Attached files

file filename
EX-31.1 - SECTION 302 CERTIFICATION - BANGI INC.exhibit31-1.htm
EX-32.1 - SECTION 906 CERTIFICATION - BANGI INC.exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2010

or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File Number 000-52057

CYPLASIN BIOMEDICAL LTD.
(Exact name of registrant as specified in its charter)

Nevada 47-0930829
               (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
   
9650 – 20 Avenue, Edmonton, Alberta, Canada T6N 1G1
(Address of principal executive offices) (Zip Code)

780.469.2975
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] YES     [   ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[   ] YES     [   ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]   Accelerated filer                   [   ]
Non-accelerated filer   [   ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
[   ] YES     [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[   ] YES    [   ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 14,949,053 common shares issued and outstanding as of December 17, 2010

1


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim financial statements for the three and nine month periods ended October 31, 2010 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

2


CYPLASIN BIOMEDICAL, LTD.
(A Development Stage Company)
October 31, 2010
(Unaudited)


 

  Index
   
Consolidated Balance Sheets F–1
   
Consolidated Statements of Operations F–2
   
Consolidated Statements of Cash Flows F–3
   
Notes to Consolidated Financial Statements F–4

3


CYPLASIN BIOMEDICAL, LTD.
(A Development Stage Company)
Consolidated Balance Sheets

    October 31,     January 31,  
    2010     2010  
ASSETS   $     $  
    (Unaudited)     (Audited)  
             
Current Assets            
   Cash   81,540     4,918  
   Receivables   38,386     32,019  
   Prepaids (Note 4)       22,108  
Total Current Assets   119,926     59,045  
Account receivable (Note 2)       69,335  
Equipment, net   941     1,576  
Licenses (Note 3)   740,427     740,427  
Total Assets   861,294     870,383  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current Liabilities            
   Accounts payable and accrued liabilities (Note 3 and 5)   205,482     114,782  
   Due to related party (Note 7)   40,334      
   Loan payable (Note 5)   20,000     10,000  
Total Liabilities   265,816     124,782  
             
Contingency (Note 1)            
Commitments (Note 3, 4 and 5)            
Stockholders’ Equity            
   Common stock (Note 6)            
     Authorized: 100,000,000 shares of common stock, par value $0.001 
          and 100,000,000 shares of preferred stock, par value $0.001
       
     Issued and outstanding: 14,949,053 common shares 
          (January 31, 2010 – 4,104,200)
  14,949     4,104  
   Additional paid-in capital   2,829,085     1,638,211  
   Accumulated other comprehensive income   26,536     28,756  
   Obligation to issue shares (Note 3 and 4)   113,875     654,475  
   Subscriptions received (Note 6)   62,647     206,922  
   Deficit   (54,275 )   (54,275 )
   Deficit accumulated during the development stage   (2,397,339 )   (1,732,592 )
Total Stockholders’ Equity   595,478     745,601  
Total Liabilities and Stockholders’ Equity   861,294     870,383  

The accompanying notes are an integral part of these consolidated financial statements.

F-1


CYPLASIN BIOMEDICAL, LTD.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)

    Accumulated                          
    From                          
    February 15, 2007                          
    (Date of reporting                          
    as a development     Nine     Nine     Three     Three  
    stage company)     Months     Months     Months     Months  
    to     Ended     Ended     Ended     Ended  
    October 31,     October 31,     October 31,     October 31,     October 31,  
    2010     2010     2009     2010     2009  
     $       $           $      
Operating Expenses                              
                               
   General and administrative   1,126,285     494,421     139,344     87,121     83,682  
   Management fees (Note 7)   309,777     49,116     68,983     16,473     20,875  
   Research and development (Note 7)   939,501     49,116     68,983     16,473     20,875  
   Travel   15,953     1,141     215     46     84  
                               
Loss Before Other Items   (2,391,516 )   (593,794 )   (277,525 )   (120,112 )   (125,516 )
                               
Other Items                              
   Gain of sale of patent (Note 2)   70,025         70,645         70,645  
   Loss on settlement of debt (Note 6)   (4,894 )       (4,894 )       (4,894 )
   Write-off of patent (Note 4)   (1 )       (1 )       (1 )
   Write-off of accounts receivable (Note 2)   (70,953 )   (70,953 )            
Net Loss   (2,397,339 )   (664,747 )   (211,775 )   (120,113 )   (59,766 )
                               
Loss Per Share – Basic and Diluted         (0.08 )   (0.15 )   (0.01 )   (0.03 )
                               
Weighted Average Shares Outstanding – Basic and Diluted          8,859,289     1,459,152     11,845,433     2,382,943  

The accompanying notes are an integral part of these consolidated financial statements.

F-2


CYPLASIN BIOMEDICAL, LTD.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

    Accumulated From              
    February 15, 2007              
    (Date of reporting as     Nine     Nine  
    a development stage     Months     Months  
    company) To     Ended     Ended  
    October 31,     October 31,     October 31,  
    2010     2010     2009  
    $     $     $  
                   
                   
Cash Flows From Operating Activities                  
                   
   Net loss   (2,451,614 )   (664,747 )   (221,775 )
                   
       Adjustments to reconcile loss to net cash used in operating 
       activities:
           
                   
         Depreciation   1,968     635     410  
         Gain on sale of patent   (70,025 )       (70,645 )
         Foreign exchange on gain on sale of patent   790          
         Loss on settlement of debt   4,894         4,894  
         Accrued interest   1,718     1,718      
         Shares for consulting services   387,500     347,500     68,350  
         Obligation to issue shares for consulting services   28,875          
         Stock-based compensation   363,495         49,482  
         Write-off of patent   1         1  
         Write-off of accounts receivable   70,953     70,953      
         Foreign exchange on accounts receivable   (1,618 )   (1,618 )    
                   
   Changes in operating assets and liabilities:                  
                   
       Receivables   (38,386 )   (6,367 )   (14,840 )
       Prepaids           5,421  
       Accounts payable and accrued liabilities   89,418     (25,363 )   13,770  
       Due to related party   40,334     40,334        
                   
Net Cash Used in Operating Activities   (1,571,697 )   (236,955 )   (154,932 )
Cash Flows From Investing Activities                  
                   
   Acquisition of equipment   (2,909 )        
   Acquisition of patent   (100 )        
   Acquisition of license   (97,291 )        
                   
Net Cash Used in Investing Activities   (100,300 )        
                   
Cash Flows From Financing Activities                  
                   
   Proceeds from loan payable   20,000     10,000      
   Issuance of common stock   1,644,354     284,906     72,428  
   Subscriptions received   62,647     20,891     113,160  
                   
Net Cash Provided By Financing Activities   1,727,001     315,797     185,588  
                   
Effect of Exchange Rate Changes   26,536     (2,220 )   (4,153 )
                   
Increase in Cash   81,540     76,622     26,503  
                   
Cash– Beginning       4,918     25,953  
                   
Cash– Ending   81,540     81,540     52,456  
                   
Supplemental cash flow information (Note 8)  

The accompanying notes are an integral part of these consolidated financial statements.

F-3



1.

Basis of Presentation

   

Cyplasin Biomedical, Ltd. (the “Company”) was incorporated in the state of Nevada on November 25, 2004 and is a development stage company in the business of developing its licenses for patents pertaining to the technology utilized in the prevention and treatment of hepatitis C. The Company’s shares are quoted on the OTC-BB.

   

The Company is in the development stage and has not yet realized any revenues from its planned operations. These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern and the ability of the Company to emerge from the development stage are dependent upon its successful efforts to raise additional equity financing to continue operations and generate sustainable significant revenue. There is no guarantee that the Company will be able to raise adequate equity financings or generate profitable operations. These financial statements do not include any adjustment to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

   

Unaudited Interim Financial Statements

   

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the rules and regulations of the Securities and Exchange Commission. They may not include all information and footnotes required by US GAAP for complete financial statements. The consolidated interim unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-K as at January 31, 2010. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the period ended October 31, 2010, are not necessarily indicative of the results that may be expected for the year ending January 31, 2011.

   

Management has evaluated events occurred between the end of the fiscal quarter, October 31, 2010 to the date when the financial statements were issued.

   
2.

Patent

   

On April 10, 2007, the Company entered into an Asset Purchase Agreement with Bioxen Ltd., (“Bioxen”) a company indirectly owned by a former director of the Company, for the purchase of the rights, title and interest to certain intellectual property for $100. On August 12, 2009, the Company entered into another Asset Purchase Agreement whereby Bioxen purchased the rights, title and interest to the intellectual property from the Company. As consideration, Bioxen is obligated to pay the Company $69,335 (50,000 EUR) which was recorded as a receivable at January 31, 2010 and during the year ended January 31, 2010, the Company recorded a gain of $70,025 on the sale of the intellectual property, net of foreign exchange losses. During the quarter ended July 31, 2010, management determined the balance was uncollectible and wrote-off the receivable of $70,953, net of foreign exchange.

   

In addition, Bioxen will pay the Company a 0.5% royalty, calculated on all gross revenue of licensed products sold by Bioxen, to a maximum payment of $3,000,000. At October 31, 2010 and January 31, 2010, the Company has recorded $Nil in royalties receivable from Bioxen.

   
3.

Licenses

   

Effective December 29, 2009, the Company entered into an Asset Assignment Agreement with C-Virionics Corporation (“C-Virionics”) whereby the Company acquired certain licenses to patents used in the development of vaccination for prevention and treatment of hepatitis C. In consideration, the Company paid $97,291 in royalty and other costs on behalf of C-Virionics and accrued $17,536 in royalties payable during the year ended January 31, 2010. The Company is also obligated to issue 3,680,000 shares of common stock with a fair value of $625,600 which 3,180,000 shares of common stock with a fair value of $540,600 has been issued (Note 6), and $85,000 is remaining in obligation to issue shares at October 31, 2010 (January 31, 2010 – $625,600).

   

At October 31, 2010, the Company has recorded a royalty payable of $12,506 (January 31, 2010 - $17,536) in accounts payable and accrued liabilities.

F-4



4.

Commitments

     
a)

On January 1, 2009, the Company entered into a finder’s fee agreement with a third party consultant, whereby the consultant would introduce investment capital to the Company for a period of 1 year. The consultant will receive a fee of 15% of the funds raised. The Company also agrees that if one of more parties introduced to the Company by the consultant during the term of the finder’s fee agreement completes an investment within one year after the term of the agreement, the Company will pay the fees as stated above. At January 31, 2010, recorded in prepaids was $22,108 in finder’s fees, which was reallocated to common stock at October 31, 2010. During the nine months ended October 31, 2010, the Company accrued an additional $114,346, in finders’ fees which was allocated to common stock at October 31, 2010. The Company also issued the consultant 500,000 shares of common stock at a fair value of $50,000 as finders’ fees (Note 6).

     
b)

On July 14, 2009, the Company had entered into a service agreement with Moody Capital Solutions, Inc. (“Moody”) whereby Moody would serve as an investment banker and placement agency for the Company. The term of the agreement was until November 10, 2009 and Moody was entitled to receive $8,000 ($4,000 paid, $4,000 accrued); and issued 210,000 restricted shares of common stock with a fair value of $28,875 which have been recorded in obligation to issue shares. To October 31, 2010 and January 31, 2010, Moody had not assisted with any private placement and, therefore, all fees paid to Moody have been allocated to consulting fees which are recorded in general and administrative expenses.

     

Upon closing the placement of shares of common or preferred stock and any convertible or redeemable debt, Moody was entitled to receive 10% of the principal amount raised at each closing and 10% warrant coverage for any equity or sub-debt placed. The warrants will be exercisable at 10% above the offering or conversion price, have piggyback registration rights and exercisable for a period of 5 years. Should the Company be sold during the term of the agreement, Moody will receive a break-up fee of $100,000. The Company also agrees that if Moody or any affiliate with over 50% control by Moody introduces the Company, during the term of the agreement or within three years from the termination date, to equity or debt financing, the Company will pay the fees as stated above.

     
c)

On May 17, 2010, the Company entered into a Letter of Agreement (the “letter of Agreement”) with Minapharm Pharmaceuticals SAE (“Minapharm”) a company incorporated in Egypt. Minapharm is engaged in the development and commercialization of pharmaceutical products within Egypt.

     

Pursuant to the Letter of Agreement, the Company will grant Minapharm an exclusive product distribution agreement and a royalty bearing sub-license which will give Minapharm the right to manufacture, market, sell or otherwise commercialize the Company’s ribavirin USP hepatitis C vaccine in either formula or other form. In return, Minapharm will grant the Company the rights to exclusive product development, marketing and distribution rights and a royalty bearing license to rights to its pegylated interferon-alpha, in an active pharmaceutical ingredient or as finished final product. The Letter of Agreement also stipulates that Minapharm will make a loan to the Company to assist in its therapeutic development program. To October 31, 2010, Minapharm has not made a loan to the Company.

     
d)

On May 18, 2010, the Company entered into an Engagement Agreement (the “Engagement Agreement”) with Cambridge Partners LLC (“Cambridge”) whereby Cambridge will act as a financial advisor with respect to a future financing, until May 15, 2011. The Engagement Agreement can be terminated after November 15, 2010. The Company will pay Cambridge a cash fee equal to 5% of the gross proceeds raised in addition to issuing Cambridge warrants equal to 5% of the shares of common stock issued in the financing. Such warrants will be exercisable at the same price of the shares of common stock issued in the financing. The Company also agrees that if the Company completes a financing within one year after the term of the agreement, the Company will pay the fees as stated above. Subsequent to October 31, 2010, the Company terminated the Engagement Agreement. As a result, the retainer of $5,000 paid to Cambridge was recorded as consulting fees which are recorded in general and administrative expenses.

     
e)

On June 8, 2010, the Company entered into an Agreement with Investor Outreach Services LLC. (“IOS”) whereby IOS will introduce the Company to investors. The Company will pay IOS a cash fee equal to 5% of the gross proceeds raised, in addition to 3% of any additional funds later brought forth from the investors. Such provisions for compensation will last for a period of 3 years from the date any investor first invests in the Company. To October 31, 2010, the Company has paid or accrued $Nil to IOS.

     
f)

On July 27, 2010, the Company entered into a Securities Purchase Agreement with Tangiers Investors, LP (“Tangiers”). Under the agreement, the Company would agree to issue and sell its shares of common stock to Tangiers for an aggregate purchase price of up to $10,000,000. The funding obligates Tangiers to buy the Company’s stock in amounts of up to $250,000 per draw down, at the Company’s discretion over a period of 2 years. The purchase and sale of common stock is predicated upon the Company filing a S1 Registration with SEC, which at October 31, 2010, was not completed.

F-5



5.

Promissory Note

   

On April 5, 2010, the Company entered into an unsecured promissory note agreement with a shareholder whereby the Company has borrowed $20,000 ($10,000 as at January 31, 2010). The note is interest bearing at 15% per commencing April 5, 2010, and repayable upon the Company completing a financing of at least $100,000. During the term that the note is outstanding, the shareholder will have the right to convert the outstanding principal balance and accrued and unpaid interest into shares of preferred stock. The number of preferred stock into which the note will be converted will be equal to the total borrowed plus accrued interest on the date of conversion dividend by $0.80. The conversion feature had no intrinsic value and accordingly no beneficial conversion feature was recorded.

   

If the Company fails to make payment, interest will accrue at a rate of 18% on the outstanding balance plus accrued interest. Included in accounts payable and accrued liabilities at October 31, 2010 is $1,718 (January 31, 2010 - $Nil) in accrued interest which has been recorded in general and administrative expenses.

   
6.

Common Stock

   

As at January 31, 2010, the Company had received $206,922 in subscriptions which was comprised of advances towards private placements of 1,158,366 shares of common stock at $0.17 per share and 100,000 shares of common stock at $0.10 per share.

   

On February 12, 2010, the Company completed a private placement of 100,000 shares of common stock for gross proceeds of $10,000 and 846,176 shares of common stock for gross proceeds of $143,850. The total proceeds of $153,850 had been recorded in subscriptions received at January 31, 2010 and was reallocated to common stock in fiscal 2011.

   

On March 22, 2010, the Company issued 150,000 shares of common stock, at a fair value of $46,500, for consulting services.

   

On May 14, 2010, the Company completed a private placement of 486,567 shares of common stock for gross proceeds of $82,720. Of the total proceeds of $82,720, $11,316 had been recorded in subscriptions received at January 31, 2010 and was reallocated to common stock in fiscal 2011.

   

On May 14, 2010, the Company issued 3,180,000 shares of common stock at a fair value of $540,600 for license (Note 3) and 1,300,000 shares of common stock at a fair value of $130,000 for consulting services.

   

On May 14, 2010, the Company issued 500,000 shares of common stock at a fair value of $50,000 for finders’ fee (Note 4) and 800,000 shares of common stock at a fair value of $80,000 for consulting services.

   

On July 15, 2010, the Company issued 1,000,000 shares of common stock, at a fair value of $170,000, for consulting services.

   

On July 21, 2010, the Company issued 300,000 shares of common stock, at a fair value of $51,000, for consulting services.

   

On October 21, 2010, the Company completed a private placement of 3,482,110 shares of common stock for gross proceeds of $241,959.

   

During the nine month period ended October 31, 2010, the Company paid share issuance costs of $28,457.

   

At October 31, 2010, the Company has $62,647 in subscriptions received, of which $20,891 was received during the nine month period October 31, 2010. These subscriptions are comprised of advances towards a private placement of 850,600 shares of common stock at $0.17 per share.

   

Stock Options

   

The following are the assumptions used for the Black-Scholes option pricing model to record the fair value of the stock options:


  a)

The Company calculated volatility for stock options and awards using historical volatility.

  b)

The Company used a 0% forfeiture rate and the Company does not consider forfeitures to be material.

  c)

The Company has not, and does not intend to, issue dividends, therefore, the dividend yield assumption is 0%.

  d)

The risk-free rate for the expected term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.

On May 11, 2007 the Company adopted a stock option plan (the ‘”Plan”) and granted 22,250 stock options to officers, employees and consultants, exercisable at $30.40 per share for a period of five years. The Company recognizes stock-

F-6



6.

Common Stock (continued)

   

Stock Options (continued)

   

based compensation costs over the requisite service period of the award, which is the option vesting term. The options vest over a period of 30 months, commencing November 10, 2007. The fair value of these options at the date of grant was estimated to be $575,656 using the Black-Scholes option pricing model with an expected life of 5 years, a risk-free interest rate of 4.75%, a dividend yield of 0%, and expected volatility of 123%. These stock options expire on May 11, 2012.

   

To October 31, 2010 and January 31, 2010, 4,000 of these stock options are outstanding and exercisable and 18,250 stock options were cancelled in 2009. During the year ended January 31, 2010, $41,396 in stock-based compensation expense was recognized in relation to the vested portion of these stock options.

   

On January 31, 2010, the Company issued 500,000 stock options to the President of the Company, pursuant to the Plan. These options are exercisable at a price of $0.18 for a period of five years. The Company recognizes stock-based compensation costs over the requisite service period of the award, which is the option vesting term. The options vest at a rate of 20% per year, commencing January 31, 2010. The fair value of these options at the date of grant was estimated to be $68,006 using the Black-Scholes option pricing model with an expected life of 5 years, a risk-free interest rate of 2.34%, a dividend yield of 0%, and expected volatility of 101%. These stock options expire on January 31, 2014. To January 31, 2010, 100,000 of these stock options are exercisable and the Company recognized $13,600 in stock-based compensation expense in relation to these vested stock options.

   

Stock option transactions during the year ended January 31, 2010 were as follows:


Balance, January 31, 2008   22,250  
 Cancelled   (18,250 )
Balance, January 31, 2009   4,000  
 Issued   500,000  
Balance, January 31, 2010 – Outstanding   504,000  
Balance, January 31, 2010 – Exercisable   104,000  

7.

Related Party Transactions

   

During the nine month period ended October 31, 2010, the President of the Company received a monthly management consulting fee of CDN$11,250 totaling $98,232 (October 31, 2009 - $88,485), of which $49,116 (October 31, 2009 - $44,242) has been recorded as management fees and $49,116 (October 31, 2009 - $44,242) as a research and development. As at October 31, 2010, recorded in due to related party is $40,334 (2009 - $nil) owing to the President for management consulting fees.

F-7



8.

Supplemental Cash Flow Information


      Accumulated              
      From              
      February 15,              
      2007     Nine Month     Nine Month  
      (Date of     Period ended     Period ended  
      reporting as a     October 31,     October 31,  
      development     2010     2009  
      stage company)     $     $  
      to October 31,              
      2010              
      $              
  Cash paid for Interest            
  Cash paid for income taxes            
  Obligation to issue shares of common stock for acquisition of licenses   85,000          
  Issue shares of common stock for acquisition of licenses   540,600     540,600      
  Issue shares of common stock for consulting services   387,500     347,500      
  Royalties recorded in accounts payable and accrued liabilities   17,536     12,506      
  Finder’s fee shares   50,820     50,000      
  Finder’s fees recorded in accounts payable and accrued liabilities   114,346     114,346      
  Reclassification of prepaids to common stock       22,108      
  Reclassification of subscriptions received to common stock       144,275      

F-8


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Cyplasin Biomedical Ltd., unless otherwise indicated.

General Overview

We were incorporated pursuant to the laws of the State of Nevada on May 12, 2004 under the name Glass Wave Enterprises, Inc. Effective February 16, 2007, we changed our name to Cyplasin Biomedical Ltd. and effected a 6.2 for 1 forward stock split of our authorized, issued and outstanding common stock. Following our incorporation, we commenced the business, through our wholly-owned subsidiary, Astro Nutrition Inc., as a reseller of health products and herbal remedies. We targeted the market of health food supplements and herbal remedies by catering mainly to the European and Asian markets. We disposed of our former wholly-owned subsidiary, Astro Nutrition Inc. during our quarter July 31, 2007.

As management of our company investigated opportunities and challenges in the business of being a reseller of health products and herbal remedies, management realized that the business did not present the best opportunity for our company to realize value for our shareholders. Accordingly, we abandoned our previous business plan and focused on the identification of suitable businesses with which to enter into a business opportunity or business combination.

On April 10, 2007, we entered into an asset purchase agreement with Bioxen Ltd. to acquire certain intellectual property. The closing of the transactions contemplated in the asset purchase agreement and the acquisition of the intellectual property occurred on April 10, 2007. In accordance with the closing of the asset purchase agreement, we paid $100 to Bioxen in exchange for the acquisition by our company of such intellectual property.

4


As of the closing date of the asset purchase agreement on February 15, 2007, our company commenced the business of developing a novel therapeutic, recombinant protein called “Cyplasin”. On April 10, 2007, we entered into an asset purchase agreement with Bioxen Ltd., whereby we acquired a second Cyplasin patent describing a protein having anti tumor effect. Research into the Cyplasin protein structure has allowed us to manufacture the protein in the laboratory and develop procedures for the scale up in large-scale manufacturing processes as the discovery was to be commercialized. Additional patents were filed for these various processes and some have been issued in various jurisdictions.

Prior to the Cyplasin asset being vended into our company an aggregate of approximately $1.8 million had been spent on research and development related activities. These previous expenditures allowed for our company to anticipate the further development of the protein molecule from discovery and proof of concept stage to a clinical development stage.

During the last part of 2008 as we completed our preclinical testing and analysis of Cyplasin-SC™, as a therapy for skin cancer and melanoma treatment, it was determined the product would require additional product formulation work and additional funding would b e required in order to advance the potential product to human clinical studies. Due to the troubled financial environment we were not successful in being able to raise the required funds and subsequently we were unable to proceed with the Cyplasin product development on our own and started looking for strategic development partners or a sale of our company via a reverse take over event.

In order to prepare for such events, on December 23, 2008, we effected a 40 old for 1 new reverse stock split of our authorized and issued and outstanding common stock. As a result, our authorized capital decreases from 465,000,000 shares of common stock with a par value of $0.001 to 11,625,000 shares of common stock with a par value of $0.001and our issued and outstanding shares decrease from 39,584,000 shares of common stock to 989,600 shares of common stock.

The reverse stock split became effective with the Over-the-Counter Bulletin Board at the opening for trading on February 2, 2009 under the stock symbol “CPBM”. Our CUSIP number is 232664201.

On February 7, 2009, we entered into a licensing agreement with Bioxen for further development of the Cyplasin product. Under terms of the agreement, Bioxen received an exclusive license to further develop the Cyplasin product and commercialize the intellectual property and corresponding patents held by our company.

In consideration of the license granted, Bioxen agreed to pay our company a 1.25% royalty, calculated on all gross revenue of licensed products sold by Bioxen. In addition, Bioxen would also pay a non-refundable license fee of 25,000 EUR. This fee shall be due within 30 days of the completion of any corporate financing by Bioxen, in which Bioxen receives a minimum collective amount of 500,000 EUR. Bioxen also agrees to pay all current outstanding patent amounts owed by our company and all ongoing, continued, and related patent and maintenance fees owed.

On February 13, 2009, we entered into a letter of intent with Vancouver based Pacific Therapeutics Ltd. to effect a reverse takeover in which we would acquire 100% of Pacific Therapeutics Ltd.’s common stock to be completed on or before March 30, 2009. Due to Pacific Therapeutics Ltd.’s investors wishing to remain a private company, the letter of intent with PTL was terminated May 1, 2009.

On July 1, 2009, our company entered into a license agreement with Arizona based C-Virionics Corporation for their Hepatitis C prophylactic vaccine. The technology is based upon the work of Dr. Jake Laing from the NIH and involves the synthesis of vaccines based on Virus Like Particles. We have also developed a revenue generation strategy based upon the manufacture of generic off patent drugs which are used in the treatment of Hepatitis C.

5


On August 1, 2009 our company entered into an IP Asset Transfer Agreement with Bioxen Ltd., which effectively terminated the previous license agreement and in consideration for cancellation of Bioxen shares in our company, returned the Cyplasin patents back to Bioxen. Under the terms of the agreement, Bioxen is obligated to pay our company $74,030 (50,000 EUR) within 5 days of completion of a corporate financing in a minimum amount of 500,000 EUR. At October 31, 2010, management determined the balance was uncollectible and wrote-off the receivable of $70,953, net of foreign exchange.

Effective November 25, 2009, the Nevada Secretary of State accepted for filing a Certificate of Amendment, wherein we have effected an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock from 11,625,000 shares to 100,000,000 shares, par value of $0.001 per share; and an amendment to our Articles of Incorporation for the alteration of our authorized share capital to authorize the issuance of up to 100,000,000 shares of preferred stock, par value of $0.001 per share, for which our directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of the shares of preferred stock. This amendment was approved by our board of directors and the holders of the majority of our outstanding shares on February 4, 2009.

Upon further discussion with C-Virionics we announced the entering into a letter of intent to effect a reverse take-over with C-Virionics. Subsequently the reverse take-over discussions were terminated and instead it was agreed that Cyplasin would be assigned certain intellectual property held by C-Virionics. 4231083, 2,269,097.

The IP to be assigned from the NIH and Virionics is as follows:

U.S.A. Issued # 6,387,662
Australia Issued # 738585
EPO Issued # 9791652.6
Japan Issued # 4,231,08
Canada Issued # 2,269,097

U.S. Patent No. 6,387,662 (U.S. S/N 09/246,441), issued May 14, 2002, entitled "Synthesis and Purification of Hepatitis C Virus-Like particles" (E-009-1997/0) (Inventors: T. Jake Liang (NIDDK), Thomas F. Baumert (NIDDK)). This application is a continuation of and claims the benefit of priority of International Application No. PCT/US97/05096 designating the U.S. having International filing date of Mar. 25, 1997, claims the benefit of priority of U.S. S/N 60/030,238, filed Nov. 8, 1996.

PCT/US97/05096 filed March 25, 1997, entitled "Synthesis and Purification of Hepatitis C Virus-Like particles in vitro" (related to E-009-1997/0) (Inventors: T. Jake Liang (NIDDK), Thomas F. Baumert (NIDDK)). National Stage filed March 25, 1997: in Australia Patent No. 738585, issued Jan. 03, 2002, in

EPO patent application No. 9791652.6, in Canada patent application No. 2269097, in Japan patent application No. 10-522521.

On December 30, 2009 the IP Licenses were obtained from Virionics in exchange for 3,680,000 Common Shares of Cyplasin plus a cash payment for settlement of outstanding NIH invoices, totaling $97,291 in royalty and other costs. During the nine months ended October 31, 2010, 3,180,000 shares of common stock with a fair value of $540,600 have been issued and $85,000 is remaining in obligation to issue shares at October 31, 2010 (January 31, 2010 – $625,600).

At October 31, 2010 our company has recorded a royalty payable of $12,506 (January 31, 2010 - $17,536) in accounts payable and accrued liabilities in relation to the licenses.

On May 17, 2010, our company entered into a letter of agreement with Minapharm Pharmaceuticals SAE a company incorporated in Egypt. Among other products Minapharm is engaged in the development and commercialization of Hepatitis C pharmaceutical products within Egypt.

6


Pursuant to the letter of agreement, our company will grant Minapharm an exclusive product distribution agreement and a royalty bearing sub-license which will give Minapharm the right to manufacture, market, sell or otherwise commercialize our company’s ribavirin (C-Virin) and our USP hepatitis C vaccine (C-Vaxin). Minapharm will grant our company the rights to exclusive product development, marketing and distribution rights and a royalty bearing license to rights to its pegylated interferon-alpha, in an active pharmaceutical ingredient or as finished final product. The agreement also calls a small convertible loan to be made to Cyplasin to help initiate the manufacture of the Ribavirin product.

On May 18, 2010, our company entered into an Engagement Agreement (the “Engagement Agreement”) with Cambridge Partners LLC, whereby Cambridge will act as a financial advisor with respect to a future financing, until May 15, 2011. The Engagement Agreement can be terminated after November 15, 2010. Our company will pay Cambridge a cash fee equal to 5% of the gross proceeds raised by them, in addition to issuing Cambridge warrants equal to 5% of the shares of common stock issued in the financing. Such warrants will be exercisable at the same price of the shares of common stock issued in the financing. Our company also agrees that if our company completes a financing with one of their contacts within one year after the term of the agreement, our company will pay the fees as stated above. Subsequent to October 31, 2010, the company terminated the Engagement Agreement. As a result, the retainer of $5,000 paid to Cambridge was recorded as consulting fees which are recorded in general and administrative expenses.

On June 8, 2010, our company entered into an agreement with Investor Outreach Services (“IOS”) whereby Investor Outreach will introduce our company to investors. Our company will pay Investor Outreach a cash fee equal to 5% of the gross proceeds raised, in addition to 3% of any additional funds later brought forth from the investors. Such provisions for compensation will last for a period of 3 years from the date any investor first invests in our company. To October, 31, 2010, the company has paid or accrued $Nil to IOS

On July 27, 2010, our company entered into a Securities Purchase Agreement with Tangiers Investors, LP (“Tangiers”). Under the agreement, our company would agree to issue and sell its common stock to Tangiers for an aggregate purchase price of up to $10,000,000. The funding obligates Tangiers to buy our company’s stock in amounts of up to $250,000 per draw down, at our company’s discretion over a period of 24 months. The purchase and sale of common stock is predicated upon our company filing a S1 Registration with the SEC, which at October 31, 2010, was not completed.

During the course of these events our company was also actively sourcing funding from various investors in order to continue with the operations of our company.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Results of Operations

Three month Summary ending October 31, 2010 and 2009

    Three Months Ended  
    October 31  
    2010     2009  
Revenue $  Nil   $ Nil  
Operating Expenses $  120,112   $ 125,516  
Net Loss $  (120,112 ) $ (125,516 )

7


Expenses

Our operating expenses for the three month periods ended October 31, 2010 and 2009 are outlined in the table below:

    Three Months Ended  
    October 31  
    2010     2009  
General and administrative $  87,121   $  83,682  
Management fees $  16,473   $  20,875  
Research and development $  16,473   $  20,875  
Travel $  46   $  84  

Operating expenses for the three months ended October 31, 2010, increased by 4.31% as compared to the comparative period in 2009 primarily as a result of increases in general and administrative expenses which consist mainly of consulting fees.

Nine month Summary ending October 31, 2010 and 2009

    Nine Months Ended  
    October 31  
    2010     2009  
Revenue $  Nil   $ Nil  
Operating Expenses $  593,794   $ 277,525  
Net Loss $  (664,747 ) $  (211,775 )

Expenses

Our operating expenses for the nine month periods ended October 31, 2010 and 2009 are outlined in the table below:

    Nine Months Ended  
    October 31  
    2010     2009  
General and administrative $  494,421   $  139,344  
Management fees $  49,116   $  68,983  
Research and development $  49,116   $  68,983  
Travel $  1,141   $  215  

Operating expenses for the nine months ended October 31, 2010, increased by 113.96% as compared to the comparative period in 2009 primarily as a result of increases in general and administrative expenses which consist mainly of increased consulting fees.

Revenue

We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter.

8


Equity Compensation

On March 31, 2007 our board of directors approved our 2007 stock option plan. Under the 2007 stock option plan, options may be granted only to our directors, officers, employees and consultants as determined by our board of directors. Pursuant to the stock option plan, we may issue up to 10% of the issued and outstanding common shares in stock options. As at October 31, 2010, there were 990,905 shares of our common stock still available for future grant under the plan.

Liquidity and Financial Condition

Working Capital

    At October 31,     At January 31,     Percentage  
    2010     2010     Increase/Decrease  
Current Assets $  119,926   $ 59,045     103.11%  
Current Liabilities $  265,816   $ 124,782     113.03%  
Working Capital $  (145,890 ) $ (65,737 )   121.93%  

Cash Flows

    As at     As at  
    October 31,     October 31,  
    2010     2009  
Net Cash Provided by (Used in) Operating Activities $  (236,955 ) $ (154,932 )
Net Cash Provided by (Used In) Investing Activities $  Nil   $ Nil  
Net Cash Provided by Financing Activities $  315,797   $ 185,588  
Effect of Exchange Rate Changes $  (2,220 ) $ (4,153 )
Increase (Decrease) In Cash During The Period $  76,622   $ 26,503  

As of October 31, 2010, our company had working capital deficit of $145,890. We estimate our operating expenses and working capital requirements for the next twelve month period to be as follows:

Estimated Expenses for the Next Twelve Month Period  
           Operating Expenses      
           Management and Consulting $  500,000  
           Research and Development   3,500,000  
           General and Administrative   550,000  
Total $  4,550,000  

We plan to raise additional capital required to meet immediate short-term needs and to meet the balance of our estimated funding requirements for the twelve months, primarily through the private placement of our securities.

We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.

9


Future Financings

We will require additional financing in order to enable us to proceed with our product development program. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations. We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

We presently do not have any arrangements for additional financing and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Basis of Presentation

These consolidated financial statements and notes are presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are expressed in US dollars. Our company’s fiscal year end is January 31.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Our company’s actual results could differ from management’s estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of impairment of intangibles and long lived assets, expected tax rates for future income tax recoveries and determining the fair values of financial statements.

10


Recent Accounting Pronouncements

Our company recognizes in the financial statements the effects of subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. An entity shall disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued. Companies are not permitted to recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are issued. Some non recognized subsequent events must be disclosed to keep the financial statements from being misleading. For such events a company must disclose the nature of the event, an estimate of our financial effect, or a statement that such an estimate cannot be made.

The FASB Accounting Standards Codification (the “Codification”) is the source of authoritative GAAP recognized by the FASB to be applied to nongovernment entities. The adoption of the Codification has not had a material impact on our financial position, results of operations or cash flows.

Certain other recent accounting pronouncements have not been disclosed as they are not applicable to our company.

Item 3. Quantitative Disclosures About Market Risks

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer, principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (also our principal executive officer, principal financial and accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended October 31, 2010 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

11


Item 1A. Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.

RISKS RELATED TO OUR BUSINESS

We have had negative cash flows from operations since inception. We will require significant additional financing, the availability of which cannot be assured, and if our company is unable to obtain such financing, our business may fail.

To date, we have had negative cash flows from operations and have depended on sales of our equity securities and debt financing to meet our cash requirements. Our ability to develop and, if warranted, commercialize our technologies, will be dependent upon our ability to raise significant additional financing. If we are unable to obtain such financing, we will not be able to fully develop our business. Specifically, we will need to raise additional funds to:

  • support our planned growth and carry out our business plan;
  • continue scientific progress in our research and development programs;
  • address costs and timing of conducting clinical trials and seek regulatory approvals and patent prosecutions;
  • address competing technological and market developments; and
  • establish additional collaborative relationships.

We may not be able to obtain additional equity or debt financing on acceptable terms as required. Even if financing is available, it may not be available on terms that are favourable to us or in sufficient amounts to satisfy our requirements. If we require, but are unable to obtain, additional financing in the future, we may be unable to implement our business plan and our growth strategies, respond to changing business or economic conditions, withstand adverse operating results and compete effectively. More importantly, if we are unable to raise further financing when required, we may be forced to scale down our operations and our ability to generate revenues may be negatively affected.

We have a history of losses and nominal operating results, which raise substantial doubt about our ability to continue as a going concern.

Since February 15, 2007 (date of reporting as a development stage company), we have a net loss of $2,397,339. We can offer no assurance that we will operate profitably or that we will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the level of competition and general economic conditions.

12


Our company's operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. No assurance can be given that we may be able to operate on a profitable basis.

Due to the nature of our business and the early stage of our development, our securities must be considered highly speculative. We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short or medium term. Any profitability in the future from our business will be dependent upon the successful commercialization or licensing of our core technology, which itself is subject to numerous risks.

We expect to continue to incur development costs and operating costs. Consequently, we expect to incur operating losses and negative cash flows until our technology gains market acceptance sufficient to generate a sustainable level of income from the commercialization or licensing of our technology.

Our inability to complete our product development activities successfully may severely limit our ability to operate and finance operations.

Commercialization of our core technology will require significant additional research and development as well as substantial clinical trials. We believe that the United States will be the principal market for our technology, as will any country in the world where the need for anti cancer therapeutics, initially for skin cancer and melanomas, exists. We may not be able to successfully complete development of our core technology, or successfully market our technology. We, and any of our potential collaborators, may encounter problems and delays relating to research and development, regulatory approval and intellectual property rights of our technology. Our research and development programs may not be successful. Our core technology may not prove to be safe and efficacious in clinical trials, and we may not obtain the intended regulatory approvals for our core technology. Whether or not any of these events occur, we may not have adequate resources to continue operations for the period required to resolve the issue delaying commercialization and we may not be able to raise capital to finance our continued operation during the period required for resolution of that issue.

We may lose our competitiveness if we are not able to protect our proprietary technology and intellectual property rights against infringement, and any related litigation may be time-consuming and costly.

Our success and ability to compete depends to a significant degree on our proprietary technology. If any of our competitors copy or otherwise gain access to our proprietary technology or develop similar technologies independently, we may not be able to compete as effectively. The measures we have implemented to protect our proprietary technology and other intellectual property rights are currently based upon a combination of patents and trade secrets. This, however, may not be adequate to prevent the unauthorized use of our proprietary technology and our other intellectual property rights. Further, the laws of foreign countries may provide inadequate protection of such intellectual property rights. We may need to bring legal claims to enforce or protect such intellectual property rights. Any litigation, whether successful or unsuccessful, may result in substantial costs and a diversion of our company's resources. In addition, notwithstanding our rights to our intellectual property, other persons may bring claims against us alleging that we have infringed on their intellectual property rights or claims that our intellectual property rights are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our attention and resources, result in the loss of goodwill associated with our business or require us to make changes to our technology.

Our company may become subject to intellectual property litigation which may harm our business.

Our success depends in part on our ability to develop commercially viable products without infringing the proprietary rights of others. Although we have not been subject to any filed infringement claims, other patents could exist or could be filed which may prohibit or limit our ability to market our products or maintain a competitive position. In the event of an intellectual property dispute, we may be forced to litigate. Intellectual property litigation may divert management's attention from developing our technology and may force us to incur substantial costs regardless of whether we are successful. An adverse outcome could subject us to significant liabilities to third parties, and force us to curtail or cease the development and commercialization of our technology.

13


If our company commercializes or tests our technology, our company will be subject to potential product liability claims which may affect our earnings and financial condition.

We face an inherent business risk of exposure to product liability claims in the event that the use of our core technology during research and development efforts, including clinical trials, or after commercialization, results in adverse affects. As a result, we may incur significant product liability exposure, which may exceed any insurance coverage that we obtain in the future. Even if we elect to purchase such issuance in the future, we may not be able to maintain adequate levels of insurance at reasonable cost and/or reasonable terms. Excessive insurance costs or uninsured claims may increase our operating loss and affect our financial condition.

If we fail to effectively manage the growth of our company and the commercialization or licensing of our technology, our future business results could be harmed and our managerial and operational resources may be strained.

As we proceed with the development of our technology and the expansion of our marketing and commercialization efforts, we expect to experience significant growth in the scope and complexity of our business. We will need to add staff to manage operations, handle business development efforts and perform finance and accounting functions. We anticipate that we will be required to hire a broad range of additional personnel in order to successfully advance our operations. This growth is likely to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a material adverse effect on our business and financial condition.

Failure to obtain and maintain required regulatory approvals will severely limit our ability to commercialize our technology.

We believe that it is important for the success of our business to obtain the approval of the Food and Drug Administration in the United States (FDA) before we commence commercialization of our technology in the United States, the principal market for our technology. We may also be required to obtain additional approvals from foreign regulatory authorities to apply for any sales activities we may carry out in those jurisdictions. If we cannot demonstrate the safety, reliability and efficacy of our technology, the FDA or other regulatory authorities could delay or withhold regulatory approval of our technology.

Even if we obtain regulatory approval of our technology, that approval may be subject to limitations on the indicated uses for which it may be marketed. Even after granting regulatory approval, the FDA and other regulatory agencies and governments in other countries will continue to review and inspect any future marketed products as well as any manufacturing facilities that we may establish in the future. Later discovery of previously unknown problems with a product or facility may result in restrictions on the product, including a withdrawal of the product from the market. Further, governmental regulatory agencies may establish additional regulations which could prevent or delay regulatory approval of our technology.

Even if we obtain regulatory approval to commercialize our products, lack of commercial acceptance may impair our business.

Our product development efforts are primarily directed toward obtaining regulatory approval for our Hepatitis C product treatments. Our products may not be employed in all potential applications being investigated, and any reduction in applications may limit the market acceptance of our products and our potential revenues. As a result, even if our products are developed into marketable products and we obtain all required regulatory approvals, we cannot be certain that our products will be adopted at a level that would allow us to operate profitably.

14


If we do not keep pace with our competitors, technological advancements and market changes, our technology may become obsolete and our business may suffer.

The market for our technology is very competitive, is subject to rapid technological changes and varies for different individual products. We believe that there are potentially many competitive approaches being pursued that compete with our technology, including some by private companies for which information is difficult to obtain.

Many of our competitors have significantly greater resources and have developed products and processes that directly compete with our technology. Our competitors may develop, or may in the future develop, new technologies that directly compete with our technology or even render our technology obsolete. Our technology is designed to develop a topical treatment for skin cancer and melanoma. Even if we are able to demonstrate improved or equivalent results from our technology, researchers and practitioners may not use our technology and we may suffer a competitive disadvantage. Finally, to the extent that others develop new technologies that address the targeted application for our current technology, our business will suffer.

Our ability to hire and retain key personnel will be an important factor in the success of our business and a failure to hire and retain key personnel may result in our inability to manage and implement our business plan.

We are highly dependent upon our management personnel such as the loss of the services of one or more of our management may impair management's ability to operate our company. We have not purchased key man insurance on any of these individuals, which insurance would provide us with insurance proceeds in the event of their death. Without key man insurance, we may not have the financial resources to develop or maintain our business until we could replace the individual or to replace any business lost by the death of that person. The competition for qualified personnel in the markets in which we operate is intense. In addition, in order to manage growth effectively, we must implement management systems and recruit and train new employees. We may not be able to attract and retain the necessary qualified personnel. If we are unable to retain or to hire qualified personnel as required, we may not be able to adequately manage and implement our business.

Most of our assets and all of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or officers.

Although we are organized under the laws of the State of Nevada, United States, our principal business office is located in Edmonton, Alberta, Canada. Outside the United States, it may be difficult for investors to enforce judgments against us that are obtained in the United States in any action, including actions predicated upon civil liability provisions of federal securities laws. In addition, a majority of our directors and officers reside outside the United States, and nearly all of the assets of these persons and our assets are located outside of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against us or such persons judgments predicated upon the liability provisions of United States securities laws. There is substantial doubt as to the enforceability against us or any of our directors and officers located outside the United States in original actions or in actions of enforcement of judgments of United States courts or liabilities predicated on the civil liability provisions of United States federal securities laws. In addition, as the majority of our assets are located outside of the United States, it may be difficult to enforce United States bankruptcy proceedings against us. Under bankruptcy laws in the United States, courts typically have jurisdiction over a debtor's property, wherever it is located, including property situated in other countries. Courts outside of the United States may not recognize the United States bankruptcy court's jurisdiction. Accordingly, you may have trouble administering a United States bankruptcy case involving a Nevada company as debtor with most of its property located outside the United States. Any orders or judgments of a bankruptcy court obtained by you in the United States may not be enforceable.

15


Our business is subject to comprehensive government regulation and any change in such regulation may have a material adverse effect on our company.

There is no assurance that the laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States or any other jurisdiction, will not be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business. The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on our company. Any or all of these situations may have a negative impact on our operations.

RISKS RELATED TO OUR COMMON STOCK

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a significant portion of our operations has been and will be financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

The market price for our common stock may also be affected by our ability to meet or exceed expectations of analysts or investors. Any failure to meet these expectations, even if minor, may have a material adverse effect on the market price of our common stock.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our certificate of incorporation authorizes the issuance of up to 100,000,000 shares of common stock. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Trading of our stock may be restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

16


The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in the stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

17


Item 6. Exhibits.

Exhibit

Number

Description

   
(3)

Articles of Incorporation and By-laws

   
3.1

Articles of Incorporation (Incorporated by reference from our Registration Statement on Form SB-2/a filed on July 29, 2005)

   
3.2

Bylaws (Incorporated by reference from our Registration Statement on Form SB-2 filed on May 5, 2005)

   
(10)

Material Contracts

   
10.1

Asset Purchase Agreement dated February 1, 2007 with Christian Petzelt (Incorporated by reference from our Form 8-K Current Report filed on February 5, 2007)

 

10.2

Asset Purchase Agreement dated April 10, 2007 with Bioxen Ltd. (Incorporated by reference from our Form 8-K Current Report filed on April 13, 2007)

   
10.3

Consulting Agreement dated February 15, 2007 with Christian Petzelt (Incorporated by reference from our Form 10-KSB filed on May 1, 2007)

   
10.4

Consulting Agreement dated February 15, 2007 with Bioxen Ltd. (Incorporated by reference from our Form 10-KSB filed on May 1, 2007)

   
10.5

Consulting Agreement dated February 15, 2007 with Garth Likes (Incorporated by reference from our Form 10-KSB filed on May 1, 2007)

   
10.7

Form of Stock Option Agreement (Incorporated by reference from our Form 8-K Current Report filed on July 3, 2007)

   
(31)

Section 302 Certification

   
31.1*

Certification of Principal Executive Officer and Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

   
(32)

Section 906 Certification

   
32.1*

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith

18


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  CYPLASIN BIOMEDICAL LTD.
                                                     (Registrant)
   
   
Dated: December 17, 2010 /s/ “Garth Likes”
  Garth Likes
  President, Chief Executive Officer and Director
  (Principal Executive Officer, Principal Financial
  Officer and Principal Accounting Officer)

19