels in the laboratory as opposed to <I>in vivo</I>, which is performed in a living
organism. This combination of instrumentation and test kits is generally sold to reference laboratories, hospital clinical laboratories,
state and national health testing facilities, and other laboratories that in turn perform the laboratory tests and provide results
to physicians and their patients. According to a report published by PricewaterhouseCoopers titled Diagnostics 2009, the worldwide
IVD market was $37 billion in 2007 and is expected to grow by 5% per annum to $50 billion in 2012. According to market research
by Kalorama Information, the U.S. IVD market is the single largest diagnostics market in the world and represents 43% of the global
IVD market. The largest IVD companies in the world are Roche, Abbott, Siemens, Johnson &amp; Johnson (Ortho), Beckman Coulter,
bio M&eacute;rieux, Inverness Medical, Bio-Rad, Sysmex, and Becton Dickenson.</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; text-indent: 0.25in">All of these 10 companies have IVD sales
exceeding $1 billion and collectively they represent approximately 85% of the total worldwide IVD market. The fastest growing segment
within the IVD market is molecular diagnostics, which is expected to grow by 14% per annum and reach $5 billion in 2012. In the
context of this PricewaterhouseCoopers market report, molecular diagnostics includes only those tests that analyze the DNA or RNA
of an organism. However, molecular diagnostics is more often widely defined to include tests that analyze other types of molecules
as well. In their report, PricewaterhouseCoopers goes on to state that besides the dramatic increase in molecular diagnostics,
some of the biggest changes within the diagnostics industry will be the increased use of:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Early
diagnostics</I>. </B>Diagnostic products permitting the detection of a disease at very early stages of its development thus giving
more treatment options (e.g. early ovarian and lung cancer detection allowing surgery);</FONT></P>

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

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<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Prognostics</I>.
</B>Diagnostics that provide a prediction or estimate the risk of developing a particular condition based on <I>phenotypic </I>(e.g.
transcriptomic, proteomic or metabolomic) parameters; or <I>genomic </I>(e.g. hereditary or gene based) characteristics;</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Companion
diagnostics</I>: </B>Diagnostic products to evaluate an individual patient&rsquo;s likelihood of benefiting from a particular therapeutic
or risk of suffering certain adverse events from a particular therapeutic. Companion diagnostics represent a greater integration
between diagnostics and therapeutics;</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Screening
tests</I>. </B>Diagnostics performed on people prior to a clinical manifestation of disease &ndash; this contrasts with most other
medical checks, which are performed when symptoms are already available. Screening typically involves testing a target population
for a particular condition as part of a public health strategy; and</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Pharmacogenomic
tests</I>. </B>Examine the influence of genetic variation on drug response in patients by correlating gene expression or single
nucleotide polymorphisms (SNPs) with a drug&rsquo;s efficacy or toxicity. The aim of pharmacogenomics is to take into account a
patient&rsquo;s genotype to optimize drug therapy, i.e. to maximize efficacy while minimizing adverse effects;</FONT></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; text-indent: 0.25in">There are a number of key trends that are
having a significant impact on the clinical testing business and represent opportunities for companies that can develop novel diagnostic
tests. Clinical laboratory testing is an essential healthcare service and is being favorably impacted by the following:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Demographics.
</I></B>The growing and aging population is increasing the demand for clinical testing;</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Increased
testing. </I></B>Physicians are increasingly relying on diagnostic testing to help identify disease risk, detect the symptoms of
disease earlier, aid in the choice of therapeutic regimen, and monitor patient compliance and to evaluate treatment results;</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Advances
in science and technology. </I></B>Recent medical advances have allowed earlier diagnosis and treatment of diseases and continuing
research and development in the area of genomics is expected to yield new, more sophisticated and specialized diagnostic tests.
These advances also are spurring interest in, and demand for, personalized or tailored medicine; and</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Prevention
and wellness. </I></B>There is an increased awareness of the benefits of preventative medicine and wellness. Consumers, employers,
health plans, and government agencies are increasingly focusing on detecting diseases earlier and providing preventative care that
helps avoid disease.</FONT></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; text-indent: 0.25in">As a result of these significant changes
in the laboratory testing and IVD markets, it is evident that there is a significant commercial opportunity for companies that
provide products or services that address the new needs of the evolving diagnostics marketplace. This is the market opportunity
that Arrayit Diagnostics is addressing through its introduction of diagnostics tests that use patented, patent-pending, and proprietary
technology to improve health and reduce the overall cost of healthcare through early detection, prevention, and treatment.</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>Our solution and strategy</B></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; text-indent: 0.25in">Our solution is to utilize the technology
that we have exclusively licensed from WSU to exploit the new opportunities that are evolving in the diagnostics industry. We were
created to specifically commercialize microarray-based diagnostic tests and services that are focused on early detection and pre-symptomatic
screening. These new tests are based on patented and proprietary technology that is well-suited to be run in a central laboratory
utilizing samples that are collected by healthcare providers and sent to our authorized CLIA-certified testing facility for processing.</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; text-indent: 0.25in">This approach is similar to the business
model that Myriad Genetics, Inc. (Revenues: $470.45 million; market cap: $1.98 billion; NASDAQ:MYGN) has utilized with the seven
tests that it markets that determine predisposition to hereditary breast cancer, ovarian cancer, colon cancer, endometrial cancer
and melanoma skin cancer. However, whereas Myriad Genetics determines a predisposition to a particular disease, we will market
diagnostic tests that can be used to screen for the actual disease itself, in most cases before any symptoms have been observed.</P>

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

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<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; text-indent: 0.25in">To achieve this goal of commercializing
new diagnostic opportunities, we are leveraging off the strategic relationships that have been established with organizations such
as Wayne State University and others to develop unique and high value-added diagnostic tests.</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; text-indent: 0.25in">Although the initial focus of Diagnostics
is an ovarian cancer and a prostate cancer<B> </B>test, we will explore opportunities for other microarray-based diagnostic tests,
including pre-symptomatic screening tests for Parkinson&rsquo;s disease, Alzheimer&rsquo;s disease, and other applications that
allow early detection. We will also explore companion diagnostic opportunities for pharmaceuticals such as Plavix<SUP>&reg;</SUP>,
the world&rsquo;s leading anti-clotting medication that is manufactured by Bristol-Myers Squibb in conjunction with Sanofi-Aventis
Pharmaceuticals.</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; text-indent: 0.25in">With the completion of the human genome
sequencing project, genetic research has increased its focus on identifying the variations of the specific genes in the genome.
These variations are what define individual characteristics, including disease states or a statistical propensity for disease.</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; text-indent: 0.25in">The implications are far-reaching and impact
not only the research community, but also individual patients and medical providers. Diagnostic tests that detect diseases very
early in their progression will provide options for earlier treatments that may improve the patient&rsquo;s quality of life and
prognosis by delaying or preventing disease progression or even death. Medical providers will incur major cost savings by avoiding
costly late stage disease treatments.</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; text-indent: 0.25in">As a result of a Technology Transfer Agreement
dated July 18, 2009, we have exclusive license rights to all of the trade secrets and protocols, developed by Arrayit, required
for the sale and use of the ovarian cancer test. We have collaborated with others to accomplish the opportunity for the following:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Microarray
expertise.</I></B> The future success of Diagnostics is made possible by leveraging our ability to continually innovate and develop
sophisticated microarray based diagnostic products. We rely on the identification of biomarkers and the ability to commercialize
them by utilizing a microarray delivery technology. The microarrays manufactured for </FONT>our<FONT STYLE="color: black"> tests
are considered to be the best in the industry and are 99% pure (versus 70% for competitors) and are the most sensitive on the market.</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Growing
menu of screening tests.</I></B> Our ovarian cancer test will set the standard for early detection and pre-symptomatic screening
utilizing a microarray based diagnostic test. We expect to expand this menu of tests to provide other early detection tests for
key diseases where adequate diagnostic screening tests do not exist and where early detection can save lives and improve quality
of life, such as Parkinson&rsquo;s disease, Alzheimer&rsquo;s disease, prostate cancer, and other diseases and medical conditions.
We expect that other cancer tests, neurological assays, and areas such as allergy and food intolerance testing will benefit from
the efficient patient screening model that are utilized in our tests. Additional markets for consideration that will also benefit
from screening tests using our licensed technology are blood typing, parentage testing, forensics, human leukocyte antigen (HLA)
analysis, infectious disease diagnosis, food testing, crop testing, and anti-terrorism analysis.</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><I>Ability
to leverage strategic relationships.</I></B> We expect that the relationships that have been established with the Centers for Disease
Control (CDC), Sandia Laboratories, Johns Hopkins University School of Medicine, the U.S. Department of Agriculture (USDA), MD
Anderson Cancer Center, The Parkinson&rsquo;s Institute, MIT, Stanford University, the NIH, and other prestigious institutions,
organizations, and companies around the world will benefit us immensely as we strive to create a world-class diagnostic testing
company. We believe that our relationships will allow us to license biomarkers discoveries from these and other research facilities
that have the potential to create innovative diagnostic tests. Similar to our relationship with Wayne State University, and the
worldwide exclusive licensing and sponsored research agreements that we put in place with them, we believe additional novel diagnostic
tests can be developed based on licensing of biomarkers discovered by our academic and scientific collaborators.</FONT></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: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Ovarian cancer</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Background. </I></B>As reported by
Dr. W. J. Allard from Medivice Consulting and Dr. R. G. Moore from Women&rsquo;s and Infants&rsquo; Hospital at Brown University,
ovarian cancer is diagnosed annually in more than 200,000 women worldwide, with the greatest incidence in the U.S. and Northern
Europe, and lowest incidence in Africa and Asia. Ovarian cancer is the fifth leading cause of cancer death worldwide and is responsible
for 5% of all cancer deaths in women. The American Cancer Society estimates that 21,650 women were diagnosed with ovarian cancer
in the US in 2008 and about 15,520 women in the US die every year from the disease. Mammography and cervical cancer screening with
Pap smears have led to a shift in the diagnosis of breast and cervical cancer to earlier stages and to pre-invasive disease that
are fundamentally curable, leading to a decrease in mortality for these cancers. However, no such tools are available for early
detection of ovarian cancer. While the serum CA 125 blood test is effective for monitoring women with ovarian cancer for progression
or recurrence, the sensitivity and specificity are both approximately 50%, which is too low for effective screening. Although early
detection strategies have not proven successful so far, novel approaches to patient management using biomarkers and statistical
algorithms have been suggested. This unmet medical need to improve survival for women with ovarian cancer through better screening
strategies will be addressed by our ovarian cancer<B> </B>test.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Current testing methods</I>. </B>As
summarized by the Ovarian Cancer Research Fund (OCRF), ovarian cancer is currently diagnosed using the following methods:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.25in"><FONT STYLE="font: 10pt Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black">A
vaginal-rectal pelvic examination (also called a bimanual exam): This exam allows the ovaries to be examined from many sides. It
is recommended that every woman should undergo a rectal and vaginal pelvic examination at her annual checkup with her gynecologist.</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.25in"><FONT STYLE="font: 10pt Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black">Transvaginal
Ultrasound: This test uses sound waves to create a picture of the ovaries, and can often reveal if there are masses or irregularities
on the surface of the ovaries. It cannot determine if a woman has cancer, but it can show characteristics that give different levels
of suspicion.</FONT></P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.25in"><FONT STYLE="font: 10pt Symbol; color: black">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black">CA
125 blood test: This test measures the level of a substance in the blood that may increase when a cancerous tumor is present. This
protein is produced by ovarian cancer cells and is elevated in more than 80% of women with advanced ovarian cancers and 50% of
those with early-stage cancers. Because CA 125 misses half of early cancers and can be elevated by benign conditions, the National
Cancer Institute (NCI) does not endorse using it to screen women at ordinary risk or in the general population.</FONT></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; text-indent: 0.25in">&#9;We believe it important that none of
these tests are definitive when used on their own. They are most effective when used in combination with each other. The only way
to confirm the presence of ovarian cancer suspected by the above tests is through a surgical biopsy of the tumor tissue.</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>Our ovarian cancer strategy</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Overview</I></B>. In response to
this unmet medical need and unprecedented diagnostic market opportunity, Arrayit initiated an ovarian cancer program in the year
2000, to create a microarray platform that would enable early stage pre-symptomatic screening of ovarian cancer. The goal of this
program was to develop a definitive screen that would become the standard of care in the industry. To facilitate this program,
Arrayit equipped the laboratory of Michael Tainsky, Ph.D., the director of molecular biology and genetics at Karmanos Cancer Institute
and professor of pathology at Wayne State University's School of Medicine with the Arrayit platform to enhance critical basic research
in molecular oncology. Over the past 10 years, Dr. Tainsky&rsquo;s laboratory has performed important basic research in the area
of ovarian and other cancers and his laboratory filed early diagnostics patents. Additionally, an exclusive worldwide license with
WSU was signed that grants us exclusive worldwide rights to develop and commercialize a novel microarray-based diagnostic test
on a planar surface using biomarkers developed by Professors Michael Tainsky of the School of Medicine and Sorin Draghici of the
College of Liberal Arts and Sciences, and Madhumita Chatterjee, research associate in the School of Medicine.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B>The ovarian cancer market. </B>Historically,
the laboratory test that physicians have utilized to assist in managing ovarian cancer has been the CA 125 test. CA (Cancer Antigen)
125 is not approved by the Food and Drug Administration as a diagnostic screening assay, but only an aid in monitoring response
to therapy for patients with epithelial ovarian cancer. CA 125 may also be elevated in other cancers and benign conditions such
as endometriosis. Its role in the early diagnosis of ovarian cancer is therefore controversial, and it is probably more useful
for monitoring patients for recurrence. The FDA restricts the indicated use of CA 125 because it has high rates of false positive
results in a normal population and high rates of false negative results in women with cancer. Although doctors now use the CA 125
test to check for ovarian cancer, this assay uses a single biomarker and generally only finds the disease in its later stages.
The CA 125 test is an immunoassay test that is routinely offered by clinical laboratories as part of their test menu of tests and
services. HealthLinx Limited, an Australian biomarker and diagnostic firm that launched its OvPlex&trade; test in the UK in early
2010, stated in a March 2010 press release that over 8 million CA 125 tests are performed in the U.S. annually. Laboratories routinely
charge about $125 for the CA 125. As an example, the Mayo Clinic charges $147.10 for CA 125 at their Mayo Medical Laboratories
in Rochester, Minnesota. Assuming an average price of $125 and 8 million tests performed annually, the total U.S. market for limited-use
ovarian cancer diagnostic tests is estimated to be $1 billion</P>

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

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

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">A diagnostic procedure that is often used
in conjunction with CA 125 testing is the transvaginal ultrasound (TVU), also known as an endovaginal ultrasound, and involves
the use of sound waves to delineate internal structures with a transducer placed in the vagina. Transvaginal ultrasound imaging
is recommended for ovarian cancer screening in asymptomatic women at high risk for developing ovarian cancer. Women considered
at high risk are those with a strong family history of either ovarian or breast cancer (two or more first-degree relatives have
or had the disease). Current recommendations suggest that high risk patients should begin TVU and CA 125 screening five years prior
to the earliest age of onset of the disease in their family. After initial screening, it is recommended that this be followed by
an annual CA 125 measurement and a TVU every two years. According to the New Choice Health website, the national average price
for a TVU is currently $525. Therefore, if TVU and CA 125 are run together for high risk patients, the resulting cost is approximately
$650. This pricing level further supports the basis that the $583 price per test to the patient for each ovarian cancer test is
more cost effective.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B>The ovarian cancer marketing strategy.
</B>Consistent with the business model of Diagnostics to partner with companies with an established presence, a definitive agreement
to transfer a portion of the intellectual property related to the WSU patent was entered into with Yarra Dx, Inc. Yarra is led
by an ovarian cancer survivor who has established an extensive network of business leaders with the capabilities to greatly expand
the scope of the market for Ovarian Cancer test in the medical communities as well as financial markets. This allows us to apply
our resources to the development of prostate cancer, a much larger market.</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>Prostate cancer</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Incident frequency in U.S.</I></B>
As reported by the American Cancer Society, an estimated 240,890 new cases of prostate cancer were reported in the US in 2011.
Prostate cancer is the most frequently reported cancer in men. With an estimated 33,720 deaths in 2011, it is the second leading
cause of cancer death in men. In early stages of development prostate cancer has no clear symptoms, but if detected early the survival
rate approaches 100%.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Current testing methods.</I> </B>Prostate
cancer is currently diagnosed using the following methods:</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
rectal digital exam: This exam allows the prostate to be examined for abnormalities by touch.</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transrectal
ultrasound: This test uses sound waves to create a picture of the prostate, and can reveal surface irregularities. It can not determine
if a man has cancer, but it can show characteristics that give different levels of suspicion.</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PSA
blood test: This test measures the level of a substance in the blood that may increase when a cancerous tumor is present. This
protein is produced by prostate cancer cells. However, this protein is not always elevated with the presence of cancer and is sometimes
elevated in the absence of cancer.</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; text-indent: 0.25in">None of these tests are definitive when
used on their own. The only way to confirm the presence of prostate cancer suspected by the above tests is through a surgical biopsy
of the tumor tissue.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B>Our prostate cancer strategy. </B>The
exclusive rights to the WSU patents apply equally to prostate cancer as to ovarian cancer. The objective is to pursue the further
development of a pre-symptomatic prostate cancer test as permitted by the patents.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>The prostate cancer market</I>. </B>The
laboratory test that physicians have utilized to assist in managing prostate cancer has been the PSA test (prostate specific antigen).
PSA is present in all men but can be elevated with the occurrence of prostate cancer. The problem is that PSA can also be elevated
by other benign conditions. The incidence of false positive results is about 70%, leading to unnecessary treatment, with potentially
debilitating side effects. There are currently about 20 million PSA tests administered annually in the US.</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; text-indent: 0.25in"><B><I>Prostate Cancer Test (PCT); advertising,
marketing, and sales</I>. </B>Our initial sales and marketing efforts will be based on a national awareness campaign that can utilize
the extensive contact base that has been developed to date. This will include press releases to all major news outlets, direct
mail campaigns, relevant articles to diagnostic, biotechnology and genomic web-based outlets, major trade publications, e-mail
newsletters, and scientific trade shows. We will expand its website to offer easy access to patients and their caregivers as well
as healthcare providers interested in the <B>PCT</B> test and other future diagnostic tests.</P>

<P STYLE="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: 0.25in"><FONT STYLE="color: black">This expanded
website will allow patients and caregivers access to extensive patient information regarding Diagnostics; the diagnostic tests
offered by us; how to order a test and assistance in locating a doctor that prescribes </FONT>our<FONT STYLE="color: black"> tests;
links to relevant support groups, foundations, and associations related to the different disease state tests; and information and
web links that provides assistance with insurance related issues. Healthcare providers will have access to technical information
and clinical data relating to </FONT>our<FONT STYLE="color: black"> tests; information about us; access to information appropriate
for their patients; and how to order a test.</FONT></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; text-indent: 0.25in"><FONT STYLE="color: black">We expect to
develop key strategic relationships with select clinical reference laboratories, genetic testing laboratories, HMO organizations,
and other strategic partners to obtain maximum market share. We will assist </FONT>our<FONT STYLE="color: black"> strategic partners
with a small direct sales force in the United States, where the primary focus will be commercializing the <B>PCT</B> test in the
men&rsquo;s health marketplace. In addition to facilitating the expansion of the number of healthcare providers that recommend
and prescribe the <B>PCT </B>test and other future diagnostic tests, we and </FONT>our<FONT STYLE="color: black"> strategic partners
will manage attendance at health fairs, contact regional laboratories that are candidates to refer testing to us and </FONT>our<FONT STYLE="color: black">
partners, and visit individual healthcare providers, giving preference to large group obstetrics and gynecology practices and other
groups dealing with women&rsquo;s health issues.</FONT></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; text-indent: 0.25in">All sales and marketing activities are
initially focused on the U.S. market where we have a direct presence and sales force representation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>The market</I></B>. According to
PricewaterhouseCoopers publication Diagnostics 2009, the global IVD market size of the IVD industry is $37 billion. A market research
report by Kalorama Information, states that the U.S. IVD market is the single largest diagnostics market in the world and represents
43% of the global IVD market. According to a December 15, 2009 press release by EDMA, the European Diagnostic Manufacturers Association,
the 27 countries that make up the EU had a total IVD market of $12 billion in 2008 and therefore represents 32% of the global IVD
market. According to EDMA, the five largest markets in Europe are Germany, France, Italy, Spain, and the UK and collectively they
represent approximately 76% of the total IVD market in the 27 country EU database. We have not included any international sales
in the forecast assumptions or projections, although the Company will be exploring appropriate strategic alliances that will allow
it to participate in these markets as well.</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; text-indent: 0.25in">These potential strategic partners include
reference laboratories active in these markets, such as Sonic HealthCare that currently has laboratory operations in Germany, Ireland,
Belgium, Switzerland, and the UK. Preference will be given strategic alliances with companies located in the five largest European
markets referenced above, which according to EDMA data each represent 7, 6, 5, 4, and 2 percent of the global IVD market respectively.
Collectively, these five countries represent approximately 24% of the global IVD market or slightly more than half of the total
IVD market in the United States.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Employees. </I></B>At December 31,
2011, we had one full time employee, and agreements with four consultants. We had no part-time employees. None of our employees
are covered by a collective bargaining agreement with a union. We consider our relationship with our employees to be good.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>Properties. </I></B>Our corporate
offices are located at 1950 Cinnamon Teal Drive, Redmond, Oregon. The temporary corporate headquarters cover 500 square feet and
has zero rent until October 1, 2013.</P>

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

<P STYLE="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>Description of the spin-off</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: 0.25in">Nineteen million three hundred fifty thousand
(19,350,000) shares of our common stock will be distributed by Arrayit to its shareholders (the &ldquo;Distribution&rdquo;) as
of the &ldquo;Record Date&rdquo;. The Record Date will be established when this registration statement is deemed effective. As
a result, each holder of record, on the Record Date to be selected, of: (i) Arrayit common stock, (ii) Arrayit convertible preferred
stock; and (iii) options or warrants to purchase Arrayit common stock will receive one share of our common stock for every 3.34
shares of: (i) Arrayit common stock, (ii) Arrayit common stock issuable upon conversion of convertible preferred stock; and (iii)
Arrayit common stock issuable upon exercise of options or warrants to purchase 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: 0.25in">The spin-off is expected to be effective
as of 11 AM, Washington time, on the spin-off date estimated to occur on or about January 15, 2013. (Because certain regulatory
filings and notices must be made with regard to this spinoff, the Record Date and spin-off date are not precisely knowable). To
receive our common stock, you must be a holder of record of Arrayit common stock, convertible preferred stock or warrants to purchase
common stock at the close of business on the Record Date to be selected.</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: 0.25in">The Distribution is expected to be effected
as soon as practicable after the date the registration statement, of which this prospectus is a part, is declared effective. The
shares of our common stock will be distributed electronically to the Arrayit stockholders on that date or as soon thereafter as
practicable. No fractional shares of our common stock will be issued.</P>

<P STYLE="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>Reasons for the spin-off</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: 0.25in">We are presently (prior to the spin-off
as contemplated herein) a majority-owned subsidiary of Arrayit. We want a new and independent price and capital structure as we
move to the OTCBB and become a reporting company, and Arrayit desires to remain an independent publicly reporting and trading entity
pursuing its separate business plan.</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; text-indent: 0.25in">On December 14, 2011, Arrayit&rsquo;s board
of directors approved the spin-off of Diagnostics into an independent publicly reporting and trading company. The reasons for the
spin-off consist principally of the following, all of which are supported by both Diagnostics and Arrayit and their respective
management and board of directors.</P>

<P STYLE="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: 0.25in"><B><I>Impact on price and market capitalization.</I>
</B>Arrayit management (and our management concurs) is hereby registering and issuing as a dividend to Arrayit shareholders its
ownership interest in us. Management believes that the result of the restructuring will be (i) the operations of Diagnostics are
expected to be in an entity trading at a higher price without damaging the market capitalization of Arrayit, and (ii) that Arrayit
shareholders should have greater value in owning two separate stocks as Arrayit shareholders will still own all of their Arrayit
shares, and Arrayit will remain a reporting, publicly trading company (See &ldquo;<I>Risk Factors</I>&rdquo;). In any event, the
stock price of Diagnostics may or may not exceed that of Arrayit and, following the spin-off, the combined market value of a shareholder&rsquo;s
stock in Diagnostics and Arrayit may or may not exceed or even equal the current or pre-spin-off market value of their Arrayit
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: 0.25in">It is possible that the following the spin-off,
the combined market value of a shareholder&rsquo;s stock in Diagnostics and Arrayit will be less than the current or pre-spin-off
market value of their Arrayit stock. By way of example, if a current Arrayit common shareholder has 1 million shares and the current
price is $0.14 per share, then the theoretical market value of this shareholder&rsquo;s position is $140,000 (1,000,000 Arrayit
shares times $0.14). Pursuant to the spin-off, this shareholder will receive approximately 346,000 shares of our common stock,
while retaining the 1 million Arrayit common shares. If, for example, following the spin-off, the Arrayit stock price decreases
from the current fourteen cents per share to $.10 per share and our common stock price does not increase to $.04 per share, but
instead reaches $.01 per share, then the shareholder&rsquo;s combined holdings would be worth only $103,460 (1,000,000 Arrayit
shares times $.10, or $100,000, plus 346,000 Diagnostics&rsquo; shares times $.01, or $3,460).</P>

<P STYLE="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: 0.25in"><B><I>Enable Arrayit and Diagnostics to
use stock more efficiently as an acquisition currency. </I></B>Our ability to expand through selective acquisitions and partnerships
is expected to be important to each company&rsquo;s continued success. Management believes the spin-off will enable each company
to use its own stock more effectively as currency in acquiring, merging and otherwise making strategic investments in or partnering
with other companies. We believe we are generally a less desirable acquisition currency due to being a majority owned subsidiary
of Arrayit and, specifically, to <I>potential investor&rsquo;s concerns about holding shares that have no direct claim against
its assets and no direct voting rights concerning its governance</I>. As a subsidiary of Arrayit, we have no control over our destiny.
As a result of the spinoff, we will control our own destiny. Our shareholders will have a direct claim against our assets (versus
indirectly as a shareholder of our parent, Arrayit) and direct voting rights concerning our governance. For these reasons, we expect
that, after the spin-off, we will have greater autonomy and control over the use of our equity than we have as a business unit
of Arrayit. For more information regarding these limitations, see the section entitled &ldquo;<I>Relationship between Diagnostics
and Arrayit Following the Spin-Off&mdash;Agreement between Diagnostics and Arrayit Relating to the Spin-Off.</I>&rdquo;</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: 0.25in"><B><I>Eliminate some impediments that could
discourage a change of control and the payment of a premium for Diagnostics and/or Arrayit shares.</I> </B>The existence of two
separate businesses and two classes of common stock with variable votes per share could present complexities that could, in certain
circumstances, pose obstacles, financial or otherwise, to an acquiring person, thereby potentially discouraging some change of
control transactions. As a result of the spin-off, these complexities and obstacles will be eliminated for both Arrayit and Diagnostics.</P>

<P STYLE="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: 0.25in"><B><I>Enhance stockholder influence on
the outcome of stockholder voting.</I> </B>Under the current structure, holders of Arrayit have absolute voting power over our
outstanding common stock. Except in limited circumstances requiring separate class voting, this disproportionate voting power affords
holders of Arrayit the ability to control the outcome of stockholder votes - even if the matter involved a divergence or conflict
of the interests of the holders of the stock of Diagnostics and Arrayit. The spin-off will vest in our shareholders all of the
voting rights associated with our common stock and, as a result, afford our holders enhanced influence over the outcome of our
stockholder voting.</P>

<P STYLE="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>Taxable event and related considerations</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: 0.25in">The Arrayit board of directors considered
other factors relating to the spin-off, including the expectation that the spin-off will not qualify as a tax-free exchange for
U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code and will eliminate risk not directly associated
with our business. The Arrayit board of directors also considered other potential risks and consequences to Diagnostics and Arrayit
associated with the spin-off, including those relating to us that are described in &ldquo;<I>Risk Factors&mdash;Risk Factors Relating
to the Spin-Off,</I>&rdquo; but believed that the considerations described above outweighed those risks. Our shareholders are urged
to read all of the Risk Factors described in this prospectus.</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>The restructuring; spin-off ratio</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: 0.25in">The spin-off is expected to be effective
at 11 AM, Washington time, on the spin-off date, estimated to occur on or about January 15, 2012. The spin-off will be affected
through an initial stock dividend by us to Arrayit, based on a 1 for 3.34 ratio on outstanding capital stock of Arrayit. Those
Diagnostics&rsquo; shares will then be issued on a pro rata basis to all Arrayit shareholders. Specifically, each holder of record
of Arrayit at the close of business on the Record Date will receive on the spin-off date one share of our common stock for every
3.34 shares of Arrayit held by such Arrayit shareholder. The Record Date will be established when this S-1 is deemed effective.</P>

<P STYLE="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>Arrayit is not seeking stockholder approval of the spin-off,
and holders of Arrayit have no appraisal rights in connections with the spin-off from and after the spin-off date. </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: 0.25in">To be entitled to receive shares of our
common stock in the dividend, holders of Arrayit must be stockholders at the close of business on the Record Date. The Record Date
will be established when the registration statement of which this prospectus is a part is deemed effective.</P>

<P STYLE="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>Distribution of the spin-off 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: 0.25in">As part of the spin-off, we will be adopting
a book-entry share transfer and registration system for our common and preferred stock. Instead of receiving physical share certificates,
registered holders who currently hold certificates representing Arrayit will receive, for every 3.34 shares of Arrayit held on
the spin-off date, one share of our common or preferred stock credited to book-entry accounts established for them by our transfer
agent and a pro rata share of our common or preferred 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; text-indent: 0.25in">Our transfer agent will mail an account
statement to each registered holder stating the number of shares of our common stock credited to such holder&rsquo;s account. After
the distribution, holders may request that their shares of Diagnostics&rsquo; common stock be transferred to a brokerage or other
account at any time without charge. For stockholders who own Arrayit shares through a broker or other nominee, their shares of
our common stock will be credited to their account by the broker or other nominee.</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: 0.25in">From and after the spin-off date, holders
of Arrayit will become holders of our common stock, and their rights as holders of Arrayit will continue.</P>

<P STYLE="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: 0.25in">John Howell, President of Diagnostics,
has been appointed to respond to any shareholder questions about the spin-off. Questions and requests for assistance and additional
copies of this prospectus should be directed to Mr. Howell at 916-599-3138.</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>Results of the spin-off</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: 0.25in">Upon completion of the spin-off, we will
be an independent public company, owning and operating the businesses that currently constitute the business of Diagnostics, and
Arrayit will continue its present operations. For a discussion of the post spin-off businesses of Diagnostics, see the section
entitled &ldquo;<I>Arrayit and Diagnostics</I>.&rdquo; Immediately after the spin-off, we expect we will have approximately 400
beneficial owners of shares of our common stock and 32,205 million shares of common stock outstanding plus additional shares issued
to round up each holder to the next highest whole share.</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>Listing and trading of diagnostics&rsquo; 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: 0.25in">We intend to apply to the OTCBB to quote
our common stock. We cannot assure investors as to the price at which our common stock (or that of Arrayit) will trade. The trading
prices of our common stock after the spin-off may be less than, equal to, or greater than the trading price of the Arrayit stock
before (or after) the spin-off. Shares of our common stock issued in the spin-off will be freely transferable, except for shares
received by those who may have a special relationship or are affiliates. Those who may be considered our affiliates after the spin-off
generally include individuals or entities that control, are controlled by, or are under common control with Diagnostics. This may
include some or all of Diagnostics and Arrayit&rsquo;s officers and directors. Persons who are our affiliates will be permitted
to sell their shares only pursuant to an effective Registration Statement under the Securities Act of 1933, as amended, and/or
an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144 hereunder specifically
including the permitted number of shares. For more information on trading in shares of our common stock, see the section entitled
&ldquo;<I>Shares Eligible for Future Sales</I>.&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>Reason for furnishing this 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-indent: 0.25in">We are furnishing this prospectus to provide
information to holders of Arrayit who will be issued our shares in the spin-off. It is not, and is not to be construed as, an inducement
or encouragement to buy or sell any of our securities or those of Arrayit. The information contained in this prospectus is believed
by us to be accurate as of the date set forth on its cover. Changes may occur after that date, and neither we nor Arrayit are required
to update the information except in the normal course of our public disclosure obligations and practices.</P>

<P STYLE="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>Expenses</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: 0.25in">The expenses of the spin-off are estimated
to be approximately $82,500. These expenses will be borne by us prior to and after the spin-off.</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>Accounting consequences of the spin-off</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: 0.25in">Following the spin-off, we will account
for our assets and liabilities based on the historical values at which they were carried immediately prior to the spin-off. The
financial statements attached to this prospectus include the historical financial information for Diagnostics and the capital structure,
and will not change as a result of the spin-off.</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>Certain U.S. federal income tax consequences of the spin-off</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: 0.25in">The following is a summary of certain material
U.S. federal income tax consequences relating to the spin-off. The summary is based on the Internal Revenue Code, the Treasury
regulations promulgated there under, and interpretations of the Internal Revenue Code and Treasury regulations by the courts and
the Internal Revenue Service, all as they exist as of the date of this document and all of which are subject to change at any time,
possibly with retroactive effect.</P>

<P STYLE="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: 0.25in">We have not requested nor do we intend
to request a ruling from the Internal Revenue Service or an opinion of tax counsel as to the federal income tax consequences of
the Spin-Off. However, based on the facts of the proposed transaction, it is the opinion of our management that the transaction
will not qualify as a tax free spin off under Section 355 of the Internal Revenue Code of 1986, as amended. As such, we will likely
report the transaction as a taxable distribution to which Section 301 applies.</P>

<P STYLE="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: 0.25in">This summary does not discuss all tax considerations
that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders
subject to special treatment under the U.S. federal income tax laws, including, without limitation:</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>non-U.S. persons</TD></TR></TABLE>

<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>insurance companies</TD></TR></TABLE>

<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>dealers or brokers in securities or currencies</TD></TR></TABLE>

<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>tax-exempt organizations</TD></TR></TABLE>

<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>financial institutions</TD></TR></TABLE>

<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>mutual funds</TD></TR></TABLE>

<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>pass through entities and investors in such entities</TD></TR></TABLE>

<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>holders who hold their shares as a hedge or as part of a hedging, straddle, conversion, synthetic security, integrated investment
or other-risk reduction transaction</TD></TR></TABLE>

<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>holders who are subject to the alternative minimum tax</TD></TR></TABLE>

<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>holders who acquired their shares upon the exercise of employee stock options or otherwise as compensation</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: 0.25in">In addition, this summary does not address
the U.S. federal income tax consequences to those Arrayit holders who do not hold their Arrayit shares as a capital asset. Finally,
this summary does not address any state, local or foreign tax consequences. <B>You are urged to consult your own tax advisor concerning
the U.S. federal, state and local and any non-U.S. tax consequences of the spin-off.</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: 0.25in">The U.S. federal income tax consequences
of the spin-off are that gain or loss will be recognized by (and may be included in the income of) Arrayit holders upon their receipt
of shares of our common stock in the spin-off.</P>

<P STYLE="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: 0.25in">Notwithstanding the foregoing discussion,
the IRS could assert that the spin-off is taxable without reduction for any cost basis and could further determine that the value
is greater than anticipated for U.S. federal income tax purposes. If the IRS were successful in taking this position, our initial
public stockholders (the former Arrayit shareholders who were issued our stock in the spin-off) and we could be subject to significant
U.S. federal income tax liabilities. In general, we will not be subject to tax. Arrayit will not be subject to tax, given the current
earnings and profits or accumulated earning and profits, and Arrayit&rsquo;s shareholders would recognize gain or loss equal to
the difference between the fair market value of the shares of our common stock received and 2% of the holder&rsquo;s tax basis
in the Arrayit shares held prior to the spin-off.</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: 0.25in">Current Treasury regulations require that
if you are a holder of Arrayit who receives our stock in the spin-off and, immediately prior to the spin-off, own:</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>at least five percent of the total outstanding stock of Diagnostics, or</TD></TR></TABLE>

<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>securities of Diagnostics with a tax basis of $1,000,000 or more</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">then you must attach a statement relating to the spin-off to
your federal income tax return for the year in which the spin-off occurs.</P>

<P STYLE="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: 0.25in"><B>The foregoing is a summary of certain
U.S. federal income tax consequences of the spin-off under current law and is for general information only. The foregoing does
not purport to address all U.S. federal income tax consequences or tax consequences that may arise under the tax laws of other
jurisdictions or that may apply to particular categories of stockholders. You should consult your tax advisor as to the particular
tax consequences of the spin-off, including the application of U.S. federal state, local and foreign tax laws, and the effect of
possible changes in tax laws that may affect the tax consequences described above.</B></P>

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

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

<P STYLE="font: bold 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"><B>Shares to be issued</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: 0.25in">This prospectus relates to the resale of
up to 10,791,400 shares of our common stock by AEF Master SPV LP. AEF Master will acquire our common stock pursuant to the terms
and conditions of the Investment Agreement. The 10,791,400 shares include: (i) 8,000,000 shares issuable by us at an assumed price
of $1.00 per share to be purchased by AEF Master under the Investment Agreement, (ii) 125,000 shares issued to AEF Master SPV,
LP as payment of commitment and expense fees in connection with the transaction and (iii) 2,666,400 shares as 1/3<SUP>rd</SUP>
of the number of shares which may be issued for purchase from time to time under the investment agreement.</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 Investment Agreement</B></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; text-indent: 0.25in">The Investment Agreement with AEF Master
provides that AEF Master is committed to purchase from us, from time to time, up to $8,000,000 of our common stock over the course
of 36 months. We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms
and conditions of the Investment Agreement. The amount that we are entitled to put in any one notice will be determined in accordance
with a formula set forth in the Investment Agreement. Generally, in respect of each put, AEF Master will pay us a per share purchase
price equal to 100% of the volume weighted average price, or VWAP, of our common stock during the 15 consecutive trading days immediately
prior and five days after our put notice. The initial number of shares issuable by us and purchasable by AEF Master under the Investment
Agreement is 8,000,000 shares.</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>SELLING STOCKHOLDER</B></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; text-indent: 0.25in">The information provided in the table and
discussions below has been obtained from AEF Master<B>, </B>the selling stockholder. The selling stockholder may have sold, transferred
or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date on which
it provided the information regarding the shares, all or a portion of the shares of common stock beneficially owned in transactions
exempt from the registration requirements of the Securities Act. As used in this prospectus, &ldquo;selling stockholder&rdquo;
includes the person or persons listed in the table below, and the donees, pledgees, transferees or other successors-in-interest
selling shares received from the named selling stockholder as a gift, pledge, distribution or other transfer.</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; text-indent: 0.25in">Beneficial ownership is determined in accordance
with Rule 13d-3(d) promulgated by the Commission under the Securities Exchange Act of 1934. Unless otherwise noted, each person
or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where
applicable.</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: 100%; font: 8pt Times New Roman, Times, Serif">
<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">Shares Beneficially Owned Prior to<BR> the Offering</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">Shares offered<BR> under this<BR> Prospectus(4)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Shares Beneficially Owned<BR> After the Offering(1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid">Name of Selling<BR> Stockholder</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Number</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">Percentage of<BR> Class</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">&nbsp;</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">Number</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">Percentage of<BR> Class(3)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 35%; text-align: left">AEF Master SPV LP. (2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">125,000</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">&nbsp;</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: 10%; text-align: right">30,141,400</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">0</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">0</TD><TD STYLE="width: 1%; 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">*Percentage of shares owned before the offering is less than
one percent.</P>

<P STYLE="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)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These numbers assume the selling stockholder sells all
of its shares being offered 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">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AEF Master is the investor under the Investment Agreement.
All investment decisions and control of AEF Master are made and held by its investment manager. As a result, Mr. Robert C. Rhodes,
the managing member of Rhodes Holdings, makes the investment decisions on behalf of and control American Equity Fund. American
Equity Fund has informed us that it is an &ldquo;underwriter&rdquo; within the meaning of the Securities Act, and to the best of
our knowledge, no other underwriter or person has been engaged to facilitate the sale of shares of the common stock 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">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applicable percentage ownership is based on 32,205,000
shares of common stock outstanding as of August 31, 2012 and on common stock owned by the selling stockholder. Beneficial ownership
is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to 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">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Includes (i) 8,000,000 shares of common stock which may
be issued under the investment agreement between Arrayit Diagnostics, Inc. and AEF Master SPV LP, having a total value of $8,000,000,
based on an assumed price per share of $1.00, (ii) 125,000 shares issued to AEF Master SPV, LP as payment of commitment and expense
fees in connection with the transaction and (iii) 2,666,400 shares as 1/3<SUP>rd</SUP> of the number of shares which may be issued
for purchase from time to time under the investment agreement..</P>

<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">PLAN OF DISTRIBUTION</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; text-indent: 0.25in">Each selling stockholder of our common
stock and any of their donees, pledgees, transferees, assignees and other successors-in-interest may, from time to time, sell,
transfer or otherwise dispose of any or all of their shares of common stock on the OTC Bulletin Board&nbsp;or any other stock exchange,
market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated
prices. A selling stockholder may use any one or more of the following methods when selling 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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an
exchange distribution in accordance with the rules of the applicable exchange;</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;privately
negotiated 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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;settlement
of short sales entered into after the effective date of the registration statement of which this prospectus is a part;</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;broker-dealers
may agree with the selling stockholders to sell a specified number of such shares at a stipulated price 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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
combination of any such methods of sale; or</P>

<P STYLE="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; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
other method permitted pursuant to applicable law.</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 may also sell shares
under Rule 144 under the Securities Act, if available, rather than under this prospectus.</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; text-indent: 0.25in">Broker-dealers engaged by any selling stockholder
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 purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary
brokerage commission in compliance with FINRA NASD Rule 2440; and in the case of a principal transaction a markup or markdown in
compliance with FINRA IM-2440.</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; text-indent: 0.25in">In connection with the sale of our common
stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, who may in turn engage in short sales of our common stock in the course of hedging the positions they assume. However,
the selling stockholders will not sell shares of our common stock short. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which
require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).</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 selling stockholders and any underwriters,
broker-dealers or agents that participate in the sale of our common stock or interests therein&nbsp;will be considered &ldquo;underwriters&rdquo;
within the meaning of Section 2(11) of the Securities Act in connection with such sales and, as such, any discounts, commissions,
concessions or profit they earn on any resale of the shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Since the selling stockholders are deemed to be an &ldquo;underwriter&rdquo; within the meaning of Section 2(11)
of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act. In no event shall any
broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).</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 are required to pay certain fees and
expenses incurred by us incident to the registration of the shares. We have agreed to 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; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The selling stockholders&nbsp;are subject
to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than
this prospectus. There is no underwriter or coordinating broker-dealer acting in connection with the proposed sale of the resale
shares by the selling stockholders.&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">The resale shares will be sold only through
registered or licensed broker-dealers if required under applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with. As of the date of this prospectus, we have not filed
for registration or qualification in any state.</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">Under applicable rules and regulations under
the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities
with respect to our common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of
the distribution. In addition, the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of our common stock
by the selling stockholders or any other person. We will make copies of this prospectus available to the selling stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).</P>

<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">DIVIDEND POLICY</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; text-indent: 0.25in">Following the spin-off, we do not anticipate
paying any dividends on our common stock in the foreseeable future because we expect to retain our earnings for use in the operation
and expansion of our business. Any such payment and amount of dividends will be subject to the discretion of our board of directors
and will depend, among other things, on our financial condition, results of operations, cash requirements, future prospects and
other factors that may be considered relevant by our board of directors.</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">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; text-indent: 0.25in">The respective Diagnostics and, as applicable,
Arrayit boards have separately adopted a written Related Party Transaction Policy for the review, approval and ratification of
transactions involving the related parties of Diagnostics. In each case, related parties are directors and nominees for director,
executive officers and immediate family members of the foregoing, as well as security holders known to beneficially own more than
five percent of our common stock. The policy covers any transaction, arrangement or relationship, or series of transactions, arrangements
or relationships, in which Arrayit and/or Diagnostics was, is or will be a participant and the amount exceeds $10,000, and in which
a related party has any direct or indirect interest. The policy is administered by the appropriate board acting as a committee
of the whole.</P>

<P STYLE="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: 0.25in">In determining whether to approve or ratify
a related party transaction, the appropriate board will consider whether or not the transaction is in, or not inconsistent with,
the best interests of the appropriate company. In making this determination, the appropriate board is required to consider all
of the relevant facts and circumstances in light of the following factors and any other factors to the extent deemed pertinent
by the committee:</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether
the terms of the Related Party Transaction are fair to the company and on the same basis as would apply if the transaction did
not involve a Related Party;</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether
there are business reasons for the company to enter into the Related Party Transaction;</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether
the Related Party Transaction would impair the independence of an outside director, if applicable; and</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 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether
the Related Party Transaction would present an improper conflict of interests for any director or executive officer of the company,
taking into account the size of the transaction, the overall financial position of the director, executive officer or Related Party,
the direct or indirect nature of the director's, executive officer's or Related Party's interest in the transaction and the ongoing
nature of any proposed relationship, and any other factors the board deems relevant.</P>

<P STYLE="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: 0.25in">The policy contains standing pre-approvals
for certain types of transactions which, even though they may fall within the definition of a related party transaction, are deemed
to be pre-approved by Diagnostics and/or Arrayit given their nature, size and/or degree of significance to the appropriate 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: 0.25in">In the event Diagnostics and/or Arrayit
inadvertently enters into a related party transaction that requires, but has not received, pre-approval under the policy, the transaction
will be presented to the appropriate board for review and ratification promptly upon discovery. In such event, the committee will
consider whether such transaction should be rescinded or modified and whether any changes in our controls and procedures or other
actions are needed.</P>

<P STYLE="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: 0.25in">For a discussion of the potential conflicts
of interest between Diagnostics and Arrayit, see &ldquo;<I>Relationship between Diagnostics and Arrayit Following the Spin-off</I>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">Arrayit believes that any past transactions
with its affiliates have been at prices and on terms no less favorable to us than transactions with independent third parties.
We may enter into transactions with its affiliates in the future. We intend to continue to enter into such transactions only at
prices and on terms no less favorable to us than transactions with independent third parties. In this context, we will require
any director or officer who has a pecuniary interest in a matter being considered to excuse him or herself from any negotiations.
In any event, any debt instruments of Diagnostics in the future are expected generally to prohibit us from entering into any such
affiliate transaction on other than arm&rsquo;s-length terms.</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: 0.25in">In addition, a majority of the board is
(and must continue to be) neither an officer nor have a pecuniary interest (other than as a shareholder or director) in any transactions
with us. In turn, commencing immediately, a majority of the independent Board of Directors members (defined as having no pecuniary
interest in the transaction under consideration) will be required to approve all matters involving interested parties. Moreover,
it is expected that additional independent directors will be added to the board and the independent transfer agent, VStock Transfer,
LLC, will begin serving no later than the initial closing for this Offering, to assure proper issuance of stock to shareholders.</P>

<P STYLE="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>Additional disclosures</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: 0.25in"><B><I>Litigation. </I></B>There has not
been any material civil, administrative or criminal proceedings concluded, pending or on appeal against us, or our affiliates or
principals.</P>

<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">SELECTED FINANCIAL DATA</P>

<P STYLE="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: 0.25in">The following table sets forth certain
financial data for Diagnostics. The selected financial data should be read in conjunction with our &ldquo;Management&rsquo;s Discussion
and Analysis of Financial Condition and Results of Operations&rdquo; and notes thereto. The selected financial data for the six
months ended June 30, 2012 and the years ended December 31, 2011 and 2010 have been derived from our audited and unaudited financial
statements that are a part of this prospectus.</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; text-align: justify"></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">Six Months<BR> Ended<BR> 06/30/2012<BR> (unaudited)</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">Year Ended<BR> 12/31/2011</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">Year Ended<BR> 12/31/2010</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Income Statement Data:</TD><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>Revenue</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="width: 61%; text-align: left">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">1,167,286</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">274,090</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">631,361</TD><TD STYLE="width: 1%; 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">(1,167,286</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(274,090</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(631,361</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,884</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">49,804</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net Loss Attributable to Non-Controlling Interests</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">3,604</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,694</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">Net Loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,173,885</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(291,370</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(619,471</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net Loss per Share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.04</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">(0.03</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Weighted Average Common Shares Outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,659,435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,111,890</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,508,356</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Balance Sheet Data:</TD><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">Working Capital (Deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,167,350</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,075,051</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(793,168</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,339</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,716</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,807</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">Accumulated Deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,462,921</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,289,036</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(997,666</TD><TD STYLE="text-align: left">)</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">(1,164,323</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,065,478</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(770,504</TD><TD STYLE="text-align: left">)</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-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note: The weighted average share of common
stock reflects: (1) shares of our common stock issued to Arrayit; and (2) our common shares already held by other shareholders.</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">UNAUDITED, AUDITED AND 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: 0.25in">Unaudited financial statements for the
period ended June 30, 2012 and audited financial statements for the years ended December 31, 2011 and 2010 are provided in this
prospectus. In addition, summary financial data is provided in &ldquo;<I>Selected Financial Data</I>&rdquo; above.</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">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS
OF<BR>
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"><B>Current operational overview</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>Results of operations:</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: 0.25in"><B><I>Six months ended June 30, 2012 (unaudited)
and the twelve months ended December 31, 2011 compared to the twelve months ended December 31, 2010:</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: 0.25in">Because we are a development stage enterprise,
we have not incurred the normal operating expenses we expect to incur once we expand operations. Except as described below, the
development stage expenses incurred did not fluctuate significantly during the twelve months ended December 31, 2011 compared to
the same period in 2010. Management expects development stage expenses to stay fairly consistent during 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: 0.25in"><B><I>Inflation and seasonality:</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: 0.25in">We do not believe that inflation or seasonality
will significantly affect our results of operation.</P>

<P STYLE="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>Liquidity and capital resources</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: 0.25in">Management believes that its short and
long-term needs for working capital, capital expenditures, new facilities and acquisitions will be satisfied by the proceeds of
its investment strategy and the funds generated from future operations. Post spin-off, our current liabilities will continue to
be covered by the existing assets.</P>

<P STYLE="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: 0.25in"><B>Debt and Contractual Obligations</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: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD 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 30, 2012<BR> (unaudited)</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: right; border-bottom: Black 1pt solid">December<BR> 31,2011</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: right; border-bottom: Black 1pt solid">December 31,<BR> 2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<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">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">NOTES PAYABLE - ARRAYIT DIAGNOSTICS, INC.</TD><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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; text-align: left">Notes payable, interest at 10%, which was due January 22, 2011&nbsp;and is now past due, secured by 1,000,000 shares out of the Company's common stock, pledged to the private lender without compensation&nbsp;by the Company's Chairman.&nbsp; The terms also called for the issuance of 300,000 warrants issuable for shares of common stock at $0.22 per share.&nbsp; The annual effective&nbsp;interest rate for this loan is estimated to be 243.8%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">76,640</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">72,990</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">66,371</TD><TD STYLE="width: 1%; 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="text-align: left; padding-bottom: 1pt">LESS: Unamortized loan fee and discount in connection with the obtaining of the loan</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&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">(8,916</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Notes payable, interest at 10%, which was due August 10, 2010 and is now past due, secured by 200,000 shares out of the Company's common stock, pledged to the private lender without compensation as follows: 100,000 common shares provided by the Company's chief financial officer; 50,000 common shares provided without compensation by a minority shareholder in Arrayit Diagnostics; and a call option call to acquire an additional 50,000 common shares currently held by a minority shareholder in Arrayit Diagnostics.</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; vertical-align: bottom">61,939</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">58,990</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">53,640</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&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">&nbsp;</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">&nbsp;</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">&nbsp;</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">Notes payable, interest at 10%, due upon demand with no payments currently due, payable to the Company&rsquo;s Chairman</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">25,000</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">-</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;<B>Total Notes Payable</B></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">163,579</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">131,980</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">111,095</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">&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"><B>Royalty obligations</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><B>Wayne State University </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: 0.25in">Under terms of a biomarker license agreement
between Wayne State University (&ldquo;University&rdquo;) and Diagnostics, effective December 7, 2009 we are obligated to pay the
University royalties of 5% of net sales. In addition the license agreement provides for lump sum payments to be made as milestone
events are achieved.</P>

<P STYLE="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: 0.25in">There were no revenues generated during
the six months ended June 30, 2012 and the fiscal period ended December 31, 2011 and 2010, and hence no obligation to pay any royalties
to University.</P>

<P STYLE="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: 0.25in"><B>Critical accounting policies</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: 0.25in">Our discussion and analysis of our financial
condition and the results of our operations are based upon our consolidated financial statements and the data used to prepare them.
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. On
an ongoing basis we evaluate our judgments and estimates including those related to bad debts, investments, long-lived intangible
assets, and income taxes. We base our estimates and judgments on our historical experience, knowledge of current conditions and
our beliefs of what could occur in the future considering available information. Actual results may differ from these estimates
under different assumptions or conditions. Our estimates are guided by observing the following critical 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; text-indent: 0.25in"><B><I>Investments</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: 0.25in">We account for the purchase of non-marketable
equity and debt securities on a cost basis of accounting. Equity securities are classified as non-marketable when at the time of
the purchase the equity security does not have readily determinable fair values because the security is not publicly traded and
we do not have the ability to easily or readily convert the investment to cash in the open market. Consequently, significant gains
or losses may be recognized when equity securities are finally sold. In some cases the size of the potential gain or loss is not
easily estimable since there is no readily determinable fair value available. In other cases it may be subject to significant fluctuations
in the market before the restrictions on the sale are removed.</P>

<P STYLE="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: 0.25in">We account for the purchase of marketable
equity securities in accordance with ASC 320, &ldquo;Investment &ndash; Debt and Equity Securities&rdquo; with any unrealized gains
and losses included in earnings. However, those securities may not have the trading volume to support the stock price if the company
were to sell all their shares in the open market at once, so the company may have a loss on the sale of marketable securities even
though they record marketable equity securities at the current market value. All marketable equity securities totaled $0 at 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; text-indent: 0.25in"><B><I>Long-lived intangible assets and
goodwill</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: 0.25in">We evaluate our long-lived assets for impairment
whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash
flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the
excess of the carrying amount over the fair value of the asset.</P>

<P STYLE="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: 0.25in"><B><I>Income taxes</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: 0.25in">We account for income taxes using the liability
method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial
and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which differences are expected to reverse.
Deferred tax assets are adjusted by a valuation allowance, if based on the weight of available evidence it is more likely than
not that some portion or all of the deferred tax assets will not be realized.</P>

<P STYLE="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: 0.25in">There are no recently issued accounting
standards known to have a material impact on our Financial Statements as of December 31, 2011.</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>MANAGEMENT</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>Directors, executive officers and other key employees</B></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>
    <TD STYLE="width: 15%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: black 0.75pt solid"><B>Name </B></P></TD>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; font-weight: bold; text-align: center"><B>Age</B></TD>
    <TD STYLE="width: 55%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">John Howell</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">66</TD>
    <TD STYLE="vertical-align: bottom">Chairman of the Board and Chief Executive Officer</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: 0.25in">John Howell earned a Bachelor of Science
degree in Aerospace Engineering from Oregon State University with graduate studies at the University of San Francisco in Organizational
Development and Change. He originally joined Arrayit Corporation in July 2008 as a consultant, but assumed the post of President
and CEO of Arrayit Diagnostics upon its formation in June 2009.</P>

<P STYLE="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: 0.25in">With over 30 years experience in the development,
creation and management of sales and marketing platforms and internal management systems for businesses in the areas of health
care, real estate, high technology and telecommunications. For the past 15 years, he was primarily engaged in the fields of high
technology and telecommunications, serving as CEO of Eversys Corporation, a manufacturer of computer equipment for the local area
network January 1997-November 1997; Vice President of Sales &amp; Marketing for TeraGlobal Communications, a manufacturer of equipment
for the convergence of voice, video and data December 1997-October 1998; Executive Vice President of Rim Semiconductor Corp., a
late development stage fabless communications semiconductor company April 2000-September 2002; Executive Vice President and Chief
Operating Officer of Kingdom Ventures, Inc., a marketing company for the Christian community October 2002-April 2003; and President
of NutraCea, (OTCBB: NTRZ) an international nutraceutical company April 2003-July 2004.</P>

<P STYLE="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>Board of directors</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: 23pt">The board is currently composed of John Howell.
Our director is elected or appointed to hold office until the next annual meeting of stockholders and until his or her successor
has been elected and qualified.</P>

<P STYLE="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>Executive compensation</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: 23pt"><B><I>Compensation Discussion and Analysis</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: 23pt">We have prepared the following Compensation
Discussion and Analysis to provide you with information that we believe is helpful to understand our executive compensation policies
and decisions as they relate to the 2011 compensation of our named executive officers as identified in our Summary Compensation
Table.</P>

<P STYLE="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: 23.05pt"><B><I>Objectives</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.05pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">To attract, retain, and motivate qualified
executive officers, we aim to establish wages and salaries that are competitive with those of people employed by similar companies
in our operating industries. The base salaries we paid in 2011 were intended to be consistent among executives as well. Through
2011, we took a simple approach to compensating our named executive officer. We sought to avoid complex forms of compensation,
such as awards under long-term cash incentive plans, non-qualified defined benefit plans and pension plans, while we are still
evolving as a business. We intend that base salaries for our executives reflect the marketplace for similar positions. In February
2009, we established the equity plan, with the goal to provide equity ownership opportunities to our employees and directors so
they can have a stake in the success of Diagnostics, just like our 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: 23pt"><B><I>Compensation program administration
and policies</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">During 2011, specific salary and bonus levels,
as well as the amount and timing of equity grants, were determined on a case-by-case basis through negotiations with our executives.
During the fiscal year ended December 31, 2009, we entered into employment agreements with Mr. Howell, our Chairman of the Board
and Chief Executive Officer, effective as of August 15, 2009. In January 2012, we established a Compensation Committee that has
general responsibility for executive compensation and benefits, including incentive compensation and equity-based plans.</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: 0.25in"><B><I>Pay elements</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">As of December 2011, we provided the following
pay elements to our executive officers in varying combinations to accomplish our compensation objectives:</P>

<P STYLE="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: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base salary;</P>

<P STYLE="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: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity-based
compensation (e.g., stock options and restricted stock grants), with awards to be granted pursuant to the 2009 Plan; 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: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
modest executive perquisites and benefits.</P>

<P STYLE="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: 0.25in">Our goal is to set each executive&rsquo;s
base salary at a level we believe enables us to hire and retain individuals in a competitive environment and to reward satisfactory
individual performance and a satisfactory level of contribution to our overall business goals. We may utilize cash bonuses to reward
performance achievements within the past fiscal year. We intend to utilize equity-based compensation under the 2010 Plan to provide
long-term rewards for retention and performance.</P>

<P STYLE="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: 0.25in">Each compensation element and its purpose
are further described below.</P>

<P STYLE="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: 0.25in"><B><I>Base salary</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">Base salary is intended to compensate the
executive for the basic market value of the position and the responsibilities of that position relative to other positions in the
company. The board considers several factors such as the duties and responsibilities of the position, the individual executive&rsquo;s
experience and qualifications, the executive&rsquo;s prior salary and competitive salary information in establishing base salaries
but did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. Our
named executive officer&rsquo;s annual base salaries for fiscal year 2011 were: Mr. Howell $120,000. The base salary for our named
executive officer for fiscal year 2012 has not been adjusted from the 2011 base salary.</P>

<P STYLE="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: 23pt">We will review our base salaries from time
to time, and may adjust them based on market trends. We also intend to review the applicable executive&rsquo;s responsibilities,
performance and experience. We do not intend to provide formulaic base salary increases to our executives. If necessary, we may
realign base salaries with market levels for the same positions in companies of similar size to us represented in compensation
data we review, if we identify significant market changes in our data analysis. Additionally, we may adjust base salaries as warranted
throughout the year for promotions or other changes in the scope or breadth of an executive&rsquo;s role or responsibilities.</P>

<P STYLE="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: 23pt">In the third quarter of 2009, we entered
into an employment agreement with Mr. Howell, which was effective as of August 15, 2009 with respect to base salary. The material
terms of the agreement are described in &ldquo;&mdash;Employment Agreements&rdquo; below.</P>

<P STYLE="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: 23pt"><B><I>Bonus</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">In addition to base salary, existing executives
are eligible for a discretionary annual bonus, the amount of which is determined by the board based on the quality and nature of
the executive&rsquo;s services and the performance of the company during such year. No bonus payments were made in 2010 or 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: 23pt"><B><I>Equity-based compensation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">Our board believes that granting shares of
restricted stock and/or stock options to existing executives provides an important incentive to retain executives and rewards them
for their performance. Any grants made under the 2009 Plan may be made at the discretion of our board or a committee to be designated
by the board. We do not have any practice, policy or program allowing for timing of equity grants in relation to our current stock
price or material non-public information. We have not granted any awards under the 2009 Plan to our named executive officers. We
made a grant of restricted stock to Mr. Howell outside of the 2009 Plan. The restricted stock grant to Mr. Howell was determined
and approved by our board in connection with the negotiation and execution of Mr. Howell&rsquo;s employment agreement and his appointment
as our chief executive officer.</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: 23pt"><B><I>Executive perquisites and benefits</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">Our philosophy is to provide executives with
limited perquisites. We provide certain executives that have significant travel commitments in fulfilling their roles with a monthly
car allowance, or use of a company vehicle when used in connection with the services they provide to us, and a monthly mobile phone
allowance.</P>

<P STYLE="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: 0.25in"><B><I>Payments with respect to severance
of employment and/or upon change of control</I></B></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; text-indent: 0.25in">Through December 31, 2011, we did not have
any practice of providing, or obligation to provide, payments to our named executive officers following termination of employment
or upon a change in control (or similar event).</P>

<P STYLE="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: 0.25in"><B><I>Summary compensation table</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">The following table sets forth, for the
periods indicated, the total compensation for services provided to us by the only person who served as our chief executive officer
and only executive officer at the end of 2011 and 2010 who received compensation during 2011 and 2010 (such person identified on
the table below may be referred to collectively herein as the &ldquo;named executive officer&rdquo;).</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">Name and principal<BR> Position</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">Year</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Salary($)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Stock<BR> awards($)</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">Bonus</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">Option<BR> Awards($)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">All Other<BR> Compensation<BR> ($)(3)</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($)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 30%; text-align: left; vertical-align: top">John Howell, <I>Chairman of the Board and Chief Executive Officer(1)</I></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: center">Six months ended June 30, 2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">60,000</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: 7%; 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: 7%; 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: 7%; 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: 7%; 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: 7%; text-align: right">60,000</TD><TD STYLE="width: 1%; 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: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,000</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">120,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.2in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,000</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">120,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<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; text-indent: 0.25in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August 9, 2009, we entered into
an employment agreement with Mr. John Howell, the President, CEO and Chairman of the Board. The agreement was originally for a
term of three years, expiring the 9th day of August, 2012, and was renewed on February 1, 2012 for a term of three years. The agreement
provides that Mr. Howell shall be compensated at the rate of $120,000 per year plus a bonus up to a maximum of 100% of salary,
payable in cash or stock, based upon the achievement of the performance objectives defined by the Board of Directors. In addition
the employment agreement provides to Mr. Howell 3,000 shares of preferred stock, series B. The preferred stock has the following
rights and privileges:</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">a) <I>Super voting rights</I>:
Except as otherwise required by law, the shares of the outstanding Preferred series B stock shall have the number of votes equal
to the number of votes of all outstanding shares of capital stock plus one additional vote such that the holders of the outstanding
shares of Preferred series B shall always constitute a majority of the voting rights of the Corporation..</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">b) <I>No other rights</I>: The
preferred series B shares have no other rights, including but not limited to any conversion rights; no dividend rights;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Outstanding equity awards as of December&nbsp;31, 2011</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: 0.25in">Our CEO, Mr. John Howell, was granted 450,000
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"><B>Employment agreements</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: 0.25in">We entered into an employment agreement
with our CEO, Mr. John Howell. The agreement provides that Mr. Howell shall be compensated at the rate of $120,000 per year plus
a bonus up to a maximum of 100% of salary, payable in cash or stock, based upon the achievement of the performance objectives defined
by the Board of Directors.</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>Compensation committee interlocks and insider participation</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: 0.25in">We have adopted the charter for our compensation
committee but have not yet appointed any members of the committee.</P>

<P STYLE="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>2009 Directors, officers and consultants stock option, stock
warrant and stock award plan</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: 0.25in">The purpose of our 2009 Plan is to maintain
the ability of the company and our subsidiaries to attract and retain highly qualified and experienced directors, employees and
consultants and to give such directors, employees and consultants a continued proprietary interest in the success of Diagnostics
and our subsidiaries. In addition, the 2009 Plan is intended to encourage ownership of our common stock by the directors, employees
and consultants of the company and its affiliates and to provide increased incentive for such persons to render services and to
exert maximum effort for the success of our business. The 2009 Plan provides eligible employees and consultants the opportunity
to participate in the enhancement of stockholder value by the grants of options (including incentive stock options for employees
only), restricted or unrestricted common stock and other awards under the 2009 Plan, including having their bonuses and consulting
fees payable in restricted or unrestricted common stock and other awards, or any combination thereof. The number of shares that
currently may be issued under the 2009 Plan is 12,000,000 shares of common stock, subject to adjustment in accordance with the
adjustment provisions of the 2009 Plan and subject to increases immediately upon the grant of any option, warrant, shares of preferred
stock or award. The number of shares of such increase shall be such that immediately after such increase the total number of shares
issuable under the 2009 Plan and reserved for issuance upon exercise of outstanding options, warrants or conversion of shares of
preferred stock will equal approximately 15% of the total number of issued and outstanding shares of common stock of the company.</P>

<P STYLE="font: bold 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"><B>Compensation policies and practices as they relate to risk
management</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: 0.25in">We reviewed and analyzed our compensation
arrangements and determined that our compensation plans do not pose an unreasonable risk to the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Compensation of directors</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: 0.25in">In 2012, we commenced a compensation program
for board members whereby each non-employee director is entitled to an annual fee in cash to be determined, as long as the director
attends the meetings during each quarter. The board is exploring additional equity compensation for our non-employee directors
in consideration of services rendered. We paid no compensation to non-employee directors in 2011.</P>

<P STYLE="font: bold 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"><B>Board composition</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: 0.25in">Our business and affairs are managed under
the direction of the board. The board currently consists of one member, John Howell. Our bylaws provide that our board will consist
of a number of directors to be fixed from time to time by resolution adopted by the affirmative vote of a majority of the total
directors then in office. In addition, our articles of incorporation provide for a staggered, or classified, board of directors
consisting of three classes of directors, each serving a staggered three-year term and with one class being elected at each year&rsquo;s
annual meeting of stockholders. Such articles provide that the Class III director will initially be Mr. Howell, who will serve
for terms expiring in 2015.</P>

<P STYLE="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>Committees of the board of directors</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: 0.25in">Our board has an audit committee, a compensation
committee and a nominating and governance committee, each of which has the composition and responsibilities described below. Our
board may also establish from time to time any other committees that it deems necessary or desirable. The composition of each committee
will comply, when required, with the NYSE listing standards and other rules of the SEC and NYSE.</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: 23pt"><B><I>Audit committee</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: 0.25in">Our audit committee consists of Mr. Howell.
Mr. Howell is not independent within the meaning of applicable SEC rules and NYSE listing standards and is not an &ldquo;audit
committee financial expert&rdquo; as defined in the rules and regulations of the SEC, in that he is not financially literate under
the current listing standards of the NYSE. The audit committee has oversight responsibilities regarding matters 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the integrity of our financial statements and our financial reporting and disclosure practices;</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 soundness of our system of internal controls regarding finance and accounting compliance;</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 independent registered public accounting firm&rsquo;s qualifications and independence;</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 engagement of the independent registered public accounting firm;</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 performance of our internal audit function and independent registered public accounting firm;</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>our compliance with legal and regulatory requirements in connection with the foregoing;</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>review of related-party transactions in accordance with our written policy as to such transactions (see &ldquo;<I>Related Party
Transactions</I>&rdquo; on page 29); 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>compliance with our Code of Conduct and Ethics.</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: 0.25in">We will rely on the phase-in rules of the
SEC and NYSE with respect to the independence of our audit committee. These rules permit us to have an audit committee that has
at least one member who is independent by the NYSE listing date, at least two members (a majority of whom are independent) within
90 days after the effectiveness of the registration statement of which this prospectus forms a part, and at least three members
(all of whom are independent) within one year thereafter.</P>

<P STYLE="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: 0.25in">Our board has adopted a written charter
for our audit committee, which will be available upon completion of this offering on our website. The information on our website
is not, and will not be deemed to be part of 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: 0.25in"><B><I>Compensation committee</I></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">Our compensation committee consists of
John Howell. We have determined that Mr. Howell is not independent within the meaning of the listing standards of the NYSE. The
compensation committee is authorized to assist the board in discharging the board&rsquo;s responsibilities relating to matters
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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>review and administration of compensation and benefit policies and programs designed to attract, motivate and retain personnel
with the requisite skills and abilities to us to achieve superior operating results;</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>review and approval annually of goals and objectives relevant to compensation of our chief executive officer, including evaluating
the performance of the chief executive officer in light of those goals and objectives and setting of our chief executive officer&rsquo;s
compensation based on such evaluation. Our compensation committee will have sole authority to determine such compensation;</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>establishment of the compensation of our other executives and the chairman of our board, and recommendation of the compensation
of our non-employee directors for approval by majority vote of independent directors, 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>issuance of an annual report on executive compensation for inclusion in our annual proxy statement, when required.</TD></TR></TABLE>

<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; text-indent: 0.25in">We will rely on the phase-in rules of the
SEC and NYSE with respect to the independence of our compensation committee. These rules permit us to have a compensation committee
that has at least one member who is independent by the later of the date this offering closes or five business days from the NYSE
listing date, at least a majority of members who are independent within 90 days of the NYSE listing date and all independent members
within one year of the NYSE listing date.</P>

<P STYLE="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: 0.25in">Our board has adopted a written charter
for our compensation committee, which will be available upon completion of this offering on our website. The information on our
website is not, and will not be deemed to be part of this prospectus. To assist the compensation committee in discharging its responsibilities,
the compensation committee may engage a compensation consulting firm or other advisors.</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: 0.25in"><B><I>Nominating and governance committee</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: 0.25in">Our nominating and governance committee
consists of John Howell. We have determined that Mr. Howell is not independent within the meaning of the listing standards of NYSE.
The nominating and governance committee is authorized to:</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>recommend to the board nominees for election as directors and committee members;</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>develop and recommend to the board a set of corporate governance guidelines;</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>review candidates for nomination for election as directors submitted by directors, officers, employees and stockholders and
establish procedures to be followed by stockholders in submitting nominees;</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>recommend to the board non-nomination or removal from the board or a board committee as appropriate;</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>review with the board the requisite skills and characteristics for continuation as board members, the selection of new board
members and board composition; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>select, retain and evaluate any search firm with respect to the identification of candidates for nomination for election as
directors. Our nominating and governance committee shall have the sole authority to approve any such firm&rsquo;s fees and other
retention terms.</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: 0.25in">We will rely on the phase-in rules of the
SEC and NYSE with respect to the independence of our nominating and governance committee. These rules permit us to have a nominating
and governance committee that has at least one member who is independent by the later of the date this offering closes or five
business days from the NYSE listing date, at least a majority of members who are independent within 90 days of the NYSE listing
date and all independent members within one year of the NYSE listing date.</P>

<P STYLE="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: 0.25in">The committee will assist the board in
the selection of nominees for election as directors at each annual meeting of our stockholders and will establish policies and
procedures regarding the consideration of director nominations from stockholders. Our board has adopted a written charter for our
nominating and governance committee, which will be available upon completion of this offering on our website. The information on
our website is not, and will not be deemed to be part of 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>Corporate governance and limitations on directors&rsquo;
and officers&rsquo; liability</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: 0.25in">We have also adopted a Code of Conduct
and Ethics, Corporate Governance Guidelines and Insider Trading Policy, and we intend to adopt other standard policies and procedures
relating to matters such as corporate communications.</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; text-indent: 23pt">Our directors and officers are indemnified
as provided by general corporation law of the Nevada Revised Statutes, as amended (&ldquo;NRS&rdquo;), and our articles of incorporation
and indemnification agreements with 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: 23pt">Under the NRS, director immunity from liability
to a company or its stockholders for monetary liabilities applies automatically unless it is specifically limited by a company&rsquo;s
articles of incorporation, which is not the case with our articles of incorporation. Excepted from that immunity are:</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 willful failure to deal fairly with the company or its stockholders in connection with a matter in which the director has
a material conflict of interest;</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>a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable
cause to believe that his or her conduct was unlawful;</TD></TR></TABLE>

<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 transaction from which the director derived an improper personal profit; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>willful misconduct.</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: 23pt">Our articles of incorporation provide that
we will indemnify our directors, officers, employees and agents to the fullest extent required by the NRS, and shall indemnify
such individuals to the extent permitted by the NRS. We may purchase and maintain liability insurance, or make other arrangements
for such obligations or otherwise, to the extent permitted by the NRS. We have also entered into indemnification agreements with
each of our directors and officers.</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">APPLICATION OF PROCEEDS</P>

<P STYLE="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: 0.25in">We will not proceeds from the spin-off
or from the resale of the shares of common stock offered by the selling stockholders as all of such 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: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">MARKET PRICE OF COMMON STOCK AND RELATED
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"><B>Market information</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: 0.25in">There has been no public trading market
for the shares of Diagnostics prior to the spin-off. We intend to apply to qualify our common stock for quotation on the OTCBB
such that a secondary market will commence on the spin-off date.</P>

<P STYLE="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>Holders</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: 0.25in">As of December 31, 2011, there were approximately
three shareholders of record of our&rsquo; common stock and one shareholders of record of our preferred stock.</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">PRINCIPAL 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: 0.25in">Before the spin-off, 60% of the outstanding
shares of our common stock is held beneficially and of record by Arrayit and 100% of our preferred stock is held by John Howell,
the chief executive officer and sole director. The following table sets forth, as of the Record Date of the spin-off, information
concerning expected beneficial ownership of our common stock after giving effect to the spin-off by:</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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each person or entity known to us who will beneficially own more than five percent of the outstanding shares of our common
stock;</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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each person who we currently know will be one of our directors or named executive officers at the time of the spin-off; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as a group, all persons who we currently know will be our directors and executive officers at the time of the spin-off.</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">The following information:</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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;gives effect to the spin-off as if it had occurred on December 31, 2011, on which date 19,350,000 shares of our common stock
were held by Arrayit; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a pro rata distribution of same held by persons listed in the table below.</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: 0.25in">The actual number of shares of common stock
outstanding as of the spin-off date may differ to the extent that new Arrayit common or preferred shares are issued or repurchased
between December 31, 2011 and the spin-off date and if (while unlikely) the assumed conversion ratio differs from the actual ratio.</P>

<P STYLE="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: 0.25in">Based on information furnished to us by
or on behalf of such person or entity, except as otherwise indicated in the footnotes below, we believe that each person or entity
has sole voting and investment power with respect to the shares of common stock set forth opposite such person&rsquo;s or entity&rsquo;s
name. Beneficial ownership is determined in accordance with the rules of the SEC and generally attributes beneficial ownership
of securities to persons who possess sole or shared voting or investment power with respect to such shares. Shares of our common
stock (subject to options that are currently exercisable for shares of our common stock or other securities evidencing the right
to receive shares of our common stock that are vested, or that will be exercisable for shares of our common stock or that will
vest within 60 days after December 31, 2011), are deemed to be outstanding and beneficially owned by the person holding such options
or other securities for the purpose of computing the percentage ownership of such person, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other person.</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: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Name and Address of Beneficial Owner</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Number&nbsp;of&nbsp;Shares&nbsp;of<BR> Common Stock (3)</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">Number&nbsp;of&nbsp;Shares&nbsp;of<BR> Preferred Stock</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">Percent&nbsp;of<BR> Class(4)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%">John Howell(2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</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">3,000</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">100</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">John Howell (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,761,400</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">5.85</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Rene Schena(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,041,902</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">15.5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Todd J Martinsky(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,694,570</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">10.3</TD><TD NOWRAP STYLE="text-align: left">%3</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: justify">All directors and officers as a group</TD><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">5.46</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>(1 person)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,761,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000</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: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address of each person, unless otherwise noted, is
524 East Weddell Drive, Sunnyvale, CA 94089.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The business address of Mr. Howell is 1950 Cinnamon Teal
Drive, Redmond, Oregon 97756.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial ownership is determined in accordance with
the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person,
shares subject to options, warrants and convertible securities held by that person that are currently exercisable or exercisable
within 60 days of December 31, 2011 are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, each stockholder named
in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder&rsquo;s name.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on a total of 32,205,000 shares of our common stock
outstanding exclusive of additional shares issued to round up fractional shares..</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issued and outstanding shares of series B preferred
stock, voting as a class, have the number of votes equal to twice the number of votes of all outstanding shares of capital stock
such that the holders of outstanding shares of Series B Preferred Stock shall always constitute two-thirds of the voting rights
of the corporation. Except as otherwise required by law or by the articles of incorporation, the holders of shares of common stock
and Series B Preferred Stock shall vote together and not as separate classes.</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">ARRAYIT&rsquo;S RELATIONSHIP WITH DIAGNOSTICS
FOLLOWING THE SPIN-OFF</P>

<P STYLE="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: 0.25in">The specific terms and conditions of the
spin-off are governed by an Agreement and Plan of Distribution between Diagnostics and Arrayit.</P>

<P STYLE="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: 0.25in">The material terms of the respective Agreement
are described below. Copies of such Agreements have been filed as Exhibits to the Registration Statement of which this prospectus
forms a part, and the summaries of these documents that follow are qualified in their entirety by reference to the full text of
these documents which are incorporated by reference into 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>Agreements between diagnostics and Arrayit relating to the
spin-off</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: 0.25in"><B>Agreement and Plan of Distribution</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: 0.25in">The Agreement and Plan of Distribution
sets forth the agreements between Diagnostics and Arrayit with respect to the principal corporate transactions required to effect
the spin-off, and a number of other agreements governing the relationship between Arrayit and us following the spin-off. The Agreement
and Plan of Distribution also provides for a series of preliminary restructuring transactions to affect the transfer to us of all
of the assets and liabilities relating to our business. We expect to finalize the transfers called for under the Agreement and
Plan of Distribution before the effectiveness of the spin-off. However, we will only complete the spin-off if specified conditions
are met. These conditions include:</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>the transfer to us of all of the assets and liabilities attributable to our business;</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 SEC declaring effective the Form S-1 Registration Statement of which this prospectus forms a part;</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>

<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 reporting of our common stock on the OTCBB or other proprietary trading system;</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>receipt of material consents and approvals; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the absence of any injunction or similar order preventing the consummation of the spin-off.</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: 0.25in">Even if these conditions are satisfied,
other events or circumstances, including litigation, could occur that could affect the timing or terms of the spin-off or our ability
or plans to complete the spin-off. As a result of any such events or circumstances, the spin-off may not occur and, if it does
occur, it may not occur on the terms or in the manner described, or in the time frame contemplated.</P>

<P STYLE="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: 0.25in"><B>The Separation Agreement</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">Pursuant to the Separation Agreement, Arrayit
will transfer, or cause its other subsidiaries to transfer, to us:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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>all assets of Diagnostics attributable to our business;</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>all other assets of Diagnostics reflected in the most recent balance sheet of Arrayit;</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>contracts that relate to the business of Diagnostics; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>other specified assets.</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: 0.25in">We will also agree to assume, fulfill and/or
indemnify Arrayit for:</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>all liabilities of Diagnostics to the extent arising out of, relating to, or resulting from the operations of its business,
including its contracts and assets;</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>all other liabilities reflected in the most recent balance sheet of Arrayit;</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>any liabilities arising out of, relating to or resulting from, a specified list of litigation (none of which is anticipated);</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>specified liabilities resulting from the spin-off;</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>obligations and commitments under specified contracts; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>other specified liabilities.</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: 0.25in">In addition, the Separation Agreement includes
operating principles that will govern Diagnostics&rsquo; and Arrayit&rsquo;s conduct concerning, and use of, specified instruments
and other technologies currently utilized by one or both of Diagnostics and Arrayit.</P>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ABSENCE OF PUBLIC MARKET AND 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"><B>Public market</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: 0.25in">Arrayit, which currently has approximately
four hundred common and four preferred shareholders, is a reporting company under Section 15(d) of the Securities Exchange Act
of 1934. There is a public trading market on the Over-the-Counter Bulletin Board for the shares of Arrayit.</P>

<P STYLE="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: 0.25in">While not currently a reporting company,
we will become a Section 15(d) reporting company because of this registered spin-off concurrent with the date of this prospectus.
Moreover, this registered spin-off and associated reporting status will permit us to qualify our shares for quotation on the OTCBB
(the Over-the-Counter Bulletin Board) or other secondary markets for which our common shares may then qualify. (See &ldquo;<I>Risk
Factors</I>&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>Dividend policy</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: 0.25in">Short-term or long-term operations prospects
may not result in generating a profit. Therefore we are not likely to pay immediate dividends and an investment in Diagnostics
is thus not suitable for investors seeking current income for financial or tax planning purposes. Future dividends will be paid
at the sole discretion of the respective Boards of Directors.</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">CAPITALIZATION</P>

<P STYLE="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: 0.25in">The following sets forth the capitalization
of Diagnostics as of December 31, 2011 (the date of the audited Arrayit Diagnostics, Inc. financials contained in this prospectus):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,345,000 shares of common stock outstanding.</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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,000 shares of Series B preferred stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each share of our common stock is entitled to one vote in connection with the matters requiring shareholder vote and the series
B preferred, as a class, is always entitled to two-thirds of the total vote because it is entitled to double the number of other
votes outstanding at any time and from time to time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&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: 0.25in">The percentage of our equity owned by Arrayit
before completion of the spin-off will be owned ratably by the Arrayit shareholders after the spin-off. The spin-off will create
no change in the ownership of the other shareholders of Diagnostics immediately before, or after, the spin-off is completed.</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">DESCRIPTION OF CAPITAL 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: 0.25in">In conjunction with completion of the spin-off,
our certificate of incorporation and by-laws will not be amended. Copies of our articles of incorporation and bylaws have been
filed as exhibits to the registration statement of which this prospectus forms a part. The following information summarizes our
articles of incorporation and bylaws as these documents will be in effect at the time of the consummation of the spin-off.</P>

<P STYLE="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>Authorized capital 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: 0.25in">Our authorized capital stock consists of
500,000,000 shares all of which have a par value of $0.001 per share. Of the total shares, 480,000,000 are designated as common
stock, 20,000,000 are authorized as preferred stock. Immediately before and after the spin-off, the number of our outstanding shares
will remain unchanged at 32,205,000 shares of common stock. There are no other outstanding warrants or any other contract right
or shares that vest the right to receive shares of Diagnostics common as part of the spin off.</P>

<P STYLE="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>Common stock of Diagnostics and Arrayit</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: 0.25in">The holders of Diagnostics, organized in
Nevada, have the following rights, powers and privileges.</P>

<P STYLE="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: 0.25in"><I>Voting rights.</I> The holders of our
common stock will be entitled to one vote for each share held, on all matters voted on by its stockholders, including elections
of directors. Our certificate of incorporation does not provide for cumulative voting in the election of directors. Generally,
all matters to be voted on by our stockholders must be approved by a majority of the votes entitled to be cast by all shares of
common stock present or represented by proxy.</P>

<P STYLE="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: 0.25in"><I>Dividends.</I> Holders of our common
stock are entitled to receive dividends as, when and if dividends are declared by our board of directors out of assets legally
available for the payment of dividends. It is not the current expectation of us to pay 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: 0.25in"><I>Liquidation.</I> In the event of a liquidation,
dissolution or winding up of our affairs, whether voluntary or involuntary, after payment of liabilities and obligations to creditors,
the remaining assets will be distributed ratably among the holders of shares of common stock on a per share basis. If there exists
any preferred stock outstanding at such time, holders of the preferred stock are not entitled to distribution and/or liquidation
preferences. In either case, we would need to pay the applicable distribution to its holders of preferred stock before distributions
are paid to the holders of the associated 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: 0.25in"><I>Rights and preferences.</I> Our common
stock has no preemptive, redemption, conversion or subscription rights. The rights, powers, preferences and privileges of holders
of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred
stock that may be designated and issued in the future.</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>Preferred stock of Diagnostics</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: 0.25in">Our certificate of incorporation provides
that our board of directors has the authority, without action by the stockholders, to designate and issue up to 20,000,000 shares
of preferred stock in one or more classes or series and to fix the powers, rights, preferences and privileges of each class or
series of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any class or series, which may be greater than the rights of the holders of the common stock.
Any issuance of shares of preferred stock could adversely affect the voting power of holders of common stock, and the likelihood
that the holders will receive dividend payments and payments upon liquidation could have the effect of delaying, deferring or preventing
a change in control.</P>

<P STYLE="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: 0.25in">We adopted resolutions establishing the
terms, designations, relative rights, preferences and limitations of 3,000 shares of the $.001 par value Series B Preferred Stock
in a Certificate of Designation and filed it with the State of Nevada. The material terms are as follows:</P>

<P STYLE="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: 0.25in">The shares of series B preferred stock,
voting as a class, have the number of votes equal to twice the number of votes of all outstanding shares of capital stock such
that the holders of outstanding shares of Series B preferred stock shall always constitute two-thirds of the voting rights of the
corporation. Except as otherwise required by law or by the articles of incorporation, the holders of shares of common stock and
Series B preferred stock shall vote together and not as separate classes.</P>

<P STYLE="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>Anti-takeover effects of certain provisions of our charter
and by-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: 0.25in"><I>Board of directors.</I> Our articles
of incorporation provide that, subject to the rights of the holders of any class or series of preferred stock to elect additional
directors under specified circumstances, the number of directors will be fixed from time to time exclusively by a resolution adopted
by our board of directors, but will not be less than one nor more than fifteen directors. The current number of directors currently
serving is one.</P>

<P STYLE="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: 0.25in">Our certificate of incorporation further
provides that, subject to the rights of the holders of any class or series of preferred stock to elect directors under specified
circumstances, any vacancy on the board of directors that results from an increase in the number of directors may be filled by
a majority of the board of directors then in office, provided that a quorum is present, and any other vacancy occurring on the
respective board of directors may be filled by a majority of the board of directors then in office, even if less than a quorum,
or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of
directors of such class will hold office for a term that coincides with the remaining term of that class. Any director elected
to fill a vacancy not resulting from an increase in the number of directors will have the same remaining term as that of his or
her predecessor. Subject to the rights, if any, of the holders of any outstanding class or series of preferred stock, any or all
of our directors may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of
at least a majority of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors.</P>

<P STYLE="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: 0.25in"><I>Authorized shares.</I> Our certificate
of incorporation provides that we may from time to time issue shares of preferred stock in one or more series, the terms of which
will be determined by the respective board of directors, and common stock. We will not solicit approval of our stockholders unless
the associated board of directors believes that approval is advisable or is required by stock exchange regulations or the applicable
corporation law. This could enable the respective board of directors to issue shares to persons friendly to current management
which could render more difficult or discourage an attempt to obtain control of the company by means of a merger, tender offer,
proxy contest or otherwise and thereby protect the continuity of our management. Such additional shares also could be used to dilute
the stock ownership of persons seeking to obtain control of the 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: 0.25in"><I>Special meetings.</I> Unless the certificate
of incorporation or the by-laws provide otherwise, stockholders are not permitted to call a special meeting of stockholders. Our
certificate of incorporation and by-laws do not permit stockholders to call a special meeting.</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: 0.25in"><I>Restrictions on stockholder action by
written consent.</I> Our certificate of incorporation and by-laws provide that stockholders may effect any action required or permitted
to be taken at a duly called annual or special meeting of stockholders by consent in writing by the stockholders only if the taking
of such action by such written consent has expressly been approved in advance by the board of directors. Except as otherwise required
by law or by any preferred stock designation, special meetings of stockholders may be called only by our board of directors, our
chairman of the board, our president or our secretary. No business other than that stated in the notice of meeting may be transacted
at any special meeting. These provisions may have the effect of delaying consideration of a stockholder proposal until the next
annual meeting unless a special meeting is called by the affected board, chairman, president or secretary.</P>

<P STYLE="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: 0.25in"><I>Advance notice procedures.</I> Our by-laws
establish an advance notice procedure for stockholders to make nominations of candidates for election as directors or to bring
other business before an annual meeting of stockholders. These stockholder notice procedures provide that only persons who are
nominated by our board of directors, or by a stockholder who was a stockholder of record at the time of giving notice and has given
timely written notice to our secretary before the meeting at which directors are to be elected, will be eligible for election as
directors.</P>

<P STYLE="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: 0.25in">For nominations or other business to be
properly brought before an annual meeting by a stockholder, a stockholder&rsquo;s notice delivered to our secretary must set forth
as to each matter the stockholder proposes to bring before the annual meeting:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>a brief description of the business desired to be brought before the annual meeting and the reasons for conducting this business
at the annual meeting;</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 name and record address of the stockholder;</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 class or series and number of shares of capital stock of the company which are owned beneficially or of record by the stockholder;</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>a description of all arrangements or understandings between the stockholder and any other person or persons (including their
names) in connection with the proposal and any material interest of the stockholder in the desired business; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>a representation that the stockholder intends to appear in person or by proxy at the annual meeting to bring such business
before the meeting.</TD></TR></TABLE>

<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; text-indent: 0.25in">A stockholder&rsquo;s notice for purposes
of nominating directors must also contain additional information about each nominee, including a current resume and curriculum
vitae and a statement describing each nominee&rsquo;s qualifications.</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; text-indent: 0.25in">To be timely, a stockholder&rsquo;s notice
to our secretary must be delivered to or mailed and received at our principal executive offices not less than 90 days and not more
than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. In the event that our
annual meeting is to be held on a date that is not within 30 days before or after the anniversary date, the notice must be received
not later than the close of business on the tenth day following the day on which the notice of the date of the annual meeting was
mailed or public disclosure of the date of the annual meeting was made, whichever occurs first.</P>

<P STYLE="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: 0.25in">The chairman of the board has the power
and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance
with the advance notice procedures. If any proposed nomination or business is not in compliance with our by-laws, the chairman
of the board has the power to declare that the defective proposed business or nomination will not be presented for stockholder
action at the meeting and will be disregarded.</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: 0.25in"><I>Business combination statutes.</I><B>
</B>The Nevada General Corporation Law prohibits a business combination between a corporation and an interested stockholder within
three years of the time such stockholder became an interested stockholder, unless:</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>prior to such time the board of directors of the corporation approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder;</TD></TR></TABLE>

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

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<P STYLE="margin: 0">&nbsp;</P>


<P STYLE="margin: 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>upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, exclusive of shares
owned by directors who are also officers and by certain employee stock plans; or</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; 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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>at or subsequent to such time, the business combination is approved by the board of directors and authorized by the affirmative
vote at a stockholders&rsquo; meeting of at least two thirds of the outstanding voting stock that is not owned by the interested
stockholder.</TD></TR></TABLE>

<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; text-indent: 0.25in">The term &ldquo;business combination&rdquo;
is defined to include, among others, transactions between an interested stockholder and a corporation or any direct or indirect
majority owned subsidiary thereof; a merger or consolidation; a sale, pledge, transfer or other disposition (including as part
of a dissolution) of assets having a total market value equal to 10% or more of either the total market value of all assets of
the corporation on a consolidated basis or the total market value of all the outstanding stock of the corporation; certain transactions
that would increase the interested stockholder&rsquo;s proportionate share ownership of the stock of any class or series of the
corporation or such subsidiary; and any receipt by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation or any such subsidiary. In general, and subject to certain
exceptions, an &ldquo;interested stockholder&rdquo; is any person who is the owner of 15% or more of the outstanding voting stock
(or, in the case of a corporation with classes of voting stock with disparate voting power, 15% or more of the voting power of
the outstanding voting stock) of the corporation, and the affiliates and associates of such person. The term &ldquo;owner&rdquo;
is broadly defined to include any person that individually or with or through such person&rsquo;s affiliates or associates, among
other things, beneficially owns such stock, or has the right to acquire such stock (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement or understanding or upon the exercise of options or other convertible
securities or otherwise or has the right to vote such stock pursuant to any agreement or understanding, or has an agreement or
understanding with the beneficial owner of such stock for the purpose of acquiring, holding, voting or disposing of such 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: 0.25in">The restrictions of the applicable Nevada
laws do not apply to corporations that have elected, in the manner provided therein, not to be subject to the applicable law or,
with certain exceptions, which do not have a class of voting stock that is listed on a national securities exchange or held of
record by more than 2,000 stockholders. Our certificate of incorporation and By-laws do not opt out of the applicable Nevada 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"><B>Transfer agent and registrar</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: 0.25in">VStock Transfer, LLC, 77 Spruce Street,
Suite 201, Cedarhurst, New York 11516, is our stock transfer company and registrar. Phone: (212) 828-8436, Facsimile: (646) 536-3179.</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; text-align: center"><B>DEFENSES AGAINST HOSTILE TAKEOVERS</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-indent: 0.25in">The following discussion summarizes the
reasons for, and the operation and effects of, certain provisions in our articles of incorporation which management has identified
as potentially having an anti-takeover effect. It is not intended to be a complete description of all potential anti-takeover effects,
and it is qualified in its entirety by reference to our articles of incorporation. Substantially similar provisions were contained
in our Certificate of Incorporation and the reincorporation does not change the nature of the anti-takeover provisions or their
effect.</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; text-indent: 0.25in">The anti-takeover provisions of our articles
of incorporation are designed to minimize the possibility of a sudden acquisition of control of Diagnostics which has not been
negotiated with and approved by our board of directors. These provisions may tend to make it more difficult to remove the incumbent
members of the board of directors. The provisions would not prohibit an acquisition of control of Diagnostics or a tender offer
for all of our capital stock. However, to the extent these provisions successfully discourage the acquisition of control of Diagnostics
or tender offers for all or part of our capital stock without approval of the board of directors, they may have the effect of preventing
an acquisition or tender offer which might be viewed by stockholders to be in their best interests.</P>

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

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<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; text-indent: 0.25in">Tender offers or other non-open market
acquisitions of stock are usually made at prices above the prevailing market price. In addition, acquisitions of stock by persons
attempting to acquire control through market purchases may cause the market price of the stock to reach levels which are higher
than would otherwise be the case. Anti-takeover provisions may discourage such purchases, particularly those of less than all of
the outstanding capital stock, and may thereby deprive stockholders of an opportunity to sell their stock at a temporarily higher
price. These provisions may therefore decrease the likelihood that a tender offer will be made adversely affect those stockholders
who would desire to participate in a tender offer. These provisions may also serve to insulate incumbent management from change
and to discourage not only sudden or hostile takeover attempts, but any attempts to acquire control which are not approved by the
board of directors, whether or not stockholders deem such transactions to be in their best interests.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Authorized shares of capital stock</I>.
Our articles of incorporation authorize the issuance of up to 20,000,000 shares of serial preferred stock, without any action on
the part of the stockholders. Shares of our serial preferred stock with voting rights could be issued and would then represent
an additional class of stock required to approve any proposed acquisition. This preferred stock, together with authorized but unissued
shares of common stock (the articles of incorporation authorizes the issuance of up to 480,000,000 shares of common stock), could
represent additional capital stock required to be purchased by an acquirer. If the board of directors of Diagnostics determined
to issue an additional class of voting preferred stock to a person opposed to a proposed acquisition, such person might be able
to prevent the acquisition single-handedly.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Stockholder meetings</I>. Nevada law
provides that the annual stockholder meeting may be called by a corporation's board of directors or by such person or persons as
may be authorized by a corporation's articles of incorporation or bylaws. Our articles of incorporation provide that annual stockholder
meetings may be called only by our board of directors or a duly designated committee of the board. Although we believe that this
provision will discourage stockholder attempts to disrupt the business of Diagnostics between annual meetings, its effect may be
to deter hostile takeovers by making it more difficult for a person or entity to obtain immediate control of us.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Classified board of directors and removal
of directors</I>. Our articles of incorporation provide that the board of directors is to be divided into three classes which shall
be as nearly equal in number as possible. The directors in each class serve for terms of three years, with the terms of one class
expiring each year. Each class currently consists of approximately one-third of the number of directors. Each director will serve
until his successor is elected and qualified. A classified board of directors could make it more difficult for stockholders, including
those holding a majority of our outstanding stock, to force an immediate change in the composition of a majority of the board of
directors. Since the terms of only one-third of the incumbent directors expire each year, it requires at least two annual elections
for the stockholders to change a majority, whereas a majority of a non-classified board may be changed in one year. The provision
for a staggered board of directors affects every election of directors and is not triggered by the occurrence of a particular event
such as a hostile takeover. Thus a staggered board of directors makes it more difficult for stockholders to change the majority
of directors even when the reason for the change would be unrelated to a takeover.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Restriction of maximum number of directors
and filling vacancies on the board of directors</I>. Nevada law requires that the board of directors of a corporation consist of
one or more members and that the number of directors shall be set by or in the manner described in the corporation's articles of
incorporation or bylaws. Our articles of incorporation provides that the number of directors (exclusive of directors, if any, to
be elected by the holders of preferred stock) shall not be less than one or more than 15, as shall be provided from time to time
in accordance with the bylaws. The power to determine the number of directors within these numerical limitations is vested in the
board of directors and requires the concurrence of at least two-thirds of the entire board of directors. The effect of such provisions
may be to prevent a person or entity from quickly acquiring control of Diagnostics through an increase in the number of the directors
and election of nominees to fill the newly created vacancies.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Advance notice requirements for nomination
of directors and proposal of new business at annual stockholder meetings</I>. Our articles of incorporation provide that any stockholder
desiring to make a nomination for the election of directors or a proposal for new business at a stockholder meeting must submit
written notice not less than 30 or more than 60 days in advance of the meeting provided. This advance notice requirement may give
management time to solicit its own proxies in an attempt to defeat any dissident slate of nominations. Similarly, adequate advance
notice of stockholder proposals will give management time to study such proposals and to determine whether to recommend to the
stockholders that such proposals be adopted. In certain instances, such provisions could make it more difficult to oppose management's
nominees or proposals, even if the stockholders believe such nominees or proposals are in their interests. These provisions may
tend to discourage persons from bringing up matters disclosed in the proxy materials furnished to the stockholders and could inhibit
the ability of stockholders to bring up new business in response to recent developments.</P>

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

<P STYLE="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: 0.25in">After completion of the spin-off, there
will be 32,205,000 Diagnostics&rsquo; shares of common stock outstanding plus and additional shares issued to round up fractional
shares, based upon the number of shares of common and preferred shares outstanding on June 30, 2012. 19,350,000 of these shares
will be freely transferable without restriction under the Securities Act except for 12,103,900 shares that are owned by our &ldquo;affiliates,&rdquo;
as that term is defined in Rule 144 under the Securities Act, which includes the directors and significant stockholders of Arrayit
who become affiliates of us. Shares of our common stock held by affiliates may not be sold unless they are registered under the
Securities Act or are sold pursuant to an exemption from registration, including an exemption contained in Rule 144 under the Securities
Act. Further, as described below, we plan to file a registration statement to cover the shares issued under our equity incentive
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"><B>Rule 144</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: 23pt">In general, Rule 144 under the Securities
Act, as in effect on the date of this prospectus, authorizes a person who is one of our affiliates, or who is selling shares on
behalf of one of our affiliates, and has beneficially owned shares of our common stock for at least six months would be entitled
to sell, within any three-month period a number of shares that does not exceed the greater of:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;one
percent of the number of shares of our common stock then outstanding, which will equal approximately 301,414 if all the shares
in this offering are sold; and</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;the
average weekly trading volume of our common stock during the four-calendar weeks preceding the filing of a notice on Form 144 with
respect to the sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">Approximately 30,141,400 shares of common
stock will be outstanding upon completion of the spin-off and sale by the AEF Master, the selling shareholder. Of these shares,
all of the shares distributed in the spin-off will be freely tradable without restriction under the Securities Act, unless acquired
by our &ldquo;affiliates&rdquo; as that term is defined under Rule 144 under the Securities Act. The remaining 12,855,000 shares
of common stock outstanding after this offering will be &ldquo;restricted securities&rdquo; within the meaning of Rule 144. Restricted
securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption
from registration, including the exemptions provided by Rule 144 and Rule 701 under the Securities Act, which rules are summarized
below. The remaining shares of common stock held by our existing stockholders upon completion of this spin-off will be available
for sale in the public market taking into account the provisions of Rules 144 and 701 under the Securities Act.</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; text-indent: 0.25in">Shares received by our affiliates in the
spin-off or upon exercise of stock options or upon vesting of other equity-linked awards may be &ldquo;controlled securities&rdquo;
rather than &ldquo;restricted securities.&rdquo; &ldquo;Controlled securities&rdquo; are subject to the same volume limitations
as &ldquo;restricted securities&rdquo; but are not subject to holding period requirements.</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; text-indent: 23pt">A person or persons whose shares are aggregated
who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially
owned restricted securities within the meaning of Rule 144 for at least six months, including the holding period of any prior owner
other than an affiliate, would be entitled to sell those shares, subject only to the availability of current public information
about us. A non-affiliated person, who has beneficially owned restricted securities within the meaning of Rule 144 for at least
one year, including the holding period of any prior owner other than an affiliate, would be entitled to sell those shares without
restriction.</P>

<P STYLE="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 701</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: 23pt">Rule 701 under the Securities Act, as in
effect on the date of this prospectus, permits resale of shares in reliance upon Rule 144 but without compliance with certain restrictions
of Rule 144, including the holding period requirement. Most of our employees, executive officers or directors who purchased shares
under a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701, but all holders of
Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&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>Equity plans</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: 23pt">As soon as practicable after the completion
of this offering, we are eligible to file a Form S-8 registration statement under the Securities Act to register shares of our
common stock subject to options reserved for issuance under the 2009 Plan. Such registration statement will become effective immediately
upon filing, and shares covered by that registration statement will thereupon be eligible for sale in the public markets, subject
to Rule 144 limitations applicable to affiliates and any lock-up agreements. For a more complete discussion of our stock plans,
see &ldquo;<I>Management&mdash;Executive Compensation&mdash;Compensation Discussion and Analysis.</I>&rdquo;</P>

<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">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: 0.25in">The validity of the shares of common stock
offered hereby has been passed upon for us by Sonfield &amp; Sonfield, Houston, Texas.</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&nbsp;</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; text-indent: 0.25in">The financial statements of Arrayit Diagnostics,
Inc. for the period from inception, June 2, 2009, through December 31, 2011, included elsewhere in this Prospectus have been audited
by Moss, Krusick &amp; Associates, LLC, independent registered public accounting firm, as stated in its report appearing herein,
and are included in reliance upon the report of such firm given upon its authority as experts in accounting and auditing. With
respect to the unaudited financial statements of Arrayit Diagnostics, Inc. as of June 30, 2012 and for the six months ended June
30, 2012 and 2011 and the period from inception through June 30, 2012, included elsewhere in this Prospectus, such statements have
not been audited by Moss, Krusick &amp; Associates, LLC and that firm does not express an opinion on them.</P>

<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">INTERESTS OF NAMED EXPERTS AND COUNSEL</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; text-indent: 0.25in">No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of our common stock was employed on a contingency
basis or had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the registrant
or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents, subsidiaries
as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.</P>

<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">COMMISSION&rsquo;S POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES</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; text-indent: 0.25in">The Nevada Revised Statutes authorizes
indemnification of a director, officer, employee or agent of the Company against expenses incurred in connection with any action,
suit, or proceeding to which he or she is named a party by reason of his or her having acted or served in such capacity, except
for liabilities arising from his or her own misconduct or negligence in performance of his or her duty. In addition, even a director,
officer, employee, or agent of the Company who was found liable for misconduct or negligence in the performance of his or her duty
may obtain such indemnification if, in view of all the circumstances in the case, a court of competent jurisdiction determines
such person is fairly and reasonably entitled to indemnification.</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; text-indent: 0.25in">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the Nevada
Revised Statutes, our Amended and Restated Bylaws or otherwise, we have been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. No pending material litigation
or proceeding involving our directors, executive officers, employees or other agents as to which indemnification is being sought
exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification by
any of our directors or executive officers.</P>

<P STYLE="font: bold 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: 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">We have filed with the SEC a Registration
Statement on Form S-1 under the Securities Act of 1933 with respect to the shares of our common stock being registered hereunder.
This prospectus, which forms a part of the Registration Statement, does not contain all the information included in the Registration
Statement and the exhibits thereto, to which reference is hereby made. You should refer to the Registration Statement, including
its exhibits and schedules, for further information about Arrayit, its common stock and our stock being spun-off pursuant to this
prospectus. From and after the effective date of the spin-off, we will become subject to the informational requirements of 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: 0.25in">Accordingly, we will file annual, quarterly
and other reports and other information with the SEC. Arrayit is required to file annual, quarterly and other information with
the SEC, and such reports and other information may contain important information about us. For so long as Diagnostics has been
operating, the results of our operations have been included in Arrayit&rsquo;s consolidated 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: 0.25in">You may read and copy the Registration
Statement and the reports and other information we may in the future file at the SEC&rsquo;s Public Reference Room located at Station
Place, 100 F Street, N.E., Washington D.C. 20549. You may also receive copies of these documents upon payment of a duplicating
fee, by writing to the SEC&rsquo;s Public Reference Room. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Room. Our future SEC filings will also be available to the public from commercial document retrieval services
and at the Internet world-wide website maintained by the SEC at www.sec.gov. Information on in our website does not form a part
of this prospectus.</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: 0.25in">No person is authorized to give any information
or to make any representations other than those contained in this prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any distribution of securities made
hereunder shall imply that there has been no change in the information set forth herein or in our affairs since the date hereof.</P>

<P STYLE="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: 0.25in">No person is authorized to give any information
or to make any representations other than those contained in this prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any distribution of securities made
hereunder shall imply that there has been no change in the information set forth herein or in our affairs since the date hereof.</P>

<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">INDUSTRY AND MARKET DATA</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; text-indent: 0.25in">We obtained the industry, market and competitive
position data in this prospectus from our own internal estimates and research as well as from industry and general publications
and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they
have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.
While we believe that each of these studies and publications is reliable, we have not independently verified market and industry
data from third-party sources. While we believe our internal company research is reliable and the market definitions are appropriate,
neither such research nor these definitions have been verified by any independent source.</P>

<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; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">The Financial Statements required by Article
8 of Regulation S-X are stated in U.S. dollars and are prepared in accordance with Accounting Principles Generally Accepted in
the United States of America (&ldquo;US GAAP&rdquo;). The following financial statements Arrayit Diagnostics, Inc., Inc. are filed
as part of this Prospectus.&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a development stage company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Index to Consolidated Financial Statements</B></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="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center">Page</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 88%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Report of Independent Registered Public Accounting Firm</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">F-2</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Balance Sheets</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">F-3</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Statements of Operations</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">F-4</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Statements of Changes in Stockholder&rsquo;s Equity (Deficit)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">F-5</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Statements of Cash Flows</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">F-6</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Notes to Financial Statements</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">F-7</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;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">REPORT OF INDEPENDENT REGISTERED CERTIFIED
PUBLIC ACCOUNTING FIRM</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">To the Board of Directors and Stockholders
of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Arrayit Diagnostics, 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 Arrayit Diagnostics, Inc. (a development stage company) as of December 31, 2011 and 2010, and the related consolidated
statements of operations, stockholders&rsquo; equity (deficit), and cash flows for the years then ended and for the period from
inception (June 2, 2009) through December 31, 2011. Arrayit Diagnostics, Inc.&rsquo;s management is responsible for these consolidated
financial statements. Our responsibility is to express an opinion on these consolidated 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 audits 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 consolidated 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 consolidated financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.</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 Arrayit Diagnostics, Inc. as of
December 31, 2011 and 2010, and the results of its operations and its cash flows for the years ended December 31, 2011 and 2010,
and the period from inception (June 2, 2009) through 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 1 to the consolidated
financial statements, the Company has suffered operating losses and has accumulated deficits and negative cash flows from operations
which raise substantial doubt about its ability to continue as a going concern. Management&rsquo;s plans regarding these matters
are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.</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">/s/ Moss, Krusick &amp; Associates, LLC</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">Winter Park, Florida</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">November 9, 2012</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">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a development stage company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>June 30, 2012, December 31, 2011 and
2010</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"></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; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">June&nbsp;30,</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">December&nbsp;31,</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">December&nbsp;31,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">$2012&nbsp;<BR>
(unaudited)</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; vertical-align: top">$2011</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; vertical-align: top">$2010</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: center"><B>ASSETS</B>&nbsp;</TD><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="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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; 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><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: 9pt">&nbsp;</TD><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: 61%; text-align: left; padding-left: 9pt">Cash and equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">21,312</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">143</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">143</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><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">Deferred development costs</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">10,000</TD><TD STYLE="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><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: 0.5in">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,312</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,143</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -9.35pt; padding-left: 9.35pt">Fixed assets (net of accumulated depreciation of $36,245, $29,700 and $16,609, respectively)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,027</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,572</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,663</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other assets, net</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</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.5in">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">24,339</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,716</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">32,807</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: 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><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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; 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><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: 9pt">&nbsp;</TD><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">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">499,546</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">417,677</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">187,239</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><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">Accrued liabilities</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><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><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: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><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">Due to Arrayit Corporation and subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">505,537</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">505,537</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">484,977</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">Notes payable, current portion (net of debt discount of $0, $0 and $8,916, respectively)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,579</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">111,095</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: 0.5in">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,188,662</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,075,194</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">803,311</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; 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><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: -9.35pt; padding-left: 18.7pt">Preferred series B stock, $0.001 par value; 20,000,000 shares authorized, 3,000 issued and outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</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: -9.35pt; padding-left: 18.7pt">Common stock, $0.001 par value; 480,000,000 shares authorized, 32,205,000, 25,345,000 and 24,750,000 issued and outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,205</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9.35pt; padding-left: 18.7pt">&nbsp;</TD><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: -9.35pt; padding-left: 18.7pt">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,266,390</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198,210</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-indent: -9.35pt; padding-left: 18.7pt">&nbsp;</TD><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-bottom: 1pt; text-indent: -9.35pt; padding-left: 18.7pt">Accumulated deficit during 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">(2,462,921</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">(1,289,036</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">(997,666</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9.35pt; padding-left: 18.7pt">&nbsp;</TD><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-bottom: 1pt; padding-left: 0.5in">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">(1,164,323</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">(1,065,478</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">(972,913</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Non-controlling interests</TD><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">&nbsp;</TD><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">Royalty interests</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">285,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Less: Subscription receivable</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">(13,750</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; 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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Interest in subsidiary's accumulated 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">-</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">(68,841</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-left: 0.5in">&nbsp;</TD><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-bottom: 1pt; padding-left: 0.5in">Total non-controlling interests</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">202,409</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.5in">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">(1,164,323</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">(1,065,478</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">(770,504</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD><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-bottom: 2.5pt; padding-left: 0.5in">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">24,339</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9,716</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">32,807</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"><B>&nbsp;</B></P>

<!-- Field: Page; Sequence: 58; Value: 1 -->
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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"><B>&nbsp;&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a development stage company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Periods from Inception, June
2, 2009, to June 30, 2012</B>&nbsp;</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; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</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">&nbsp;</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">&nbsp;</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">&nbsp;</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">June&nbsp;2,&nbsp;2009</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Six&nbsp;Months&nbsp;Ended</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Year&nbsp;Ended</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">(inception)&nbsp;to</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">June&nbsp;30,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">December&nbsp;31,</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">June&nbsp;30,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP 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">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: center; border-bottom: Black 1pt solid">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: center; border-bottom: Black 1pt solid">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: center; border-bottom: Black 1pt solid">2010</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: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</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">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">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="font-weight: bold; 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 STYLE="width: 35%; padding-left: 0.25in">Consulting</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,000,000</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">-</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: 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: 10%; text-align: right">1,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.25in">Salaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,120</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,594</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,594</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">316,881</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">880,424</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">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,984</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">95,823</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166,747</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">317,570</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.25in">Depreciation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,546</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,546</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,091</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,609</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,246</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">Office and general</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,073</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">898</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,497</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,492</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,875</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">Professional fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,085</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,085</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,544</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,929</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">Travel and entertainment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,247</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">22,247</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">Public relations</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">82,088</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">97,088</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">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">1,167,286</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">157,107</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">274,090</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">631,361</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">2,458,379</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="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,167,286</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(157,107</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(274,090</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(631,361</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,458,379</TD><TD STYLE="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; 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">6,599</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">14,900</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">20,884</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">49,804</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">76,987</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Loss before non controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,173,885</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(172,007</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(294,974</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(681,165</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,535,366</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 attributable to non controlling interests</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">3,604</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">3,604</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">61,694</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">72,445</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Net loss attributable to common stockholders</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">(1,173,885</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">(168,403</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">(291,370</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">(619,471</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">(2,462,921</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="padding-bottom: 1pt; padding-left: 0.5in">Loss per share</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">(0.04</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">(0.01</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">(0.01</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">(0.03</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</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-left: 0.5in">&nbsp;</TD><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; padding-left: 0.5in">Weighted average 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">30,659,435</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">24,875,611</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">25,111,890</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">24,508,356</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"><B>&nbsp;&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARRAYIT DIAGNOSTICS, INC.<BR>
(a development stage company)<BR>
Consolidated Statement of Changes in Stockholders' Equity (Deficit)<BR>
For the Periods from Inception, June 2, 2009, to June 30, 2012</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="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="26" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">CONTROLLING&nbsp;INTERESTS</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">NON-CONTROLLING&nbsp;INTERESTS</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Preferred&nbsp;Series&nbsp;B</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Common&nbsp;Stock</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; text-decoration: none">
    <TD NOWRAP STYLE="text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Number&nbsp;of
    <BR>Issued <BR>Shares</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Number&nbsp;of</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Issued&nbsp;Shares</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Additional
    <BR>Paid-in <BR>Capital</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Accumulated
    <BR>Deficit&nbsp;During <BR>Development <BR>Stage</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Total</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Royalty
    <BR>Interest</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Subscription</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Receivable</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><FONT STYLE="font-size: 6pt">Interest&nbsp;in
    <BR>Subsidiaries' <BR>Accumulated <BR>Deficit&nbsp;During <BR>Development <BR>Stage</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Total&nbsp;Non-</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Controlling</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Interest</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid; text-decoration: none"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Total</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>Equity</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-decoration: none"><FONT STYLE="font-size: 6pt"><B>(Deficit)</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-decoration: none"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD><FONT STYLE="font-size: 6pt">Balance, June 2, 2009</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; width: 16%"><FONT STYLE="font-size: 6pt">Issued for services</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">3,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Issued for technology transfer</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">24,300,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">24,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">24,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">24,300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Royalty Interest</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">285,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">(13,750</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">271,250</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">271,250</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">Loss for the period June 2, 2009 to December 31, 2009</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(378,195</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(378,195</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(7,147</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(7,147</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(385,342</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">Balance, December 31, 2009</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">24,300,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">24,300</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(378,195</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(353,892</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">285,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(13,750</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(7,147</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">264,103</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(89,789</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Issued for services</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">450,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">450</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">450</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">450</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">Loss for the fiscal year 2010</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(619,471</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(619,471</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(61,694</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(61,694</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(681,165</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">Balance, December 31, 2010</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">24,750,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">24,750</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(997,666</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(972,913</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">285,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(13,750</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(68,841</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">202,409</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(770,504</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Acquisition of Subsidiary interest</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">595,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">595</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">198,210</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">198,805</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">(285,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">13,750</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">72,445</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">(198,805</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">Loss for the fiscal year 2011</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(291,370</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(291,370</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(3,604</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(3,604</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(294,974</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">Balance, December 31, 2011</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">25,345,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">25,345</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">198,210</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(1,289,036</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(1,065,478</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(1,065,478</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Issued for services (unaudited)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">5,000,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">5,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">995,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1,000,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1,000,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">Issued for cash (unaudited)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">375,200</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">375</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">74,665</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">75,040</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">75,040</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD><FONT STYLE="font-size: 6pt">Anti-dilution shares (unaudited)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1,484,800</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">1,485</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">(1,485</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">Loss for the six months ended June 30, 2012 (unaudited)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(1,173,885</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(1,173,885</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 6pt">(1,173,885</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">Balance, June 30, 2012 (unaudited)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">3</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">30,205,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">32,205</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">1,266,390</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(2,462,921</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(1,164,323</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 6pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 6pt">(1,164,323</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 6pt">)</FONT></TD></TR>
</TABLE>

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

<!-- Field: Page; Sequence: 60; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <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"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a development stage company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Six Months Ended June 30, 2012
and 2011, and the Years Ended December 31, 2011 and 2010, and the Period from Inception, June 2, 2009, to June 30, 2012</B>&nbsp;</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">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</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">&nbsp;</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">&nbsp;</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">&nbsp;</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">For&nbsp;the&nbsp;Period</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Six&nbsp;Months&nbsp;Ended</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Years&nbsp;Ended</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">from&nbsp;June&nbsp;2,&nbsp;2009</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">June&nbsp;30,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">December&nbsp;31,</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">(Inception)&nbsp;&nbsp;to</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<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: center; border-bottom: Black 1pt solid">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: center; border-bottom: Black 1pt solid">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: center; border-bottom: Black 1pt solid">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: center; border-bottom: Black 1pt solid">2010</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: center; border-bottom: Black 1pt solid">June&nbsp;30,&nbsp;2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</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">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 0.12in; text-indent: -0.12in">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><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: 35%; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(1,173,885</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(172,007</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(294,974</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(681,165</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: 10%; text-align: right">(2,535,366</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: 0.24in; text-indent: -0.12in">Adjustments to reconcile net loss to net cash used by operations:</TD><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-left: 0.25in">Depreciation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,545</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,546</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,091</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,609</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,245</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: 0.36in; text-indent: -0.12in">Amortization of deferred financing costs</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">12,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Amortization of debt discount</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">8,916</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,916</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,692</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,608</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: 0.36in; text-indent: -0.12in">Stock compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000,000</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">-</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">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Stock options of parent issued for compensation - related party</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">85,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">338,639</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: 0.36in; text-indent: -0.12in">Stock of parent issue to officer for salary - related party</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">123,337</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">173,337</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.36in; text-indent: -0.12in">Other</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">20,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,973</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,533</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: 0.24in; text-indent: -0.12in">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><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: 0.36in; text-indent: -0.12in">(Increase) decrease in deferred development costs - related party</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">10,000</TD><TD STYLE="text-align: left">&nbsp;</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><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,900</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: 0.36in; text-indent: -0.12in">Interest accrued on notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,984</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,969</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,611</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,180</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: 0.36in; text-indent: -0.12in">Increase in accounts payable and accrued 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">81,869</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">120,001</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">230,438</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">181,798</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">519,546</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: 0.48in; text-indent: 0">Net cash used by 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">(78,871</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">-</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">(117,495</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">(363,778</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9.35pt; padding-left: 9.35pt">&nbsp;</TD><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; text-indent: -9.35pt; padding-left: 9.35pt">CASH FLOWS FROM INVESTING 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><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: 9pt">Purchase of property and equipment</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">-</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">(39,272</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; text-indent: -9.35pt; padding-left: 9.35pt">Net cash used by 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><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">(39,272</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9.35pt; padding-left: 9.35pt">&nbsp;</TD><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; text-indent: -9.35pt; padding-left: 9.35pt">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><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: 0.24in; text-indent: -0.12in">Proceeds from sale of stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,040</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">75,040</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: 0.24in; text-indent: -0.12in">Payment of deferred offering costs</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">(12,500</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.24in; text-indent: -0.12in">Proceeds from royalty interests</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">271,250</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: 0.24in; text-indent: -0.12in">Proceeds from issuances of notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</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">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">140,400</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: 0.24in; text-indent: -0.12in">Related party advances</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">-</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">(49,828</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: -9.35pt; padding-left: 9.35pt">&nbsp;</TD><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; text-indent: -9.35pt; padding-left: 9.35pt">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">100,040</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">115,400</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">424,362</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; text-indent: -9.35pt; padding-left: 9.35pt">Net increase (decrease) in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,169</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">(2,095</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,312</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9.35pt; padding-left: 9.35pt">&nbsp;</TD><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; padding-bottom: 1pt; text-indent: -9.35pt; padding-left: 9.35pt">Cash and equivalents, 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">143</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">143</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">143</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">2,238</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; text-indent: -9.35pt; padding-left: 9.35pt">Cash and equivalents, 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">21,312</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">143</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">143</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">143</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21,312</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-indent: -9.35pt; padding-left: 9.35pt">&nbsp;</TD><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; text-indent: -9.35pt; padding-left: 9.35pt">Supplemental 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><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">Significant non-cash investing and 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><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: 0.36in; text-indent: -0.12in">Common stock issued to parent for technology rights - related party</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">$</TD><TD STYLE="text-align: right">24,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Common stock issued for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</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">$</TD><TD STYLE="text-align: right">450</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">450</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Preferred stock issued for services</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">$</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Subscription receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</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">13,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Beneficial conversion feature</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">41,608</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">41,608</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.36in; text-indent: -0.12in">Common stock issued for subsidiary interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">595</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">595</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; padding-left: 0.36in; text-indent: -0.12in">Acquisition of subsidiary 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">198,210</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">198,210</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">198,805</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.36in; text-indent: -0.12in">Anti-dilution shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,485</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">198,210</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">198,210</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">1,485</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARRAYIT DIAGNOSTICS, INC.</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"><B>(a development stage company)</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"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</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"><B>June 30, 2012 (unaudited) and December
31, 2011</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"><B>NOTE 1 &ndash; DESCRIPTION OF BUSINESS AND GOING CONCERN</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">Arrayit Diagnostics, Inc. (the &ldquo;Company&rdquo;) develops
medical tests and markets these tests to the medical community. The Company was incorporated on June 2, 2009 under the laws of
the State of Nevada. Arrayit Corporation is its controlling parent, holding 61% of the issued, outstanding and voting 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">On December 12, 2011, Arrayit Corporation signed an Agreement
and Plan of Distribution with its subsidiary, Arrayit Diagnostics, Inc., whereby 19,350,000 shares of common stock of Arrayit Diagnostics
owned by Arrayit Corporation will be distributed ratably to the shareholders of Arrayit Corporation on the record date which will
be upon successful completion of the Form S-1 registration statement by Arrayit Diagnostics, Inc.</P>

<P STYLE="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>Going Concern</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">The accompanying consolidated financial statements of the Company
were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. The Company has incurred significant net losses and negative cash flows from operations since inception.
At June 30, 2012, December 31, 2011 and 2010, the Company had accumulated deficits of $2,462,921, $1,289,036 and $997,666, respectively.
The Company currently concentrates its resources on developing clinical protein biomarker diagnostic products and services, and
it does not expect to generate substantial revenue until certain diagnostic tests are cleared by the United States Food and Drug
Administration and commercialized. Management believes that current available resources will not be sufficient to fund the Company&rsquo;s
planned expenditures over the next twelve months. The Company&rsquo;s ability to continue to meet its obligations and to achieve
its business objectives is dependent upon, among other things, raising additional capital or generating sufficient revenue in excess
of costs. At such time as the Company requires additional funding, the Company will seek to raise such additional funding from
various possible sources, including the public equity market, private financings, sales of assets, collaborative arrangements and
debt. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity,
stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders
of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject
to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through
arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain technologies
or products that it might otherwise seek to retain. There can be no assurance that the Company will be able to raise additional
funds, or raise them on acceptable terms. If the Company is unable to obtain financing on acceptable terms, it may be unable to
execute its business plan, the Company could be required to delay or reduce the scope of its operations, and the Company may not
be able to pay off its obligations, if and when they come due. These consolidated financial statements do not include any adjustments
relating to the recoverability or classification of recorded assets and liabilities or other adjustments that may be necessary
should the Company not be able 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">The Company&rsquo;s inability to operate profitably and to generate
cash flows consistently from operations and its reliance on external funding either from loans or from equity, raise 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 2 &ndash; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</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"><U>Basis of Presentation</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">Through May 23, 2011, Consolidated Financial Statements of the
Company include the following majority-owned subsidiaries for all or a portion of the periods indicated, each of which has been
consolidated since the date the Company acquired majority-voting control (collectively, the &ldquo;Consolidated Subsidiaries&rdquo;):</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%">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 83px">
        <P STYLE="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></TD>
    <TD NOWRAP STYLE="width: 78px">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date&nbsp;of</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Incorporation</P></TD>
    <TD NOWRAP>
        <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">Business&nbsp;of&nbsp;Entity</P></TD>
    <TD NOWRAP STYLE="width: 147px">
        <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">Ownership</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Parent:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Arrayit Diagnostics, Inc.</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">June 2, 2009</P></TD>
    <TD>Develops medical tests and through its partially owned subsidiaries markets these tests to the medical community. incorporating the technology and equipment developed by Arrayit Corporation</TD>
    <TD>78.2% owned by Arrayit Corporation</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">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">Arrayit Diagnostics (Ovarian), Inc.</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">June 16, 2009</P></TD>
    <TD>Markets a test for Ovarian Cancer incorporating the technology and equipment developed by Arrayit Corporation</TD>
    <TD>80% owned by Arrayit Diagnostics, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>Arrayit Diagnostics (Parkinson), Inc.</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">October 15, 2009</P></TD>
    <TD>Markets a test for Parkinson&rsquo;s Disease incorporating the technology and equipment developed by Arrayit Corporation</TD>
    <TD>80% owned by Arrayit Diagnostics, Inc.</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">On May 23, 2011, the Company acquired the outstanding 20% non-controlling
interest in Arrayit Diagnostics (Ovarian), Inc., recognizing no gain or loss on the transaction. Arrayit Diagnostics (Ovarian),
Inc. was then collapsed into the 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">Also on May 23, 2011, the Company acquired the outstanding 20%
non-controlling interest in Arrayit Diagnostics (Parkinson), Inc., also recognizing no gain or loss on the transaction, and distributed
the now 100% owned subsidiary directly to Arrayit Corporation. As part of the exchange, Parkinson&rsquo;s name was changed to Arrayit
Scientific Solutions, Inc.</P>

<P STYLE="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 connection with these May 23, 2011 transactions, amounts
that were previously presented as non-controlling interests were recorded as additional paid-in capital as of December 31, 2011.
Subsequent to the year ended December 31, 2011, 595,000 shares of Arrayit Diagnostics, Inc. stock were issued as consideration
for the non-controlling interests.</P>

<P STYLE="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 December 12, 2011, Arrayit Corporation signed an Agreement
and Plan of Distribution with its subsidiary, Arrayit Diagnostics, Inc., whereby 19,350,000 shares of common stock of Arrayit Diagnostics,
Inc. (78.2% of the total outstanding) owned by Arrayit Corporation will be distributed ratably to the shareholders of Arrayit Corporation
on the record date which will be upon successful completion of the Form S-1 registration statement by Arrayit Diagnostics, Inc.</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>Financial Reporting:</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: justify">The Company prepares its financial statements
in conformity with accounting principles generally accepted in the United States of America. Revenues and expenses are reported
on the accrual basis, which means that income is recognized as it is earned and expenses are recognized as they are incurred.</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">Management acknowledges that it is solely responsible for adopting
sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.
The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are
valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the
respective periods being presented.</P>

<P STYLE="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>Development Stage Company:</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">The Company is in the development stage in accordance with the
Accounting and Reporting by Development Stage Enterprises Topic of the Financial Accounting Standards Board&rsquo;s Accounting
Standards Codification (FASB ASC). The Company has not generated any revenues since inception.</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>Use of Estimates:</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 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 revenues and
expenses during the reporting period. While the Company believes that such estimates are fair when considered in conjunction with
the financial statements taken as a whole, the actual amounts of such estimates, when known, will vary from these estimates. If
actual results significantly differ from the Company&rsquo;s estimates, the Company&rsquo;s financial condition and results of
operations could be materially impacted. The Company&rsquo;s significant estimates include those related to stock compensation
and awards.</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>Cash and Cash Equivalents:</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: justify">The Company considers all highly liquid
securities with original maturities of three months or less when acquired, to be cash equivalents.&nbsp;&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Fixed Assets</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">Fixed assets consists of a microarray scanner purchased from
Arrayit Corporation for $39,272 in 2009. Fixed assets are being recorded at cost less accumulated depreciation. Depreciation and
amortization on property and equipment are determined using the straight-line method over the three year estimated useful life
of the asset.</P>

<P STYLE="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>Income Taxes:</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">The Company accounts for income taxes in accordance with FASB
ASC 740, Income Taxes.&nbsp; Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.&nbsp; Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.&nbsp;
A valuation allowance is recorded and deducted from deferred tax assets when the deferred tax assets are not expected to be realized
based on currently available evidence.&nbsp; The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.</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>Fair Value Measurements:</B></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"><FONT STYLE="color: black">U.S. </FONT>GAAP
for fair value measurements establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure
fair value into three levels. The fair value hierarchy gives the highest priority to quoted market prices (unadjusted) in active
markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 inputs
are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly
or indirectly. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical
assets or liabilities and the lowest priority to unobservable inputs.</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">At June 30, 2012, the Company has no instruments
that require additional disclosure. The carrying amounts of the Company&rsquo;s short-term financial instruments, including cash
and equivalents and accounts payable approximate fair value because of the short period to maturity for these instruments.</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>Revenue Recognition:</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">Overview</P>

<P STYLE="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 will recognize revenue when persuasive evidence
of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is reasonably assured. In
instances where final acceptance of the product or system is required, revenue is deferred until all the acceptance criteria have
been met.</P>

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

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<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"><I>Product Sales </I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Product sales will include sales of probe arrays, reagents and
related instrumentation. Probe array, reagent and instrumentation revenues are recognized when earned, which is generally upon
shipment and transfer of title to the customer and fulfilment of any significant post-delivery obligations. Accruals are provided
for anticipated warranty expenses at the time the associated revenue is recognized.</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"><I>Services</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Services revenue will be comprised of equipment service revenue;
revenue from custom probe array design fees; and scientific services revenue, which includes associated consumables.</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"><I>Diagnostic Revenue</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Revenue from medical testing and scientific services will be
recognized upon shipment of the reported results.</P>

<P STYLE="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>Other Income</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">The Company recognizes interest income as earned.</P>

<P STYLE="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>Accounting for Uncertainty in Income Taxes:</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: justify">The FASB has issued guidance on Accounting
for Uncertainty in Income Taxes, FASB ASC 740, Income Taxes.&nbsp; Management has concluded that the Company has taken no uncertain
tax positions that require adjustment to the financial statements to comply with the provisions of this guidance.</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>Non-Controlling Interest: </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 Company accounted for the non-controlling interest in its
two subsidiaries, prior to May 23, 2011, under FASB ASC 810-10-45-16, Non-controlling Interest in a Subsidiary. This standard defines
a non-controlling interest, previously called a minority interest, as the portion of equity in a subsidiary not attributable, directly
or indirectly, to a parent. The standard requires, among other items, that a non-controlling interest be included in the consolidated
statement of financial position within equity separate from the parent's equity; consolidated net income to be reported at amounts
inclusive of both the parent's and non-controlling interest&rsquo;s shares and, separately, the amounts of consolidated net income
attributable to the parent and non-controlling interest all on the consolidated statement of operations; and if a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former subsidiary be measured at fair value and a gain or
loss be recognized in net income based on such fair value. Additionally, the standard defines a non-controlling interest as a financial
instrument issued by a subsidiary that is classified as equity in the subsidiary's financial statements. A financial instrument
issued by a subsidiary that is classified as a liability in the subsidiary's financial statements based on the guidance in other
standards is not a controlling interest because it is not an ownership interest.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Royalty interests that entitle the holder to participate in
future earnings and are not repayable are classified as non-controlling interests.</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>Deferred Offering Costs:</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 Company may incur legal and accounting fees, as well as
due diligence fees related to the preparation of any pending financing.&nbsp;&nbsp;Such costs may initially be deferred until the
offering is completed, at which time they will be recorded as a reduction of gross proceeds from the offering, or expensed to operations
if the offering is unsuccessful. Other start-up costs are expensed as incurred.</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: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recently Issued Accounting Pronouncements:</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">In June 2011, the FASB issued Accounting Standards Update (&ldquo;ASU&rdquo;)
No. 2011-05, Presentation of Comprehensive Income, which eliminates the current option to present components of other comprehensive
income as part of the statements of changes in stockholder&rsquo;s equity and requires entities to present comprehensive income
in either a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do
not change the components of other comprehensive income. The new disclosure requirements was effective for the six months ended
June 30, 2012 and had no impact on the 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">The Company continually assesses any new accounting pronouncements
to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company&rsquo;s
financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and
assures that there are proper controls in place to ascertain that the Company&rsquo;s financials properly reflect the change.</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>NOTE 3 &ndash; OTHER ASSETS, NET</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">Pursuant to a, perpetual, non-exclusive, &ldquo;Technology Assignment
Agreement&rdquo; entered into as of July 18, 2009 between Arrayit Diagnostics, Inc. (the Company) and Arrayit Corporation (the
Parent), the Parent assigned to the Company an exclusive, worldwide interest in all trade secrets and protocols required for the
production and use of the Ovarian Cancer biomarker panel for the early stage (pre-symptomatic) screen and detection of Ovarian
Cancer and monitoring of early and late state Ovarian Cancer in human Patients. The Assignment is carried at a nominal value of
$1.00.</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>NOTE 4 &ndash; DEFERRED DEVELOPMENT COSTS</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">Deferred development costs included $110,900 paid to the Company&rsquo;s
parent, Arrayit Corporation, in 2009 to complete the development of the Ovarian Cancer tests. The Company evaluated the progress
to date and determined that the development is complete, and expensed the deferred development costs to research and development
expenditures. Amounts expensed to research and development for deferred development costs totalled $10,000 in 2011 and $100,900
in 2010.</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: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5 &ndash; NOTES PAYABLE</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">Notes payable consisted of the following at the following dates:</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>&nbsp;</TD><TD NOWRAP 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">June&nbsp;30, <BR>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: center; border-bottom: Black 1pt solid">December&nbsp;31, <BR>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: center; border-bottom: Black 1pt solid">December&nbsp;31, <BR>2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-weight: bold">&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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">NOTES PAYABLE - ARRAYIT DIAGNOSTICS, INC.</TD><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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: left">Note payable to WEM Equity Capital, with interest at 10%, due January 22, 2011 and now past due, secured by 1,000,000 shares&nbsp; of Company's common stock.&nbsp; The terms also called for Arrayit Corporation to issue 300,000 warrants&nbsp; for shares of common stock of Arrayit Corporation&nbsp; at $0.22 per share, expires February 15, 2013.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">76,640</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">72,990</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">66,371</TD><TD STYLE="width: 1%; 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="text-align: left">LESS: Unamortized loan fee and discount in connection with the obtaining of the loan</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">(8,916</TD><TD STYLE="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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Note payable to Juggernaut Financial Group, LLC, interest at 10%, due August 10, 2010 and is now past due, secured by 200,000 shares of the Company's common stock, pledged by Company shareholders.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,939</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,990</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,640</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-bottom: 1pt">Note payable to Chief Executive Officer of the Company, annual interest of 10%, due on demand.</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">25,000</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">-</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></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Notes Payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">163,579</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">131,980</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">111,095</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 6 &ndash; ROYALTY OBLIGATIONS</B></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"></TD><TD STYLE="width: 0.25in">(a)</TD><TD>Advisory Agreement</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">Under paragraph 2 (b) of an advisory agreement dated August
11, 2009 between Arrayit Diagnostics, Inc. and a limited liability partnership, controlled by parties that were also shareholders
in Arrayit Corporation, there was a contractual obligation to pay a Royalty of Twenty percent (20%) of the net sales of Arrayit
Diagnostics, Inc., and its subsidiaries. &ldquo;Net Sales&rdquo; means the gross selling price by the Company and sub-licensees
for the sale of any product or products, less trade discounts allowed, credits for claims or allowances, commissions, refunds,
returns and recalls.</P>

<P STYLE="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 term of the advisory agreement was five years. The royalties
and ownership provisions were in perpetuity.</P>

<P STYLE="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 entitlement to royalties under the advisory agreement was
decreased by obligation to pay royalties to other advisors and investors. With respect to the revenue generated by Arrayit Diagnostics
(Ovarian), Inc. as described in (b) below the Company was obligated to pay a 0.95% royalty to purchasers of royalty interests,
thereby reducing the Company&rsquo;s obligation to the advisor by a similar amount, resulting in a net royalty obligation to the
advisor of 19.05% on revenue generated by the Ovarian 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">During the periods ended June 30, 2012 (unaudited), December
31, 2011 and 2010 there were no revenues earned and hence no obligation to pay any royalties.</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">On March 5, 2012, the 20% royalty interests were exchanged for
385,000 common shares of Arrayit Diagnostics, Inc.</P>

<P STYLE="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) Royalty Interests &ndash; ARRAYIT DIAGNOSTICS (OVARIAN),
INC.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Third party investors, who were not related parties with the
Parent Company, purchased royalty interests in the amount of $285,000 in Arrayit Diagnostics (Ovarian), Inc., in return for a zero
decimal nine five percent (0.95%) royalty on net sales of the Ovarian test. Amounts received with respect to these royalty interests
were shown as Non-Controlling Interests on the Balance Sheet, as there are no terms of repayment of the royalty interests.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the periods ended June 30, 2012 (unaudited), December
31, 2011 and 2010 there were no revenues earned and hence no obligation to pay any royalties.</P>

<P STYLE="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 March 5, 2012, the 0.95% royalty interests were exchanged
for 210,000 common shares of Arrayit Diagnostics, Inc.</P>

<P STYLE="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">(c) Wayne State University &ndash; ARRAYIT
DIAGNOSTICS (OVARIAN), INC.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under terms of a biomarker license agreement between Wayne State
University (&ldquo;WSU&rdquo;) and the Company, effective December 7, 2009, the Company is obligated to pay WSU royalties of 5%
of net sales and a minimum yearly royalty starting in 2011. The royalty expense for the period ended June 30, 2012 (unaudited)
was $25,000 and $50,000 for the year ended December 31, 2011. The following is a schedule of the future minimum royalty payments
for the next five years that are expected to be paid under the license agreement as of December 31, 2011:</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: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: justify">2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">50,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><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: justify">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><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: justify">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><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: justify">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><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: justify; padding-bottom: 1pt">2016</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">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><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: justify; 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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">950,000</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The license agreement can be terminated by either party. The
Company has the right to terminate the license agreement for any reason with 120 days&rsquo; notice to WSU.</P>

<P STYLE="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">(d) The Parkinson&rsquo;s Institute &ndash;
ARRAYIT DIAGNOSTICS (PARKINSON&rsquo;S), INC.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to an agreement dated February 9, 2009 between TeleChem
International (doing business as Arrayit), a wholly owned subsidiary of Arrayit Corporation and The Parkinson's Institute, a California
Corporation, Arrayit Diagnostics (Parkinson&rsquo;s), Inc. was obligated to make payments of 5% of gross earnings generated from
Research derived from the biological specimens from Parkinson's disease patients and control patients provided by the Parkinson's
Institute.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There were no revenues generated from June 2, 2009 (inception)
through June 30, 2012 and hence not obligated to pay any amounts to the Parkinson&rsquo;s Institute.</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">On May 23, 2011, the Company acquired the outstanding 20% non-controlling
interest in Arrayit Diagnostics (Parkinson), Inc., also recognizing no gain or loss on the transaction, and distributed the then
100% owned subsidiary directly to Arrayit Corporation.</P>

<P STYLE="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>NOTE 7 &ndash; SHARE CAPITAL</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">The Company is authorized to issue a total of 500,000,000 shares
of stock, including 480,000,000 shares of common stock, par value $0.001 per share, and 20,000,000 shares of preferred stock, par
value $0.001 per share.</P>

<P STYLE="font: 10pt Courier; 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">In 2009, the Company issued 3,000 series B preferred shares
to its President and CEO. The 3,000 issued and outstanding shares of series B preferred stock, voting as a class, have the number
of votes equal to twice the number of votes of all outstanding shares of capital stock such that the holders of outstanding shares
of Series B preferred stock shall always constitute a two-thirds of the voting rights of the corporation.</P>

<P STYLE="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 June 2009, the Company issued 1,000 common shares to its
Parent as compensation for the Technology Assignment, more fully described in Note 3.</P>

<P STYLE="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 June 2009, the Company issued 250 common shares pursuant
to paragraph 2 (a) of an advisory agreement dated August 11, 2009 between Arrayit Diagnostics, Inc. (the Company&rsquo;s parent
company) and a limited liability partnership, not affiliated with the company or its parent. This advisory agreement created a
contractual obligation to issue Twenty percent (20%) of the fully diluted equity (the &ldquo;Equity&rdquo;) of the Arrayit Diagnostics,
Inc., and its subsidiaries, which includes the Company, which shall be fully earned and non-refundable in consideration of its
execution of the Agreement. On July 15, 2010, the Company issued an additional 25 common shares to the limited liability partnership.</P>

<P STYLE="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 July 15, 2010, the Company issued 100 common shares to its
President and CEO.</P>

<P STYLE="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 July 15, 2010, the Company issued a stock dividend which
included a 6000:1 common stock split. On May 23, 2011, the Company issued another stock dividend which included an additional
3:1 common stock split. Additionally, 500,000 shares were surrendered on May 23, 2011. These transactions have been accounted
for retroactively within the 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">On May 15, 2012 the Company issued 1,484,800 common shares
to Recap Marketing and Consulting, LLP (Recap), in compliance with an anti-dilution clause contained in the 2009 consulting agreement
with Recap. This clause was terminated on June 30, 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">As a result of these transactions, there were 3,000 preferred
shares outstanding and 32,205,000 common shares outstanding at June 30, 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"><B>NOTE 8 &ndash; STOCK-BASED COMPENSATION</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 Company follows FASB ASC 718, &quot;Compensation-Stock
Compensation&quot; and ASC 505, &ldquo;Equity&rdquo;, to account for its stock options and similar equity instruments issued.
&nbsp;Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the
fair value at the grant date, and expensed over the expected vesting period. ASC 718 and ASC 505 require excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operations for the six months ended June 30, 2012 (unaudited)
included $1,000,000 of stock based compensation arising from the granting of 5,000,000 shares of common stock. Operations for
the year ended December 31, 2011 and 2010 includes $450 in compensation arising from the granting of 450,000 shares of common
stock.</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">Operations for the year ended December 31, 2010 and for the
period from June 2, 2009 (inception) to June 30, 2012 include $208,587 and $511,976, respectively, in stock and stock option based
compensation expense relating to stock and options issued by Arrayit Corporation, the Company&rsquo;s parent. These amounts were
recorded at fair value based upon the trading price of the parent company&rsquo;s stock on the date of grant and Black-Scholes
option pricing models as determined by the parent.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 9 &ndash; RELATED PARTY TRANSACTIONS</B></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 amounts due of $505,537 to Arrayit
Corporation and its subsidiaries are non-interest bearing, unsecured, and have no specific terms of repayment. The amounts arose
from stock compensation to the Company&rsquo;s President satisfied by share issuances and options of Arrayit 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; text-align: justify">Fixed assets with a cost of $39,272 were
purchased from Arrayit Corporation at third party arms length pricing, less accumulated depreciation.</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">Development costs of $110,900 were paid to Arrayit Corporation
to further develop the pre-symptomatic Ovarian Cancer test. The Company evaluated the progress to date and determined that the
development is complete, and expensed the deferred development costs to research and development expenditures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Premises are provided at no cost to the
Company by a stockholder.<BR>
<BR>
</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 10 &ndash; INCOME TAXES</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">At June 30, 2012, December 31, 2011 and 2010, the Company had
net operating loss (NOL) carry-forwards available to offset future taxable income of approximately $2,462,921, $1,289,036 and 997,666,
respectively. The utilization of the NOL carry-forwards is dependent upon the tax laws in effect at the time the NOL carry-forwards
can be utilized. A valuation allowance of approximately $985,000 at June 30, 2012, $515,000 at December 31, 2011 and $399,000 at
December 31, 2010 has been recorded against the deferred tax asset (tax benefit of the NOL) due to the uncertainty surrounding
its realization caused by the Company&rsquo;s recurring losses. The valuation allowance changed by approximately $470,000, $117,000
and $248,000 during 2012, 2011 and 2010, respectively. The NOL carry-forwards will expire in 2019.</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>NOTE 11 &ndash; SUBSEQUENT EVENTS</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">Management evaluated subsequent events through August 20, 2012,
the date the financial statements were available to be issued.</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;<B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><BR>
INFORMATION NOT REQUIRED IN PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item&nbsp;13.</B></TD><TD STYLE="text-align: justify"><B>Other Expenses of Issuance and Distribution</B> *</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: justify">The expenses relating to the registration
of the securities will be borne by registrant. Such expenses are estimated to be as follows: The following table sets forth an
itemized statement of all cash expenses in connection with the issuance and distribution of the securities being registered:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: left">SEC registration fee</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">4,111</TD><TD STYLE="width: 1%; 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">14,500</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 and related expenses*</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Legal fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,500</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">Accounting fees and expenses</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: 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">3,000</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">1,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">87,111</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></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>*Estimated.</TD><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-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Item 14. Indemnification of Directors
and Officers</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: 23pt">Pursuant to the provisions of the Nevada
Revised Statutes 78.7502 to 78.752 (the &ldquo;NRS&rdquo;), we must indemnify directors and officers for any expenses, including
attorneys&rsquo; fees, actually and reasonably incurred by any director or officer in connection with any actions or proceedings,
whether civil, criminal, administrative, or investigative, brought against such director or officer because of his or her status
as a director or officer, to the extent that the director or officer has been successful on the merits or otherwise in defense
of the action or proceeding. The NRS permits a corporation to indemnify a director or officer, even in the absence of an agreement
to do so, for expenses actually and reasonably incurred in connection with any action or proceeding (i) if such officer or director
(a) acted in good faith and in a manner in which he or she reasonably believed to be in, or not opposed to, the best interests
of the corporation, (b) is not liable pursuant to Section 78.138 of the NRS (fiduciary duties), and (c)&nbsp;with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, or (ii) with respect to an action by
or in the right of the corporation, if such director or officer (a)&nbsp;acted in good faith and in a manner which he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation, and (b) is not liable pursuant to Section 8.138 of
the NRS (fiduciary duties), except that indemnification may not be made for any claim, issue or matter as to which a person has
been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation
or for amounts paid in settlement to the corporation, unless and only to the extent that the court determines upon application
that the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.</P>

<P STYLE="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: 23pt">The NRS also prohibits indemnification of
a director or officer if a final adjudication establishes that the director&rsquo;s or officer&rsquo;s acts or omissions involved
intentional misconduct, fraud, or a knowing violation of the law and were material to the cause of action. Despite the foregoing
limitations on indemnification, the NRS may permit a director or officer to apply to the court for approval of indemnification
even if the director or officer is adjudged to have committed intentional misconduct, fraud, or a knowing violation of the law.
The NRS further provides that a corporation may purchase and maintain insurance for directors and officers against liabilities
incurred while acting in such capacities regardless of whether the corporation has the authority to indemnify such persons under
the NRS. Any discretionary indemnification under the NRS must be authorized upon a determination that such indemnification is proper:
(i) by the stockholders, (ii) by a majority of a quorum of disinterested directors, or (iii)&nbsp;by independent legal counsel
in a written opinion authorized by a majority vote of a quorum of directors consisting of disinterested directors or by independent
legal counsel in a written opinion if a quorum of disinterested directors cannot be obtained.</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: 23pt">Article XII of the company&rsquo;s articles
of incorporation provide for the indemnification of a present or former director or officer, or person who is or was serving at
the request of the company as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise
(including an employee benefit plan) to the fullest extent permitted by Nevada law. Such indemnification shall include expenses,
including attorney&rsquo;s fees, judgments, fines, and amounts paid in settlement actually incurred by him in any threatened, pending,
or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative because such individual is or
was a director or officer. Additionally, the company will advance any and all such expenses to the individual upon request.</P>

<P STYLE="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: 23pt">The company&rsquo;s bylaws are silent with
respect to indemnification.</P>

<P STYLE="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: 23pt">The company has entered into an indemnification
agreement with each of its directors and officers. The agreement provides that the company will indemnify, defend and hold harmless
the director and/or officer to the fullest extent permitted by Nevada 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: 23pt">The company also maintains insurance for
the benefit of its directors and officers against liability in their respective capacities as directors and officers. The directors
and officers are not required to pay any premium in respect of this insurance. The policy contains various industry exclusions
and no claims have been made thereunder to date.</P>

<P STYLE="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: 23pt">See page 49 for a description of the SEC&rsquo;s
position regarding such indemnification provisions.</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: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><B>Item&nbsp;15.</B></TD><TD STYLE="text-align: justify"><B><I>Recent Sales of Unregistered Securities</I></B></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: 23pt">During the three years preceding the filing
of this registration statement, we issued and sold the following securities that were not registered 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: 23pt">On January 4, 2012, we issued for $10,000
cash, 50,000 shares of common stock to Bettina Mackenbach in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On January 4, 2012, we issued for $10,000
cash, 50,000 shares of common stock to Jukka Tolonen in reliance upon the exemption from registration in Rule 506 of Regulation
D 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: 23pt">On January 9, 2012, we issued for $25,000
cash, 125,000 shares of common stock to Helena Wahala in reliance upon the exemption from registration in Regulation S and Rule
506 of Regulation D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On January 18, 2012, we issued 1,000,000
shares to Issuers Capital Advisors in consideration for their services as investment advisors in reliance upon the exemption from
registration in Regulation S and Rule 506 of Regulation D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On January 18, 2012, we issued 1,000,000
shares to Dr. Eric Zuckerman in consideration for his services as a consultant to form and chair a scientific advisory board in
reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On January 18, 2012, we issued 500,000 shares
to Gregg Linn in consideration for his services as a consultant to assist in the accounting setup and compliance with SEC regulations
in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On January 18, 2012, we issued 500,000 shares
to Steven Scott in consideration for his services as a consultant to assist in the formation of the public entity and compliance
with SEC regulations in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities
Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On February 1, 2012, we issued 1,000,000
shares to Tamarin Fuller in consideration for her services in public relations and the development of the corporate structure of
officers and directors in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the
Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On February 1, 2012, we issued 1,000,000
shares to John Howell in consideration for his services as CEO, President and Chairman of the Board in the form of an employment
agreement for a 3 year period. This agreement replaces and extends the original employment agreement that was set to expire in
August of 2012. These shares were issued in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation
D under the Securities Act.</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: 23pt">On March 5, 2012, we issued a total of 210,000
shares to the following persons in the following amounts in consideration of the royalty previously issued by Arrayit Diagnostics
(Ovarian), Inc. At the time the royalty was issued, Arrayit Diagnostics (Ovarian), Inc. was a wholly owned subsidiary of Arrayit
Diagnostics, Inc. However, effective May 23, 2011, Arrayit Diagnostics (Ovarian), Inc. was merged with and into Arrayit Diagnostics,
Inc.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 23pt">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 79%; text-align: left">John R. Lester</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">25,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">John Wiesner</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: rgb(204,255,204)">
    <TD STYLE="text-align: left">Timothy Phelan</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">Jerry W. Neel Jr.</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: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Dr. Sylvin Mayford Griffin</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">10,000</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">Palmer and Talley Melton</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">25,000</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="padding-bottom: 2.5pt; padding-left: 0.25in">TOTAL</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">210,000</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The shares were issued in reliance upon the exemptions from
registration in Section 3(a)(9) and Rule 506 of Regulation D 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: 23pt">On March 5, 2012, we issued 385,000 shares
to Recap Marketing and Consulting, LLP in consideration for the 20% royalty they had in Arrayit Diagnostics, Inc. and the sale
of the OvaDx pre-symptomatic ovarian cancer diagnostic test. This payment cancels any and all royalty interest that Recap held
in Arrayit Diagnostics and any of its subsidiaries. On May 23, 2011 Arrayit Diagnostics (Ovarian), Inc., a subsidiary of Arrayit
Diagnostics, was merged into Arrayit Diagnostics. Arrayit Diagnostics (Parkinsons&rsquo;), Inc. was removed as a subsidiary of
Arrayit Diagnostics and renamed Arrayit Scientific Solutions, Inc. These shares were issued in reliance upon the exemption from
registration in Regulation S and Rule 506 of Regulation D 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: 23pt">On April 2, 2012, we issued for $10,000 cash,
50,000 shares of common stock to Craig Musick in reliance upon the exemption from registration in Rule 506 of Regulation D under
the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On April 17, 2012, we issued for $5,000 cash,
25,000 shares of common stock to Bettina Mackenbach in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On May 1, 2012, we issued for $10,000 cash,
50,000 shares of common stock to Craig Musick in reliance upon the exemption from registration in Rule 506 of Regulation D under
the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On May 15, 2012 we issued 1,484,800 shares
to Recap Marketing and Consulting, LLP, in compliance with the anti-dilution clause contained in the original consulting agreement
with that entity, as a result of the issuance of additional shares to investors and consultants. These shares were issued in reliance
upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On June 25, 2012, we issued for $5,000 cash,
25,000 shares of common stock to Gerald Bridge in reliance upon the exemption from registration in Rule 506 of Regulation D under
the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On September 18, 2012, we issued for $6,000
cash, 30,000 shares of common stock to Michael Montante in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23pt">On October 15, 2012 we issued for $50,000
cash, 200,000 shares of common stock to Brierpatch, LTD in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.</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: justify"><B>Item 16. <I>Exhibits and Financial Statement
Schedules</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: justify">(a)(1) Index to Financial Statements &mdash;
Included in prospectus&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&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: 6%">(a)(2)</TD>
    <TD STYLE="width: 94%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Included Separately from prospectus: Consent
        of Independent Registered Public Accounting Firm.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(See Exhibits 23.2 and 23.3 below.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than the Financial Data Schedule,
no schedules are included for the reason that all required information is contained in the financial statements included in the
prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(b) <B>Financial Statement Schedules.</B>
Schedules not listed above have been omitted because the information to be set forth therein is not material, not applicable or
is shown in the financial statements or notes thereto.</P>

<P STYLE="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">(c) Exhibits:</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"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&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: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 8%">2.1</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 88%">Agreement and Plan of Distribution between the Registrant and Arrayit Corporation (incorporated herein by reference to Item 9.01(b) to the Form 8-K&nbsp; filed under file no. 33-119586, December 14, 2011.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>3.1</TD>
    <TD>&nbsp;</TD>
    <TD>Amended and Restated Articles of Incorporation of Registrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>3.2</TD>
    <TD>&nbsp;</TD>
    <TD>Bylaws of Registrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>4.1</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Common Stock Certificate of Registrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>4.2</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Preferred Stock Certificate</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>Plan and Agreement of Merger, dated May 23, 2011, merging Arrayit Diagnostics (Ovarian), Inc. with and into Arrayit Diagnostics, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>5.1</TD>
    <TD>&nbsp;</TD>
    <TD>Opinion of Counsel as to the Legality of the Shares Being Spun Off</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.1</TD>
    <TD>&nbsp;</TD>
    <TD>Technology Assignment Agreement dated as of July 18, 2009 between Arrayit Diagnostics, Inc. and Arrayit Corporation.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.2</TD>
    <TD>&nbsp;</TD>
    <TD>United States Patent No.6,101,946 dated August 15, 2000 assigned to TeleChem International Inc. (now a wholly owned subsidiary of Arrayit Corporation)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.3</TD>
    <TD>&nbsp;</TD>
    <TD>Exclusive Services Agreement effective September 10, 2009 &nbsp;between Arrayit Diagnostics, Inc. and Arrayit Corporation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.4</TD>
    <TD>&nbsp;</TD>
    <TD>2009 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.5</TD>
    <TD>&nbsp;</TD>
    <TD>Advisory Agreement, effective January 18, 2012 between Arrayit Diagnostics, Inc. and Dr. Eric Zuckerman</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.6</TD>
    <TD>&nbsp;</TD>
    <TD>Advisory Agreement, effective January 18, 2012 between Arrayit Diagnostics, Inc. and Gregg Linn.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.7</TD>
    <TD>&nbsp;</TD>
    <TD>Consulting Agreement, effective May 27, 2010 between Arrayit Diagnostics, Inc. and Issuers Capital Advisors LLC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.8</TD>
    <TD>&nbsp;</TD>
    <TD>Employment Agreement, dated as of August 15, 2009 between Arrayit Diagnostics and John Howell</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.9</TD>
    <TD>&nbsp;</TD>
    <TD>Employment Agreement, dated as of&nbsp; February 1, 2012 between Arrayit Diagnostics, Inc. and John Howell</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.10</TD>
    <TD>&nbsp;</TD>
    <TD>Investment Advisory Agreement, effective August 11, 2009 between Arrayit Diagnostics, Inc. Recap Marketing and Consulting, LLP.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.11</TD>
    <TD>&nbsp;</TD>
    <TD>Advisory Agreement, effective January 18, 2012 between Arrayit Diagnostics, Inc. and Steven Scott</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.12</TD>
    <TD>&nbsp;</TD>
    <TD>License Agreement , effective December 7, 2009, between Arrayit Diagnostics, Inc. and Wayne State University</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.13</TD>
    <TD>&nbsp;</TD>
    <TD>Sponsored Research Agreement, effective December 7, 2009, between Arrayit Diagnostics, Inc. and Wayne State University.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&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: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 8%">10.14</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 88%">Royalty Conversion Agreement, dated as of March 5, 2012, among Arrayit Diagnostics, Inc., Arrayit Corporation and Ovarian Cancer Testing, LLP</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.15</TD>
    <TD>&nbsp;</TD>
    <TD>Royalty Purchase Agreement, dated as of March 1, 2012, among Arrayit Diagnostics, Inc., and Recap Marketing and Consulting LLP</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**</TD>
    <TD></TD>
    <TD>Transfer Agent and Registrar Agreement between Arrayit Diagnostics, Inc., and VStock Transfer, LLC</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.17</TD>
    <TD>&nbsp;</TD>
    <TD>Merger of Arrayit Diagnostics (Ovarian), Inc. into Arrayit Diagnostics, Inc. dated as of&nbsp; May 23, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.18</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Stock Options Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.19</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Warrant Agreement between Arrayit Diagnostics, Inc. and Brad Fleming</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>10.20</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Indemnification Agreement between Arrayit Diagnostics, Inc. and John Howell</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>14.1</TD>
    <TD>&nbsp;</TD>
    <TD>Code of Ethics</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>23.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</TD>
    <TD></TD>
    <TD>Consent of Sonfield &amp; Sonfield (Included in Exhibit 5.1)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">23.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</TD>
    <TD STYLE="border-bottom: Black 1pt solid"></TD>
    <TD STYLE="border-bottom: Black 1pt solid">Consent of &nbsp;Moss, Krusick &amp; Associates, LLC , Independent Public Accounting Firm</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* filed herewith</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">** to be filed by amendment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.75in"><B>Item 17.</B>&#9;<B>Undertakings</B></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-align: justify">The undersigned registrant hereby undertakes
to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to each purchaser.</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">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, the registrant has 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, the registrant will,
unless in the opinion of its 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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The undersigned registrant hereby undertakes
that:</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">(1) For purposes of determining any liability
under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)&nbsp;or 497(h) under
the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.</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">(2) For the purpose of determining any
liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.</P>

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<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: 0.25in">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 Redmond, Oregon, on the 9th day of November 2012.</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; text-indent: 0.25in">Pursuant to the requirements of the Securities
Act of 1933, this Registrant&rsquo;s Form S-1 Registration Statement has been signed below by the following persons in their respective
capacity as officer and/or director of the Registrant on the date indicated.</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; text-indent: 0.25in"></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: 67%; border-bottom: Black 1pt solid">Arrayit Diagnostics, Inc. </TD>
    <TD STYLE="width: 7%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 26%; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid">/s/ John Howell </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>John Howell, Chairman, President, CEO, Principal Executive Officer as well as Principal Financial and Accounting Officer</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
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[{"type": "S-1", "sequence": "1", "filename": "v327732_s1.htm", "description": "FORM S-1", "secsgml_size_bytes": 855674}]
{"company-data": {"conformed-name": "Arrayit Diagnostics, Inc.", "cik": "0001558297", "irs-number": "271062556", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-184899", "film-number": "121197181"}, "business-address": {"street1": "1950 CINNAMON TEAL DR.", "city": "REDMOND", "state": "OR", "zip": "97756", "phone": "916-599-3138"}, "mail-address": {"street1": "1950 CINNAMON TEAL DR.", "city": "REDMOND", "state": "OR", "zip": "97756"}}
As filed with the Securities and Exchange Commission November
__
, 2012/Registration No. _________
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Arrayit Diagnostics, Inc.
(Exact name or Registrant as specified in
its charter)
Nevada
8093
27-1062556
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Number)
(IRS Employer Identification Number)
John Howell
President and Chief Executive Officer
Arrayit Diagnostics, Inc.
1950 Cinnamon Teal Drive
Redmond, Oregon 97756
Telephone 916-599-3138
(Name, address, including zip code,
and telephone number, including area code, of agent for service
)
1950 Cinnamon Teal Dr
Redmond, Oregon 97756
Telephone 916-599-3138
(Address, including zip code, and
telephone number, including area code, of registrant's principal executive offices)
Copies to:
Robert L. Sonfield, Jr., Esq.
Sonfield & Sonfield
770 South Post Oak Lane
Houston, Texas 77056
Tel: (713) 877-8333 Fax: (713) 877-1547
Approximate date of commencement of proposed sale to the
public:
From time to time after this Registration Statement becomes effective, as determined by the selling stockholders named
in the prospectus contained herein.
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
x
If this form is filed 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.
¨
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.
¨
If this form is a post-effective amendment filed pursuant to
Rule 462(d) 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.
¨
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
¨
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
x
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities To
Be Registered
Amount To Be
Registered(1)(2)(3)
Proposed Maximum
Offering Price
Per Share
Proposed Maximum
Total
Offering Price(4)
Total
Amount of
Registration Fee
Common stock, par value $0.001 per share
30,141,400 Shares
$
1.00
$
30,141,400
$
4,111.29
(1) In accordance with Rule 416(a) of the Securities Act of
1933, as amended, this registration statement shall be deemed to cover an indeterminate number of shares that may become issuable
as a result of stock splits, stock dividends, rounding up or similar transactions.
(2) Includes 19,350,000 shares of Arrayit Diagnostics, Inc.
owned by its parent, Arrayit Corporation, as of December 31, 2011, representing 60% of the total number of shares outstanding.
(3) Includes (i) 8,000,000 shares of common stock which may
be issued under the investment agreement between Arrayit Diagnostics, Inc. and AEF Master SPV LP, having a total value of $8,000,000,
based on an assumed price per share of $1.00, (ii) 125,000 shares issued to AEF Master SPV, LP as payment of commitment and expense
fees in connection with the transaction and (iii) 2,666,400 shares as 1/3
rd
of the number of shares which may be issued
for purchase from time to time under the investment agreement.
(4) Estimated solely for purposes of calculating the registration
fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based on management's estimate of future bid and
asked price in the over-the-counter market.
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 an 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 Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus
is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion,
dated November
__
, 2012
Preliminary prospectus
DISTRIBUTION OF 19,350,000 SHARES
OF COMMON STOCK
OFFERING
UP TO 10,791,400 SHARES OF COMMON STOCK
We are furnishing this prospectus to the shareholders of Arrayit
Corporation, a Nevada corporation ("Arrayit"). Shareholders of Arrayit will receive one (1) share of Arrayit Diagnostics,
Inc. (the "company," "Diagnostics," "we," "our," and "us") for approximately
every 3.34 shares of Arrayit which they own on the Record Date, which will be established when this S-1 is deemed effective (the
"Record Date" and the "Distribution"). Any fractional shares as a result of the Distribution will be rounded
up to the nearest whole share. The Distribution is expected to be effected as soon as practicable after the date the registration
statement, of which this prospectus is a part, is declared effective. Proof of issuance of the shares of company common stock will
be mailed to the Arrayit stockholders on that date or as soon thereafter as practicable. No fractional shares of company common
stock will be issued.
This prospectus also relates to the resale
of up to 10,791,400 shares of our common stock, par value $0.001 per share, by the selling stockholder, AEF Master SPV, Ltd, ("AEF
Master") 10,666,400 of which AEF Master has agreed to purchase and 125,000 has been issued as a commitment fee pursuant to
the investment agreement we entered into with AEF Master on November 2, 2012. Subject to the terms and conditions of the investment
agreement, which we refer to in this prospectus as the "Investment Agreement," we have the right to "put,"
or sell, up to $8.0 million of shares of our common stock to AEF Master. This arrangement is sometimes referred to as an "Equity
Line."
We will not receive any proceeds from the
resale of these shares of common stock offered by AEF Master. We will, however, receive proceeds from the sale of shares to AEF
Master pursuant to the Equity Line. When we put an amount of shares to AEF Master, the per share purchase price that AEF Master
will pay to us in respect of such put will be determined in accordance with a formula set forth in the Investment Agreement. Generally,
in respect of each put, AEF Master will pay us a per share purchase price equal to 100% of the volume weighted average price, or
"VWAP," of our common stock during the 15 consecutive trading days immediately prior and 5 days immediately after the
date AEF Master receives our put notice. In addition, we will issue to AEF Master the number of additional shares equal to 1/3
rd
of the number of Shares to be issued for purchase as a placement fee.
AEF Master may sell the shares of common
stock from time to time at the prevailing market price on the Over-the-Counter (OTC) Bulletin Board, or OTCBB, or on an exchange
if our shares of common stock become listed for trading on such an exchange, or in negotiated transactions.
Before this offering, there has been no public market for our
common stock and our common stock is not listed on any stock exchange or on the over-the-counter market. This Distribution of our
common shares is the first public distribution of our shares. It is our intention to seek a market maker to publish quotations
for our shares on the OTC Electronic Bulletin Board; however, we have no agreement or understanding with any potential market maker.
Accordingly, we can provide no assurance to you that a public market for our shares will develop and if so, what the market price
of our shares may be. The shares registered in this registration statement will be sold at prevailing market prices or privately
negotiated prices.
SHARES OF ARRAYIT DIAGNOSTICS, INC. INVOLVE A HIGH
DEGREE OF RISK. WE URGE YOU TO READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE 5, ALONG WITH THE REST OF THIS
PROSPECTUS RELATING TO RISKS ASSOCIATED WITH THE SECURITIES REGISTERED HEREIN.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
No shares of our common stock will be issued to any holder
of shares of our parent in any jurisdiction which such issuance would not comply with the laws of that jurisdiction.
THE DATE OF THIS PROSPECTUS IS NOVEMBER
__, 2012.
TABLE OF CONTENTS
Descriptive Title
Page
PROSPECTUS SUMMARY
1
SUMMARY FINANCIAL DATA
4
RISK FACTORS
4
DESCRIPTION OF BUSINESS
15
THE SPIN-OFF
23
THE EQUITY LINE
27
SELLING STOCKHOLDER
27
PLAN OF DISTRIBUTION
28
DIVIDEND POLICY
29
RELATED PARTY TRANSACTIONS
30
SELECTED FINANCIAL DATA
31
UNAUDITED, AUDITED AND SUMMARY FINANCIAL INFORMATION
31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
32
APPLICATION OF PROCEEDS
40
MARKET PRICE OF COMMON STOCK AND RELATED MATTERS
40
PRINCIPAL STOCKHOLDERS
40
ARRAYIT'S RELATIONSHIP WITH DIAGNOSTICS FOLLOWING THE SPIN-OFF
41
ABSENCE OF PUBLIC MARKET AND DIVIDEND POLICY
42
CAPITALIZATION
43
DILUTION
43
DESCRIPTION OF CAPITAL STOCK
43
DEFENSES AGAINST HOSTILE TAKEOVERS
46
SHARES ELIGIBLE FOR FUTURE SALES
48
LEGAL MATTERS
49
EXPERTS
49
INTERESTS OF NAMED EXPERTS AND COUNSEL
49
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
49
WHERE YOU CAN FIND MORE INFORMATION
50
INDUSTRY AND MARKET DATA
50
1
We have not authorized anyone to provide any information
other than that contained in this prospectus or to which we have referred you herein. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer to sell these securities and are not soliciting
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
we have included in this prospectus is accurate only as of the date of this prospectus and that any information we have incorporated
by reference is accurate only as of the date of the document incorporated by reference.
Market and industry data
The market data and certain other statistical
information used throughout this prospectus are based on independent industry publications, government publications, reports by
market research firms or other published independent sources. Some data is also based on our good faith estimates, which are derived
from management's review of internal data and information, as well as the independent sources listed above.
Trademarks
This prospectus also includes trademarks,
service marks and trade names of other companies. Our use or display of other companies' trademarks, service marks or trade
names is not intended to and does not imply a relationship with or endorsement or sponsorship of us by such other companies.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains "forward-looking
statements" based on management's current belief, based on currently available information, as to the outcome and timing
of future events. Pursuant to Section 27A(b)(2)(D) of the Securities Act of 1933, as amended, the safe harbor for forward-looking
statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to statements made in connection with
an initial public offering such as this. Forward-looking statements may include statements that relate to, among other things,
our:
·
future financial and operating performance and results;
·
business strategy and budgets;
·
technology;
·
financial strategy;
·
amount, nature and timing of capital expenditures;
·
competition and government regulations;
·
operating costs and other expenses;
·
cash flow and anticipated liquidity;
·
property acquisitions and sales; and
·
plans, forecasts, objectives, expectations and intentions.
All statements, other than statements of
historical fact included in this prospectus regarding our strategy, future operations, financial position, estimated revenues and
losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this prospectus,
the words "could," "believe," "anticipate," "intend," "estimate," "expect,"
"project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions
about future events and are based on currently available information as to the outcome and timing of future events. When considering
forward looking statements, please keep in mind the risk factors and other cautionary statements described under the heading "
Risk
Factors
" in this prospectus.
Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially
different from the anticipated future results or financial condition expressed or implied by the forward-looking statements. These
risks, uncertainties and other factors include but are not limited to:
i
·
concentration of our customer base and fulfillment of existing customer contracts;
·
our ability to maintain pricing;
·
the cyclical nature of the health care industry;
·
deterioration of the credit markets;
·
delays in obtaining required regulatory approvals;
·
our ability to raise additional capital to fund future capital expenditures;
·
increased vulnerability to adverse economic conditions due to indebtedness;
·
competition within the health care industry;
·
asset impairment and other charges;
·
our limited operating history on which investors will evaluate our business and prospects;
·
our identifying, making and integrating acquisitions;
·
our ability to obtain raw materials and specialized equipment;
·
technological developments or enhancements;
·
loss of key executives;
·
management control over stockholder voting;
·
the ability to employ skilled and qualified workers;
·
work stoppages and other labor matters;
·
hazards inherent to the health care industry;
·
inadequacy of insurance coverage for certain losses or liabilities;
·
regulations affecting the health care industry;
·
federal legislation and state legislative and regulatory initiatives relating to health care;
·
costs and liabilities associated with environmental, health and safety laws, including any changes in the interpretation or
enforcement thereof; and
·
future legislative and regulatory developments.
We believe that it is important to communicate
our expectations of future performance to our investors. However, events may occur in the future that we are unable to accurately
predict, or over which we have no control. We caution you against putting undue reliance on forward-looking statements or projecting
any future results based on such statements. When considering our forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this prospectus which provide examples of risks, uncertainties and events that may cause
our actual results to differ materially from those contained in any forward-looking statement. Please review the "
Risk
Factors
" included in this prospectus so that you are aware of the various risks associated with your investment.
All subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section and any other cautionary statements that may accompany such forward-looking statements.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect events or circumstances after the date of this prospectus.
You should not place undue reliance on forward-looking
statements. Each forward-looking statement speaks only as of the date of the particular statement.
ii
PROSPECTUS SUMMARY
This summary highlights certain information
appearing elsewhere in this prospectus concerning our business and this offering. Because this is a summary, it may not contain
all of the information that may be important to you and to your investment decision. In addition, certain statements contained
in this prospectus include forward-looking information that involve many risks and uncertainties, including but not limited to
those discussed under "Cautionary Statements Regarding Forward-Looking Statements" on page i. We urge you to read the
entire prospectus carefully, including the risks of owning our common stock discussed under "
Risk Factors"
beginning
on page 4
, "Management's Discussion and Analysis of Financial Condition and Results of Operations
"
and Diagnostics' financial statements and the notes thereto included in this prospectus. As used in this prospectus, references
to "Arrayit" refer to Arrayit Corporation and references to "Diagnostics" refer to Arrayit Diagnostics,
Inc.
About us
Arrayit Diagnostics, Inc. ("Diagnostics")
is a Nevada corporation located at 1950 Cinnamon Teal Dr, Redmond, Oregon 97756,
Telephone: 916-599-3138. Diagnostics is
presently a majority-owned subsidiary of Arrayit Corporation ("Arrayit"). Our business is based upon the completion
of the human genome sequencing project. Genetic research is increasingly focused on identifying the variations of the specific
genes in the genome. These variations are what define individual characteristics, including disease states or a statistical propensity
for disease. The implications are far-reaching and impact not only the research community, but also the individual patients and
the medical providers. Diagnostic tests that detect diseases very early in their progression will provide options for earlier treatments
that may improve the patient's quality of life and prognosis by delaying or preventing disease progression or even death.
Medical providers will incur major cost savings by avoiding costly late stage disease treatments.
Relationship between Arrayit and Diagnostics before the spin-off
Diagnostics is a majority-owned subsidiary
of Arrayit. After the spin-off, Diagnostics will be an independent public company, any relationship thereafter is limited to the
terms of the Agreement and Plan of Distribution summarized below and Arrayit's continuing business relationship. For a more
detailed description of these relationships, see the section entitled "
Relationship between Diagnostics and Arrayit following
the Spin-Off.
"
The spin-off
See
"The Spin-Off,"
beginning
on page 22, for a more detailed description of the matters described below.
Reasons for the spin-off
See "
The Spin-Off
" describing in detail the spin-off
,
impact on price/market capitalization, spin-off ratio, results of the spin-off, reason for the prospectus and related considerations. No stockholder approval of the spin-off is required, and none is being sought. Neither Arrayit nor Diagnostics are asking you for a proxy.
Reason for furnishing this prospectus
We are furnishing this prospectus to provide information to holders of Arrayit who will be issued Diagnostics' shares in the spin-off.  It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of Diagnostics' securities or those of Arrayit.  The information contained in this prospectus is believed by us to be accurate as of the date set forth on its cover.  Changes may occur after that date, and neither Diagnostics nor Arrayit are required to update the information except in the normal course of our public disclosure obligations and practices.
1
Shares to be issued
Diagnostics will issue to all holders of Arrayit capital stock or the right to acquire capital stock on the effective date of the spin-off a pro rata distribution of 19,350,000 shares of our common stock based on the 64,655,424 issuable or issued and outstanding common shares of Arrayit.
Spin-off date
The spin-off date is expected to occur on or about January 15, 2013. Holders of record of Arrayit on the Record Date to be selected will become entitled to receive the our common shares as described above. In addition, their rights as holders of capital stock of Arrayit will continue.
Spin-off ratio
Pursuant to our common stock spin-off and associated distributions described above, there will be a dividend to Arrayit holders of our capital stock based on 1 for 3.34 outstanding options and warrants, common and preferred shares of Arrayit. In the case of anyone entitled to receive a fractional share, the number of our shares to be issued shall be rounded up the nearest higher whole number of shares.
Securities to be distributed
Based on the information available to us as of December 31, 2011, we believe that 28,027,934 shares of Arrayit common stock will be issued and outstanding on the Record Date. The exact number of shares of our common stock, to be received by Arrayit shareholders in connection with this spin-off will be determined based on the number of shares of Arrayit outstanding on the spin-off date.
Our transfer agent will mail an account statement to each registered holder stating the number of shares of our common stock credited to such holder's account. After the distribution, such holders may request that their shares of our common stock be transferred to a brokerage or other account at any time without charge. For stockholders who own Arrayit shares through a broker or other nominee, their shares of our common stock will be credited to their account by the broker or other nominee.
Certain U.S. federal income tax consequences of the spin-off
The value of the Diagnostics shares received from the spin-off is taxable to the recipient as a dividend.
Secondary market
There is a limited public market for common shares of Arrayit
        and trades are reported by the OTC Bulletin Board., however, there is currently no public market for our common stock. Diagnostics
        intends to apply to qualify its common stock for quotation on the OTCBB or other secondary market for which it qualifies under
        a symbol yet to be determined. Diagnostics expects that quotation by OTCBB of our common stock will begin on the effective date
        of the spin-off.
We have not applied to register the shares in any state. An
        exemption from registration will be relied upon in the states where the shares are distributed and may only be traded in such jurisdictions
        after compliance with applicable securities laws. There can be no assurances that the shares will be eligible for sale or resale
        in such jurisdictions. We may apply to register the shares in several states for secondary trading; however we are under no requirement
        to do so. Rather, we anticipate that we will distribute restricted Diagnostics' shares to holders of Arrayit common stock
        that reside in states which do not provide for an exemption from registration for this distribution.
2
Relationship between Diagnostics and Arrayit following the spin-off
Diagnostics and Arrayit have entered into an Agreement and Plan of Distribution in connection with the spin-off. This agreement provides for completion of the spin-off, and will govern the relationship between Diagnostics and Arrayit after the spin-off. For a more detailed description of the agreement, see the section entitled "
Relationship between Diagnostics and Arrayit Following the Spin-Off.
"
The Equity Line
See
"The Equity Line"
beginning
on page 27, for a more detailed description of the matters described below.
Shares to be issued
This prospectus relates to the resale of up to 10,791,400 shares of our common stock by AEF Master SPV LP.  AEF Master will acquire our common stock pursuant to the terms and conditions of the Investment Agreement.
The Investment Agreement
The Investment Agreement with AEF Master provides that AEF Master is committed to purchase from us, from time to time, up to $8,000,000 of our common stock over the course of 36 months.  We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement.  The amount that we are entitled to put in any one notice will be determined in accordance with a formula set forth in the Investment Agreement.  Generally, in respect to each put, AEF Master will pay us a per share purchase price equal to 100% of the volume weighted average price, or VWAP, of our common stock during the 15 consecutive trading days immediately prior and five days after our put notice.  The initial number of shares issuable by us and purchasable by AEF Master under the Investment Agreement is 8,000,000 shares.
Selling stockholder
AEF Master is the investor under the Investment Agreement.  All investment decisions and control of AEF Master are made and held by its managing member.  As a result, Mr. Robert C. Rhodes, the managing member of Rhodes Holdings, makes the investment decisions on behalf of and control American Equity Fund.  American Equity Fund has informed us that it is an "underwriter" within the meaning of the Securities Act, and to the best of our knowledge, no other underwriter or person has been engaged to facilitate the sale of shares of the common stock in this offering.
Plan of distribution
AEF Master, as selling stockholder of our common stock and any of their donees, pledgees, transferees, assignees and other successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock on the OTC Bulletin Board or any other stock exchange, market or trading facility on which the shares are traded or in private transactions.   These sales may be at fixed or negotiated prices. (See "Plan of Distribution").
Dividend policy
Following this share distribution, neither Arrayit nor Diagnostics anticipate paying any dividends on their respective common stock in the foreseeable future.
No appraisal rights
Holders of Arrayit common or preferred shares have no dissenters' rights or appraisal rights in connection with this distribution of our common shares.
3
Transfer agent and registrar
VStock Transfer, LLC, 77 Spruce Street, Suite 201, Cedarhurst, New York 11516, is our stock transfer company and registrar. Phone: (212) 828-8436, Facsimile: (646) 536-3179.
Risk factors
See the section entitled "
Risk Factors
" beginning on page 4 for a discussion of some of the factors you should carefully consider in connection with this spin-off, including detailed risks related respectively to the spin-off proper, our common stock and our business.
SUMMARY FINANCIAL DATA
The Summary Financial Information, all
of which has been derived from audited and unaudited financial statements included elsewhere in this prospectus, reflects the operations
of Arrayit Diagnostics for its limited operating history as of and for the period from inception to June 30, 2012. You should read
this summary financial information in conjunction with our plan of operation, financial statements and related notes to the financial
statements, each appearing elsewhere in this prospectus and "Management's Discussion and Analysis of Financial Condition
and Results of Operation."
Consolidated Balance Sheets
For the Six Months Ended June 30, 2012
(unaudited) and Years Ended December 31, 2011 and 2010
06/30/2012
(unaudited)
12/31/2011
12/31/ 2010
Total Assets
$
24,339
$
9,716
$
32,807
Total Current Liabilities
$
1,188,662
$
1,075,194
$
803,311
Total Stockholder's Equity (Deficit)
$
(1,164,323
)
$
(1,065,478
)
$
(770,504
)
Total Liabilities and Stockholder's Equity (Deficit)
$
24,339
$
9,716
$
32,807
Consolidated Statement of Operations
For the Six Months Ended June 30, 2012
and 2011 (unaudited) and the Years Ended December 31, 2011 and 2010, and the Period from June 2, 2009 (Inception) to June 30, 2012
(unaudited)
06/30/2012
(unaudited)
06/30/2011
(unaudited)
12/31/2011
12/31/2010
06/02/2009
(inception)
to
06/30/2012
(unaudited)
Revenues
$
-
$
-
$
-
$
-
$
-
Total Operating Expenses
$
1,167,286
$
157,107
$
274,090
$
631,361
$
(2,458,379
)
Operating Loss
$
(1,167,286
)
$
(157,107
)
$
(274,090
)
$
(631,361
)
$
(2,458,379
)
Interest Expense (Income)
$
6,599
$
14,900
$
20,884
$
49,804
$
76,987
Net Loss Attributable to Non-Controlling Interest
$
-
$
3,604
$
3,604
$
61,694
$
72,445
Loss Per Share
$
(0.04
)
$
(0.01
)
$
(0.01
)
$
(0.03
)
Weighted Average Shares Outstanding
30,659,435
24,875,611
25,111,890
24,508,356
RISK FACTORS
The securities offered herein are highly
speculative. You should carefully consider the following risk factors and other information in this prospectus. If any of the following
risks actually occur, our business and financial results could be negatively affected to a significant extent.
4
Our business is subject to many risk
factors; including the following (references to "our," "we," "us," "company" and
words of similar meaning in these Risk Factors refer to Diagnostics):
The occurrence of any of the risks or
uncertainties described below could significantly and adversely affect our business, prospects, financial condition and operating
results. In any event, the trading price of Arrayit's common stock (and Diagnostics, once the market expected to develop,
occurs) could decline, and the investor could lose part or all of his investment.
Risks related to this offering
and ownership of our common stock
The market price of our common stock is
likely to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including
the following:
·
technological innovations or new products and services by us or our competitors;
·
additions or departures of key personnel;
·
limited availability of freely-tradable "unrestricted" shares of our common stock to satisfy purchase orders;
·
our ability to execute our business plan;
·
operating results that fall below expectations;
·
industry developments;
·
we have issued warrants and options that may have a dilutive effect for our stockholders;
·
economic and other external factors; and
·
period-to-period fluctuations in our financial results.
In addition, the securities markets have
from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular
companies. These market fluctuations may also significantly affect the market price of our common stock.
There may be a limited market for
our securities and we may fail to qualify for an exchange listing.
Although we plan on applying for listing of our common
stock on the NYSE Amex or a different national exchange if we meet the qualifications, there can be no assurance that we will meet
the qualifications or our initial listing application will be granted, when the required listing criteria will be met or when,
or if, our application will be granted. Thereafter, there can be no assurance that trading of our common stock on such market will
be sustained or desirable. At the present time, we do not qualify for certain of the initial listing requirements of the NYSE Amex
or other national exchanges. In the event that our common stock fails to qualify for initial or continued inclusion, our common
stock could thereafter only be quoted on the OTC Bulletin Board or in what are commonly referred to as the "pink sheets."
Under such circumstances, you may find it more difficult to dispose of, or to obtain accurate quotations, for our common stock,
and our common stock would become substantially less attractive to certain purchasers, such as financial institutions, hedge funds,
and large investors.
Offers or availability for sale of
a substantial number of shares of our common stock may cause the price of our common stock to decline.
If our stockholders
sell substantial amounts of our common stock in the public market, including shares covered by the registration statement of which
this prospectus forms a part, upon the expiration of any regulatory holding period, under Rule 144, or issued upon the exercise
of outstanding options or warrants, could create a circumstance commonly referred to as an "overhang" and in anticipation
of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are
occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related
securities in the future at a time and price that we deem reasonable or appropriate.
5
We do not expect to pay dividends
in the future. As a result, any return on investment may be limited to the value of our common stock.
We do not anticipate
paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on
our earnings, financial condition and other business and economic factors as our board of directors may consider relevant. If we
do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price
appreciates.
We lack a significant operating history
focusing on our current business strategy which you can use to evaluate us, making share ownership in our company risky.
We
lack a long standing operating history focusing on our current business strategy which you can use to evaluate our previous earnings.
Therefore, ownership in Diagnostics is risky because we have no significant business history and it is hard to predict what the
outcome of our business operations will be in the future.
Our quarterly results may fluctuate
significantly. Failure to meet financial expectations may disappoint securities analysts or investors and result in a decline in
our stock price.
Our revenues and operating results may fluctuate significantly due in part to factors that are beyond
our control and which we cannot predict. The timing of our customers' orders may fluctuate from quarter to quarter. License
revenue may also be unpredictable and may fluctuate due to the timing of payments of non-recurring licensing fees. Because our
expenses are largely fixed in the short to medium term, any material shortfall in revenues may cause us to experience material
losses.
Because of this difficulty in predicting
future performance, our operating results may fall below our own expectations and the expectations of securities analysts or investors
in some future quarter or quarters.
In addition to factors that affect the
spending levels of our customers, additional factors could cause our operating results to fluctuate, including:
·
competition;
·
our inability to produce products in sufficient quantities and with appropriate quality;
·
the frequency of experiments conducted by our customers;
·
our customers' inventory of products;
·
the receipt of relatively large orders with short lead times; and
·
our customers' expectations as to how long it takes us to fill future orders.
Anti-takeover provisions could deter
takeover attempts of Diagnostics and limit appreciation
. Our articles of incorporation, bylaws and Nevada law contain provisions
that may have the impact of delaying or precluding our acquisition without the approval of our board of directors. These provisions
may limit the price that investors otherwise might be willing to pay in the future for shares of our common stock. In addition
to any stockholder rights plan instituted in the future, these provisions include advance notice procedures for stockholder proposals
and director nominations and a provision in our bylaws that does not afford stockholders the right to call a special meeting of
stockholders. In addition, there are provisions of Nevada law that may also have the effect of precluding an acquisition of Diagnostics
without the approval of our board of directors. For more information regarding these provisions, see the sections entitled "
Description
of Capital Sock—Anti-Takeover Effects of Certain Provisions of our Charter and bylaws.
"
The market price and trading
volume of our common stock may be volatile and may face negative pressure.
Before the spin-off, there was a trading
market for Arrayit's common stock but not for the shares of our common stock. Arrayit's common stock will continue
to be traded publicly while our shares issued in the spin-off will trade publicly for the first time following the spin-off. Until
and possibly even after, orderly trading markets develop for our stock, there may be significant fluctuations in price. Investors'
interest may not lead to a liquid trading market and the market price of our common stock may be volatile. This may result in short-
or long-term negative pressure on the trading price of shares of our common stock—or that of Arrayit. The market price of
our common stock may be volatile due to the risks and uncertainties described in this "Risk Factors" section, as well
as other factors that may affect the market price, such as:
·
changes
in general economic or market conditions or trends in the health care industry generally;
6
·
changes
in key personnel;
·
entry
into new markets;
·
changes
in operating performance and stock market valuations of other companies in the industry, including customers and suppliers;
·
investors'
perceptions of our prospects and the prospects of the health care industry;
·
fluctuations
in quarterly operating results, as well as differences between our actual financial and operating results and those expected by
investors;
·
price
and volume fluctuations in the stock market at large which do not relate to our operating performance; and
·
comments
by securities analysts or government officials, including those with regard to the viability or profitability of the biotechnology
sector generally or with regard to our ability to meet market expectations.
The stock market has from time to time
experienced extreme price and volume fluctuations that are unrelated to the operating performance of particular companies.
Furthermore, because our common stock is
expected to be traded on the Over-The-Counter Bulletin Board, our stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions,
such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
Additionally, immediately after the effective date of the spin-off, we will have a limited number of shares in our public float,
and as a result, there could be extreme fluctuations in the price of our common stock.
Further, because of the limited volume
of our shares which trade and our limited public float, we believe that our stock prices (bid, ask and closing prices) will be
entirely arbitrary, not related to the actual value of Diagnostics, and not reflect the actual value of our common stock (and in
fact reflect a value that is much higher than the actual value of our common stock). Shareholders and potential investors in our
common stock should exercise caution before making an investment in Diagnostics, and should not rely on the publicly quoted or
traded stock prices in determining our common stock value, but should instead determine the value of our common stock based on
the information contained in our public reports, industry information, and those business valuation methods commonly used to value
private companies.
The market value of a share of our
common stock received in the spin-off might be less than the market value of a share of Arrayit before the spin-off.
If the spin-off is completed as currently contemplated, holders of Arrayit shares will, after the spin-off, hold common stock
of both Arrayit and Diagnostics. Because the two companies will be independent of each other, thereafter, we cannot assure you
that the public market for our common stock will be similar to the public market for that of Arrayit. Ultimately, the value of
each share of our common stock will be principally determined in trading markets and could be influenced by many factors, including
our operations, the growth and expansion of our business, investors' expectations of our prospects, our credit worthiness,
trends and uncertainties affecting the industries in which we compete, future issuances and repurchases of our common stock and
general economic and other conditions. The market value of our common stock could be less than the market value before the spin-off
or that of Arrayit's market value added to that of Diagnostics. In addition, the trading price of our common stock may decline
following the spin-off.
Investors may face significant restrictions
on the resale of our common stock due to federal regulations of penny stocks.
Our common stock will be subject to the requirements
of Rule 15(g) 9, promulgated under the Securities Exchange Act as long as the price of our common stock is below $5.00 per share.
Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited
investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability
determination for the purchaser and receive the purchaser's consent prior to the transaction. The Securities Enforcement Remedies
and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined
as a penny stock.
7
Generally, the Commission defines a penny
stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share.
The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the penny
stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and
the ability of purchasers to sell their securities in the secondary market.
In addition, various state securities laws
impose restrictions on transferring "penny stocks" and as a result, investors in the common stock may have their ability
to sell their shares of the common stock impaired.
Failure to meet previously announced
financial expectations could have an adverse impact on the market price of our common stock.
Our ability to achieve announced
financial targets is subject to a number of risks, uncertainties and other factors affecting its business and the health care industry
generally, many of which are beyond our control. These factors may cause actual results to differ materially. We describe a number
of these factors throughout this document, including in these Risk Factors. We cannot assure you that we will meet the targets
when announced. If we are not able to meet these targets, it could harm the market price of our common stock.
Future sales of our stock could adversely
affect our stock price and our ability to raise capital in the future.
Sales of substantial amounts of our common stock
could harm the market price of our stock. This also could harm our ability to raise capital in the future. The shares issued in
the spin-off are freely tradable without restriction under the Securities Act of 1933 (the "Securities Act") by persons
other than "affiliates," as defined under the Securities Act. Any sales of substantial amounts of our common stock
in the public market, or the perception that those sales might occur, could harm the market price of our common stock.
Neither Diagnostics nor Arrayit will solicit
the approval of its stockholders for the issuance of authorized but unissued shares of our common stock unless this approval is
deemed advisable by our board of directors or is required by applicable law, regulation or any applicable stock exchange listing
requirements. The issuance of those shares could dilute the value of our outstanding shares of common stock.
State securities laws may limit secondary
trading that will restrict the states in which you can sell shares.
Secondary trading in our common stock will not be possible
in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation
that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If
we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular
state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant
number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly
impacted.
Risk factors relating to our business
We are a development stage company
and have engaged only in organizational and regulatory compliance-related activities and have not realized any revenues from our
operations.
We may not currently have the capital required to execute our plan of operation. Therefore, we will require
additional funding and/or a development partner in order to go forward. We cannot assure our investors that we will be able to
raise the necessary capital or find the development partners necessary to launch our operations.
Acquisitions, investments or other
strategic relationships or alliances, may consume significant resources.
Acquisitions, investments and other strategic
relationships and alliances, if pursued, may involve significant cash expenditures, debt incurrence, additional operating losses,
and expenses that could have a material adverse effect on our financial condition and operating results. Acquisitions involve numerous
other risks, including:
·
diversion of management time and attention from daily operations;
·
difficulties integrating acquired businesses, technologies and personnel into our business;
8
·
inability to obtain required regulatory approvals and/or required financing on favorable terms;
·
entry into new markets in which we have little previous experience;
·
potential loss of key employees, key contractual relationships or key customers of acquired companies or of Diagnostics; and
·
assumption of the liabilities and exposure to unforeseen liabilities of acquired companies.
If these types of transactions are pursued,
it may be difficult for us to complete these transactions quickly and to integrate these acquired operations efficiently into our
current business operations. Any acquisitions, investments or other strategic relationships and alliances by Diagnostics may ultimately
harm our business and financial condition. In addition, future acquisitions may not be as successful as originally anticipated
and may result in impairment charges.
Principal stockholders will retain
approximately 37% of our voting shares.
Prior to the date of this prospectus, Arrayit owned approximately 60% of our shares.
After the spin-off, individual officers, directors and shareholders of Arrayit will own 31% of our shares. (See "
Security
Ownership of Certain Beneficial Owners and Management.
"). Upon completion of the spin-off, the principal stockholders'
and their affiliates' total ownership shares in Diagnostics will permit them to retain approximately 37% of the shares. However,
voting control of Diagnostics will remain with the present management of Diagnostics because John Howell owns the Series B Preferred
Stock that casts the number of votes equal to the total votes of all other shareholders multiplied by two. As a result the holder
or holders of the Series B Preferred Stock is entitled to two thirds of the voting power of Diagnostics. Consequently, John Howell
will be able to effectively control the outcome on all matters submitted for a vote to our stockholders. Specifically, at least
initially, Mr. Howell will be able to elect all of our directors. Such control by Mr. Howell may have the effect of discouraging
certain types of transactions involving an actual or potential change of control, including transactions in which holders of shares
might otherwise receive a premium for their shares over then current market prices.
We may require additional financing
to implement our business plan and continue developing and marking our environmental compliance systems.
We have not generated
any revenues since our incorporation in June 2009. We currently believe that we will be able to continue our business operations
for approximately the next three months with our current cash on hand. We anticipate the need for approximately $3,000,000 to $5,000,000
in additional funding to support the planned expansion of our operations over the next approximately 12 months. We may choose to
raise additional funds in the future through sales of debt and/or equity securities to support our ongoing operations and for expansion.
If we are unable to raise additional financing in the future, we may be forced to abandon or curtail our business plan, which would
cause the value of our securities, if any, to decrease in value and/or become worthless.
Our auditors have expressed an opinion
that there is substantial doubt about our ability to continue as a going concern.
Our auditors have expressed an opinion
that there is substantial doubt about our ability to continue as a going concern primarily because we had a net loss of $1,173,885
and $291,370 and cash used in operations of $78,871 and $0 for the six months ended June 30, 2012 and the year ended December 31,
2011, respectively. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going
concern. The financial statements do not include any adjustments that might result from our inability to continue as a going concern.
If we are unable to continue as a going concern, our securities will become worthless.
We may have difficulty obtaining
future funding sources, if needed, and we may have to accept terms that would adversely affect shareholders.
We will need
to raise funds from additional financing. We have no commitments for any financing and any financing commitments may result in
dilution to our existing stockholders. We may have difficulty obtaining additional funding, and we may have to accept terms that
would adversely affect our stockholders. For example, the terms of any future financings may impose restrictions on our right to
declare dividends or on the manner in which we conduct our business. Additionally, we may raise funding by issuing convertible
notes, which if converted into shares of our common stock would dilute our then shareholders interests. Lending institutions or
private investors may impose restrictions on a future decision by us to make capital expenditures, acquisitions or significant
asset sales. If we are unable to raise additional funds, we may be forced to curtail or even abandon our business plan.
9
We will need to make substantive
changes to operate as an entity independent of Arrayit.
We were incorporated in Nevada June 2, 2009, to operate as a business
unit of Arrayit. However, following the spin-off, Arrayit will have no obligation (beyond that provided in the Agreement and Plan
of Distribution) to provide financial, operational or organizational assistance to us. As a consequence, we may not be able to
successfully implement the changes necessary to operate independently. We may also incur additional costs relating to operating
independently that would cause its available funds to decline materially. We cannot assure that once we become a stand-alone company,
we will be profitable.
Spin-off is taxable.
The
spin-off is taxable to the recipient, as with any dividend. However, since the taxability is dependent, in part, upon our earnings
and profits, accumulated or during the current taxable year, it cannot be determined, at this time, whether and to what extent
the dividend would be taxable to the recipient. For more information, see the section entitled "
The Spin-Off—Certain
U.S. Federal Income Tax Consequences of the Spin-Off.
"
Because the spin-off is not a tax-free
transaction, Arrayit is subject to tax as if it had sold our common stock in a taxable sale at fair market value and our initial
public stockholders—the holders of Arrayit, who receive stock to be issued as a dividend in the spin-off will recognize a
taxable dividend related to their Arrayit stock.
For a more detailed discussion, see the
section entitled "
Relationship between Diagnostics and Arrayit Following the Spin-Off—Agreement between Diagnostics
and Arrayit Relating to the Spin-Off."
Our accounting and management systems
and resources may be inadequate.
Our accounting and other management systems and resources may not be adequate to meet
the financial reporting and other requirements to which we will be subject following the spin-off. If we are unable to achieve
and maintain effective internal controls, our operating results and financial condition could be harmed.
Prior to the spin-off, we were not directly
subject to reporting and other requirements of the Securities Exchange Act of 1934 (the "Exchange Act"). As a result
of the spin-off, we will be directly subject to reporting and other obligations under the Exchange Act, including the requirements
of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"). Sarbanes-Oxley's reporting and other obligations will place
significant demands on its management and administrative and operational resources, including accounting resources.
To comply with these requirements, we may
need to upgrade our systems, including information technology, implement additional financial and management controls, reporting
systems and procedures and hire additional legal, accounting and finance staff. If we are unable to upgrade our systems and procedures
in a timely and effective fashion, we may not be able to comply with our financial reporting requirements and other rules that
apply to public companies. In addition, if we are unable to conclude that our internal controls over financial reporting are effective,
we could lose investor confidence in the accuracy and completeness of our financial reports. Any failure to achieve and maintain
effective internal controls could harm our operating results and financial condition.
Our success will depend on our ability
to retain our key managers and recruit additional employees
.
We will rely heavily on two knowledgeable and highly-skilled
full-time employee managers, who are currently the full-time employee managers of Arrayit. Either or both of these key employees
could leave us and so deprive us of the skill and knowledge essential for performance of our existing and new businesses. Our employees
may have additional or different responsibilities following the spin-off as a result of the fact that we will be an independent
public company subject to the reporting requirements of the Securities Exchange Act of 1934, as amended and other rules and regulations
of the SEC, including the Sarbanes-Oxley Act of 2002. If any of our key employees leave for any reason(s), it could harm our operating
results and financial condition. Additionally, we cannot assure our investors that we will be able to offer prospective managers
and other key employees' competitive opportunities with the compensation and benefits packages necessary to attract talented
and experienced people to fill key management, professional and technical positions.
10
The spin-off agreements require us
to assume liabilities and other terms that may be less favorable to registrant.
We negotiated and entered into the spin-off
agreements as a subsidiary of Arrayit. Had these agreements been negotiated with unaffiliated third parties, their terms might
have been more favorable to us. These agreements require Diagnostics to assume and/or indemnify Arrayit for, among other things,
all past, present and future liabilities related to our business. The allocation of assets and liabilities between Diagnostics
and Arrayit may not reflect the allocation that would have been reached between two unaffiliated parties.
Risks relating to our organization
Our certificate of incorporation
authorizes our board to create new series of preferred stock without further approval by our stockholders, which could adversely
affect the rights of the holders of our common stock.
Our board of directors has the authority to fix and determine the
relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without
further stockholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that
would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends
are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to
the redemption of our common stock. In addition, our board of directors could authorize the issuance of a series of preferred stock
that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative
voting power of our common stock or result in dilution to our existing stockholders.
Limitations of liability; indemnification.
Our articles of incorporation and bylaws contain provisions that limit the liability of directors for monetary damages
and provides for indemnification of officers and directors under certain circumstances. Such provisions may discourage stockholders
from bringing a lawsuit against directors for breaches of fiduciary duty and may also have the effect of reducing the likelihood
of derivative litigation against directors and officers even though such action, if successful, might otherwise have benefited
our stockholders. In addition, a stockholder's investment in the company may be adversely affected to the extent that costs
of settlement and damage awards against our officers or directors are paid by the company pursuant to such provisions.
If we fail to develop and maintain
an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a
result, our current and potential stockholders could lose confidence in our financial reports, which could harm our business and
the trading price of our common stock.
Effective internal controls are necessary for us to provide reliable financial reports
and effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal
controls over financial reporting and may in the future require our independent registered public accounting firm to annually attest
to our evaluation, as well as issue their own opinion on our internal controls over financial reporting. The process of implementing
and maintaining proper internal controls and complying with Section 404 is expensive and time consuming. We cannot be certain that
we can attract and retain a sufficient number of independent directors that includes independent members of our audit committee
and accomplish the other measures that ensure we will maintain adequate controls over our financial processes and reporting in
the future. Furthermore, if we are able to rapidly grow our business, the internal controls that we will need may become more complex,
and significantly more resources and independent officers and directors may be required to ensure our internal controls remain
effective. Failure to implement required controls, or difficulties encountered in their implementation, could harm our operating
results or cause us to fail to meet our reporting obligations. If we or our auditors discover a material weakness in our internal
controls, the disclosure of that fact, even if the weakness is quickly remedied, could diminish investors' confidence in
our financial statements and harm our stock price. In addition, non-compliance with Section 404 could subject us to a variety of
administrative sanctions, including the suspension of trading, ineligibility for future listing on NYSE Amex or another national
securities exchange, and the inability of registered broker-dealers to make a market in our common stock, which may reduce our
stock price.
Because we became public by means
of a spin-off, we may not be able to attract the attention of major brokerage firms.
There may be risks associated with
us becoming public through a spin-off. Securities analysts of major brokerage firms may not provide coverage of us since there
is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms
will, in the future, want to conduct any public or private offerings on our behalf.
11
Our growth will place significant
strains on our resources.
Our growth, if any, is expected to place a significant strain on our managerial, operational
and financial resources. Furthermore, assuming we receive additional contracts, and obtains additional partners, we will be required
to manage multiple relationships with other third parties. These requirements will be exacerbated in the event of further growth
of the company or in the number of our contracts, partnerships and employees. There can be no assurance that our systems, procedures
or controls will be adequate to support our operations or that we will be able to achieve the rapid execution necessary to successfully
offer our services and continue our business plan. Our future operating results, if any, will also depend on our ability to add
additional personnel commensurate with the growth of our business, if any. If we are unable to manage growth effectively, our business,
results of operations and financial condition will be adversely affected.
Risks related to government regulation and litigation
We and our customers are subject
to various government regulations, and we may incur significant expenses to comply with, and experience delays in our product commercialization
as a result of, these regulations.
The FDA must approve certain in-vitro diagnostic products before they can be marketed
in the United States. Certain in-vitro diagnostic products must also be approved by the regulatory agencies of foreign governments
or jurisdictions before the product can be sold outside the United States. Commercialization of our and our collaborative partners'
in-vitro diagnostic products outside of the research environment may depend upon successful completion of clinical trials. Clinical
development is a long, expensive and uncertain process and we do not know whether we, or any of our collaborative partners, will
be permitted to undertake clinical trials of any potential in-vitro diagnostic products. It may take us or our collaborative partners
many years to complete any such testing, and failure can occur at any stage. Delays or rejections of potential products may be
encountered based on changes in regulatory policy for product approval during the period of product development and regulatory
agency review. Moreover, if and when our projects reach clinical trials, we, or our collaborative partners, may decide to discontinue
development of any or all of these projects at any time for commercial, scientific or other reasons. Any of the foregoing matters
could have a material adverse effect on our business, financial condition and results of operations.
Many of our products are labeled for research
only. Even when a product is exempted from FDA clearance or approval, the FDA may impose restrictions as to the types of customers
to which we can market and sell our products. Such restrictions may materially and adversely affect our business, financial condition
and results of operations.
The FDA, the U.S. Department of Health
and Human Services and foreign government regulators are increasingly focused on genetic analysis tools, including the use of arrays
that are labeled for research use only by cytogenetics labs, including labs certified under the Clinical Laboratory Improvement
Amendments ("CLIA"). We cannot predict the extent of the FDA's future efforts in regulation and policies with
respect to the sale and use of arrays for the development of assays by CLIA laboratories, which are referred to as laboratory developed
tests ("LDTs"). If new regulations restrict our customers' development of LDTs using our products labeled for
research use only, or if we otherwise are required to obtain FDA premarket clearance or approval prior to commercializing these
products, our ability to generate revenue from the sale of our products may be delayed or otherwise adversely affected. Moreover,
our failure to comply with governmental rules and regulations related to our products could cause us to incur significant adverse
publicity, subject us to investigations and notices of non-compliance or lead to fines or restrictions upon our ability to sell
our products.
Medical device laws and regulations are
also in effect in many countries, ranging from comprehensive device approval requirements to requests for product data or certifications.
The number and scope of these requirements are increasing. We may not be able to obtain regulatory approvals in such countries
or may incur significant costs in obtaining or maintaining our foreign regulatory approvals. In addition, the export by us of certain
of our products which have not yet been cleared for domestic commercial distribution may be subject to FDA or other export restrictions.
12
We may enter into agreements relating to
the sale of our products to government entities and, as a result, we are subject to various statutes and regulations that apply
to companies doing business with the government. A failure to comply with these regulations might result in suspension of these
contracts or administrative penalties, and could have a material adverse effect on our ability to compete for future government
grants, contracts and programs.
Healthcare reform and restrictions
on reimbursements may limit our returns on molecular diagnostic products that we may develop with our collaborators.
We
are currently collaborating with our partners to develop diagnostic and therapeutic products. The ability of our collaborators
to commercialize such products may depend, in part, on the extent to which reimbursement for the cost of these products will be
available under U.S. and foreign regulations that govern reimbursement for clinical testing services by government authorities,
private health insurers and other organizations. In the United States, third-party payer price resistance, the trend towards managed
health care and legislative proposals to reform health care or government insurance programs could reduce prices for health care
products and services, adversely affecting the profits of our customers and collaborative partners and reduce our future royalties.
Risks related to handling of hazardous
materials and other regulations governing environmental safety.
Our operations are subject to complex and stringent environmental,
health, safety and other governmental laws and regulations that both public officials and private individuals may seek to enforce.
Our activities that are subject to these regulations include, among other things, our use of hazardous materials and the generation,
transportation and storage of waste. We could discover that we or an acquired business is not in material compliance. Existing
laws and regulations may also be revised or reinterpreted, or new laws and regulations may become applicable to us, whether retroactively
or prospectively, that may have a negative effect on our business and results of operations. It is also impossible to eliminate
completely the risk of accidental environmental contamination or injury to individuals. In such an event, we could be liable for
any damages that result, which could adversely affect our business.
We may be exposed to liability due
to product defects.
The risk of product liability claims is inherent in the testing, manufacturing, marketing and sale
of human diagnostic and therapeutic products and we may be subjected to such claims. We may seek to acquire additional insurance
for clinical or product liability risks. We may not be able to obtain such insurance or general product liability insurance on
acceptable terms or in sufficient amounts. A product liability claim or recall could have a serious adverse effect on our business,
financial condition and results of operations.
Ethical, legal and social concerns
surrounding the use of genetic information could reduce demand for our products.
Genetic testing has raised ethical issues
regarding privacy and the appropriate uses of the resulting information. For these reasons, governmental authorities may call for
limits on or regulation of the use of genetic testing or prohibit testing for genetic predisposition to certain conditions, particularly
for those that have no known cure. Similarly, such concerns may lead individuals to refuse to use genetics tests even if permissible.
Any of these scenarios could reduce the potential markets for our molecular diagnostic products, which could have a material adverse
effect on our business, financial condition and results of operations.
Risks related to our intellectual property
We may be unable to effectively protect
or enforce our intellectual property, which could harm our competitive position.
Maintaining a strong patent position is
critical to our business. Patent law relating to the scope of claims in the technology fields in which we operate is uncertain,
so we cannot be assured the patent rights we have or may obtain will be valuable. Others have filed, and in the future are likely
to file, patent applications that are similar or identical to ours or those of our licensors. To determine the priority of inventions,
we may have to participate in interference proceedings declared by the United States Patent and Trademark Office that could result
in substantial costs in legal fees and could substantially affect the scope of our patent protection. We cannot be assured our
patent applications will have priority over those filed by others. Also, our intellectual property may be subject to significant
administrative and litigation proceedings such as opposition proceedings against our patents in Europe, Asia and other jurisdictions.
Legal actions to enforce our patent rights
can be expensive and may involve the diversion of significant management time. In addition, these legal actions could be unsuccessful
and could also result in the invalidation of our patents or a finding that they are unenforceable. We may or may not choose to
pursue litigation or interferences against those that have infringed on our patents, or used them without authorization, due to
the associated expense and time commitment of monitoring these activities. If we fail to protect or to enforce our intellectual
property rights successfully, our competitive position could suffer, which could harm our results of operations.
13
In addition to patent protection, we also
rely upon copyright and trade secret protection, as well as non-disclosure agreements with our employees, consultants and third-parties,
to protect our confidential and proprietary information. Such measures may not provide adequate protection for our proprietary
information.
Litigation or other proceedings or
third party claims of intellectual property infringement could require us to spend significant time and money and could prevent
us from selling our products or services or impact our stock price.
Third parties may in the future assert that we are
employing their proprietary technology without authorization. In addition, we are aware of third-party patents that may relate
to our technology.
As we enter new markets, we expect that
competitors may claim that our products infringe their intellectual property rights as part of business strategies designed to
impede our successful entry into those markets. In addition, third parties may have obtained, and may in the future obtain, patents
allowing them to claim that the use of our technologies infringes these patents. We could incur substantial costs and divert the
attention of our management and technical personnel in defending ourselves against any of these claims. Any adverse ruling or perception
of an adverse ruling in defending ourselves against these claims could have a material adverse impact on our stock price, which
may be disproportionate to the actual import of the ruling itself. Furthermore, parties making claims against us may be able to
obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products, and could result
in the award of substantial damages against us. In the event of a successful claim of infringement against us, we may be required
to pay damages and obtain one or more licenses from third parties, or be prohibited from selling certain products. In addition,
we may be unable to obtain these licenses at a reasonable cost, if at all. We could therefore incur substantial costs related to
royalty payments for licenses obtained from third parties, which could negatively affect our gross margins. In addition, we could
encounter delays in product introductions while we attempt to develop alternative methods or products. Defense of any lawsuit or
failure to obtain any of these licenses on favorable terms could prevent us from commercializing products, and the prohibition
of sale of any of our products could materially affect our ability to grow and maintain profitability.
We will incur significant costs as
a result of operating as a fully reporting company in connection with Section 404 of The Sarbanes Oxley Act, and our management
is required to devote substantial time to compliance initiatives.
We anticipate incurring significant legal, accounting
and other expenses in connection with our status as a fully reporting public company. The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
Act") and new rules subsequently implemented by the SEC have imposed various new requirements on public companies, including
requiring changes in corporate governance practices. As such, our management and other personnel will need to devote a substantial
amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial
compliance costs and will make some activities more time-consuming and costly. In addition, the Sarbanes-Oxley Act requires, among
other things, that we maintain effective internal controls for financial reporting and disclosure of controls and procedures. In
particular, Section 404 will require us to obtain a report from our independent registered public accounting firm attesting to
the assessment made by management. Our testing, or the subsequent testing by our independent registered public accounting firm,
may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Our compliance
with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We currently
do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public
company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section
404 in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal controls
over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline, and we could be
subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and
management resources.
14
We have no history as a public company
upon which you can assess our prospects and we are subject to the risks associated with any new public company.
As a result of our short history of operations
as a public company, there is little historical information regarding our operations upon which you can base your investment decision.
In addition, we are subject to all of the business risks and uncertainties associated with any newly public business enterprise.
 Additionally, our management has limited experience operating a public company.  As such, our company may not be able
to continue to meet its continued filing requirements and may be late in its periodic filings, which late filings may cause the
company to be delisted from the Over-The-Counter Bulletin Board. If this were to happen, any investment in the company could become
devalued or worthless.
DESCRIPTION OF BUSINESS
Arrayit Corporation
Arrayit Corporation owns 19,350,000 of
our shares, which represents 60% of the 28,027,934 shares presently outstanding. Arrayit is a Nevada corporation that entered into
the life sciences industry in 1996. Arrayit is a leading edge developer, manufacturer and marketer of next-generation life science
tools and integrated systems for the large scale analysis of genetic variation, biological function and diagnostics. Using Arrayit's
proprietary technologies, the company provides a comprehensive line of products and services that currently serve the sequencing,
genotyping, gene expression and protein analysis markets, and the company expects to enter the market for molecular diagnostics.
Arrayit is a leader in the health care
and life sciences industries with its expertise in three key areas: the development and support of microarray tools and components,
custom printing and analysis of microarrays for research, and the identification and development of diagnostic microarrays and
tools for early detection of treatable disease states. As a result, Arrayit has provided tools and services to thousands of the
leading genomic research centers, pharmaceutical companies, academic institutions, clinical research organizations, government
agencies and biotechnology companies worldwide.
The company's patented tools and
trade secrets provide researchers around the world with the performance, throughput, cost effectiveness and flexibility necessary
to perform the billions of genetic tests needed to extract valuable medical information. The company believes this information
will enable researchers to correlate genetic variation and biological function, which will enhance drug discovery, drug development
and clinical research, allowing diseases to be detected earlier and permitting better choices of drugs for individual patients.
Arrayit Diagnostics, Inc.
Strategic relationships and licensing
arrangements.
We have a license with Wayne State University (WSU) that provides for an exclusive right to use patented
methods of discovery on a worldwide basis, which patented methods have led to discovery of unique biomarkers for ovarian cancer.
These specific markers are included in this license. Additional work has been done related to prostate cancer using the licensed
technology. The ovarian cancer and prostate cancer tests for diagnostics use will be marketed upon FDA approval. We are exploring
strategic partnership opportunities for diagnostic tests with corporations that have a strong customer base, and a significant
sales and marketing presence in the diagnostics industry worldwide.
The resulting diagnostic tests created
by the patented methods are sophisticated microarray-based tests that measure the activation of the immune system in response to
early stage tumor cell development. Serum is applied to the microarray to allow binding between proteomic biomarkers in the sample
and capture agents on the microarray. The microarray is washed and scanned to produce a digital readout for each serum sample,
and the data are quantified and analyzed in software to generate the test results. This technology will identify different tumor
types and stages, the effectiveness of chemotherapies, biomarker profiles in breast cancer, prostate cancer and other epithelial
cancers, the effectiveness of cancer drugs for treatment and prevention, and to benchmark existing tests including CA-125 and PSA.
Regulatory matters.
We and
our customers are subject to various government regulations, and we may incur significant expenses to comply with, and experience
delays in our product commercialization as a result of, these regulations.
15
The FDA must approve certain in-vitro diagnostic
products before they can be marketed in the U.S. Certain in-vitro diagnostic products must also be approved by the regulatory agencies
of foreign governments or jurisdictions before the product can be sold outside the U.S. Commercialization of our and our collaborative
partners' in-vitro diagnostic products outside of the research environment may depend upon successful completion of clinical
trials. Clinical development is a long, expensive and uncertain process and we do not know whether we, or any of our collaborative
partners, will be permitted to undertake clinical trials of any potential in-vitro diagnostic products. It may take us or our collaborative
partners years to complete any such testing, and failure can occur at any stage. Delays or rejections of potential products may
be encountered based on changes in regulatory policy for product approval during the period of product development and regulatory
agency review. Moreover, if and when our projects reach clinical trials, we or our collaborative partners may decide to discontinue
development of any or all of these projects at any time for commercial, scientific or other reasons. Any of the foregoing matters
could have a material adverse effect on our business, financial condition and results of operations.
Our products may be labeled for research
only. Even where a product is exempted from FDA clearance or approval, the FDA may impose restrictions as to the types of customers
to which we can market and sell our products. Such restrictions may materially and adversely affect our business, financial condition
and results of operations.
The FDA, the U.S. Department of Health
and Human Services and foreign government regulators are increasingly focused on genetic analysis tools, including the use of arrays
that are labeled for research use only by cytogenetics labs, including labs certified under the Clinical Laboratory Improvement
Amendments ("CLIA"). We cannot predict the extent of the FDA's future efforts in regulation and policies with
respect to the sale and use of arrays for the development of assays by CLIA laboratories, which are referred to as laboratory developed
tests ("LDTs"). If new regulations restrict our customers' development of LDTs using our products labeled for
research use only, or if we otherwise are required to obtain FDA premarket clearance or approval prior to commercializing these
products, our ability to generate revenue from the sale of our products may be delayed or otherwise adversely affected. Moreover,
our failure to comply with governmental rules and regulations related to our products could cause us to incur significant adverse
publicity, or subject us to investigations and notices of non-compliance or lead to fines or restrictions upon our ability to sell
our products.
Medical device laws and regulations are
also in effect in many countries, ranging from comprehensive device approval requirements to requests for product data or certifications.
The number and scope of these requirements are increasing. We may not be able to obtain regulatory approvals in such countries
or may incur significant costs in obtaining or maintaining our foreign regulatory approvals. In addition, the export by us of certain
of our products which have not yet been cleared for domestic commercial distribution may be subject to FDA or other export restrictions.
We may obtain agreements relating to the
sale of our products to government entities and, as a result, we would be subject to various statutes and regulations that apply
to companies doing business with the government. A failure to comply with these regulations might result in suspension of these
contracts or administrative penalties, and could have a material adverse effect on our ability to compete for future government
grants, contracts and programs.
Healthcare reform and restrictions
on reimbursement.
We are currently collaborating with our partners to develop diagnostic and therapeutic products.
The ability of our collaborators to commercialize such products may depend, in part, on the extent to which reimbursement for the
cost of these products will be available under U.S. and foreign regulations that govern reimbursement for clinical testing services
by government authorities, private health insurers and other organizations. In the U.S., third-party payer price resistance, the
trend towards managed health care and legislative proposals to reform health care or reduce government insurance programs could
reduce prices for health care products and services adversely affect the profits of our customers and collaborative partners and
reduce our future royalties.
Handling of hazardous materials and
other regulations governing environmental safety.
Our operations are subject to complex and stringent environmental, health,
safety and other governmental laws and regulations that both public officials and private individuals may seek to enforce. Our
activities that are subject to these regulations include, among other things, our use of hazardous materials and the generation,
transportation and storage of waste. We could discover that we or an acquired business is not in material compliance. Existing
laws and regulations may also be revised or reinterpreted, or new laws and regulations may become applicable to us, whether retroactively
or prospectively, that may have a negative effect on our business and results of operations. It is also impossible to eliminate
completely the risk of accidental environmental contamination or injury to individuals. In such an event, we could be liable for
any damages that result, which could adversely affect our business.
16
Our market opportunity.
According
to Quest Diagnostics, the largest clinical testing laboratory in the U.S., the laboratory testing market in the United States is
a $50 billion dollar market that is 60% controlled by testing performed by hospital-based laboratories. The remaining portion of
this market is divided between independent clinical laboratories (35%) and physician office laboratories (POLs) that perform 5%
of overall testing. Within the independent clinical laboratory segment, Quest Diagnostics and LabCorp are the two largest national
reference labs and control approximately $12.5 billion of this $17.5 billion market segment.
The remaining $5 billion is controlled
by other national laboratories and smaller independent regional laboratories. Within this $50 billion market, most of the testing
that is performed is for routine lab tests and anatomic pathology tests and services. However, recently there has been a dramatic
increase in gene-based and esoteric testing. Esoteric tests include procedures in the areas of molecular diagnostics, protein chemistry,
cellular immunology, and advanced microbiology. Commonly ordered esoteric tests include viral and bacterial detection tests, drug
therapy monitoring tests, autoimmune panels, and complex cancer evaluations.
The growth of these specialized tests has
been made possible through new molecular diagnostic technologies that make it possible to detect diseases earlier, utilize genetic
testing for disease predisposition, and advance the use of personalized medicine, such as the tailoring of cancer therapies to
those individuals most likely to respond. Esoteric tests typically require highly-skilled technical personnel and generally require
more sophisticated technology, equipment or materials. As a result, esoteric tests are generally reimbursed at higher levels than
routine tests.
This increase in specialized testing is
evidenced by the shift in Quest Diagnostics' esoteric testing revenues from less than 10% of total revenues to their current
level of 20% over the past 9 years. In the case of LabCorp, the second largest clinical testing laboratory in the country, in 2009
esoteric testing accounted for 36% of their annual consolidated revenue, which they expect to grow to 40% within three to five
years. In addition to Quest Diagnostics and LabCorp, there are approximately 60 commercial laboratories that control the independent
clinical laboratory market segment in the United States. There are also approximately 300 genetic testing laboratories in the U.S.,
with 80% of them affiliated with academic institutions. As a result of these new trends, molecular diagnostic testing that supports
personalized medicine is now the fastest growing segment within the overall laboratory testing market.
In addition to the laboratory testing market,
there is another market that is comprised of diagnostic instrumentation and test kits that are marketed for the purpose of performing
diagnostic testing on human samples, which normally uses blood, urine, or other body fluid specimens.
This market is referred to as the in vitro
diagnostic (IVD) market and literally means "within the glass", as in a test tube. A test that is performed
in vitro
is one that is done in glass or plastic vessels in the laboratory as opposed to
in vivo
, which is performed in a living
organism. This combination of instrumentation and test kits is generally sold to reference laboratories, hospital clinical laboratories,
state and national health testing facilities, and other laboratories that in turn perform the laboratory tests and provide results
to physicians and their patients. According to a report published by PricewaterhouseCoopers titled Diagnostics 2009, the worldwide
IVD market was $37 billion in 2007 and is expected to grow by 5% per annum to $50 billion in 2012. According to market research
by Kalorama Information, the U.S. IVD market is the single largest diagnostics market in the world and represents 43% of the global
IVD market. The largest IVD companies in the world are Roche, Abbott, Siemens, Johnson & Johnson (Ortho), Beckman Coulter,
bio Mérieux, Inverness Medical, Bio-Rad, Sysmex, and Becton Dickenson.
All of these 10 companies have IVD sales
exceeding $1 billion and collectively they represent approximately 85% of the total worldwide IVD market. The fastest growing segment
within the IVD market is molecular diagnostics, which is expected to grow by 14% per annum and reach $5 billion in 2012. In the
context of this PricewaterhouseCoopers market report, molecular diagnostics includes only those tests that analyze the DNA or RNA
of an organism. However, molecular diagnostics is more often widely defined to include tests that analyze other types of molecules
as well. In their report, PricewaterhouseCoopers goes on to state that besides the dramatic increase in molecular diagnostics,
some of the biggest changes within the diagnostics industry will be the increased use of:
·
Early
diagnostics
.
Diagnostic products permitting the detection of a disease at very early stages of its development thus giving
more treatment options (e.g. early ovarian and lung cancer detection allowing surgery);
17
·
Prognostics
.
Diagnostics that provide a prediction or estimate the risk of developing a particular condition based on
phenotypic
(e.g.
transcriptomic, proteomic or metabolomic) parameters; or
genomic
(e.g. hereditary or gene based) characteristics;
·
Companion
diagnostics
:
Diagnostic products to evaluate an individual patient's likelihood of benefiting from a particular therapeutic
or risk of suffering certain adverse events from a particular therapeutic. Companion diagnostics represent a greater integration
between diagnostics and therapeutics;
·
Screening
tests
.
Diagnostics performed on people prior to a clinical manifestation of disease – this contrasts with most other
medical checks, which are performed when symptoms are already available. Screening typically involves testing a target population
for a particular condition as part of a public health strategy; and
·
Pharmacogenomic
tests
.
Examine the influence of genetic variation on drug response in patients by correlating gene expression or single
nucleotide polymorphisms (SNPs) with a drug's efficacy or toxicity. The aim of pharmacogenomics is to take into account a
patient's genotype to optimize drug therapy, i.e. to maximize efficacy while minimizing adverse effects;
There are a number of key trends that are
having a significant impact on the clinical testing business and represent opportunities for companies that can develop novel diagnostic
tests. Clinical laboratory testing is an essential healthcare service and is being favorably impacted by the following:
·
Demographics.
The growing and aging population is increasing the demand for clinical testing;
·
Increased
testing.
Physicians are increasingly relying on diagnostic testing to help identify disease risk, detect the symptoms of
disease earlier, aid in the choice of therapeutic regimen, and monitor patient compliance and to evaluate treatment results;
·
Advances
in science and technology.
Recent medical advances have allowed earlier diagnosis and treatment of diseases and continuing
research and development in the area of genomics is expected to yield new, more sophisticated and specialized diagnostic tests.
These advances also are spurring interest in, and demand for, personalized or tailored medicine; and
·
Prevention
and wellness.
There is an increased awareness of the benefits of preventative medicine and wellness. Consumers, employers,
health plans, and government agencies are increasingly focusing on detecting diseases earlier and providing preventative care that
helps avoid disease.
As a result of these significant changes
in the laboratory testing and IVD markets, it is evident that there is a significant commercial opportunity for companies that
provide products or services that address the new needs of the evolving diagnostics marketplace. This is the market opportunity
that Arrayit Diagnostics is addressing through its introduction of diagnostics tests that use patented, patent-pending, and proprietary
technology to improve health and reduce the overall cost of healthcare through early detection, prevention, and treatment.
Our solution and strategy
Our solution is to utilize the technology
that we have exclusively licensed from WSU to exploit the new opportunities that are evolving in the diagnostics industry. We were
created to specifically commercialize microarray-based diagnostic tests and services that are focused on early detection and pre-symptomatic
screening. These new tests are based on patented and proprietary technology that is well-suited to be run in a central laboratory
utilizing samples that are collected by healthcare providers and sent to our authorized CLIA-certified testing facility for processing.
This approach is similar to the business
model that Myriad Genetics, Inc. (Revenues: $470.45 million; market cap: $1.98 billion; NASDAQ:MYGN) has utilized with the seven
tests that it markets that determine predisposition to hereditary breast cancer, ovarian cancer, colon cancer, endometrial cancer
and melanoma skin cancer. However, whereas Myriad Genetics determines a predisposition to a particular disease, we will market
diagnostic tests that can be used to screen for the actual disease itself, in most cases before any symptoms have been observed.
18
To achieve this goal of commercializing
new diagnostic opportunities, we are leveraging off the strategic relationships that have been established with organizations such
as Wayne State University and others to develop unique and high value-added diagnostic tests.
Although the initial focus of Diagnostics
is an ovarian cancer and a prostate cancer
test, we will explore opportunities for other microarray-based diagnostic tests,
including pre-symptomatic screening tests for Parkinson's disease, Alzheimer's disease, and other applications that
allow early detection. We will also explore companion diagnostic opportunities for pharmaceuticals such as Plavix
®
,
the world's leading anti-clotting medication that is manufactured by Bristol-Myers Squibb in conjunction with Sanofi-Aventis
Pharmaceuticals.
With the completion of the human genome
sequencing project, genetic research has increased its focus on identifying the variations of the specific genes in the genome.
These variations are what define individual characteristics, including disease states or a statistical propensity for disease.
The implications are far-reaching and impact
not only the research community, but also individual patients and medical providers. Diagnostic tests that detect diseases very
early in their progression will provide options for earlier treatments that may improve the patient's quality of life and
prognosis by delaying or preventing disease progression or even death. Medical providers will incur major cost savings by avoiding
costly late stage disease treatments.
As a result of a Technology Transfer Agreement
dated July 18, 2009, we have exclusive license rights to all of the trade secrets and protocols, developed by Arrayit, required
for the sale and use of the ovarian cancer test. We have collaborated with others to accomplish the opportunity for the following:
·
Microarray
expertise.
The future success of Diagnostics is made possible by leveraging our ability to continually innovate and develop
sophisticated microarray based diagnostic products. We rely on the identification of biomarkers and the ability to commercialize
them by utilizing a microarray delivery technology. The microarrays manufactured for
our
tests
are considered to be the best in the industry and are 99% pure (versus 70% for competitors) and are the most sensitive on the market.
·
Growing
menu of screening tests.
Our ovarian cancer test will set the standard for early detection and pre-symptomatic screening
utilizing a microarray based diagnostic test. We expect to expand this menu of tests to provide other early detection tests for
key diseases where adequate diagnostic screening tests do not exist and where early detection can save lives and improve quality
of life, such as Parkinson's disease, Alzheimer's disease, prostate cancer, and other diseases and medical conditions.
We expect that other cancer tests, neurological assays, and areas such as allergy and food intolerance testing will benefit from
the efficient patient screening model that are utilized in our tests. Additional markets for consideration that will also benefit
from screening tests using our licensed technology are blood typing, parentage testing, forensics, human leukocyte antigen (HLA)
analysis, infectious disease diagnosis, food testing, crop testing, and anti-terrorism analysis.
·
Ability
to leverage strategic relationships.
We expect that the relationships that have been established with the Centers for Disease
Control (CDC), Sandia Laboratories, Johns Hopkins University School of Medicine, the U.S. Department of Agriculture (USDA), MD
Anderson Cancer Center, The Parkinson's Institute, MIT, Stanford University, the NIH, and other prestigious institutions,
organizations, and companies around the world will benefit us immensely as we strive to create a world-class diagnostic testing
company. We believe that our relationships will allow us to license biomarkers discoveries from these and other research facilities
that have the potential to create innovative diagnostic tests. Similar to our relationship with Wayne State University, and the
worldwide exclusive licensing and sponsored research agreements that we put in place with them, we believe additional novel diagnostic
tests can be developed based on licensing of biomarkers discovered by our academic and scientific collaborators.
19
Ovarian cancer
Background.
As reported by
Dr. W. J. Allard from Medivice Consulting and Dr. R. G. Moore from Women's and Infants' Hospital at Brown University,
ovarian cancer is diagnosed annually in more than 200,000 women worldwide, with the greatest incidence in the U.S. and Northern
Europe, and lowest incidence in Africa and Asia. Ovarian cancer is the fifth leading cause of cancer death worldwide and is responsible
for 5% of all cancer deaths in women. The American Cancer Society estimates that 21,650 women were diagnosed with ovarian cancer
in the US in 2008 and about 15,520 women in the US die every year from the disease. Mammography and cervical cancer screening with
Pap smears have led to a shift in the diagnosis of breast and cervical cancer to earlier stages and to pre-invasive disease that
are fundamentally curable, leading to a decrease in mortality for these cancers. However, no such tools are available for early
detection of ovarian cancer. While the serum CA 125 blood test is effective for monitoring women with ovarian cancer for progression
or recurrence, the sensitivity and specificity are both approximately 50%, which is too low for effective screening. Although early
detection strategies have not proven successful so far, novel approaches to patient management using biomarkers and statistical
algorithms have been suggested. This unmet medical need to improve survival for women with ovarian cancer through better screening
strategies will be addressed by our ovarian cancer
test.
Current testing methods
.
As
summarized by the Ovarian Cancer Research Fund (OCRF), ovarian cancer is currently diagnosed using the following methods:
·
A
vaginal-rectal pelvic examination (also called a bimanual exam): This exam allows the ovaries to be examined from many sides. It
is recommended that every woman should undergo a rectal and vaginal pelvic examination at her annual checkup with her gynecologist.
·
Transvaginal
Ultrasound: This test uses sound waves to create a picture of the ovaries, and can often reveal if there are masses or irregularities
on the surface of the ovaries. It cannot determine if a woman has cancer, but it can show characteristics that give different levels
of suspicion.
·
CA
125 blood test: This test measures the level of a substance in the blood that may increase when a cancerous tumor is present. This
protein is produced by ovarian cancer cells and is elevated in more than 80% of women with advanced ovarian cancers and 50% of
those with early-stage cancers. Because CA 125 misses half of early cancers and can be elevated by benign conditions, the National
Cancer Institute (NCI) does not endorse using it to screen women at ordinary risk or in the general population.
We believe it important that none of
these tests are definitive when used on their own. They are most effective when used in combination with each other. The only way
to confirm the presence of ovarian cancer suspected by the above tests is through a surgical biopsy of the tumor tissue.
Our ovarian cancer strategy
Overview
. In response to
this unmet medical need and unprecedented diagnostic market opportunity, Arrayit initiated an ovarian cancer program in the year
2000, to create a microarray platform that would enable early stage pre-symptomatic screening of ovarian cancer. The goal of this
program was to develop a definitive screen that would become the standard of care in the industry. To facilitate this program,
Arrayit equipped the laboratory of Michael Tainsky, Ph.D., the director of molecular biology and genetics at Karmanos Cancer Institute
and professor of pathology at Wayne State University's School of Medicine with the Arrayit platform to enhance critical basic research
in molecular oncology. Over the past 10 years, Dr. Tainsky's laboratory has performed important basic research in the area
of ovarian and other cancers and his laboratory filed early diagnostics patents. Additionally, an exclusive worldwide license with
WSU was signed that grants us exclusive worldwide rights to develop and commercialize a novel microarray-based diagnostic test
on a planar surface using biomarkers developed by Professors Michael Tainsky of the School of Medicine and Sorin Draghici of the
College of Liberal Arts and Sciences, and Madhumita Chatterjee, research associate in the School of Medicine.
The ovarian cancer market.
Historically,
the laboratory test that physicians have utilized to assist in managing ovarian cancer has been the CA 125 test. CA (Cancer Antigen)
125 is not approved by the Food and Drug Administration as a diagnostic screening assay, but only an aid in monitoring response
to therapy for patients with epithelial ovarian cancer. CA 125 may also be elevated in other cancers and benign conditions such
as endometriosis. Its role in the early diagnosis of ovarian cancer is therefore controversial, and it is probably more useful
for monitoring patients for recurrence. The FDA restricts the indicated use of CA 125 because it has high rates of false positive
results in a normal population and high rates of false negative results in women with cancer. Although doctors now use the CA 125
test to check for ovarian cancer, this assay uses a single biomarker and generally only finds the disease in its later stages.
The CA 125 test is an immunoassay test that is routinely offered by clinical laboratories as part of their test menu of tests and
services. HealthLinx Limited, an Australian biomarker and diagnostic firm that launched its OvPlex™ test in the UK in early
2010, stated in a March 2010 press release that over 8 million CA 125 tests are performed in the U.S. annually. Laboratories routinely
charge about $125 for the CA 125. As an example, the Mayo Clinic charges $147.10 for CA 125 at their Mayo Medical Laboratories
in Rochester, Minnesota. Assuming an average price of $125 and 8 million tests performed annually, the total U.S. market for limited-use
ovarian cancer diagnostic tests is estimated to be $1 billion
20
A diagnostic procedure that is often used
in conjunction with CA 125 testing is the transvaginal ultrasound (TVU), also known as an endovaginal ultrasound, and involves
the use of sound waves to delineate internal structures with a transducer placed in the vagina. Transvaginal ultrasound imaging
is recommended for ovarian cancer screening in asymptomatic women at high risk for developing ovarian cancer. Women considered
at high risk are those with a strong family history of either ovarian or breast cancer (two or more first-degree relatives have
or had the disease). Current recommendations suggest that high risk patients should begin TVU and CA 125 screening five years prior
to the earliest age of onset of the disease in their family. After initial screening, it is recommended that this be followed by
an annual CA 125 measurement and a TVU every two years. According to the New Choice Health website, the national average price
for a TVU is currently $525. Therefore, if TVU and CA 125 are run together for high risk patients, the resulting cost is approximately
$650. This pricing level further supports the basis that the $583 price per test to the patient for each ovarian cancer test is
more cost effective.
The ovarian cancer marketing strategy.
Consistent with the business model of Diagnostics to partner with companies with an established presence, a definitive agreement
to transfer a portion of the intellectual property related to the WSU patent was entered into with Yarra Dx, Inc. Yarra is led
by an ovarian cancer survivor who has established an extensive network of business leaders with the capabilities to greatly expand
the scope of the market for Ovarian Cancer test in the medical communities as well as financial markets. This allows us to apply
our resources to the development of prostate cancer, a much larger market.
Prostate cancer
Incident frequency in U.S.
As reported by the American Cancer Society, an estimated 240,890 new cases of prostate cancer were reported in the US in 2011.
Prostate cancer is the most frequently reported cancer in men. With an estimated 33,720 deaths in 2011, it is the second leading
cause of cancer death in men. In early stages of development prostate cancer has no clear symptoms, but if detected early the survival
rate approaches 100%.
Current testing methods.
Prostate
cancer is currently diagnosed using the following methods:
·
A
rectal digital exam: This exam allows the prostate to be examined for abnormalities by touch.
·
Transrectal
ultrasound: This test uses sound waves to create a picture of the prostate, and can reveal surface irregularities. It can not determine
if a man has cancer, but it can show characteristics that give different levels of suspicion.
·
PSA
blood test: This test measures the level of a substance in the blood that may increase when a cancerous tumor is present. This
protein is produced by prostate cancer cells. However, this protein is not always elevated with the presence of cancer and is sometimes
elevated in the absence of cancer.
None of these tests are definitive when
used on their own. The only way to confirm the presence of prostate cancer suspected by the above tests is through a surgical biopsy
of the tumor tissue.
Our prostate cancer strategy.
The
exclusive rights to the WSU patents apply equally to prostate cancer as to ovarian cancer. The objective is to pursue the further
development of a pre-symptomatic prostate cancer test as permitted by the patents.
The prostate cancer market
.
The
laboratory test that physicians have utilized to assist in managing prostate cancer has been the PSA test (prostate specific antigen).
PSA is present in all men but can be elevated with the occurrence of prostate cancer. The problem is that PSA can also be elevated
by other benign conditions. The incidence of false positive results is about 70%, leading to unnecessary treatment, with potentially
debilitating side effects. There are currently about 20 million PSA tests administered annually in the US.
21
Prostate Cancer Test (PCT); advertising,
marketing, and sales
.
Our initial sales and marketing efforts will be based on a national awareness campaign that can utilize
the extensive contact base that has been developed to date. This will include press releases to all major news outlets, direct
mail campaigns, relevant articles to diagnostic, biotechnology and genomic web-based outlets, major trade publications, e-mail
newsletters, and scientific trade shows. We will expand its website to offer easy access to patients and their caregivers as well
as healthcare providers interested in the
PCT
test and other future diagnostic tests.
This expanded
website will allow patients and caregivers access to extensive patient information regarding Diagnostics; the diagnostic tests
offered by us; how to order a test and assistance in locating a doctor that prescribes
our
tests;
links to relevant support groups, foundations, and associations related to the different disease state tests; and information and
web links that provides assistance with insurance related issues. Healthcare providers will have access to technical information
and clinical data relating to
our
tests; information about us; access to information appropriate
for their patients; and how to order a test.
We expect to
develop key strategic relationships with select clinical reference laboratories, genetic testing laboratories, HMO organizations,
and other strategic partners to obtain maximum market share. We will assist
our
strategic partners
with a small direct sales force in the United States, where the primary focus will be commercializing the
PCT
test in the
men's health marketplace. In addition to facilitating the expansion of the number of healthcare providers that recommend
and prescribe the
PCT
test and other future diagnostic tests, we and
our
strategic partners
will manage attendance at health fairs, contact regional laboratories that are candidates to refer testing to us and
our
partners, and visit individual healthcare providers, giving preference to large group obstetrics and gynecology practices and other
groups dealing with women's health issues.
All sales and marketing activities are
initially focused on the U.S. market where we have a direct presence and sales force representation.
The market
. According to
PricewaterhouseCoopers publication Diagnostics 2009, the global IVD market size of the IVD industry is $37 billion. A market research
report by Kalorama Information, states that the U.S. IVD market is the single largest diagnostics market in the world and represents
43% of the global IVD market. According to a December 15, 2009 press release by EDMA, the European Diagnostic Manufacturers Association,
the 27 countries that make up the EU had a total IVD market of $12 billion in 2008 and therefore represents 32% of the global IVD
market. According to EDMA, the five largest markets in Europe are Germany, France, Italy, Spain, and the UK and collectively they
represent approximately 76% of the total IVD market in the 27 country EU database. We have not included any international sales
in the forecast assumptions or projections, although the Company will be exploring appropriate strategic alliances that will allow
it to participate in these markets as well.
These potential strategic partners include
reference laboratories active in these markets, such as Sonic HealthCare that currently has laboratory operations in Germany, Ireland,
Belgium, Switzerland, and the UK. Preference will be given strategic alliances with companies located in the five largest European
markets referenced above, which according to EDMA data each represent 7, 6, 5, 4, and 2 percent of the global IVD market respectively.
Collectively, these five countries represent approximately 24% of the global IVD market or slightly more than half of the total
IVD market in the United States.
Employees.
At December 31,
2011, we had one full time employee, and agreements with four consultants. We had no part-time employees. None of our employees
are covered by a collective bargaining agreement with a union. We consider our relationship with our employees to be good.
Properties.
Our corporate
offices are located at 1950 Cinnamon Teal Drive, Redmond, Oregon. The temporary corporate headquarters cover 500 square feet and
has zero rent until October 1, 2013.
22
THE SPIN-OFF
Description of the spin-off
Nineteen million three hundred fifty thousand
(19,350,000) shares of our common stock will be distributed by Arrayit to its shareholders (the "Distribution") as
of the "Record Date". The Record Date will be established when this registration statement is deemed effective. As
a result, each holder of record, on the Record Date to be selected, of: (i) Arrayit common stock, (ii) Arrayit convertible preferred
stock; and (iii) options or warrants to purchase Arrayit common stock will receive one share of our common stock for every 3.34
shares of: (i) Arrayit common stock, (ii) Arrayit common stock issuable upon conversion of convertible preferred stock; and (iii)
Arrayit common stock issuable upon exercise of options or warrants to purchase common stock..
The spin-off is expected to be effective
as of 11 AM, Washington time, on the spin-off date estimated to occur on or about January 15, 2013. (Because certain regulatory
filings and notices must be made with regard to this spinoff, the Record Date and spin-off date are not precisely knowable). To
receive our common stock, you must be a holder of record of Arrayit common stock, convertible preferred stock or warrants to purchase
common stock at the close of business on the Record Date to be selected.
The Distribution is expected to be effected
as soon as practicable after the date the registration statement, of which this prospectus is a part, is declared effective. The
shares of our common stock will be distributed electronically to the Arrayit stockholders on that date or as soon thereafter as
practicable. No fractional shares of our common stock will be issued.
Reasons for the spin-off
We are presently (prior to the spin-off
as contemplated herein) a majority-owned subsidiary of Arrayit. We want a new and independent price and capital structure as we
move to the OTCBB and become a reporting company, and Arrayit desires to remain an independent publicly reporting and trading entity
pursuing its separate business plan.
On December 14, 2011, Arrayit's board
of directors approved the spin-off of Diagnostics into an independent publicly reporting and trading company. The reasons for the
spin-off consist principally of the following, all of which are supported by both Diagnostics and Arrayit and their respective
management and board of directors.
Impact on price and market capitalization.
Arrayit management (and our management concurs) is hereby registering and issuing as a dividend to Arrayit shareholders its
ownership interest in us. Management believes that the result of the restructuring will be (i) the operations of Diagnostics are
expected to be in an entity trading at a higher price without damaging the market capitalization of Arrayit, and (ii) that Arrayit
shareholders should have greater value in owning two separate stocks as Arrayit shareholders will still own all of their Arrayit
shares, and Arrayit will remain a reporting, publicly trading company (See "
Risk Factors
"). In any event, the
stock price of Diagnostics may or may not exceed that of Arrayit and, following the spin-off, the combined market value of a shareholder's
stock in Diagnostics and Arrayit may or may not exceed or even equal the current or pre-spin-off market value of their Arrayit
stock.
It is possible that the following the spin-off,
the combined market value of a shareholder's stock in Diagnostics and Arrayit will be less than the current or pre-spin-off
market value of their Arrayit stock. By way of example, if a current Arrayit common shareholder has 1 million shares and the current
price is $0.14 per share, then the theoretical market value of this shareholder's position is $140,000 (1,000,000 Arrayit
shares times $0.14). Pursuant to the spin-off, this shareholder will receive approximately 346,000 shares of our common stock,
while retaining the 1 million Arrayit common shares. If, for example, following the spin-off, the Arrayit stock price decreases
from the current fourteen cents per share to $.10 per share and our common stock price does not increase to $.04 per share, but
instead reaches $.01 per share, then the shareholder's combined holdings would be worth only $103,460 (1,000,000 Arrayit
shares times $.10, or $100,000, plus 346,000 Diagnostics' shares times $.01, or $3,460).
Enable Arrayit and Diagnostics to
use stock more efficiently as an acquisition currency.
Our ability to expand through selective acquisitions and partnerships
is expected to be important to each company's continued success. Management believes the spin-off will enable each company
to use its own stock more effectively as currency in acquiring, merging and otherwise making strategic investments in or partnering
with other companies. We believe we are generally a less desirable acquisition currency due to being a majority owned subsidiary
of Arrayit and, specifically, to
potential investor's concerns about holding shares that have no direct claim against
its assets and no direct voting rights concerning its governance
. As a subsidiary of Arrayit, we have no control over our destiny.
As a result of the spinoff, we will control our own destiny. Our shareholders will have a direct claim against our assets (versus
indirectly as a shareholder of our parent, Arrayit) and direct voting rights concerning our governance. For these reasons, we expect
that, after the spin-off, we will have greater autonomy and control over the use of our equity than we have as a business unit
of Arrayit. For more information regarding these limitations, see the section entitled "
Relationship between Diagnostics
and Arrayit Following the Spin-Off—Agreement between Diagnostics and Arrayit Relating to the Spin-Off.
"
23
Eliminate some impediments that could
discourage a change of control and the payment of a premium for Diagnostics and/or Arrayit shares.
The existence of two
separate businesses and two classes of common stock with variable votes per share could present complexities that could, in certain
circumstances, pose obstacles, financial or otherwise, to an acquiring person, thereby potentially discouraging some change of
control transactions. As a result of the spin-off, these complexities and obstacles will be eliminated for both Arrayit and Diagnostics.
Enhance stockholder influence on
the outcome of stockholder voting.
Under the current structure, holders of Arrayit have absolute voting power over our
outstanding common stock. Except in limited circumstances requiring separate class voting, this disproportionate voting power affords
holders of Arrayit the ability to control the outcome of stockholder votes - even if the matter involved a divergence or conflict
of the interests of the holders of the stock of Diagnostics and Arrayit. The spin-off will vest in our shareholders all of the
voting rights associated with our common stock and, as a result, afford our holders enhanced influence over the outcome of our
stockholder voting.
Taxable event and related considerations
The Arrayit board of directors considered
other factors relating to the spin-off, including the expectation that the spin-off will not qualify as a tax-free exchange for
U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code and will eliminate risk not directly associated
with our business. The Arrayit board of directors also considered other potential risks and consequences to Diagnostics and Arrayit
associated with the spin-off, including those relating to us that are described in "
Risk Factors—Risk Factors Relating
to the Spin-Off,
" but believed that the considerations described above outweighed those risks. Our shareholders are urged
to read all of the Risk Factors described in this prospectus.
The restructuring; spin-off ratio
The spin-off is expected to be effective
at 11 AM, Washington time, on the spin-off date, estimated to occur on or about January 15, 2012. The spin-off will be affected
through an initial stock dividend by us to Arrayit, based on a 1 for 3.34 ratio on outstanding capital stock of Arrayit. Those
Diagnostics' shares will then be issued on a pro rata basis to all Arrayit shareholders. Specifically, each holder of record
of Arrayit at the close of business on the Record Date will receive on the spin-off date one share of our common stock for every
3.34 shares of Arrayit held by such Arrayit shareholder. The Record Date will be established when this S-1 is deemed effective.
Arrayit is not seeking stockholder approval of the spin-off,
and holders of Arrayit have no appraisal rights in connections with the spin-off from and after the spin-off date.
To be entitled to receive shares of our
common stock in the dividend, holders of Arrayit must be stockholders at the close of business on the Record Date. The Record Date
will be established when the registration statement of which this prospectus is a part is deemed effective.
Distribution of the spin-off shares
As part of the spin-off, we will be adopting
a book-entry share transfer and registration system for our common and preferred stock. Instead of receiving physical share certificates,
registered holders who currently hold certificates representing Arrayit will receive, for every 3.34 shares of Arrayit held on
the spin-off date, one share of our common or preferred stock credited to book-entry accounts established for them by our transfer
agent and a pro rata share of our common or preferred shares.
24
Our transfer agent will mail an account
statement to each registered holder stating the number of shares of our common stock credited to such holder's account. After
the distribution, holders may request that their shares of Diagnostics' common stock be transferred to a brokerage or other
account at any time without charge. For stockholders who own Arrayit shares through a broker or other nominee, their shares of
our common stock will be credited to their account by the broker or other nominee.
From and after the spin-off date, holders
of Arrayit will become holders of our common stock, and their rights as holders of Arrayit will continue.
John Howell, President of Diagnostics,
has been appointed to respond to any shareholder questions about the spin-off. Questions and requests for assistance and additional
copies of this prospectus should be directed to Mr. Howell at 916-599-3138.
Results of the spin-off
Upon completion of the spin-off, we will
be an independent public company, owning and operating the businesses that currently constitute the business of Diagnostics, and
Arrayit will continue its present operations. For a discussion of the post spin-off businesses of Diagnostics, see the section
entitled "
Arrayit and Diagnostics
." Immediately after the spin-off, we expect we will have approximately 400
beneficial owners of shares of our common stock and 32,205 million shares of common stock outstanding plus additional shares issued
to round up each holder to the next highest whole share.
Listing and trading of diagnostics' common stock
We intend to apply to the OTCBB to quote
our common stock. We cannot assure investors as to the price at which our common stock (or that of Arrayit) will trade. The trading
prices of our common stock after the spin-off may be less than, equal to, or greater than the trading price of the Arrayit stock
before (or after) the spin-off. Shares of our common stock issued in the spin-off will be freely transferable, except for shares
received by those who may have a special relationship or are affiliates. Those who may be considered our affiliates after the spin-off
generally include individuals or entities that control, are controlled by, or are under common control with Diagnostics. This may
include some or all of Diagnostics and Arrayit's officers and directors. Persons who are our affiliates will be permitted
to sell their shares only pursuant to an effective Registration Statement under the Securities Act of 1933, as amended, and/or
an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144 hereunder specifically
including the permitted number of shares. For more information on trading in shares of our common stock, see the section entitled
"
Shares Eligible for Future Sales
."
Reason for furnishing this prospectus
We are furnishing this prospectus to provide
information to holders of Arrayit who will be issued our shares in the spin-off. It is not, and is not to be construed as, an inducement
or encouragement to buy or sell any of our securities or those of Arrayit. The information contained in this prospectus is believed
by us to be accurate as of the date set forth on its cover. Changes may occur after that date, and neither we nor Arrayit are required
to update the information except in the normal course of our public disclosure obligations and practices.
Expenses
The expenses of the spin-off are estimated
to be approximately $82,500. These expenses will be borne by us prior to and after the spin-off.
Accounting consequences of the spin-off
Following the spin-off, we will account
for our assets and liabilities based on the historical values at which they were carried immediately prior to the spin-off. The
financial statements attached to this prospectus include the historical financial information for Diagnostics and the capital structure,
and will not change as a result of the spin-off.
25
Certain U.S. federal income tax consequences of the spin-off
The following is a summary of certain material
U.S. federal income tax consequences relating to the spin-off. The summary is based on the Internal Revenue Code, the Treasury
regulations promulgated there under, and interpretations of the Internal Revenue Code and Treasury regulations by the courts and
the Internal Revenue Service, all as they exist as of the date of this document and all of which are subject to change at any time,
possibly with retroactive effect.
We have not requested nor do we intend
to request a ruling from the Internal Revenue Service or an opinion of tax counsel as to the federal income tax consequences of
the Spin-Off. However, based on the facts of the proposed transaction, it is the opinion of our management that the transaction
will not qualify as a tax free spin off under Section 355 of the Internal Revenue Code of 1986, as amended. As such, we will likely
report the transaction as a taxable distribution to which Section 301 applies.
This summary does not discuss all tax considerations
that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders
subject to special treatment under the U.S. federal income tax laws, including, without limitation:
·
non-U.S. persons
·
insurance companies
·
dealers or brokers in securities or currencies
·
tax-exempt organizations
·
financial institutions
·
mutual funds
·
pass through entities and investors in such entities
·
holders who hold their shares as a hedge or as part of a hedging, straddle, conversion, synthetic security, integrated investment
or other-risk reduction transaction
·
holders who are subject to the alternative minimum tax
·
holders who acquired their shares upon the exercise of employee stock options or otherwise as compensation
In addition, this summary does not address
the U.S. federal income tax consequences to those Arrayit holders who do not hold their Arrayit shares as a capital asset. Finally,
this summary does not address any state, local or foreign tax consequences.
You are urged to consult your own tax advisor concerning
the U.S. federal, state and local and any non-U.S. tax consequences of the spin-off.
The U.S. federal income tax consequences
of the spin-off are that gain or loss will be recognized by (and may be included in the income of) Arrayit holders upon their receipt
of shares of our common stock in the spin-off.
Notwithstanding the foregoing discussion,
the IRS could assert that the spin-off is taxable without reduction for any cost basis and could further determine that the value
is greater than anticipated for U.S. federal income tax purposes. If the IRS were successful in taking this position, our initial
public stockholders (the former Arrayit shareholders who were issued our stock in the spin-off) and we could be subject to significant
U.S. federal income tax liabilities. In general, we will not be subject to tax. Arrayit will not be subject to tax, given the current
earnings and profits or accumulated earning and profits, and Arrayit's shareholders would recognize gain or loss equal to
the difference between the fair market value of the shares of our common stock received and 2% of the holder's tax basis
in the Arrayit shares held prior to the spin-off.
26
Current Treasury regulations require that
if you are a holder of Arrayit who receives our stock in the spin-off and, immediately prior to the spin-off, own:
·
at least five percent of the total outstanding stock of Diagnostics, or
·
securities of Diagnostics with a tax basis of $1,000,000 or more
then you must attach a statement relating to the spin-off to
your federal income tax return for the year in which the spin-off occurs.
The foregoing is a summary of certain
U.S. federal income tax consequences of the spin-off under current law and is for general information only. The foregoing does
not purport to address all U.S. federal income tax consequences or tax consequences that may arise under the tax laws of other
jurisdictions or that may apply to particular categories of stockholders. You should consult your tax advisor as to the particular
tax consequences of the spin-off, including the application of U.S. federal state, local and foreign tax laws, and the effect of
possible changes in tax laws that may affect the tax consequences described above.
THE EQUITY LINE
Shares to be issued
This prospectus relates to the resale of
up to 10,791,400 shares of our common stock by AEF Master SPV LP. AEF Master will acquire our common stock pursuant to the terms
and conditions of the Investment Agreement. The 10,791,400 shares include: (i) 8,000,000 shares issuable by us at an assumed price
of $1.00 per share to be purchased by AEF Master under the Investment Agreement, (ii) 125,000 shares issued to AEF Master SPV,
LP as payment of commitment and expense fees in connection with the transaction and (iii) 2,666,400 shares as 1/3
rd
of the number of shares which may be issued for purchase from time to time under the investment agreement.
The Investment Agreement
The Investment Agreement with AEF Master
provides that AEF Master is committed to purchase from us, from time to time, up to $8,000,000 of our common stock over the course
of 36 months. We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms
and conditions of the Investment Agreement. The amount that we are entitled to put in any one notice will be determined in accordance
with a formula set forth in the Investment Agreement. Generally, in respect of each put, AEF Master will pay us a per share purchase
price equal to 100% of the volume weighted average price, or VWAP, of our common stock during the 15 consecutive trading days immediately
prior and five days after our put notice. The initial number of shares issuable by us and purchasable by AEF Master under the Investment
Agreement is 8,000,000 shares.
SELLING STOCKHOLDER
The information provided in the table and
discussions below has been obtained from AEF Master
,
the selling stockholder. The selling stockholder may have sold, transferred
or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date on which
it provided the information regarding the shares, all or a portion of the shares of common stock beneficially owned in transactions
exempt from the registration requirements of the Securities Act. As used in this prospectus, "selling stockholder"
includes the person or persons listed in the table below, and the donees, pledgees, transferees or other successors-in-interest
selling shares received from the named selling stockholder as a gift, pledge, distribution or other transfer.
Beneficial ownership is determined in accordance
with Rule 13d-3(d) promulgated by the Commission under the Securities Exchange Act of 1934. Unless otherwise noted, each person
or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where
applicable.
27
Shares Beneficially Owned Prior to
the Offering
Shares offered
under this
Prospectus(4)
Shares Beneficially Owned
After the Offering(1)
Name of Selling
Stockholder
Number
Percentage of
Class
Number
Percentage of
Class(3)
AEF Master SPV LP. (2)
125,000
*
30,141,400
0
0
*Percentage of shares owned before the offering is less than
one percent.
(1)      These numbers assume the selling stockholder sells all
of its shares being offered pursuant to this prospectus.
(2)      AEF Master is the investor under the Investment Agreement.
All investment decisions and control of AEF Master are made and held by its investment manager. As a result, Mr. Robert C. Rhodes,
the managing member of Rhodes Holdings, makes the investment decisions on behalf of and control American Equity Fund. American
Equity Fund has informed us that it is an "underwriter" within the meaning of the Securities Act, and to the best of
our knowledge, no other underwriter or person has been engaged to facilitate the sale of shares of the common stock in this offering.
(3)      Applicable percentage ownership is based on 32,205,000
shares of common stock outstanding as of August 31, 2012 and on common stock owned by the selling stockholder. Beneficial ownership
is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
(4)      Includes (i) 8,000,000 shares of common stock which may
be issued under the investment agreement between Arrayit Diagnostics, Inc. and AEF Master SPV LP, having a total value of $8,000,000,
based on an assumed price per share of $1.00, (ii) 125,000 shares issued to AEF Master SPV, LP as payment of commitment and expense
fees in connection with the transaction and (iii) 2,666,400 shares as 1/3
rd
of the number of shares which may be issued
for purchase from time to time under the investment agreement..
PLAN OF DISTRIBUTION
Each selling stockholder of our common
stock and any of their donees, pledgees, transferees, assignees and other successors-in-interest may, from time to time, sell,
transfer or otherwise dispose of any or all of their shares of common stock on the OTC Bulletin Board or any other stock exchange,
market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated
prices. A selling stockholder may use any one or more of the following methods when selling shares:
·
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
·
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;
·
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
·
an
exchange distribution in accordance with the rules of the applicable exchange;
·
privately
negotiated transactions;
·
settlement
of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
·
broker-dealers
may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
·
through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
·
a
combination of any such methods of sale; or
·
any
other method permitted pursuant to applicable law.
28
The selling stockholders may also sell shares
under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by any selling stockholder
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 purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary
brokerage commission in compliance with FINRA NASD Rule 2440; and in the case of a principal transaction a markup or markdown in
compliance with FINRA IM-2440.
In connection with the sale of our common
stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, who may in turn engage in short sales of our common stock in the course of hedging the positions they assume. However,
the selling stockholders will not sell shares of our common stock short. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which
require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The selling stockholders and any underwriters,
broker-dealers or agents that participate in the sale of our common stock or interests therein will be considered "underwriters"
within the meaning of Section 2(11) of the Securities Act in connection with such sales and, as such, any discounts, commissions,
concessions or profit they earn on any resale of the shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Since the selling stockholders are deemed to be an "underwriter" within the meaning of Section 2(11)
of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act. In no event shall any
broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).
We are required to pay certain fees and
expenses incurred by us incident to the registration of the shares. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
The selling stockholders are subject
to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than
this prospectus. There is no underwriter or coordinating broker-dealer acting in connection with the proposed sale of the resale
shares by the selling stockholders.
The resale shares will be sold only through
registered or licensed broker-dealers if required under applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with. As of the date of this prospectus, we have not filed
for registration or qualification in any state.
Under applicable rules and regulations under
the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities
with respect to our common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of
the distribution. In addition, the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of our common stock
by the selling stockholders or any other person. We will make copies of this prospectus available to the selling stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
DIVIDEND POLICY
Following the spin-off, we do not anticipate
paying any dividends on our common stock in the foreseeable future because we expect to retain our earnings for use in the operation
and expansion of our business. Any such payment and amount of dividends will be subject to the discretion of our board of directors
and will depend, among other things, on our financial condition, results of operations, cash requirements, future prospects and
other factors that may be considered relevant by our board of directors.
29
RELATED PARTY TRANSACTIONS
The respective Diagnostics and, as applicable,
Arrayit boards have separately adopted a written Related Party Transaction Policy for the review, approval and ratification of
transactions involving the related parties of Diagnostics. In each case, related parties are directors and nominees for director,
executive officers and immediate family members of the foregoing, as well as security holders known to beneficially own more than
five percent of our common stock. The policy covers any transaction, arrangement or relationship, or series of transactions, arrangements
or relationships, in which Arrayit and/or Diagnostics was, is or will be a participant and the amount exceeds $10,000, and in which
a related party has any direct or indirect interest. The policy is administered by the appropriate board acting as a committee
of the whole.
In determining whether to approve or ratify
a related party transaction, the appropriate board will consider whether or not the transaction is in, or not inconsistent with,
the best interests of the appropriate company. In making this determination, the appropriate board is required to consider all
of the relevant facts and circumstances in light of the following factors and any other factors to the extent deemed pertinent
by the committee:
·
whether
the terms of the Related Party Transaction are fair to the company and on the same basis as would apply if the transaction did
not involve a Related Party;
·
whether
there are business reasons for the company to enter into the Related Party Transaction;
·
whether
the Related Party Transaction would impair the independence of an outside director, if applicable; and
·
whether
the Related Party Transaction would present an improper conflict of interests for any director or executive officer of the company,
taking into account the size of the transaction, the overall financial position of the director, executive officer or Related Party,
the direct or indirect nature of the director's, executive officer's or Related Party's interest in the transaction and the ongoing
nature of any proposed relationship, and any other factors the board deems relevant.
The policy contains standing pre-approvals
for certain types of transactions which, even though they may fall within the definition of a related party transaction, are deemed
to be pre-approved by Diagnostics and/or Arrayit given their nature, size and/or degree of significance to the appropriate company.
In the event Diagnostics and/or Arrayit
inadvertently enters into a related party transaction that requires, but has not received, pre-approval under the policy, the transaction
will be presented to the appropriate board for review and ratification promptly upon discovery. In such event, the committee will
consider whether such transaction should be rescinded or modified and whether any changes in our controls and procedures or other
actions are needed.
For a discussion of the potential conflicts
of interest between Diagnostics and Arrayit, see "
Relationship between Diagnostics and Arrayit Following the Spin-off
."
Arrayit believes that any past transactions
with its affiliates have been at prices and on terms no less favorable to us than transactions with independent third parties.
We may enter into transactions with its affiliates in the future. We intend to continue to enter into such transactions only at
prices and on terms no less favorable to us than transactions with independent third parties. In this context, we will require
any director or officer who has a pecuniary interest in a matter being considered to excuse him or herself from any negotiations.
In any event, any debt instruments of Diagnostics in the future are expected generally to prohibit us from entering into any such
affiliate transaction on other than arm's-length terms.
30
In addition, a majority of the board is
(and must continue to be) neither an officer nor have a pecuniary interest (other than as a shareholder or director) in any transactions
with us. In turn, commencing immediately, a majority of the independent Board of Directors members (defined as having no pecuniary
interest in the transaction under consideration) will be required to approve all matters involving interested parties. Moreover,
it is expected that additional independent directors will be added to the board and the independent transfer agent, VStock Transfer,
LLC, will begin serving no later than the initial closing for this Offering, to assure proper issuance of stock to shareholders.
Additional disclosures
Litigation.
There has not
been any material civil, administrative or criminal proceedings concluded, pending or on appeal against us, or our affiliates or
principals.
SELECTED FINANCIAL DATA
The following table sets forth certain
financial data for Diagnostics. The selected financial data should be read in conjunction with our "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and notes thereto. The selected financial data for the six
months ended June 30, 2012 and the years ended December 31, 2011 and 2010 have been derived from our audited and unaudited financial
statements that are a part of this prospectus.
Six Months
Ended
06/30/2012
(unaudited)
Year Ended
12/31/2011
Year Ended
12/31/2010
Income Statement Data:
Revenue
$
-
$
-
$
-
Operating Expenses
1,167,286
274,090
631,361
Loss From Operations
(1,167,286
)
(274,090
)
(631,361
)
Interest expense
6,599
20,884
49,804
Net Loss Attributable to Non-Controlling Interests
-
3,604
61,694
Net Loss
(1,173,885
)
(291,370
)
(619,471
)
Net Loss per Share
(0.04
)
(0.01
)
(0.03
)
Weighted Average Common Shares Outstanding
30,659,435
25,111,890
24,508,356
Balance Sheet Data:
Working Capital (Deficit)
(1,167,350
)
(1,075,051
)
(793,168
)
Total Assets
24,339
9,716
32,807
Accumulated Deficit
(2,462,921
)
(1,289,036
)
(997,666
)
Stockholders' Equity (Deficit)
(1,164,323
)
(1,065,478
)
(770,504
)
Note: The weighted average share of common
stock reflects: (1) shares of our common stock issued to Arrayit; and (2) our common shares already held by other shareholders.
UNAUDITED, AUDITED AND SUMMARY FINANCIAL
INFORMATION
Unaudited financial statements for the
period ended June 30, 2012 and audited financial statements for the years ended December 31, 2011 and 2010 are provided in this
prospectus. In addition, summary financial data is provided in "
Selected Financial Data
" above.
31
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current operational overview
Results of operations:
Six months ended June 30, 2012 (unaudited)
and the twelve months ended December 31, 2011 compared to the twelve months ended December 31, 2010:
Because we are a development stage enterprise,
we have not incurred the normal operating expenses we expect to incur once we expand operations. Except as described below, the
development stage expenses incurred did not fluctuate significantly during the twelve months ended December 31, 2011 compared to
the same period in 2010. Management expects development stage expenses to stay fairly consistent during 2012.
Inflation and seasonality:
We do not believe that inflation or seasonality
will significantly affect our results of operation.
Liquidity and capital resources
Management believes that its short and
long-term needs for working capital, capital expenditures, new facilities and acquisitions will be satisfied by the proceeds of
its investment strategy and the funds generated from future operations. Post spin-off, our current liabilities will continue to
be covered by the existing assets.
Debt and Contractual Obligations
June 30, 2012
(unaudited)
December
31,2011
December 31,
2010
NOTES PAYABLE - ARRAYIT DIAGNOSTICS, INC.
Notes payable, interest at 10%, which was due January 22, 2011 and is now past due, secured by 1,000,000 shares out of the Company's common stock, pledged to the private lender without compensation by the Company's Chairman.  The terms also called for the issuance of 300,000 warrants issuable for shares of common stock at $0.22 per share.  The annual effective interest rate for this loan is estimated to be 243.8%
$
76,640
$
72,990
$
66,371
LESS: Unamortized loan fee and discount in connection with the obtaining of the loan
-
-
(8,916
)
Notes payable, interest at 10%, which was due August 10, 2010 and is now past due, secured by 200,000 shares out of the Company's common stock, pledged to the private lender without compensation as follows: 100,000 common shares provided by the Company's chief financial officer; 50,000 common shares provided without compensation by a minority shareholder in Arrayit Diagnostics; and a call option call to acquire an additional 50,000 common shares currently held by a minority shareholder in Arrayit Diagnostics.
61,939
58,990
53,640
Notes payable, interest at 10%, due upon demand with no payments currently due, payable to the Company's Chairman
25,000
-
-
Total Notes Payable
$
163,579
$
131,980
$
111,095
32
Royalty obligations
Wayne State University
Under terms of a biomarker license agreement
between Wayne State University ("University") and Diagnostics, effective December 7, 2009 we are obligated to pay the
University royalties of 5% of net sales. In addition the license agreement provides for lump sum payments to be made as milestone
events are achieved.
There were no revenues generated during
the six months ended June 30, 2012 and the fiscal period ended December 31, 2011 and 2010, and hence no obligation to pay any royalties
to University.
Critical accounting policies
Our discussion and analysis of our financial
condition and the results of our operations are based upon our consolidated financial statements and the data used to prepare them.
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. On
an ongoing basis we evaluate our judgments and estimates including those related to bad debts, investments, long-lived intangible
assets, and income taxes. We base our estimates and judgments on our historical experience, knowledge of current conditions and
our beliefs of what could occur in the future considering available information. Actual results may differ from these estimates
under different assumptions or conditions. Our estimates are guided by observing the following critical accounting policies.
Investments
We account for the purchase of non-marketable
equity and debt securities on a cost basis of accounting. Equity securities are classified as non-marketable when at the time of
the purchase the equity security does not have readily determinable fair values because the security is not publicly traded and
we do not have the ability to easily or readily convert the investment to cash in the open market. Consequently, significant gains
or losses may be recognized when equity securities are finally sold. In some cases the size of the potential gain or loss is not
easily estimable since there is no readily determinable fair value available. In other cases it may be subject to significant fluctuations
in the market before the restrictions on the sale are removed.
We account for the purchase of marketable
equity securities in accordance with ASC 320, "Investment – Debt and Equity Securities" with any unrealized gains
and losses included in earnings. However, those securities may not have the trading volume to support the stock price if the company
were to sell all their shares in the open market at once, so the company may have a loss on the sale of marketable securities even
though they record marketable equity securities at the current market value. All marketable equity securities totaled $0 at December
31, 2011.
Long-lived intangible assets and
goodwill
We evaluate our long-lived assets for impairment
whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash
flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the
excess of the carrying amount over the fair value of the asset.
Income taxes
We account for income taxes using the liability
method, which requires the determination of deferred tax assets and liabilities based on the differences between the financial
and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which differences are expected to reverse.
Deferred tax assets are adjusted by a valuation allowance, if based on the weight of available evidence it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
There are no recently issued accounting
standards known to have a material impact on our Financial Statements as of December 31, 2011.
33
MANAGEMENT
Directors, executive officers and other key employees
Name
Age
John Howell
66
Chairman of the Board and Chief Executive Officer
John Howell earned a Bachelor of Science
degree in Aerospace Engineering from Oregon State University with graduate studies at the University of San Francisco in Organizational
Development and Change. He originally joined Arrayit Corporation in July 2008 as a consultant, but assumed the post of President
and CEO of Arrayit Diagnostics upon its formation in June 2009.
With over 30 years experience in the development,
creation and management of sales and marketing platforms and internal management systems for businesses in the areas of health
care, real estate, high technology and telecommunications. For the past 15 years, he was primarily engaged in the fields of high
technology and telecommunications, serving as CEO of Eversys Corporation, a manufacturer of computer equipment for the local area
network January 1997-November 1997; Vice President of Sales & Marketing for TeraGlobal Communications, a manufacturer of equipment
for the convergence of voice, video and data December 1997-October 1998; Executive Vice President of Rim Semiconductor Corp., a
late development stage fabless communications semiconductor company April 2000-September 2002; Executive Vice President and Chief
Operating Officer of Kingdom Ventures, Inc., a marketing company for the Christian community October 2002-April 2003; and President
of NutraCea, (OTCBB: NTRZ) an international nutraceutical company April 2003-July 2004.
Board of directors
The board is currently composed of John Howell.
Our director is elected or appointed to hold office until the next annual meeting of stockholders and until his or her successor
has been elected and qualified.
Executive compensation
Compensation Discussion and Analysis
We have prepared the following Compensation
Discussion and Analysis to provide you with information that we believe is helpful to understand our executive compensation policies
and decisions as they relate to the 2011 compensation of our named executive officers as identified in our Summary Compensation
Table.
Objectives
To attract, retain, and motivate qualified
executive officers, we aim to establish wages and salaries that are competitive with those of people employed by similar companies
in our operating industries. The base salaries we paid in 2011 were intended to be consistent among executives as well. Through
2011, we took a simple approach to compensating our named executive officer. We sought to avoid complex forms of compensation,
such as awards under long-term cash incentive plans, non-qualified defined benefit plans and pension plans, while we are still
evolving as a business. We intend that base salaries for our executives reflect the marketplace for similar positions. In February
2009, we established the equity plan, with the goal to provide equity ownership opportunities to our employees and directors so
they can have a stake in the success of Diagnostics, just like our stockholders.
Compensation program administration
and policies
During 2011, specific salary and bonus levels,
as well as the amount and timing of equity grants, were determined on a case-by-case basis through negotiations with our executives.
During the fiscal year ended December 31, 2009, we entered into employment agreements with Mr. Howell, our Chairman of the Board
and Chief Executive Officer, effective as of August 15, 2009. In January 2012, we established a Compensation Committee that has
general responsibility for executive compensation and benefits, including incentive compensation and equity-based plans.
34
Pay elements
As of December 2011, we provided the following
pay elements to our executive officers in varying combinations to accomplish our compensation objectives:
·
Base salary;
·
Equity-based
compensation (e.g., stock options and restricted stock grants), with awards to be granted pursuant to the 2009 Plan; and
·
Certain
modest executive perquisites and benefits.
Our goal is to set each executive's
base salary at a level we believe enables us to hire and retain individuals in a competitive environment and to reward satisfactory
individual performance and a satisfactory level of contribution to our overall business goals. We may utilize cash bonuses to reward
performance achievements within the past fiscal year. We intend to utilize equity-based compensation under the 2010 Plan to provide
long-term rewards for retention and performance.
Each compensation element and its purpose
are further described below.
Base salary
Base salary is intended to compensate the
executive for the basic market value of the position and the responsibilities of that position relative to other positions in the
company. The board considers several factors such as the duties and responsibilities of the position, the individual executive's
experience and qualifications, the executive's prior salary and competitive salary information in establishing base salaries
but did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. Our
named executive officer's annual base salaries for fiscal year 2011 were: Mr. Howell $120,000. The base salary for our named
executive officer for fiscal year 2012 has not been adjusted from the 2011 base salary.
We will review our base salaries from time
to time, and may adjust them based on market trends. We also intend to review the applicable executive's responsibilities,
performance and experience. We do not intend to provide formulaic base salary increases to our executives. If necessary, we may
realign base salaries with market levels for the same positions in companies of similar size to us represented in compensation
data we review, if we identify significant market changes in our data analysis. Additionally, we may adjust base salaries as warranted
throughout the year for promotions or other changes in the scope or breadth of an executive's role or responsibilities.
In the third quarter of 2009, we entered
into an employment agreement with Mr. Howell, which was effective as of August 15, 2009 with respect to base salary. The material
terms of the agreement are described in "—Employment Agreements" below.
Bonus
In addition to base salary, existing executives
are eligible for a discretionary annual bonus, the amount of which is determined by the board based on the quality and nature of
the executive's services and the performance of the company during such year. No bonus payments were made in 2010 or 2011.
Equity-based compensation
Our board believes that granting shares of
restricted stock and/or stock options to existing executives provides an important incentive to retain executives and rewards them
for their performance. Any grants made under the 2009 Plan may be made at the discretion of our board or a committee to be designated
by the board. We do not have any practice, policy or program allowing for timing of equity grants in relation to our current stock
price or material non-public information. We have not granted any awards under the 2009 Plan to our named executive officers. We
made a grant of restricted stock to Mr. Howell outside of the 2009 Plan. The restricted stock grant to Mr. Howell was determined
and approved by our board in connection with the negotiation and execution of Mr. Howell's employment agreement and his appointment
as our chief executive officer.
35
Executive perquisites and benefits
Our philosophy is to provide executives with
limited perquisites. We provide certain executives that have significant travel commitments in fulfilling their roles with a monthly
car allowance, or use of a company vehicle when used in connection with the services they provide to us, and a monthly mobile phone
allowance.
Payments with respect to severance
of employment and/or upon change of control
Through December 31, 2011, we did not have
any practice of providing, or obligation to provide, payments to our named executive officers following termination of employment
or upon a change in control (or similar event).
Summary compensation table
The following table sets forth, for the
periods indicated, the total compensation for services provided to us by the only person who served as our chief executive officer
and only executive officer at the end of 2011 and 2010 who received compensation during 2011 and 2010 (such person identified on
the table below may be referred to collectively herein as the "named executive officer").
Name and principal
Position
Year
Salary($)
Stock
awards($)
Bonus
Option
Awards($)
All Other
Compensation
($)(3)
Total($)
John Howell,
Chairman of the Board and Chief Executive Officer(1)
Six months ended June 30, 2012
60,000
60,000
2011
120,000
120,000
2010
120,000
120,000
(1)     On August 9, 2009, we entered into
an employment agreement with Mr. John Howell, the President, CEO and Chairman of the Board. The agreement was originally for a
term of three years, expiring the 9th day of August, 2012, and was renewed on February 1, 2012 for a term of three years. The agreement
provides that Mr. Howell shall be compensated at the rate of $120,000 per year plus a bonus up to a maximum of 100% of salary,
payable in cash or stock, based upon the achievement of the performance objectives defined by the Board of Directors. In addition
the employment agreement provides to Mr. Howell 3,000 shares of preferred stock, series B. The preferred stock has the following
rights and privileges:
a)
Super voting rights
:
Except as otherwise required by law, the shares of the outstanding Preferred series B stock shall have the number of votes equal
to the number of votes of all outstanding shares of capital stock plus one additional vote such that the holders of the outstanding
shares of Preferred series B shall always constitute a majority of the voting rights of the Corporation..
b)
No other rights
: The
preferred series B shares have no other rights, including but not limited to any conversion rights; no dividend rights;
Outstanding equity awards as of December 31, 2011
Our CEO, Mr. John Howell, was granted 450,000
shares of common stock.
Employment agreements
We entered into an employment agreement
with our CEO, Mr. John Howell. The agreement provides that Mr. Howell shall be compensated at the rate of $120,000 per year plus
a bonus up to a maximum of 100% of salary, payable in cash or stock, based upon the achievement of the performance objectives defined
by the Board of Directors.
36
Compensation committee interlocks and insider participation
We have adopted the charter for our compensation
committee but have not yet appointed any members of the committee.
2009 Directors, officers and consultants stock option, stock
warrant and stock award plan
The purpose of our 2009 Plan is to maintain
the ability of the company and our subsidiaries to attract and retain highly qualified and experienced directors, employees and
consultants and to give such directors, employees and consultants a continued proprietary interest in the success of Diagnostics
and our subsidiaries. In addition, the 2009 Plan is intended to encourage ownership of our common stock by the directors, employees
and consultants of the company and its affiliates and to provide increased incentive for such persons to render services and to
exert maximum effort for the success of our business. The 2009 Plan provides eligible employees and consultants the opportunity
to participate in the enhancement of stockholder value by the grants of options (including incentive stock options for employees
only), restricted or unrestricted common stock and other awards under the 2009 Plan, including having their bonuses and consulting
fees payable in restricted or unrestricted common stock and other awards, or any combination thereof. The number of shares that
currently may be issued under the 2009 Plan is 12,000,000 shares of common stock, subject to adjustment in accordance with the
adjustment provisions of the 2009 Plan and subject to increases immediately upon the grant of any option, warrant, shares of preferred
stock or award. The number of shares of such increase shall be such that immediately after such increase the total number of shares
issuable under the 2009 Plan and reserved for issuance upon exercise of outstanding options, warrants or conversion of shares of
preferred stock will equal approximately 15% of the total number of issued and outstanding shares of common stock of the company.
Compensation policies and practices as they relate to risk
management
We reviewed and analyzed our compensation
arrangements and determined that our compensation plans do not pose an unreasonable risk to the company.
Compensation of directors
In 2012, we commenced a compensation program
for board members whereby each non-employee director is entitled to an annual fee in cash to be determined, as long as the director
attends the meetings during each quarter. The board is exploring additional equity compensation for our non-employee directors
in consideration of services rendered. We paid no compensation to non-employee directors in 2011.
Board composition
Our business and affairs are managed under
the direction of the board. The board currently consists of one member, John Howell. Our bylaws provide that our board will consist
of a number of directors to be fixed from time to time by resolution adopted by the affirmative vote of a majority of the total
directors then in office. In addition, our articles of incorporation provide for a staggered, or classified, board of directors
consisting of three classes of directors, each serving a staggered three-year term and with one class being elected at each year's
annual meeting of stockholders. Such articles provide that the Class III director will initially be Mr. Howell, who will serve
for terms expiring in 2015.
Committees of the board of directors
Our board has an audit committee, a compensation
committee and a nominating and governance committee, each of which has the composition and responsibilities described below. Our
board may also establish from time to time any other committees that it deems necessary or desirable. The composition of each committee
will comply, when required, with the NYSE listing standards and other rules of the SEC and NYSE.
37
Audit committee
Our audit committee consists of Mr. Howell.
Mr. Howell is not independent within the meaning of applicable SEC rules and NYSE listing standards and is not an "audit
committee financial expert" as defined in the rules and regulations of the SEC, in that he is not financially literate under
the current listing standards of the NYSE. The audit committee has oversight responsibilities regarding matters including:
·
the integrity of our financial statements and our financial reporting and disclosure practices;
·
the soundness of our system of internal controls regarding finance and accounting compliance;
·
the independent registered public accounting firm's qualifications and independence;
·
the engagement of the independent registered public accounting firm;
·
the performance of our internal audit function and independent registered public accounting firm;
·
our compliance with legal and regulatory requirements in connection with the foregoing;
·
review of related-party transactions in accordance with our written policy as to such transactions (see "
Related Party
Transactions
" on page 29); and
·
compliance with our Code of Conduct and Ethics.
We will rely on the phase-in rules of the
SEC and NYSE with respect to the independence of our audit committee. These rules permit us to have an audit committee that has
at least one member who is independent by the NYSE listing date, at least two members (a majority of whom are independent) within
90 days after the effectiveness of the registration statement of which this prospectus forms a part, and at least three members
(all of whom are independent) within one year thereafter.
Our board has adopted a written charter
for our audit committee, which will be available upon completion of this offering on our website. The information on our website
is not, and will not be deemed to be part of this prospectus.
Compensation committee
Our compensation committee consists of
John Howell. We have determined that Mr. Howell is not independent within the meaning of the listing standards of the NYSE. The
compensation committee is authorized to assist the board in discharging the board's responsibilities relating to matters
including:
·
review and administration of compensation and benefit policies and programs designed to attract, motivate and retain personnel
with the requisite skills and abilities to us to achieve superior operating results;
·
review and approval annually of goals and objectives relevant to compensation of our chief executive officer, including evaluating
the performance of the chief executive officer in light of those goals and objectives and setting of our chief executive officer's
compensation based on such evaluation. Our compensation committee will have sole authority to determine such compensation;
·
establishment of the compensation of our other executives and the chairman of our board, and recommendation of the compensation
of our non-employee directors for approval by majority vote of independent directors, and
·
issuance of an annual report on executive compensation for inclusion in our annual proxy statement, when required.
We will rely on the phase-in rules of the
SEC and NYSE with respect to the independence of our compensation committee. These rules permit us to have a compensation committee
that has at least one member who is independent by the later of the date this offering closes or five business days from the NYSE
listing date, at least a majority of members who are independent within 90 days of the NYSE listing date and all independent members
within one year of the NYSE listing date.
Our board has adopted a written charter
for our compensation committee, which will be available upon completion of this offering on our website. The information on our
website is not, and will not be deemed to be part of this prospectus. To assist the compensation committee in discharging its responsibilities,
the compensation committee may engage a compensation consulting firm or other advisors.
38
Nominating and governance committee
Our nominating and governance committee
consists of John Howell. We have determined that Mr. Howell is not independent within the meaning of the listing standards of NYSE.
The nominating and governance committee is authorized to:
·
recommend to the board nominees for election as directors and committee members;
·
develop and recommend to the board a set of corporate governance guidelines;
·
review candidates for nomination for election as directors submitted by directors, officers, employees and stockholders and
establish procedures to be followed by stockholders in submitting nominees;
·
recommend to the board non-nomination or removal from the board or a board committee as appropriate;
·
review with the board the requisite skills and characteristics for continuation as board members, the selection of new board
members and board composition; and
·
select, retain and evaluate any search firm with respect to the identification of candidates for nomination for election as
directors. Our nominating and governance committee shall have the sole authority to approve any such firm's fees and other
retention terms.
We will rely on the phase-in rules of the
SEC and NYSE with respect to the independence of our nominating and governance committee. These rules permit us to have a nominating
and governance committee that has at least one member who is independent by the later of the date this offering closes or five
business days from the NYSE listing date, at least a majority of members who are independent within 90 days of the NYSE listing
date and all independent members within one year of the NYSE listing date.
The committee will assist the board in
the selection of nominees for election as directors at each annual meeting of our stockholders and will establish policies and
procedures regarding the consideration of director nominations from stockholders. Our board has adopted a written charter for our
nominating and governance committee, which will be available upon completion of this offering on our website. The information on
our website is not, and will not be deemed to be part of this prospectus.
Corporate governance and limitations on directors'
and officers' liability
We have also adopted a Code of Conduct
and Ethics, Corporate Governance Guidelines and Insider Trading Policy, and we intend to adopt other standard policies and procedures
relating to matters such as corporate communications.
Our directors and officers are indemnified
as provided by general corporation law of the Nevada Revised Statutes, as amended ("NRS"), and our articles of incorporation
and indemnification agreements with us.
Under the NRS, director immunity from liability
to a company or its stockholders for monetary liabilities applies automatically unless it is specifically limited by a company's
articles of incorporation, which is not the case with our articles of incorporation. Excepted from that immunity are:
·
a willful failure to deal fairly with the company or its stockholders in connection with a matter in which the director has
a material conflict of interest;
·
a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable
cause to believe that his or her conduct was unlawful;
·
a transaction from which the director derived an improper personal profit; and
·
willful misconduct.
Our articles of incorporation provide that
we will indemnify our directors, officers, employees and agents to the fullest extent required by the NRS, and shall indemnify
such individuals to the extent permitted by the NRS. We may purchase and maintain liability insurance, or make other arrangements
for such obligations or otherwise, to the extent permitted by the NRS. We have also entered into indemnification agreements with
each of our directors and officers.
39
APPLICATION OF PROCEEDS
We will not proceeds from the spin-off
or from the resale of the shares of common stock offered by the selling stockholders as all of such proceeds will be paid to the
selling stockholders.
MARKET PRICE OF COMMON STOCK AND RELATED
MATTERS
Market information
There has been no public trading market
for the shares of Diagnostics prior to the spin-off. We intend to apply to qualify our common stock for quotation on the OTCBB
such that a secondary market will commence on the spin-off date.
Holders
As of December 31, 2011, there were approximately
three shareholders of record of our' common stock and one shareholders of record of our preferred stock.
PRINCIPAL STOCKHOLDERS
Before the spin-off, 60% of the outstanding
shares of our common stock is held beneficially and of record by Arrayit and 100% of our preferred stock is held by John Howell,
the chief executive officer and sole director. The following table sets forth, as of the Record Date of the spin-off, information
concerning expected beneficial ownership of our common stock after giving effect to the spin-off by:
·
each person or entity known to us who will beneficially own more than five percent of the outstanding shares of our common
stock;
·
each person who we currently know will be one of our directors or named executive officers at the time of the spin-off; and
·
as a group, all persons who we currently know will be our directors and executive officers at the time of the spin-off.
The following information:
·
gives effect to the spin-off as if it had occurred on December 31, 2011, on which date 19,350,000 shares of our common stock
were held by Arrayit; and
·
a pro rata distribution of same held by persons listed in the table below.
The actual number of shares of common stock
outstanding as of the spin-off date may differ to the extent that new Arrayit common or preferred shares are issued or repurchased
between December 31, 2011 and the spin-off date and if (while unlikely) the assumed conversion ratio differs from the actual ratio.
Based on information furnished to us by
or on behalf of such person or entity, except as otherwise indicated in the footnotes below, we believe that each person or entity
has sole voting and investment power with respect to the shares of common stock set forth opposite such person's or entity's
name. Beneficial ownership is determined in accordance with the rules of the SEC and generally attributes beneficial ownership
of securities to persons who possess sole or shared voting or investment power with respect to such shares. Shares of our common
stock (subject to options that are currently exercisable for shares of our common stock or other securities evidencing the right
to receive shares of our common stock that are vested, or that will be exercisable for shares of our common stock or that will
vest within 60 days after December 31, 2011), are deemed to be outstanding and beneficially owned by the person holding such options
or other securities for the purpose of computing the percentage ownership of such person, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other person.
40
Name and Address of Beneficial Owner
Number of Shares of
Common Stock (3)
Number of Shares of
Preferred Stock
Percent of
Class(4)
John Howell(2)
3,000
100
%
John Howell (2)
1,761,400
5.85
%
Rene Schena(1)
4,041,902
15.5
%
Todd J Martinsky(1)
2,694,570
10.3
%3
All directors and officers as a group
5.46
%
(1 person)
1,761,400
3,000
Notes:
(1)      The address of each person, unless otherwise noted, is
524 East Weddell Drive, Sunnyvale, CA 94089.
(2)      The business address of Mr. Howell is 1950 Cinnamon Teal
Drive, Redmond, Oregon 97756.
(3)      Beneficial ownership is determined in accordance with
the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person,
shares subject to options, warrants and convertible securities held by that person that are currently exercisable or exercisable
within 60 days of December 31, 2011 are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of
computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, each stockholder named
in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder's name.
(4)      Based on a total of 32,205,000 shares of our common stock
outstanding exclusive of additional shares issued to round up fractional shares..
(5)      The issued and outstanding shares of series B preferred
stock, voting as a class, have the number of votes equal to twice the number of votes of all outstanding shares of capital stock
such that the holders of outstanding shares of Series B Preferred Stock shall always constitute two-thirds of the voting rights
of the corporation. Except as otherwise required by law or by the articles of incorporation, the holders of shares of common stock
and Series B Preferred Stock shall vote together and not as separate classes.
ARRAYIT'S RELATIONSHIP WITH DIAGNOSTICS
FOLLOWING THE SPIN-OFF
The specific terms and conditions of the
spin-off are governed by an Agreement and Plan of Distribution between Diagnostics and Arrayit.
The material terms of the respective Agreement
are described below. Copies of such Agreements have been filed as Exhibits to the Registration Statement of which this prospectus
forms a part, and the summaries of these documents that follow are qualified in their entirety by reference to the full text of
these documents which are incorporated by reference into this prospectus.
Agreements between diagnostics and Arrayit relating to the
spin-off
Agreement and Plan of Distribution
The Agreement and Plan of Distribution
sets forth the agreements between Diagnostics and Arrayit with respect to the principal corporate transactions required to effect
the spin-off, and a number of other agreements governing the relationship between Arrayit and us following the spin-off. The Agreement
and Plan of Distribution also provides for a series of preliminary restructuring transactions to affect the transfer to us of all
of the assets and liabilities relating to our business. We expect to finalize the transfers called for under the Agreement and
Plan of Distribution before the effectiveness of the spin-off. However, we will only complete the spin-off if specified conditions
are met. These conditions include:
·
the transfer to us of all of the assets and liabilities attributable to our business;
·
the SEC declaring effective the Form S-1 Registration Statement of which this prospectus forms a part;
41
·
the reporting of our common stock on the OTCBB or other proprietary trading system;
·
receipt of material consents and approvals; and
·
the absence of any injunction or similar order preventing the consummation of the spin-off.
Even if these conditions are satisfied,
other events or circumstances, including litigation, could occur that could affect the timing or terms of the spin-off or our ability
or plans to complete the spin-off. As a result of any such events or circumstances, the spin-off may not occur and, if it does
occur, it may not occur on the terms or in the manner described, or in the time frame contemplated.
The Separation Agreement
Pursuant to the Separation Agreement, Arrayit
will transfer, or cause its other subsidiaries to transfer, to us:
·
all assets of Diagnostics attributable to our business;
·
all other assets of Diagnostics reflected in the most recent balance sheet of Arrayit;
·
contracts that relate to the business of Diagnostics; and
·
other specified assets.
We will also agree to assume, fulfill and/or
indemnify Arrayit for:
·
all liabilities of Diagnostics to the extent arising out of, relating to, or resulting from the operations of its business,
including its contracts and assets;
·
all other liabilities reflected in the most recent balance sheet of Arrayit;
·
any liabilities arising out of, relating to or resulting from, a specified list of litigation (none of which is anticipated);
·
specified liabilities resulting from the spin-off;
·
obligations and commitments under specified contracts; and
·
other specified liabilities.
In addition, the Separation Agreement includes
operating principles that will govern Diagnostics' and Arrayit's conduct concerning, and use of, specified instruments
and other technologies currently utilized by one or both of Diagnostics and Arrayit.
ABSENCE OF PUBLIC MARKET AND DIVIDEND
POLICY
Public market
Arrayit, which currently has approximately
four hundred common and four preferred shareholders, is a reporting company under Section 15(d) of the Securities Exchange Act
of 1934. There is a public trading market on the Over-the-Counter Bulletin Board for the shares of Arrayit.
While not currently a reporting company,
we will become a Section 15(d) reporting company because of this registered spin-off concurrent with the date of this prospectus.
Moreover, this registered spin-off and associated reporting status will permit us to qualify our shares for quotation on the OTCBB
(the Over-the-Counter Bulletin Board) or other secondary markets for which our common shares may then qualify. (See "
Risk
Factors
").
Dividend policy
Short-term or long-term operations prospects
may not result in generating a profit. Therefore we are not likely to pay immediate dividends and an investment in Diagnostics
is thus not suitable for investors seeking current income for financial or tax planning purposes. Future dividends will be paid
at the sole discretion of the respective Boards of Directors.
42
CAPITALIZATION
The following sets forth the capitalization
of Diagnostics as of December 31, 2011 (the date of the audited Arrayit Diagnostics, Inc. financials contained in this prospectus):
·
25,345,000 shares of common stock outstanding.
·
3,000 shares of Series B preferred stock.
·
Each share of our common stock is entitled to one vote in connection with the matters requiring shareholder vote and the series
B preferred, as a class, is always entitled to two-thirds of the total vote because it is entitled to double the number of other
votes outstanding at any time and from time to time.
DILUTION
The percentage of our equity owned by Arrayit
before completion of the spin-off will be owned ratably by the Arrayit shareholders after the spin-off. The spin-off will create
no change in the ownership of the other shareholders of Diagnostics immediately before, or after, the spin-off is completed.
DESCRIPTION OF CAPITAL STOCK
In conjunction with completion of the spin-off,
our certificate of incorporation and by-laws will not be amended. Copies of our articles of incorporation and bylaws have been
filed as exhibits to the registration statement of which this prospectus forms a part. The following information summarizes our
articles of incorporation and bylaws as these documents will be in effect at the time of the consummation of the spin-off.
Authorized capital stock
Our authorized capital stock consists of
500,000,000 shares all of which have a par value of $0.001 per share. Of the total shares, 480,000,000 are designated as common
stock, 20,000,000 are authorized as preferred stock. Immediately before and after the spin-off, the number of our outstanding shares
will remain unchanged at 32,205,000 shares of common stock. There are no other outstanding warrants or any other contract right
or shares that vest the right to receive shares of Diagnostics common as part of the spin off.
Common stock of Diagnostics and Arrayit
The holders of Diagnostics, organized in
Nevada, have the following rights, powers and privileges.
Voting rights.
The holders of our
common stock will be entitled to one vote for each share held, on all matters voted on by its stockholders, including elections
of directors. Our certificate of incorporation does not provide for cumulative voting in the election of directors. Generally,
all matters to be voted on by our stockholders must be approved by a majority of the votes entitled to be cast by all shares of
common stock present or represented by proxy.
Dividends.
Holders of our common
stock are entitled to receive dividends as, when and if dividends are declared by our board of directors out of assets legally
available for the payment of dividends. It is not the current expectation of us to pay dividends.
Liquidation.
In the event of a liquidation,
dissolution or winding up of our affairs, whether voluntary or involuntary, after payment of liabilities and obligations to creditors,
the remaining assets will be distributed ratably among the holders of shares of common stock on a per share basis. If there exists
any preferred stock outstanding at such time, holders of the preferred stock are not entitled to distribution and/or liquidation
preferences. In either case, we would need to pay the applicable distribution to its holders of preferred stock before distributions
are paid to the holders of the associated common stock.
Rights and preferences.
Our common
stock has no preemptive, redemption, conversion or subscription rights. The rights, powers, preferences and privileges of holders
of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred
stock that may be designated and issued in the future.
43
Preferred stock of Diagnostics
Our certificate of incorporation provides
that our board of directors has the authority, without action by the stockholders, to designate and issue up to 20,000,000 shares
of preferred stock in one or more classes or series and to fix the powers, rights, preferences and privileges of each class or
series of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any class or series, which may be greater than the rights of the holders of the common stock.
Any issuance of shares of preferred stock could adversely affect the voting power of holders of common stock, and the likelihood
that the holders will receive dividend payments and payments upon liquidation could have the effect of delaying, deferring or preventing
a change in control.
We adopted resolutions establishing the
terms, designations, relative rights, preferences and limitations of 3,000 shares of the $.001 par value Series B Preferred Stock
in a Certificate of Designation and filed it with the State of Nevada. The material terms are as follows:
The shares of series B preferred stock,
voting as a class, have the number of votes equal to twice the number of votes of all outstanding shares of capital stock such
that the holders of outstanding shares of Series B preferred stock shall always constitute two-thirds of the voting rights of the
corporation. Except as otherwise required by law or by the articles of incorporation, the holders of shares of common stock and
Series B preferred stock shall vote together and not as separate classes.
Anti-takeover effects of certain provisions of our charter
and by-laws
Board of directors.
Our articles
of incorporation provide that, subject to the rights of the holders of any class or series of preferred stock to elect additional
directors under specified circumstances, the number of directors will be fixed from time to time exclusively by a resolution adopted
by our board of directors, but will not be less than one nor more than fifteen directors. The current number of directors currently
serving is one.
Our certificate of incorporation further
provides that, subject to the rights of the holders of any class or series of preferred stock to elect directors under specified
circumstances, any vacancy on the board of directors that results from an increase in the number of directors may be filled by
a majority of the board of directors then in office, provided that a quorum is present, and any other vacancy occurring on the
respective board of directors may be filled by a majority of the board of directors then in office, even if less than a quorum,
or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of
directors of such class will hold office for a term that coincides with the remaining term of that class. Any director elected
to fill a vacancy not resulting from an increase in the number of directors will have the same remaining term as that of his or
her predecessor. Subject to the rights, if any, of the holders of any outstanding class or series of preferred stock, any or all
of our directors may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of
at least a majority of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors.
Authorized shares.
Our certificate
of incorporation provides that we may from time to time issue shares of preferred stock in one or more series, the terms of which
will be determined by the respective board of directors, and common stock. We will not solicit approval of our stockholders unless
the associated board of directors believes that approval is advisable or is required by stock exchange regulations or the applicable
corporation law. This could enable the respective board of directors to issue shares to persons friendly to current management
which could render more difficult or discourage an attempt to obtain control of the company by means of a merger, tender offer,
proxy contest or otherwise and thereby protect the continuity of our management. Such additional shares also could be used to dilute
the stock ownership of persons seeking to obtain control of the company.
Special meetings.
Unless the certificate
of incorporation or the by-laws provide otherwise, stockholders are not permitted to call a special meeting of stockholders. Our
certificate of incorporation and by-laws do not permit stockholders to call a special meeting.
44
Restrictions on stockholder action by
written consent.
Our certificate of incorporation and by-laws provide that stockholders may effect any action required or permitted
to be taken at a duly called annual or special meeting of stockholders by consent in writing by the stockholders only if the taking
of such action by such written consent has expressly been approved in advance by the board of directors. Except as otherwise required
by law or by any preferred stock designation, special meetings of stockholders may be called only by our board of directors, our
chairman of the board, our president or our secretary. No business other than that stated in the notice of meeting may be transacted
at any special meeting. These provisions may have the effect of delaying consideration of a stockholder proposal until the next
annual meeting unless a special meeting is called by the affected board, chairman, president or secretary.
Advance notice procedures.
Our by-laws
establish an advance notice procedure for stockholders to make nominations of candidates for election as directors or to bring
other business before an annual meeting of stockholders. These stockholder notice procedures provide that only persons who are
nominated by our board of directors, or by a stockholder who was a stockholder of record at the time of giving notice and has given
timely written notice to our secretary before the meeting at which directors are to be elected, will be eligible for election as
directors.
For nominations or other business to be
properly brought before an annual meeting by a stockholder, a stockholder's notice delivered to our secretary must set forth
as to each matter the stockholder proposes to bring before the annual meeting:
·
a brief description of the business desired to be brought before the annual meeting and the reasons for conducting this business
at the annual meeting;
·
the name and record address of the stockholder;
·
the class or series and number of shares of capital stock of the company which are owned beneficially or of record by the stockholder;
·
a description of all arrangements or understandings between the stockholder and any other person or persons (including their
names) in connection with the proposal and any material interest of the stockholder in the desired business; and
·
a representation that the stockholder intends to appear in person or by proxy at the annual meeting to bring such business
before the meeting.
A stockholder's notice for purposes
of nominating directors must also contain additional information about each nominee, including a current resume and curriculum
vitae and a statement describing each nominee's qualifications.
To be timely, a stockholder's notice
to our secretary must be delivered to or mailed and received at our principal executive offices not less than 90 days and not more
than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. In the event that our
annual meeting is to be held on a date that is not within 30 days before or after the anniversary date, the notice must be received
not later than the close of business on the tenth day following the day on which the notice of the date of the annual meeting was
mailed or public disclosure of the date of the annual meeting was made, whichever occurs first.
The chairman of the board has the power
and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance
with the advance notice procedures. If any proposed nomination or business is not in compliance with our by-laws, the chairman
of the board has the power to declare that the defective proposed business or nomination will not be presented for stockholder
action at the meeting and will be disregarded.
Business combination statutes.
The Nevada General Corporation Law prohibits a business combination between a corporation and an interested stockholder within
three years of the time such stockholder became an interested stockholder, unless:
·
prior to such time the board of directors of the corporation approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder;
45
·
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, exclusive of shares
owned by directors who are also officers and by certain employee stock plans; or
·
at or subsequent to such time, the business combination is approved by the board of directors and authorized by the affirmative
vote at a stockholders' meeting of at least two thirds of the outstanding voting stock that is not owned by the interested
stockholder.
The term "business combination"
is defined to include, among others, transactions between an interested stockholder and a corporation or any direct or indirect
majority owned subsidiary thereof; a merger or consolidation; a sale, pledge, transfer or other disposition (including as part
of a dissolution) of assets having a total market value equal to 10% or more of either the total market value of all assets of
the corporation on a consolidated basis or the total market value of all the outstanding stock of the corporation; certain transactions
that would increase the interested stockholder's proportionate share ownership of the stock of any class or series of the
corporation or such subsidiary; and any receipt by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation or any such subsidiary. In general, and subject to certain
exceptions, an "interested stockholder" is any person who is the owner of 15% or more of the outstanding voting stock
(or, in the case of a corporation with classes of voting stock with disparate voting power, 15% or more of the voting power of
the outstanding voting stock) of the corporation, and the affiliates and associates of such person. The term "owner"
is broadly defined to include any person that individually or with or through such person's affiliates or associates, among
other things, beneficially owns such stock, or has the right to acquire such stock (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement or understanding or upon the exercise of options or other convertible
securities or otherwise or has the right to vote such stock pursuant to any agreement or understanding, or has an agreement or
understanding with the beneficial owner of such stock for the purpose of acquiring, holding, voting or disposing of such stock.
The restrictions of the applicable Nevada
laws do not apply to corporations that have elected, in the manner provided therein, not to be subject to the applicable law or,
with certain exceptions, which do not have a class of voting stock that is listed on a national securities exchange or held of
record by more than 2,000 stockholders. Our certificate of incorporation and By-laws do not opt out of the applicable Nevada law.
Transfer agent and registrar
VStock Transfer, LLC, 77 Spruce Street,
Suite 201, Cedarhurst, New York 11516, is our stock transfer company and registrar. Phone: (212) 828-8436, Facsimile: (646) 536-3179.
DEFENSES AGAINST HOSTILE TAKEOVERS
The following discussion summarizes the
reasons for, and the operation and effects of, certain provisions in our articles of incorporation which management has identified
as potentially having an anti-takeover effect. It is not intended to be a complete description of all potential anti-takeover effects,
and it is qualified in its entirety by reference to our articles of incorporation. Substantially similar provisions were contained
in our Certificate of Incorporation and the reincorporation does not change the nature of the anti-takeover provisions or their
effect.
The anti-takeover provisions of our articles
of incorporation are designed to minimize the possibility of a sudden acquisition of control of Diagnostics which has not been
negotiated with and approved by our board of directors. These provisions may tend to make it more difficult to remove the incumbent
members of the board of directors. The provisions would not prohibit an acquisition of control of Diagnostics or a tender offer
for all of our capital stock. However, to the extent these provisions successfully discourage the acquisition of control of Diagnostics
or tender offers for all or part of our capital stock without approval of the board of directors, they may have the effect of preventing
an acquisition or tender offer which might be viewed by stockholders to be in their best interests.
46
Tender offers or other non-open market
acquisitions of stock are usually made at prices above the prevailing market price. In addition, acquisitions of stock by persons
attempting to acquire control through market purchases may cause the market price of the stock to reach levels which are higher
than would otherwise be the case. Anti-takeover provisions may discourage such purchases, particularly those of less than all of
the outstanding capital stock, and may thereby deprive stockholders of an opportunity to sell their stock at a temporarily higher
price. These provisions may therefore decrease the likelihood that a tender offer will be made adversely affect those stockholders
who would desire to participate in a tender offer. These provisions may also serve to insulate incumbent management from change
and to discourage not only sudden or hostile takeover attempts, but any attempts to acquire control which are not approved by the
board of directors, whether or not stockholders deem such transactions to be in their best interests.
Authorized shares of capital stock
.
Our articles of incorporation authorize the issuance of up to 20,000,000 shares of serial preferred stock, without any action on
the part of the stockholders. Shares of our serial preferred stock with voting rights could be issued and would then represent
an additional class of stock required to approve any proposed acquisition. This preferred stock, together with authorized but unissued
shares of common stock (the articles of incorporation authorizes the issuance of up to 480,000,000 shares of common stock), could
represent additional capital stock required to be purchased by an acquirer. If the board of directors of Diagnostics determined
to issue an additional class of voting preferred stock to a person opposed to a proposed acquisition, such person might be able
to prevent the acquisition single-handedly.
Stockholder meetings
. Nevada law
provides that the annual stockholder meeting may be called by a corporation's board of directors or by such person or persons as
may be authorized by a corporation's articles of incorporation or bylaws. Our articles of incorporation provide that annual stockholder
meetings may be called only by our board of directors or a duly designated committee of the board. Although we believe that this
provision will discourage stockholder attempts to disrupt the business of Diagnostics between annual meetings, its effect may be
to deter hostile takeovers by making it more difficult for a person or entity to obtain immediate control of us.
Classified board of directors and removal
of directors
. Our articles of incorporation provide that the board of directors is to be divided into three classes which shall
be as nearly equal in number as possible. The directors in each class serve for terms of three years, with the terms of one class
expiring each year. Each class currently consists of approximately one-third of the number of directors. Each director will serve
until his successor is elected and qualified. A classified board of directors could make it more difficult for stockholders, including
those holding a majority of our outstanding stock, to force an immediate change in the composition of a majority of the board of
directors. Since the terms of only one-third of the incumbent directors expire each year, it requires at least two annual elections
for the stockholders to change a majority, whereas a majority of a non-classified board may be changed in one year. The provision
for a staggered board of directors affects every election of directors and is not triggered by the occurrence of a particular event
such as a hostile takeover. Thus a staggered board of directors makes it more difficult for stockholders to change the majority
of directors even when the reason for the change would be unrelated to a takeover.
Restriction of maximum number of directors
and filling vacancies on the board of directors
. Nevada law requires that the board of directors of a corporation consist of
one or more members and that the number of directors shall be set by or in the manner described in the corporation's articles of
incorporation or bylaws. Our articles of incorporation provides that the number of directors (exclusive of directors, if any, to
be elected by the holders of preferred stock) shall not be less than one or more than 15, as shall be provided from time to time
in accordance with the bylaws. The power to determine the number of directors within these numerical limitations is vested in the
board of directors and requires the concurrence of at least two-thirds of the entire board of directors. The effect of such provisions
may be to prevent a person or entity from quickly acquiring control of Diagnostics through an increase in the number of the directors
and election of nominees to fill the newly created vacancies.
Advance notice requirements for nomination
of directors and proposal of new business at annual stockholder meetings
. Our articles of incorporation provide that any stockholder
desiring to make a nomination for the election of directors or a proposal for new business at a stockholder meeting must submit
written notice not less than 30 or more than 60 days in advance of the meeting provided. This advance notice requirement may give
management time to solicit its own proxies in an attempt to defeat any dissident slate of nominations. Similarly, adequate advance
notice of stockholder proposals will give management time to study such proposals and to determine whether to recommend to the
stockholders that such proposals be adopted. In certain instances, such provisions could make it more difficult to oppose management's
nominees or proposals, even if the stockholders believe such nominees or proposals are in their interests. These provisions may
tend to discourage persons from bringing up matters disclosed in the proxy materials furnished to the stockholders and could inhibit
the ability of stockholders to bring up new business in response to recent developments.
47
SHARES ELIGIBLE FOR FUTURE SALES
After completion of the spin-off, there
will be 32,205,000 Diagnostics' shares of common stock outstanding plus and additional shares issued to round up fractional
shares, based upon the number of shares of common and preferred shares outstanding on June 30, 2012. 19,350,000 of these shares
will be freely transferable without restriction under the Securities Act except for 12,103,900 shares that are owned by our "affiliates,"
as that term is defined in Rule 144 under the Securities Act, which includes the directors and significant stockholders of Arrayit
who become affiliates of us. Shares of our common stock held by affiliates may not be sold unless they are registered under the
Securities Act or are sold pursuant to an exemption from registration, including an exemption contained in Rule 144 under the Securities
Act. Further, as described below, we plan to file a registration statement to cover the shares issued under our equity incentive
plans.
Rule 144
In general, Rule 144 under the Securities
Act, as in effect on the date of this prospectus, authorizes a person who is one of our affiliates, or who is selling shares on
behalf of one of our affiliates, and has beneficially owned shares of our common stock for at least six months would be entitled
to sell, within any three-month period a number of shares that does not exceed the greater of:
·
one
percent of the number of shares of our common stock then outstanding, which will equal approximately 301,414 if all the shares
in this offering are sold; and
·
the
average weekly trading volume of our common stock during the four-calendar weeks preceding the filing of a notice on Form 144 with
respect to the sale.
Approximately 30,141,400 shares of common
stock will be outstanding upon completion of the spin-off and sale by the AEF Master, the selling shareholder. Of these shares,
all of the shares distributed in the spin-off will be freely tradable without restriction under the Securities Act, unless acquired
by our "affiliates" as that term is defined under Rule 144 under the Securities Act. The remaining 12,855,000 shares
of common stock outstanding after this offering will be "restricted securities" within the meaning of Rule 144. Restricted
securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption
from registration, including the exemptions provided by Rule 144 and Rule 701 under the Securities Act, which rules are summarized
below. The remaining shares of common stock held by our existing stockholders upon completion of this spin-off will be available
for sale in the public market taking into account the provisions of Rules 144 and 701 under the Securities Act.
Shares received by our affiliates in the
spin-off or upon exercise of stock options or upon vesting of other equity-linked awards may be "controlled securities"
rather than "restricted securities." "Controlled securities" are subject to the same volume limitations
as "restricted securities" but are not subject to holding period requirements.
A person or persons whose shares are aggregated
who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially
owned restricted securities within the meaning of Rule 144 for at least six months, including the holding period of any prior owner
other than an affiliate, would be entitled to sell those shares, subject only to the availability of current public information
about us. A non-affiliated person, who has beneficially owned restricted securities within the meaning of Rule 144 for at least
one year, including the holding period of any prior owner other than an affiliate, would be entitled to sell those shares without
restriction.
Rule 701
Rule 701 under the Securities Act, as in
effect on the date of this prospectus, permits resale of shares in reliance upon Rule 144 but without compliance with certain restrictions
of Rule 144, including the holding period requirement. Most of our employees, executive officers or directors who purchased shares
under a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701, but all holders of
Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares.
48
Equity plans
As soon as practicable after the completion
of this offering, we are eligible to file a Form S-8 registration statement under the Securities Act to register shares of our
common stock subject to options reserved for issuance under the 2009 Plan. Such registration statement will become effective immediately
upon filing, and shares covered by that registration statement will thereupon be eligible for sale in the public markets, subject
to Rule 144 limitations applicable to affiliates and any lock-up agreements. For a more complete discussion of our stock plans,
see "
Management—Executive Compensation—Compensation Discussion and Analysis.
"
LEGAL MATTERS
The validity of the shares of common stock
offered hereby has been passed upon for us by Sonfield & Sonfield, Houston, Texas.
EXPERTS
The financial statements of Arrayit Diagnostics,
Inc. for the period from inception, June 2, 2009, through December 31, 2011, included elsewhere in this Prospectus have been audited
by Moss, Krusick & Associates, LLC, independent registered public accounting firm, as stated in its report appearing herein,
and are included in reliance upon the report of such firm given upon its authority as experts in accounting and auditing. With
respect to the unaudited financial statements of Arrayit Diagnostics, Inc. as of June 30, 2012 and for the six months ended June
30, 2012 and 2011 and the period from inception through June 30, 2012, included elsewhere in this Prospectus, such statements have
not been audited by Moss, Krusick & Associates, LLC and that firm does not express an opinion on them.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of our common stock was employed on a contingency
basis or had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the registrant
or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents, subsidiaries
as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.
COMMISSION'S POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Nevada Revised Statutes authorizes
indemnification of a director, officer, employee or agent of the Company against expenses incurred in connection with any action,
suit, or proceeding to which he or she is named a party by reason of his or her having acted or served in such capacity, except
for liabilities arising from his or her own misconduct or negligence in performance of his or her duty. In addition, even a director,
officer, employee, or agent of the Company who was found liable for misconduct or negligence in the performance of his or her duty
may obtain such indemnification if, in view of all the circumstances in the case, a court of competent jurisdiction determines
such person is fairly and reasonably entitled to indemnification.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the Nevada
Revised Statutes, our Amended and Restated Bylaws or otherwise, we have been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. No pending material litigation
or proceeding involving our directors, executive officers, employees or other agents as to which indemnification is being sought
exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification by
any of our directors or executive officers.
49
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a Registration
Statement on Form S-1 under the Securities Act of 1933 with respect to the shares of our common stock being registered hereunder.
This prospectus, which forms a part of the Registration Statement, does not contain all the information included in the Registration
Statement and the exhibits thereto, to which reference is hereby made. You should refer to the Registration Statement, including
its exhibits and schedules, for further information about Arrayit, its common stock and our stock being spun-off pursuant to this
prospectus. From and after the effective date of the spin-off, we will become subject to the informational requirements of the
Securities Exchange Act of 1934.
Accordingly, we will file annual, quarterly
and other reports and other information with the SEC. Arrayit is required to file annual, quarterly and other information with
the SEC, and such reports and other information may contain important information about us. For so long as Diagnostics has been
operating, the results of our operations have been included in Arrayit's consolidated financial statements.
You may read and copy the Registration
Statement and the reports and other information we may in the future file at the SEC's Public Reference Room located at Station
Place, 100 F Street, N.E., Washington D.C. 20549. You may also receive copies of these documents upon payment of a duplicating
fee, by writing to the SEC's Public Reference Room. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Room. Our future SEC filings will also be available to the public from commercial document retrieval services
and at the Internet world-wide website maintained by the SEC at www.sec.gov. Information on in our website does not form a part
of this prospectus.
No person is authorized to give any information
or to make any representations other than those contained in this prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any distribution of securities made
hereunder shall imply that there has been no change in the information set forth herein or in our affairs since the date hereof.
No person is authorized to give any information
or to make any representations other than those contained in this prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any distribution of securities made
hereunder shall imply that there has been no change in the information set forth herein or in our affairs since the date hereof.
INDUSTRY AND MARKET DATA
We obtained the industry, market and competitive
position data in this prospectus from our own internal estimates and research as well as from industry and general publications
and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they
have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.
While we believe that each of these studies and publications is reliable, we have not independently verified market and industry
data from third-party sources. While we believe our internal company research is reliable and the market definitions are appropriate,
neither such research nor these definitions have been verified by any independent source.
FINANCIAL STATEMENTS
The Financial Statements required by Article
8 of Regulation S-X are stated in U.S. dollars and are prepared in accordance with Accounting Principles Generally Accepted in
the United States of America ("US GAAP"). The following financial statements Arrayit Diagnostics, Inc., Inc. are filed
as part of this Prospectus.
50
ARRAYIT DIAGNOSTICS, INC.
(a development stage company)
Index to Consolidated Financial Statements
Page
Report of Independent Registered Public Accounting Firm
F-2
Balance Sheets
F-3
Statements of Operations
F-4
Statements of Changes in Stockholder's Equity (Deficit)
F-5
Statements of Cash Flows
F-6
Notes to Financial Statements
F-7
F-
1
REPORT OF INDEPENDENT REGISTERED CERTIFIED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
of
Arrayit Diagnostics, Inc.
We have audited the accompanying consolidated
balance sheets of Arrayit Diagnostics, Inc. (a development stage company) as of December 31, 2011 and 2010, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash flows for the years then ended and for the period from
inception (June 2, 2009) through December 31, 2011. Arrayit Diagnostics, Inc.'s management is responsible for these consolidated
financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits 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 consolidated 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 consolidated financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Arrayit Diagnostics, Inc. as of
December 31, 2011 and 2010, and the results of its operations and its cash flows for the years ended December 31, 2011 and 2010,
and the period from inception (June 2, 2009) through 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 1 to the consolidated
financial statements, the Company has suffered operating losses and has accumulated deficits and negative cash flows from operations
which raise substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters
are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ Moss, Krusick & Associates, LLC
Winter Park, Florida
November 9, 2012
F-
2
ARRAYIT DIAGNOSTICS, INC.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
June 30, 2012, December 31, 2011 and
2010
June 30,
December 31,
December 31,
$2012
(unaudited)
$2011
$2010
ASSETS
CURRENT ASSETS
Cash and equivalents
21,312
143
143
Deferred development costs
-
-
10,000
Total current assets
21,312
143
10,143
Fixed assets (net of accumulated depreciation of $36,245, $29,700 and $16,609, respectively)
3,027
9,572
22,663
Other assets, net
-
1
1
Total assets
$
24,339
$
9,716
$
32,807
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
$
499,546
$
417,677
$
187,239
Accrued liabilities
20,000
20,000
20,000
Due to Arrayit Corporation and subsidiaries
505,537
505,537
484,977
Notes payable, current portion (net of debt discount of $0, $0 and $8,916, respectively)
163,579
131,980
111,095
Total current liabilities
1,188,662
1,075,194
803,311
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred series B stock, $0.001 par value; 20,000,000 shares authorized, 3,000 issued and outstanding
3
3
3
Common stock, $0.001 par value; 480,000,000 shares authorized, 32,205,000, 25,345,000 and 24,750,000 issued and outstanding
30,205
25,345
24,750
Additional paid in capital
1,266,390
198,210
-
Accumulated deficit during development stage
(2,462,921
)
(1,289,036
)
(997,666
)
Total stockholders' equity (deficit)
(1,164,323
)
(1,065,478
)
(972,913
)
Non-controlling interests
Royalty interests
-
-
285,000
Less: Subscription receivable
-
-
(13,750
)
Interest in subsidiary's accumulated deficit
-
-
(68,841
)
Total non-controlling interests
-
-
202,409
Total stockholders' equity (deficit)
(1,164,323
)
(1,065,478
)
(770,504
)
Total liabilities and stockholders' equity (deficit)
$
24,339
$
9,716
$
32,807
F-
3
ARRAYIT DIAGNOSTICS, INC.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Periods from Inception, June
2, 2009, to June 30, 2012
June 2, 2009
Six Months Ended
Year Ended
(inception) to
June 30,
December 31,
June 30,
2012
2011
2011
2010
2012
(unaudited)
(unaudited)
(unaudited)
Revenues:
$
-
$
-
$
-
$
-
$
-
Operating expenses:
Consulting
1,000,000
-
-
-
1,000,000
Salaries
88,120
80,594
155,594
316,881
880,424
Research and development
25,000
67,984
95,823
166,747
317,570
Depreciation
6,546
6,546
13,091
16,609
36,246
Office and general
7,073
898
6,497
18,492
34,875
Professional fees
18,300
1,085
3,085
30,544
69,929
Travel and entertainment
22,247
-
-
-
22,247
Public relations
-
-
-
82,088
97,088
Total operating expenses:
1,167,286
157,107
274,090
631,361
2,458,379
Operating loss
(1,167,286
)
(157,107
)
(274,090
)
(631,361
)
(2,458,379
)
Interest expense
6,599
14,900
20,884
49,804
76,987
Loss before non controlling interest
(1,173,885
)
(172,007
)
(294,974
)
(681,165
)
(2,535,366
)
Net loss attributable to non controlling interests
-
3,604
3,604
61,694
72,445
Net loss attributable to common stockholders
(1,173,885
)
(168,403
)
(291,370
)
(619,471
)
(2,462,921
)
Loss per share
(0.04
)
(0.01
)
(0.01
)
(0.03
)
Weighted average shares outstanding
30,659,435
24,875,611
25,111,890
24,508,356
F-
4
ARRAYIT DIAGNOSTICS, INC.
(a development stage company)
Consolidated Statement of Changes in Stockholders' Equity (Deficit)
For the Periods from Inception, June 2, 2009, to June 30, 2012
CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
Preferred Series B
Common Stock
Number of
Issued
Shares
Amount
Number of
Issued Shares
Amount
Additional
Paid-in
Capital
Accumulated
Deficit During
Development
Stage
Total
Royalty
Interest
Subscription
Receivable
Interest in
Subsidiaries'
Accumulated
Deficit During
Development
Stage
Total Non-
Controlling
Interest
Total
Equity
(Deficit)
Balance, June 2, 2009
-
$
-
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Issued for services
3,000
3
-
-
-
-
3
-
-
-
-
3
Issued for technology transfer
-
-
24,300,000
24,300
-
-
24,300
-
-
-
-
24,300
Royalty Interest
-
-
-
-
-
-
-
285,000
(13,750
)
-
271,250
271,250
Loss for the period June 2, 2009 to December 31, 2009
-
-
-
-
-
(378,195
)
(378,195
)
-
-
(7,147
)
(7,147
)
(385,342
)
Balance, December 31, 2009
3,000
3
24,300,000
24,300
-
(378,195
)
(353,892
)
285,000
(13,750
)
(7,147
)
264,103
(89,789
)
Issued for services
-
-
450,000
450
-
-
450
-
-
-
-
450
Loss for the fiscal year 2010
-
-
-
-
-
(619,471
)
(619,471
)
-
-
(61,694
)
(61,694
)
(681,165
)
Balance, December 31, 2010
3,000
3
24,750,000
24,750
-
(997,666
)
(972,913
)
285,000
(13,750
)
(68,841
)
202,409
(770,504
)
Acquisition of Subsidiary interest
-
-
595,000
595
198,210
-
198,805
(285,000
)
13,750
72,445
(198,805
)
-
Loss for the fiscal year 2011
-
-
-
-
-
(291,370
)
(291,370
)
-
-
(3,604
)
(3,604
)
(294,974
)
Balance, December 31, 2011
3,000
$
3
25,345,000
$
25,345
$
198,210
$
(1,289,036
)
$
(1,065,478
)
$
-
$
-
$
-
$
-
$
(1,065,478
)
Issued for services (unaudited)
-
-
5,000,000
5,000
995,000
-
1,000,000
-
-
-
-
1,000,000
Issued for cash (unaudited)
-
-
375,200
375
74,665
75,040
75,040
Anti-dilution shares (unaudited)
1,484,800
1,485
(1,485
)
Loss for the six months ended June 30, 2012 (unaudited)
-
-
-
-
-
(1,173,885
)
(1,173,885
)
-
-
-
-
(1,173,885
)
Balance, June 30, 2012 (unaudited)
3,000
$
3
30,205,000
$
32,205
$
1,266,390
$
(2,462,921
)
$
(1,164,323
)
$
-
$
-
$
-
$
-
$
(1,164,323
)
F-
5
ARRAYIT DIAGNOSTICS, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2012
and 2011, and the Years Ended December 31, 2011 and 2010, and the Period from Inception, June 2, 2009, to June 30, 2012
For the Period
Six Months Ended
Years Ended
from June 2, 2009
June 30,
December 31,
(Inception)  to
2012
2011
2011
2010
June 30, 2012
(unaudited)
(unaudited)
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(1,173,885
)
$
(172,007
)
$
(294,974
)
$
(681,165
)
$
(2,535,366
)
Adjustments to reconcile net loss to net cash used by operations:
Depreciation
6,545
6,546
13,091
16,609
36,245
Amortization of deferred financing costs
-
-
-
12,500
12,500
Amortization of debt discount
-
8,916
8,916
32,692
41,608
Stock compensation
1,000,000
-
-
-
1,000,000
Stock options of parent issued for compensation - related party
-
-
-
85,250
338,639
Stock of parent issue to officer for salary - related party
-
-
-
123,337
173,337
Other
-
20,560
20,560
5,973
26,533
Changes in operating assets and liabilities
(Increase) decrease in deferred development costs - related party
-
10,000
10,000
100,900
-
Interest accrued on notes payable
6,600
5,984
11,969
4,611
23,180
Increase in accounts payable and accrued liabilities
81,869
120,001
230,438
181,798
519,546
Net cash used by operating activities
(78,871
)
-
-
(117,495
)
(363,778
)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
-
-
-
-
(39,272
)
Net cash used by investing activities
-
-
-
-
(39,272
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock
75,040
-
-
-
75,040
Payment of deferred offering costs
-
-
-
-
(12,500
)
Proceeds from royalty interests
-
-
-
-
271,250
Proceeds from issuances of notes payable
25,000
-
-
115,400
140,400
Related party advances
-
-
-
-
(49,828
)
Net cash provided by financing activities
100,040
-
-
115,400
424,362
Net increase (decrease) in cash
21,169
-
-
(2,095
)
21,312
Cash and equivalents, beginning of period
143
143
143
2,238
-
Cash and equivalents, end of period
$
21,312
$
143
$
143
$
143
$
21,312
Supplemental cash flow information:
Significant non-cash investing and financing activities:
Common stock issued to parent for technology rights - related party
$
-
$
-
$
-
$
-
$
24,300
Common stock issued for services
$
-
$
-
$
-
$
450
$
450
Preferred stock issued for services
$
-
$
-
$
-
$
-
$
3
Subscription receivable
$
-
$
-
$
-
$
-
$
13,750
Beneficial conversion feature
$
-
$
-
$
-
$
41,608
$
41,608
Common stock issued for subsidiary interest
$
-
$
595
$
595
$
-
$
-
Acquisition of subsidiary interest
$
-
$
198,210
$
198,210
$
-
$
198,805
Anti-dilution shares
$
1,485
$
198,210
$
198,210
$
-
$
1,485
F-
6
ARRAYIT DIAGNOSTICS, INC.
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2012 (unaudited) and December
31, 2011
NOTE 1 – DESCRIPTION OF BUSINESS AND GOING CONCERN
Arrayit Diagnostics, Inc. (the "Company") develops
medical tests and markets these tests to the medical community. The Company was incorporated on June 2, 2009 under the laws of
the State of Nevada. Arrayit Corporation is its controlling parent, holding 61% of the issued, outstanding and voting shares.
On December 12, 2011, Arrayit Corporation signed an Agreement
and Plan of Distribution with its subsidiary, Arrayit Diagnostics, Inc., whereby 19,350,000 shares of common stock of Arrayit Diagnostics
owned by Arrayit Corporation will be distributed ratably to the shareholders of Arrayit Corporation on the record date which will
be upon successful completion of the Form S-1 registration statement by Arrayit Diagnostics, Inc.
Going Concern
The accompanying consolidated financial statements of the Company
were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. The Company has incurred significant net losses and negative cash flows from operations since inception.
At June 30, 2012, December 31, 2011 and 2010, the Company had accumulated deficits of $2,462,921, $1,289,036 and $997,666, respectively.
The Company currently concentrates its resources on developing clinical protein biomarker diagnostic products and services, and
it does not expect to generate substantial revenue until certain diagnostic tests are cleared by the United States Food and Drug
Administration and commercialized. Management believes that current available resources will not be sufficient to fund the Company's
planned expenditures over the next twelve months. The Company's ability to continue to meet its obligations and to achieve
its business objectives is dependent upon, among other things, raising additional capital or generating sufficient revenue in excess
of costs. At such time as the Company requires additional funding, the Company will seek to raise such additional funding from
various possible sources, including the public equity market, private financings, sales of assets, collaborative arrangements and
debt. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity,
stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders
of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject
to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through
arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain technologies
or products that it might otherwise seek to retain. There can be no assurance that the Company will be able to raise additional
funds, or raise them on acceptable terms. If the Company is unable to obtain financing on acceptable terms, it may be unable to
execute its business plan, the Company could be required to delay or reduce the scope of its operations, and the Company may not
be able to pay off its obligations, if and when they come due. These consolidated financial statements do not include any adjustments
relating to the recoverability or classification of recorded assets and liabilities or other adjustments that may be necessary
should the Company not be able to continue as a going concern.
The Company's inability to operate profitably and to generate
cash flows consistently from operations and its reliance on external funding either from loans or from equity, raise substantial
doubt about the Company's ability to continue as a going concern.
F-
7
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Through May 23, 2011, Consolidated Financial Statements of the
Company include the following majority-owned subsidiaries for all or a portion of the periods indicated, each of which has been
consolidated since the date the Company acquired majority-voting control (collectively, the "Consolidated Subsidiaries"):
Date of
Incorporation
Business of Entity
Ownership
Parent:
Arrayit Diagnostics, Inc.
June 2, 2009
Develops medical tests and through its partially owned subsidiaries markets these tests to the medical community. incorporating the technology and equipment developed by Arrayit Corporation
78.2% owned by Arrayit Corporation
Subsidiary:
Arrayit Diagnostics (Ovarian), Inc.
June 16, 2009
Markets a test for Ovarian Cancer incorporating the technology and equipment developed by Arrayit Corporation
80% owned by Arrayit Diagnostics, Inc.
Arrayit Diagnostics (Parkinson), Inc.
October 15, 2009
Markets a test for Parkinson's Disease incorporating the technology and equipment developed by Arrayit Corporation
80% owned by Arrayit Diagnostics, Inc.
F-
8
On May 23, 2011, the Company acquired the outstanding 20% non-controlling
interest in Arrayit Diagnostics (Ovarian), Inc., recognizing no gain or loss on the transaction. Arrayit Diagnostics (Ovarian),
Inc. was then collapsed into the Company.
Also on May 23, 2011, the Company acquired the outstanding 20%
non-controlling interest in Arrayit Diagnostics (Parkinson), Inc., also recognizing no gain or loss on the transaction, and distributed
the now 100% owned subsidiary directly to Arrayit Corporation. As part of the exchange, Parkinson's name was changed to Arrayit
Scientific Solutions, Inc.
In connection with these May 23, 2011 transactions, amounts
that were previously presented as non-controlling interests were recorded as additional paid-in capital as of December 31, 2011.
Subsequent to the year ended December 31, 2011, 595,000 shares of Arrayit Diagnostics, Inc. stock were issued as consideration
for the non-controlling interests.
On December 12, 2011, Arrayit Corporation signed an Agreement
and Plan of Distribution with its subsidiary, Arrayit Diagnostics, Inc., whereby 19,350,000 shares of common stock of Arrayit Diagnostics,
Inc. (78.2% of the total outstanding) owned by Arrayit Corporation will be distributed ratably to the shareholders of Arrayit Corporation
on the record date which will be upon successful completion of the Form S-1 registration statement by Arrayit Diagnostics, Inc.
Financial Reporting:
The Company prepares its financial statements
in conformity with accounting principles generally accepted in the United States of America. Revenues and expenses are reported
on the accrual basis, which means that income is recognized as it is earned and expenses are recognized as they are incurred.
Management acknowledges that it is solely responsible for adopting
sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.
The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are
valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the
respective periods being presented.
Development Stage Company:
The Company is in the development stage in accordance with the
Accounting and Reporting by Development Stage Enterprises Topic of the Financial Accounting Standards Board's Accounting
Standards Codification (FASB ASC). The Company has not generated any revenues since inception.
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 revenues and
expenses during the reporting period. While the Company believes that such estimates are fair when considered in conjunction with
the financial statements taken as a whole, the actual amounts of such estimates, when known, will vary from these estimates. If
actual results significantly differ from the Company's estimates, the Company's financial condition and results of
operations could be materially impacted. The Company's significant estimates include those related to stock compensation
and awards.
F-
9
Cash and Cash Equivalents:
The Company considers all highly liquid
securities with original maturities of three months or less when acquired, to be cash equivalents.
Fixed Assets
Fixed assets consists of a microarray scanner purchased from
Arrayit Corporation for $39,272 in 2009. Fixed assets are being recorded at cost less accumulated depreciation. Depreciation and
amortization on property and equipment are determined using the straight-line method over the three year estimated useful life
of the asset.
Income Taxes:
The Company accounts for income taxes in accordance with FASB
ASC 740, Income Taxes.  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 
A valuation allowance is recorded and deducted from deferred tax assets when the deferred tax assets are not expected to be realized
based on currently available evidence.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Fair Value Measurements:
U.S.
GAAP
for fair value measurements establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure
fair value into three levels. The fair value hierarchy gives the highest priority to quoted market prices (unadjusted) in active
markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 inputs
are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly
or indirectly. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical
assets or liabilities and the lowest priority to unobservable inputs.
At June 30, 2012, the Company has no instruments
that require additional disclosure. The carrying amounts of the Company's short-term financial instruments, including cash
and equivalents and accounts payable approximate fair value because of the short period to maturity for these instruments.
Revenue Recognition:
Overview
The Company will recognize revenue when persuasive evidence
of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is reasonably assured. In
instances where final acceptance of the product or system is required, revenue is deferred until all the acceptance criteria have
been met.
F-
10
Product Sales
Product sales will include sales of probe arrays, reagents and
related instrumentation. Probe array, reagent and instrumentation revenues are recognized when earned, which is generally upon
shipment and transfer of title to the customer and fulfilment of any significant post-delivery obligations. Accruals are provided
for anticipated warranty expenses at the time the associated revenue is recognized.
Services
Services revenue will be comprised of equipment service revenue;
revenue from custom probe array design fees; and scientific services revenue, which includes associated consumables.
Diagnostic Revenue
Revenue from medical testing and scientific services will be
recognized upon shipment of the reported results.
Other Income
The Company recognizes interest income as earned.
Accounting for Uncertainty in Income Taxes:
The FASB has issued guidance on Accounting
for Uncertainty in Income Taxes, FASB ASC 740, Income Taxes.  Management has concluded that the Company has taken no uncertain
tax positions that require adjustment to the financial statements to comply with the provisions of this guidance.
Non-Controlling Interest:
The Company accounted for the non-controlling interest in its
two subsidiaries, prior to May 23, 2011, under FASB ASC 810-10-45-16, Non-controlling Interest in a Subsidiary. This standard defines
a non-controlling interest, previously called a minority interest, as the portion of equity in a subsidiary not attributable, directly
or indirectly, to a parent. The standard requires, among other items, that a non-controlling interest be included in the consolidated
statement of financial position within equity separate from the parent's equity; consolidated net income to be reported at amounts
inclusive of both the parent's and non-controlling interest's shares and, separately, the amounts of consolidated net income
attributable to the parent and non-controlling interest all on the consolidated statement of operations; and if a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former subsidiary be measured at fair value and a gain or
loss be recognized in net income based on such fair value. Additionally, the standard defines a non-controlling interest as a financial
instrument issued by a subsidiary that is classified as equity in the subsidiary's financial statements. A financial instrument
issued by a subsidiary that is classified as a liability in the subsidiary's financial statements based on the guidance in other
standards is not a controlling interest because it is not an ownership interest.
Royalty interests that entitle the holder to participate in
future earnings and are not repayable are classified as non-controlling interests.
Deferred Offering Costs:
The Company may incur legal and accounting fees, as well as
due diligence fees related to the preparation of any pending financing.  Such costs may initially be deferred until the
offering is completed, at which time they will be recorded as a reduction of gross proceeds from the offering, or expensed to operations
if the offering is unsuccessful. Other start-up costs are expensed as incurred.
F-
11
Recently Issued Accounting Pronouncements:
In June 2011, the FASB issued Accounting Standards Update ("ASU")
No. 2011-05, Presentation of Comprehensive Income, which eliminates the current option to present components of other comprehensive
income as part of the statements of changes in stockholder's equity and requires entities to present comprehensive income
in either a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do
not change the components of other comprehensive income. The new disclosure requirements was effective for the six months ended
June 30, 2012 and had no impact on the financial statements.
The Company continually assesses any new accounting pronouncements
to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company's
financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and
assures that there are proper controls in place to ascertain that the Company's financials properly reflect the change.
NOTE 3 – OTHER ASSETS, NET
Pursuant to a, perpetual, non-exclusive, "Technology Assignment
Agreement" entered into as of July 18, 2009 between Arrayit Diagnostics, Inc. (the Company) and Arrayit Corporation (the
Parent), the Parent assigned to the Company an exclusive, worldwide interest in all trade secrets and protocols required for the
production and use of the Ovarian Cancer biomarker panel for the early stage (pre-symptomatic) screen and detection of Ovarian
Cancer and monitoring of early and late state Ovarian Cancer in human Patients. The Assignment is carried at a nominal value of
$1.00.
NOTE 4 – DEFERRED DEVELOPMENT COSTS
Deferred development costs included $110,900 paid to the Company's
parent, Arrayit Corporation, in 2009 to complete the development of the Ovarian Cancer tests. The Company evaluated the progress
to date and determined that the development is complete, and expensed the deferred development costs to research and development
expenditures. Amounts expensed to research and development for deferred development costs totalled $10,000 in 2011 and $100,900
in 2010.
F-
12
NOTE 5 – NOTES PAYABLE
Notes payable consisted of the following at the following dates:
June 30,
2012
December 31,
2011
December 31,
2010
(Unaudited)
NOTES PAYABLE - ARRAYIT DIAGNOSTICS, INC.
Note payable to WEM Equity Capital, with interest at 10%, due January 22, 2011 and now past due, secured by 1,000,000 shares  of Company's common stock.  The terms also called for Arrayit Corporation to issue 300,000 warrants  for shares of common stock of Arrayit Corporation  at $0.22 per share, expires February 15, 2013.
$
76,640
$
72,990
$
66,371
LESS: Unamortized loan fee and discount in connection with the obtaining of the loan
-
-
(8,916
)
Note payable to Juggernaut Financial Group, LLC, interest at 10%, due August 10, 2010 and is now past due, secured by 200,000 shares of the Company's common stock, pledged by Company shareholders.
61,939
58,990
53,640
Note payable to Chief Executive Officer of the Company, annual interest of 10%, due on demand.
25,000
-
-
Total Notes Payable
$
163,579
$
131,980
$
111,095
NOTE 6 – ROYALTY OBLIGATIONS
(a)
Advisory Agreement
Under paragraph 2 (b) of an advisory agreement dated August
11, 2009 between Arrayit Diagnostics, Inc. and a limited liability partnership, controlled by parties that were also shareholders
in Arrayit Corporation, there was a contractual obligation to pay a Royalty of Twenty percent (20%) of the net sales of Arrayit
Diagnostics, Inc., and its subsidiaries. "Net Sales" means the gross selling price by the Company and sub-licensees
for the sale of any product or products, less trade discounts allowed, credits for claims or allowances, commissions, refunds,
returns and recalls.
The term of the advisory agreement was five years. The royalties
and ownership provisions were in perpetuity.
The entitlement to royalties under the advisory agreement was
decreased by obligation to pay royalties to other advisors and investors. With respect to the revenue generated by Arrayit Diagnostics
(Ovarian), Inc. as described in (b) below the Company was obligated to pay a 0.95% royalty to purchasers of royalty interests,
thereby reducing the Company's obligation to the advisor by a similar amount, resulting in a net royalty obligation to the
advisor of 19.05% on revenue generated by the Ovarian subsidiary.
During the periods ended June 30, 2012 (unaudited), December
31, 2011 and 2010 there were no revenues earned and hence no obligation to pay any royalties.
F-
13
On March 5, 2012, the 20% royalty interests were exchanged for
385,000 common shares of Arrayit Diagnostics, Inc.
(b) Royalty Interests – ARRAYIT DIAGNOSTICS (OVARIAN),
INC.
Third party investors, who were not related parties with the
Parent Company, purchased royalty interests in the amount of $285,000 in Arrayit Diagnostics (Ovarian), Inc., in return for a zero
decimal nine five percent (0.95%) royalty on net sales of the Ovarian test. Amounts received with respect to these royalty interests
were shown as Non-Controlling Interests on the Balance Sheet, as there are no terms of repayment of the royalty interests.
During the periods ended June 30, 2012 (unaudited), December
31, 2011 and 2010 there were no revenues earned and hence no obligation to pay any royalties.
On March 5, 2012, the 0.95% royalty interests were exchanged
for 210,000 common shares of Arrayit Diagnostics, Inc.
(c) Wayne State University – ARRAYIT
DIAGNOSTICS (OVARIAN), INC.
Under terms of a biomarker license agreement between Wayne State
University ("WSU") and the Company, effective December 7, 2009, the Company is obligated to pay WSU royalties of 5%
of net sales and a minimum yearly royalty starting in 2011. The royalty expense for the period ended June 30, 2012 (unaudited)
was $25,000 and $50,000 for the year ended December 31, 2011. The following is a schedule of the future minimum royalty payments
for the next five years that are expected to be paid under the license agreement as of December 31, 2011:
2012
$
50,000
2013
150,000
2014
150,000
2015
300,000
2016
300,000
$
950,000
The license agreement can be terminated by either party. The
Company has the right to terminate the license agreement for any reason with 120 days' notice to WSU.
(d) The Parkinson's Institute –
ARRAYIT DIAGNOSTICS (PARKINSON'S), INC.
Pursuant to an agreement dated February 9, 2009 between TeleChem
International (doing business as Arrayit), a wholly owned subsidiary of Arrayit Corporation and The Parkinson's Institute, a California
Corporation, Arrayit Diagnostics (Parkinson's), Inc. was obligated to make payments of 5% of gross earnings generated from
Research derived from the biological specimens from Parkinson's disease patients and control patients provided by the Parkinson's
Institute.
There were no revenues generated from June 2, 2009 (inception)
through June 30, 2012 and hence not obligated to pay any amounts to the Parkinson's Institute.
F-
14
On May 23, 2011, the Company acquired the outstanding 20% non-controlling
interest in Arrayit Diagnostics (Parkinson), Inc., also recognizing no gain or loss on the transaction, and distributed the then
100% owned subsidiary directly to Arrayit Corporation.
NOTE 7 – SHARE CAPITAL
The Company is authorized to issue a total of 500,000,000 shares
of stock, including 480,000,000 shares of common stock, par value $0.001 per share, and 20,000,000 shares of preferred stock, par
value $0.001 per share.
In 2009, the Company issued 3,000 series B preferred shares
to its President and CEO. The 3,000 issued and outstanding shares of series B preferred stock, voting as a class, have the number
of votes equal to twice the number of votes of all outstanding shares of capital stock such that the holders of outstanding shares
of Series B preferred stock shall always constitute a two-thirds of the voting rights of the corporation.
In June 2009, the Company issued 1,000 common shares to its
Parent as compensation for the Technology Assignment, more fully described in Note 3.
In June 2009, the Company issued 250 common shares pursuant
to paragraph 2 (a) of an advisory agreement dated August 11, 2009 between Arrayit Diagnostics, Inc. (the Company's parent
company) and a limited liability partnership, not affiliated with the company or its parent. This advisory agreement created a
contractual obligation to issue Twenty percent (20%) of the fully diluted equity (the "Equity") of the Arrayit Diagnostics,
Inc., and its subsidiaries, which includes the Company, which shall be fully earned and non-refundable in consideration of its
execution of the Agreement. On July 15, 2010, the Company issued an additional 25 common shares to the limited liability partnership.
On July 15, 2010, the Company issued 100 common shares to its
President and CEO.
On July 15, 2010, the Company issued a stock dividend which
included a 6000:1 common stock split. On May 23, 2011, the Company issued another stock dividend which included an additional
3:1 common stock split. Additionally, 500,000 shares were surrendered on May 23, 2011. These transactions have been accounted
for retroactively within the financial statements.
On May 15, 2012 the Company issued 1,484,800 common shares
to Recap Marketing and Consulting, LLP (Recap), in compliance with an anti-dilution clause contained in the 2009 consulting agreement
with Recap. This clause was terminated on June 30, 2012.
As a result of these transactions, there were 3,000 preferred
shares outstanding and 32,205,000 common shares outstanding at June 30, 2012.
NOTE 8 – STOCK-BASED COMPENSATION
The Company follows FASB ASC 718, "Compensation-Stock
Compensation" and ASC 505, "Equity", to account for its stock options and similar equity instruments issued.
 Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the
fair value at the grant date, and expensed over the expected vesting period. ASC 718 and ASC 505 require excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.
Operations for the six months ended June 30, 2012 (unaudited)
included $1,000,000 of stock based compensation arising from the granting of 5,000,000 shares of common stock. Operations for
the year ended December 31, 2011 and 2010 includes $450 in compensation arising from the granting of 450,000 shares of common
stock.
F-
15
Operations for the year ended December 31, 2010 and for the
period from June 2, 2009 (inception) to June 30, 2012 include $208,587 and $511,976, respectively, in stock and stock option based
compensation expense relating to stock and options issued by Arrayit Corporation, the Company's parent. These amounts were
recorded at fair value based upon the trading price of the parent company's stock on the date of grant and Black-Scholes
option pricing models as determined by the parent.
NOTE 9 – RELATED PARTY TRANSACTIONS
The amounts due of $505,537 to Arrayit
Corporation and its subsidiaries are non-interest bearing, unsecured, and have no specific terms of repayment. The amounts arose
from stock compensation to the Company's President satisfied by share issuances and options of Arrayit Corporation.
Fixed assets with a cost of $39,272 were
purchased from Arrayit Corporation at third party arms length pricing, less accumulated depreciation.
Development costs of $110,900 were paid to Arrayit Corporation
to further develop the pre-symptomatic Ovarian Cancer test. The Company evaluated the progress to date and determined that the
development is complete, and expensed the deferred development costs to research and development expenditures.
Premises are provided at no cost to the
Company by a stockholder.
NOTE 10 – INCOME TAXES
At June 30, 2012, December 31, 2011 and 2010, the Company had
net operating loss (NOL) carry-forwards available to offset future taxable income of approximately $2,462,921, $1,289,036 and 997,666,
respectively. The utilization of the NOL carry-forwards is dependent upon the tax laws in effect at the time the NOL carry-forwards
can be utilized. A valuation allowance of approximately $985,000 at June 30, 2012, $515,000 at December 31, 2011 and $399,000 at
December 31, 2010 has been recorded against the deferred tax asset (tax benefit of the NOL) due to the uncertainty surrounding
its realization caused by the Company's recurring losses. The valuation allowance changed by approximately $470,000, $117,000
and $248,000 during 2012, 2011 and 2010, respectively. The NOL carry-forwards will expire in 2019.
NOTE 11 – SUBSEQUENT EVENTS
Management evaluated subsequent events through August 20, 2012,
the date the financial statements were available to be issued.
F-
16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution
*
The expenses relating to the registration
of the securities will be borne by registrant. Such expenses are estimated to be as follows: The following table sets forth an
itemized statement of all cash expenses in connection with the issuance and distribution of the securities being registered:
SEC registration fee
$
4,111
Blue sky fees and expenses*
14,500
Printing and related expenses*
1,500
Legal fees
42,500
Accounting fees and expenses
20,000
Transfer Agent fees*
3,000
Miscellaneous*
1,500
TOTAL
$
87,111
*Estimated.
Item 14. Indemnification of Directors
and Officers
Pursuant to the provisions of the Nevada
Revised Statutes 78.7502 to 78.752 (the "NRS"), we must indemnify directors and officers for any expenses, including
attorneys' fees, actually and reasonably incurred by any director or officer in connection with any actions or proceedings,
whether civil, criminal, administrative, or investigative, brought against such director or officer because of his or her status
as a director or officer, to the extent that the director or officer has been successful on the merits or otherwise in defense
of the action or proceeding. The NRS permits a corporation to indemnify a director or officer, even in the absence of an agreement
to do so, for expenses actually and reasonably incurred in connection with any action or proceeding (i) if such officer or director
(a) acted in good faith and in a manner in which he or she reasonably believed to be in, or not opposed to, the best interests
of the corporation, (b) is not liable pursuant to Section 78.138 of the NRS (fiduciary duties), and (c) with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, or (ii) with respect to an action by
or in the right of the corporation, if such director or officer (a) acted in good faith and in a manner which he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation, and (b) is not liable pursuant to Section 8.138 of
the NRS (fiduciary duties), except that indemnification may not be made for any claim, issue or matter as to which a person has
been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation
or for amounts paid in settlement to the corporation, unless and only to the extent that the court determines upon application
that the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
The NRS also prohibits indemnification of
a director or officer if a final adjudication establishes that the director's or officer's acts or omissions involved
intentional misconduct, fraud, or a knowing violation of the law and were material to the cause of action. Despite the foregoing
limitations on indemnification, the NRS may permit a director or officer to apply to the court for approval of indemnification
even if the director or officer is adjudged to have committed intentional misconduct, fraud, or a knowing violation of the law.
The NRS further provides that a corporation may purchase and maintain insurance for directors and officers against liabilities
incurred while acting in such capacities regardless of whether the corporation has the authority to indemnify such persons under
the NRS. Any discretionary indemnification under the NRS must be authorized upon a determination that such indemnification is proper:
(i) by the stockholders, (ii) by a majority of a quorum of disinterested directors, or (iii) by independent legal counsel
in a written opinion authorized by a majority vote of a quorum of directors consisting of disinterested directors or by independent
legal counsel in a written opinion if a quorum of disinterested directors cannot be obtained.
II-
1
Article XII of the company's articles
of incorporation provide for the indemnification of a present or former director or officer, or person who is or was serving at
the request of the company as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise
(including an employee benefit plan) to the fullest extent permitted by Nevada law. Such indemnification shall include expenses,
including attorney's fees, judgments, fines, and amounts paid in settlement actually incurred by him in any threatened, pending,
or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative because such individual is or
was a director or officer. Additionally, the company will advance any and all such expenses to the individual upon request.
The company's bylaws are silent with
respect to indemnification.
The company has entered into an indemnification
agreement with each of its directors and officers. The agreement provides that the company will indemnify, defend and hold harmless
the director and/or officer to the fullest extent permitted by Nevada law.
The company also maintains insurance for
the benefit of its directors and officers against liability in their respective capacities as directors and officers. The directors
and officers are not required to pay any premium in respect of this insurance. The policy contains various industry exclusions
and no claims have been made thereunder to date.
See page 49 for a description of the SEC's
position regarding such indemnification provisions.
Item 15.
Recent Sales of Unregistered Securities
During the three years preceding the filing
of this registration statement, we issued and sold the following securities that were not registered under the Securities Act:
On January 4, 2012, we issued for $10,000
cash, 50,000 shares of common stock to Bettina Mackenbach in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.
On January 4, 2012, we issued for $10,000
cash, 50,000 shares of common stock to Jukka Tolonen in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.
On January 9, 2012, we issued for $25,000
cash, 125,000 shares of common stock to Helena Wahala in reliance upon the exemption from registration in Regulation S and Rule
506 of Regulation D under the Securities Act.
On January 18, 2012, we issued 1,000,000
shares to Issuers Capital Advisors in consideration for their services as investment advisors in reliance upon the exemption from
registration in Regulation S and Rule 506 of Regulation D under the Securities Act.
On January 18, 2012, we issued 1,000,000
shares to Dr. Eric Zuckerman in consideration for his services as a consultant to form and chair a scientific advisory board in
reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities Act.
On January 18, 2012, we issued 500,000 shares
to Gregg Linn in consideration for his services as a consultant to assist in the accounting setup and compliance with SEC regulations
in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities Act.
On January 18, 2012, we issued 500,000 shares
to Steven Scott in consideration for his services as a consultant to assist in the formation of the public entity and compliance
with SEC regulations in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities
Act.
On February 1, 2012, we issued 1,000,000
shares to Tamarin Fuller in consideration for her services in public relations and the development of the corporate structure of
officers and directors in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the
Securities Act.
On February 1, 2012, we issued 1,000,000
shares to John Howell in consideration for his services as CEO, President and Chairman of the Board in the form of an employment
agreement for a 3 year period. This agreement replaces and extends the original employment agreement that was set to expire in
August of 2012. These shares were issued in reliance upon the exemption from registration in Regulation S and Rule 506 of Regulation
D under the Securities Act.
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On March 5, 2012, we issued a total of 210,000
shares to the following persons in the following amounts in consideration of the royalty previously issued by Arrayit Diagnostics
(Ovarian), Inc. At the time the royalty was issued, Arrayit Diagnostics (Ovarian), Inc. was a wholly owned subsidiary of Arrayit
Diagnostics, Inc. However, effective May 23, 2011, Arrayit Diagnostics (Ovarian), Inc. was merged with and into Arrayit Diagnostics,
Inc.:
John R. Lester
25,000
John Wiesner
50,000
Timothy Phelan
50,000
Jerry W. Neel Jr.
50,000
Dr. Sylvin Mayford Griffin
10,000
Palmer and Talley Melton
25,000
TOTAL
210,000
The shares were issued in reliance upon the exemptions from
registration in Section 3(a)(9) and Rule 506 of Regulation D under the Securities Act.
On March 5, 2012, we issued 385,000 shares
to Recap Marketing and Consulting, LLP in consideration for the 20% royalty they had in Arrayit Diagnostics, Inc. and the sale
of the OvaDx pre-symptomatic ovarian cancer diagnostic test. This payment cancels any and all royalty interest that Recap held
in Arrayit Diagnostics and any of its subsidiaries. On May 23, 2011 Arrayit Diagnostics (Ovarian), Inc., a subsidiary of Arrayit
Diagnostics, was merged into Arrayit Diagnostics. Arrayit Diagnostics (Parkinsons'), Inc. was removed as a subsidiary of
Arrayit Diagnostics and renamed Arrayit Scientific Solutions, Inc. These shares were issued in reliance upon the exemption from
registration in Regulation S and Rule 506 of Regulation D under the Securities Act.
On April 2, 2012, we issued for $10,000 cash,
50,000 shares of common stock to Craig Musick in reliance upon the exemption from registration in Rule 506 of Regulation D under
the Securities Act.
On April 17, 2012, we issued for $5,000 cash,
25,000 shares of common stock to Bettina Mackenbach in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.
On May 1, 2012, we issued for $10,000 cash,
50,000 shares of common stock to Craig Musick in reliance upon the exemption from registration in Rule 506 of Regulation D under
the Securities Act.
On May 15, 2012 we issued 1,484,800 shares
to Recap Marketing and Consulting, LLP, in compliance with the anti-dilution clause contained in the original consulting agreement
with that entity, as a result of the issuance of additional shares to investors and consultants. These shares were issued in reliance
upon the exemption from registration in Regulation S and Rule 506 of Regulation D under the Securities Act.
On June 25, 2012, we issued for $5,000 cash,
25,000 shares of common stock to Gerald Bridge in reliance upon the exemption from registration in Rule 506 of Regulation D under
the Securities Act.
On September 18, 2012, we issued for $6,000
cash, 30,000 shares of common stock to Michael Montante in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.
On October 15, 2012 we issued for $50,000
cash, 200,000 shares of common stock to Brierpatch, LTD in reliance upon the exemption from registration in Rule 506 of Regulation
D under the Securities Act.
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Item 16.
Exhibits and Financial Statement
Schedules
(a)(1) Index to Financial Statements —
Included in prospectus
(a)(2)
Included Separately from prospectus: Consent
        of Independent Registered Public Accounting Firm.
(See Exhibits 23.2 and 23.3 below.)
Other than the Financial Data Schedule,
no schedules are included for the reason that all required information is contained in the financial statements included in the
prospectus.
(b)
Financial Statement Schedules.
Schedules not listed above have been omitted because the information to be set forth therein is not material, not applicable or
is shown in the financial statements or notes thereto.
(c) Exhibits:
2.1
Agreement and Plan of Distribution between the Registrant and Arrayit Corporation (incorporated herein by reference to Item 9.01(b) to the Form 8-K  filed under file no. 33-119586, December 14, 2011.
3.1
Amended and Restated Articles of Incorporation of Registrant
3.2
Bylaws of Registrant
4.1
Form of Common Stock Certificate of Registrant
4.2
Form of Preferred Stock Certificate
4.3
Plan and Agreement of Merger, dated May 23, 2011, merging Arrayit Diagnostics (Ovarian), Inc. with and into Arrayit Diagnostics, Inc.
5.1
Opinion of Counsel as to the Legality of the Shares Being Spun Off
10.1
Technology Assignment Agreement dated as of July 18, 2009 between Arrayit Diagnostics, Inc. and Arrayit Corporation.
10.2
United States Patent No.6,101,946 dated August 15, 2000 assigned to TeleChem International Inc. (now a wholly owned subsidiary of Arrayit Corporation)
10.3
Exclusive Services Agreement effective September 10, 2009  between Arrayit Diagnostics, Inc. and Arrayit Corporation
10.4
2009 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan
10.5
Advisory Agreement, effective January 18, 2012 between Arrayit Diagnostics, Inc. and Dr. Eric Zuckerman
10.6
Advisory Agreement, effective January 18, 2012 between Arrayit Diagnostics, Inc. and Gregg Linn.
10.7
Consulting Agreement, effective May 27, 2010 between Arrayit Diagnostics, Inc. and Issuers Capital Advisors LLC.
10.8
Employment Agreement, dated as of August 15, 2009 between Arrayit Diagnostics and John Howell
10.9
Employment Agreement, dated as of  February 1, 2012 between Arrayit Diagnostics, Inc. and John Howell
10.10
Investment Advisory Agreement, effective August 11, 2009 between Arrayit Diagnostics, Inc. Recap Marketing and Consulting, LLP.
10.11
Advisory Agreement, effective January 18, 2012 between Arrayit Diagnostics, Inc. and Steven Scott
10.12
License Agreement , effective December 7, 2009, between Arrayit Diagnostics, Inc. and Wayne State University
10.13
Sponsored Research Agreement, effective December 7, 2009, between Arrayit Diagnostics, Inc. and Wayne State University.
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10.14
Royalty Conversion Agreement, dated as of March 5, 2012, among Arrayit Diagnostics, Inc., Arrayit Corporation and Ovarian Cancer Testing, LLP
10.15
Royalty Purchase Agreement, dated as of March 1, 2012, among Arrayit Diagnostics, Inc., and Recap Marketing and Consulting LLP
10.16     **
Transfer Agent and Registrar Agreement between Arrayit Diagnostics, Inc., and VStock Transfer, LLC
10.17
Merger of Arrayit Diagnostics (Ovarian), Inc. into Arrayit Diagnostics, Inc. dated as of  May 23, 2011
10.18
Form of Stock Options Agreement
10.19
Form of Warrant Agreement between Arrayit Diagnostics, Inc. and Brad Fleming
10.20
Form of Indemnification Agreement between Arrayit Diagnostics, Inc. and John Howell
14.1
Code of Ethics
23.1      *
Consent of Sonfield & Sonfield (Included in Exhibit 5.1)
23.2      *
Consent of  Moss, Krusick & Associates, LLC , Independent Public Accounting Firm
* filed herewith
** to be filed by amendment
Item 17.
Undertakings
The undersigned registrant hereby undertakes
to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to each purchaser.
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, the registrant has 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, the registrant will,
unless in the opinion of its 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.
The undersigned registrant hereby undertakes
that:
(1) For purposes of determining any liability
under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any
liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
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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 Redmond, Oregon, on the 9th day of November 2012.
Pursuant to the requirements of the Securities
Act of 1933, this Registrant's Form S-1 Registration Statement has been signed below by the following persons in their respective
capacity as officer and/or director of the Registrant on the date indicated.
Arrayit Diagnostics, Inc.
/s/ John Howell
John Howell, Chairman, President, CEO, Principal Executive Officer as well as Principal Financial and Accounting Officer
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