AVCRF 20-F Report ended June 30, 2013

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Event requiring this shell company report _____________

For the transition period from ___________________ to ______________________

Commission file number: 000-51848

NUVA Pharmaceuticals Inc.

(Exact name of Registrant as specified in its charter)

Not applicable

(Translation of Company’s name into English)

Province of British Columbia, Canada

(Jurisdiction of incorporation or organization)

615 – 800 West Pender Street, Vancouver, BC, V6C 2V6 CANADA

Contact person: Eugene Beukman, Phone: 604-687-2038 Email ebeukman@pendergroup.ca

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

Name of each exchange on which registered

Not Applicable

Not Applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Shares Without Par Value - Toronto Venture Stock Exchange

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.  ( July 01, 2012)6,959,680 common shares; (June 30, 2013)21,617,075 common shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o No x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  Yes o No x

Indicate by check mark whether the Company (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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “ accelerated filer and large accelerated filer ” in Rule 12b-2 of the Exchange Act (check one):  Large accelerated filer o Accelerated filer o Non-Accelerated filer x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP o International Financial Reporting Standards as issued                                               Other o

by the International Accounting Standards Board x

If “ Other ” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Indicate by check mark which financial statement item the Company has elected to follow.  Item 17 o Item 18 o

(APPLICABLE ONLY TO ISSUES INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)

Indicate by check mark whether the Company has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes o No o

The information set forth in this Annual Report on Form 20-F is as at June 30, 2013 unless an earlier or later date is indicated.

SEC 1852 (01-12) Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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FORM 20-F ANNUAL REPORT

TABLE OF CONTENTS

PART I

4

ITEM 1. IDENTITY OF DIRECTORS SENIOR MANAGEMENT AND ADVISERS

4

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

5

ITEM 3. KEY INFORMATION

5

ITEM 4. INFORMATION ON THE COMPANY

15

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

33

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

37

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

45

ITEM 8. FINANCIAL INFORMATION

47

ITEM 9. THE OFFER AND LISTING

48

ITEM 10. ADDITIONAL INFORMATION

50

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

58

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

58

PART II

58

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

58

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

58

ITEM 15. CONTROLS AND PROCEDURES

58

ITEM 16. RESERVED

58

PART III

60

ITEM 17. FINANCIAL STATEMENTS

60

ITEM 18. FINANCIAL STATEMENTS

60

ITE M 19. E XHIBITS

60

SIGNATURES

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INTRODUCTION

The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name “Duft Biotech Capital Ltd.”

On November 13, 2003, the Company acquired the assets of ALDA Pharmaceuticals Inc. (“API”), a private company founded in 1996.

On November 26, 2003 the Company changed its name to ALDA Pharmaceuticals Corp. (“the Company”) The Company is still a British Columbia, Canada, company.

Effective August 19, 2005, the authorized share capital of the Company was increased to an unlimited number of common shares without par value. There are no Indentures or Agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.

On July 24, 2013 the Company changed its name to NUVA Pharmaceuticals Inc. (“the Company”) The Company is still a British Columbia, Canada.

BUSINESS OF NUVA PHARMACEUTICALS INC.

The Company is now focused on the licensing and sales of pharmaceuticals that can be registered as natural products, OTC’s and generics.

FINANCIAL AND OTHER INFORMATION

The Company’s reporting currency and domestic currency is Canadian Dollars. In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$). Comparisons of historic exchange rates between the US$ and the CDN$ are contained in Section 3.A.3.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, “Information on the Company” and ITEM #5, “Operating and Financial Review of Prospects”. These statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Company’s strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.

Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other things, the factors discussed in this Annual Report under ITEM #3, “Key Information, Risk Factors” and factors described in documents that the Company may furnish from time to time to the Securities and Exchange Commission. The Company undertakes no obligation to update publicly or revise any forward-looking statements because of new information.

MEASUREMENT INFORMATION

Canada uses the metric measurement system and all of the measures used by the Company adhere to the standards of the metric system.

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1.A.1. Directors and senior management

Table No. 1 lists as of June 30, 2013 the names of the Directors of the Company.

Table No. 1

Directors

(1) Ceased to be a Director June 28, 2013

⁽²⁾ Member of Audit Committee

1.A.2. Senior Management

Table No. 2 lists the names of the Senior Management of the Company. The Senior Management serves at the pleasure of the Board of Directors.

Table No. 2

Senior Management

⁽¹⁾ Mr. Owen ceased to be an Officer June 10, 2013.

Mr. Owen’s business functions, as President and CEO of the Company, included overall supervision of all officers and consultants, as well as management of research and development, strategic planning, business development, operations, liaison with auditors, accountants, lawyers, regulatory authorities, the financial community and shareholders and reporting to the Board of Directors.

Mr. Lewin’s business functions, as CFO, include financial statement preparation, accounting, liaising with auditors, accountants, lawyers and regulatory authorities and preparation, payment and organization of the expenses, taxes, and other financial activities of the Company and reporting to the Board of Directors

Mr. Lewin’s business functions, as Corporate Secretary, include attending and being the secretary of all meetings of the Board, shareholders and committees of the Board and entering, or causing to be entered in records kept for that purpose, minutes of all proceedings thereat; gives or causes to be given, as and when instructed, all notices to shareholders, Directors, officers, auditors and members of committees of the Board; is the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Company and of all books, records and instruments

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belonging to the Company, except when some other officer or agent has been appointed for that purpose; and in the future can have such other powers and duties as the Board of the chief executive officer may specify. Mr. Lewin and Mr. Chen may delegate all or part of his duties as Corporate Secretary to a nominee or to corporate counsel from time to time.

1.B. Legal Advisors

The legal advisors for the Company are Harder & Company, 2760 – 200 Granville St., Vancouver, BC, V6C 1S4 Phone 604-682 - 4466 Fax 604 682 - 4467. As of October 2, 2007, the Company retained Stanislaw Ashbaugh LLP, 4400 - 701 Fifth Avenue, Seattle, WA 98104 to provide assistance with matters concerning securities laws in the United States. The firm does not provide other legal services to the Company.

The Company’s Bank is the:  Bank of Montreal. Its business address and telephone number are  595 Burrard St. Vancouver, British Columbia Canada V7X 1L7. Tel: (604) 665-7374.

1.C. Auditors

Meyers Norris Penny LLP performed the year end audits in 2011, 2012 and 2013.

No disclosure necessary.

3.A.1. Selected Financial Data

The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Annual Report.

The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.

Table No. 3 is derived from the audited financial statements of the Company, which have been prepared in accordance with

IFRS, as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). IFRS represents standards and interpretations approved by the International Accounting Standards Board (“IASB”), and are comprised of IFRS, International Accounting Standards (“IASs”), and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRICs”) or the former Standing Interpretations Committee (“SICs”) and effective for the Company’s reporting period ended June 30,

2013.

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Table No. 3

Selected Financial Data

(CDN$)

⁽¹⁾ At June 30, 2013 there were 21,617,075 shares issued and outstanding.

3.A.3. Exchange Rates

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

Table No. 4 sets forth the exchange rates for the Canadian Dollar at the end of five most recent fiscal years ended June 30, 2013, the average rates for the period and the range of high and low rates for the period. The data for each month during the most recent six months is also provided.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.

The table sets forth the number of US Dollars required under that formula to buy one Canadian Dollar. For example, where the number “0.8704” is quoted in the upper left hand number in the table, it means that it took on average in December 2012, 98.95 cents US to purchase one Canadian dollar. For most periods presented, the Canadian dollar has been worth less than one US dollar.

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Table No. 4

U.S. Dollar/Canadian Dollar

(Source: http://www.bankofcanada.ca/rates/exchange/10-year-converter/)

Table No. 5 sets forth the capitalization and indebtedness of the Company as of June 30, 2013.

Private Placements:

On September 9, 2009 , the Company completed a private placement of 6,000,000 units of the Company at a price of $0.25 per unit for gross proceeds of $1,500,000. Each unit consists of one common share of the Company and one share purchase warrant. Each warrant entitles the holder to acquire one additional common share at a price of $0.40 per share until September 11, 2010 with a forced exercise provision attached to each warrant. Finders’ fees and legal fees in the amount of $53,523 were charged against share capital in connection with the private placement. Warrants were valued at $490,142. On August 13, 2010, the Company received an approval for the extension of the exercise period of these 6,000,000 outstanding share purchase warrants. Pursuant to the extension, the applicable exercise period was extended by one further year, from September 16, 2010 to September 16, 2011. The warrant exercise price of 40 cents per share remained the same. At the time of this report, all of the warrants expired without being exercised.

On September 7, 2010, the Company closed a private placement for total gross proceeds of $327,500. A total of 3,275,000 units of the Company were issued at a price of 10 cents per unit. Each unit consists of one common share of the Company and one non-transferable share purchase warrant entitling the holder to acquire one additional common of the Company at a price of 20 cents per common share for a period of 24 months from the date of the issuance of the purchase warrant with a forced exercise provision attached to each warrant. The Company paid finders’ fee of $2,250 to certain registrants with respect to the offering. Finders’ fees of $2,250 and legal fees of $15,887 were charged against share capital in connection with the private placement. Warrants were valued at $86,334.

On January 12, 2011, the Company closed a private placement for total gross proceeds of $200,000. A total of 2,000,000 units of the Company were issued at a price of 10 cents per unit. Each unit consists of one common share of the Company and one non-transferable share purchase warrant entitling the holder to acquire one additional common share of the Company at a price of 20 cents per common share for a period of 24 months from the date of issuance of the purchase warrant with a forced exercise prevision attached to each warrant. The issuance with respect to the private placement will be subject to a hold period expiring on May 13, 2011. Legal fees of $5,626 were charged against share capital in connection with the private placement. Warrants were valued at $18,676.

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On April 27, 2012, the Company closed a non-brokered private placement of 560,000 units of the Company’s common shares at a price of 10 cents per unit, for proceeds of $56,000. Each unit consists of one common share of the Company and one share purchase warrant, which will entitle the holder thereof to purchase one additional common share of the Company for a period of 24 months from the closing date of the offering at an exercise price of 15 cents for the first 12 months and 20 cents during the next 12 months. The Company has paid a finder’s fee of $4,100 pursuant to the policies of the TSX Venture Exchange.

On June 12, 2013 the Company closed a non-brokered private placement of 8,000,000 units of the Company’s common shares at a price of $0.10 per unit, for proceeds of $800,000. Each Unit will be exchangeable for one common share of the Company and one share purchase warrant.

Each warrant will entitle the holder to purchase one additional common share of the Company for a period of 36 months at a price of $0.30 per common share in the first year, $0.40 in the second year and $0.50 in the third year. The Units cannot be exchanged for shares and warrants during the first year unless the holder either simultaneously exercises or forgoes the warrants. The warrants will be subject to an accelerated exercise provision in the event that the shares trade more than $0.10 above the exercise price for ten consecutive trading days.

The private placement was subject to a TSX-V hold period expiring on October 12, 2013. As of June 30, 2013, the private placement was classified as Share Subscriptions. Legal fees of $850 and finders’ fees of $57,600 were charged against share capital in connection with the private placement. The fair value of the warrants issued as part of the private placement is $663,834.

Options:

On October 31, 2008, the Company granted options to acquire 550,000 common shares of the Company to directors, consultants, officers, employees and investor relations. The options have an exercise price of $0.20 with an exercisable term of five years expiring on October 31, 2013. 500,000 options vested immediately with an estimated fair value of $0.09 per share resulting $48,743 in stock based compensation expense being recognized and 50,000 options vested in equal quarterly installments over a period of 12 months from the date of grant.

On June 5, 2009, the Company granted options to acquire 1,600,000 common shares of the Company to directors, consultants, officers, employees and investor relations. The options have an exercise of $0.25 with an exercisable term of five years expiring on June 4, 2014. 1,450,000 options vested immediately with an estimate fair value of $0.13 per share resulting $185,853 in stock based compensation expense being recognized and 150,000 options vested in equal quarterly installments over a period of 12 months from the date of grant.

On October 15, 2009, the Company granted options to acquire 750,000 common shares of the Company to directors, consultants, officers, employees and investor relations. The options have an exercise price of $0.55 with an exercisable term of five years expiring on October 15, 2014. Of these, 700,000 options vested immediately with an estimate fair value of $0.46 per share resulting $324,935 in stock based compensation expense being recognized. The remaining 50,000 options were vested in equal quarterly installments over a period of 12 months from the date of grant, are now fully vested and resulted in additional stock based compensation of $23,044. During the year ended June 30, 2010, a total of 20,000 of these particular options were cancelled due to the departure of an employee, leaving a total of 730,000 options.

During the year ended June 30, 2013, no options were exercised by the option holders.

Warrants:

During the year ended June 30, 2013, no warrants were exercised.

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Table No. 5

Capitalization and Indebtedness

As of June 30, 2013

⁽¹⁾ See Table 13 for exercise prices and terms of these warrants.

3.C. Reasons for the Offer and Use of Proceeds

General working capital, pay down liabilities and applications for registrations with Health Canada.

3.D. Risk Factors

Risks pertaining to the Company:

The Company's limited operating history makes it difficult to evaluate the Company’s current business and forecast future results.

The Company was started as a Capital Pool Company, has been operating its current business since November, 2003 and has had limited revenues during this time. Since its inception, the Company has experienced significant operating losses each year. These losses are due to substantial expenditures on intellectual property protection, product development and product testing of commercial and consumer infection control products. The Company has also been engaged in a program of pre-clinical testing for registration of a number of therapeutic products with Health Canada and the FDA. This testing is costly and time consuming and the Company does not have sufficient funds to undertake all of the testing that is required to satisfy the requirements of these regulatory agencies. Accordingly, the Company requires outside funding to complete these tests. As funds are raised, they will be invested in the testing and the Company will continue to accumulate losses that are proportional to the funds raised and spent on testing. In addition, the Company launched a number of consumer and commercial products, described above, and established new sales and distribution agreements. Although sales of T ³ 6 ^® Antiseptic Hand Sanitizer products were substantial during the last quarter of 2009, sales subsequently dropped to nearly zero for reasons discussed below in the commentary on the financial statements. As a result, future sales of the Company’s products are virtually impossible to predict.

The Company has no significant source of operating cash flow and failure to generate revenues in the future could cause the Company to go out of business.

Based upon current plans to introduce its products into new markets in Canada and internationally, pursue additional patent applications and regulatory approvals for the T ³ 6 ^® technology, develop new products, maintain the Company’s public listing on the TSX-Venture Exchange (“the Exchange”) and support the continued registration of its securities in

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the US, the Company expects to incur operating losses in future periods. These losses will occur because there are continuing expenses associated with the marketing and production of the Company’s products, research and development, intellectual property protection, testing and registration of therapeutic products, legal and accounting fees, the maintenance of its public listing and other expenses associated with running an operating business. Even if the Company becomes operationally profitable from the introduction and sale of new products, the Company plans to invest heavily in pre-clinical testing, clinical trials and registration of its therapeutic products and will need to raise significant amounts of new funding to complete these activities. Also, the Company may not be successful in generating significant revenues from therapeutic products in the future. Failure to generate more revenues could cause the Company to contract or go out of business. At the time of this report, the Company is insolvent because its liabilities are greater than its assets and trading in its shares have been halted due to a failure to file its audited annual statements on time. If the Company was forced to liquidate its assets, the value received would be less than what is shown on the balance sheet because the inventory is valued at cost, not selling price. In the future, it is likely that the inventory value will be reduced to reflect selling cost which will further decrease the value of the assets compared to liabilities. Also at the time of this report, the Company has insufficient funds to continue the production and sales of its products and will be unable to do so without securing further financing.

In order to undertake further financings, the Company consolidated its shares

On March 08, 2012 the Company consolidated its shares on a 10 to 1 basis. This resulted in the outstanding shares of the company being consolidated from 63,996,800 to 6,399,680. All references to common shares, share purchase warrants, stock options, and per share amounts for all periods have been adjusted on a retrospective basis to reflect the common share consolidation. At June 30, 2013 there were 21,617,075 shares issued and outstanding.

If the Company raises further funds through equity issuances, the price of its securities could decrease due to the dilution caused by the sale of additional shares.

Additional funds raised by the Company through the issuance of equity or convertible debt securities will cause the Company’s current shareholders to experience dilution and possibly lower the trading price of its shares. Such securities may grant rights, preferences or privileges senior to those of the Company’s common shareholders. The Company is not profitable and will not be profitable for the foreseeable future under its current development plan. The Company plans to issue further equity to raise funds as necessary to continue operations and fund its program of research and development, patent protection and regulatory approvals. As a result, an indeterminate amount of dilution of the Company’s capital stock will occur.

The Company has issued a limited number of shares out of its authorized capital of an unlimited number of common shares, which could be dilutive and negatively affect the share price.

Having an unlimited number of authorized but unissued common shares could allow the Company’s Directors and Officers to issue a large number of shares without shareholder approval, leading to significant dilution of current shareholders and possible lowering of the share price.

The Company could enter into debt obligations and not have the funds to repay these obligations.

The Company does not have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its operations. Any such indebtedness could contain covenants, which would restrict the Company’s operations. The Company might not be able to repay indebtedness.

The Company could enter into contractual obligations and not have the funds to pay for these obligations.

The Company does not have any contractual restrictions on its ability to enter into binding agreements and, accordingly, the Company could incur significant obligations to third parties including financial obligations. Any such obligations could restrict the Company’s operations and the Company might not be able to pay for its commitments. If the Company cannot meet its commitments, legal action could be taken against the Company. Any such actions could further restrict the Company’s ability to conduct its business or could cause the Company to go out of business.

The Company has a history of generating limited revenues and the continuing failure to generate further revenues could cause the Company to cease operations.

The Company has no history of pre-tax profit and in the previous three years has had only limited annual revenues for each of the years it has been operating. The Company sustained operating losses for each of its fiscal years and has sustained significant accumulated operating losses. The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. The Company may not be successful in generating revenues or raising capital in the future. Failure to generate revenues or raise capital could cause the Company to cease operations. The auditor’s reports to the shareholders are expressed in accordance with Canadian reporting standards, which do not require a reference to conditions and events that cast substantial doubt on the

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Company's ability to continue as a going concern when these are adequately disclosed in the financial statements. In the United States, reporting standards for auditors require the addition of an explanatory paragraph when the financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern. Had the Company’s financial statements been audited by US auditors, the Company may have received a “going concern” qualification. A “going concern” qualification, or the existence of a basis for such a qualification, could negatively affect the Company’s ability to raise capital.

As the Company is a Canadian company, it may be difficult for U.S. shareholders of the Company to effect service on the Company or to realize on judgments obtained in the United States.

The Company is a Canadian corporation. A majority of its directors and officers are residents of Canada and a significant part of its assets are, or will be, located outside of the United States. As a result, it may be difficult for shareholders resident in the United States to effect service within the United States upon the Company, directors, officers or experts who are not residents of the United States, or to realize in the United States judgments of courts of the United States predicated upon civil liability of any of the Company, directors or officers under the United States federal securities laws. If a judgment is obtained in the U.S. courts based on civil liability provisions of the U.S. federal securities laws against the Company or its directors or officers, it will be difficult to enforce the judgment in the Canadian courts against the Company and any of the Company’s non-U.S. resident executive officers or directors. Accordingly, United States shareholders may be forced to bring actions against the Company and its respective directors and officers under Canadian law and in Canadian courts in order to enforce any claims that they may have against the Company or its directors and officers. Nevertheless, it may be difficult for United States shareholders to bring an original action in the Canadian courts to enforce liabilities based on the U.S. federal securities laws against the Company and any of the Company’s non-U.S. resident executive officers or directors.

The Company’s future performance is dependent on key personnel. The loss of the services of any of the Company’s executives or Board of Directors could have a material adverse effect on the Company.

The Company’s performance is substantially dependent on the performance and continued efforts of the Company’s executives and its Board of Directors. Jamie Lewin is the Secretary, Chief Financial Office and a Director. Eugene Beukman and Tom Kennedy are independent Directors and members of the Audit Committee. The loss of the services of any of the Company’s executives or Board of Directors could have a material adverse effect on the Company’s business, results of operations and financial condition. There is no assurance that key personnel can be replaced with people with similar qualifications within a reasonable period of time. The Company currently does not carry any key person insurance on any of the executives or members of the board of directors. The only contracts in place with any of the employees, officers or directors of the Company are with Terrance Owen. The Company currently has no Directors and Officers insurance in place and, as a result, it is possible that some or all of the Directors may resign. If any or all Directors resign, there is no assurance that new Directors can be found to replace any directors who resign.

The Company has not declared any dividends since its inception in 2000 and has no present intention of paying any cash dividends on its common shares in the foreseeable future.

The Company has not declared any dividends since its inception in 2000, and has no present intention of paying any cash dividends on its common shares in the foreseeable future. The payment by the Company of dividends, if any, in the future, rests in the discretion of the Company's Board of Directors and will depend, among other things, upon the Company's earnings, its capital requirements and financial condition, as well as other relevant factors.

The Company’s future performance is dependent on key suppliers and manufacturers and a loss of any suppliers or manufacturers could have a material adverse effect on the Company by reducing or eliminating the ability of the Company to manufacture or sell its products.

The Company does not have agreements in place with any of its key suppliers for raw materials, other supplies or manufacturing. If any of the Company’s suppliers or manufacturers were to go out of business or were unable to procure the raw materials or other supplies required by the Company to manufacture its products, the Company would have to find other suppliers or manufacturers. There is no guarantee that the Company would be able to find other suppliers or manufacturers. If the Company could not find other suppliers or manufacturers, production of the Company’s products would be delayed for an indefinite period of time and such delays would lead to delayed revenues or reduced revenues or both.

If the Company is unable to manufacture its products, there is a risk that customers will be lost and that the Company will be unable to regain these customer.

At the time of this report, the Company has insufficient funds to have some of its products manufactured and there are back orders for products that the Company may not be able to deliver. Customers may go to other suppliers to satisfy their needs and it is possible that the Company will not be able to regain these customers.

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To meet its financial obligations, the Company may be required to divest itself of certain assets

Since the Company has insufficient funds to meet its financial obligations, it is possible that the Company may have to sell or provide rights to some or all of its assets.

There is no assurance that the patent applications filed for the T ³ 6 ^® technology or for other products will be approved, and failure to obtain such approvals could leave the Company with no further protection for its intellectual property and reduced sales.

Patent protection of the T ³ 6 ^® technology is very important to the Company’s current and future products because the T ³ 6 ^® Disinfectant technology is the basis for most of its products. Although patents have been allowed in China there is also no assurance that these patents will not be challenged or that future patent applications will be successful. A lack of patent protection would significantly alter the competitive environment and possibly allow competitors to infringe on the technology of the Company’s business. Reduced revenues and lack of future products could result from such infringement.

There is no assurance that the Company will be able to secure the funds needed for future development, and failure to secure such funds could lead to a lack of opportunities for growth .

Many of the Company’s products require very costly laboratory testing to establish toxicity, efficacy and analytical methods and clinical trials to establish effectiveness and safety on human subjects. This testing is required in order to obtain required regulatory approvals from Health Canada, the EPA and FDA in the US and the EMA in the EU. A lack of funds would impair the ability of the Company to complete such tests. A lack of funds would also impair the Company’s ability to establish marketing and sales plans once the products have been approved for sale. If adequate financing is not available when required, the Company may be required to delay, scale back or eliminate various activities and may be unable to continue in operation. The Company may seek such additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company’s shareholders and may result in dilution to the value of such interests.

There is no assurance that research and development being conducted by the Company to create new products will be successful.

The Company is conducting research and development on new products, but the outcomes of research and development are never certain. For example, there is no assurance that any new products will be developed or that any new products that do result will have a competitive advantage or market acceptance, will not be superseded by the new products of competitors, will not infringe on the patents of other companies or that other companies will not develop products that infringe on patents obtained by the Company for its new products. The Company has completed the formulations for new products but still needs to conduct the toxicity and efficacy tests and establish the analytical methods required to obtain regulatory approvals from Health Canada, the EPA and FDA in the US and the EMA in the EU.

The Company and the Company’s products have limited brand awareness which limits the ability of the Company to gain credibility from prospective customers and to sell its products into new markets.

Market knowledge of the Company’s name is limited. The Company will need to devote considerable resources to educate new markets about the products the Company offers. In establishing new markets, the Company will be competing with companies that are potentially already entrenched in such markets or may be better funded than the Company. The ability of the Company to raise brand awareness will depend on its ability to raise the money required to undertake such an intensive marketing effort. As noted elsewhere, there is no assurance that the Company can raise funds required for such an investment in marketing.

The Company has limited sales and marketing experience and can provide no assurance that the Company can keep its current customers or gain new ones.

The Company has limited experience in marketing and selling its products and the Company has no sales or marketing staff. The Company will have to expend substantial funds to promote and develop its products. The Company’s success in this regard will depend on the quality of its products and its ability to develop and implement an effective sales and marketing strategy. Failure to achieve the marketing objectives will have a material adverse effect on the Company and on its results of operations and financial condition.

Conflicts of interest may exist for Directors and Officers which may inhibit their ability to act in the best interests of the Company and its shareholders leading to possible impairment of the Company’s ability to achieve its business objectives.

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The directors and officers of the Company will not be devoting all of their time to the affairs of the Company. The directors and officers of the Company are directors and officers of other companies. The directors and officers of the Company will be required by law to act in the best interests of the Company. They will have the same obligations to the other companies in respect of which they act as directors and officers. Discharge by the directors and officers of their obligations to the Company may result in a breach of their obligations to the other companies and, in certain circumstances, this could expose the Company to liability to those companies. Similarly, discharge by the directors and officers of their obligations to the other companies could result in a breach of their obligation to act in the best interests of the Company. Such conflicting legal obligations may expose the Company to liability to others and impair its ability to achieve its business objectives. Jamie Lewin is a Director and/or CFO of seven other public companies and spends up to 5 hours per week on these companies. Jamie Lewin is not a Director or Officer of any companies that compete with or provide services that are similar to those of the Company.

Management of the Company can, through their stock ownership in the Company, influence all matters requiring approval by the Company’s shareholders.

Management of the Company at the time of this report, collectively own approximately 1.8% of the Company's issued and outstanding common shares at that date. These shareholders, if acting together, could significantly influence all matters requiring approval by the Company's shareholders, including the election of directors and the approval of mergers or other business combination transactions. Management may not make decisions that will maximize shareholder value and may make decisions that will contribute to or cause the entrenchment of management.

The value and transferability of the Company shares may be adversely impacted by the limited trading market for the Company’s common shares.

No assurance can be given that a market for the Company’s common shares will be quoted on an exchange in the U.S. or on the NASD's Over the Counter Bulletin Board. The Company’s common shares may be subject to illiquidity and investors may not be able to sell their shares in a timely manner.

The value and transferability of the Company shares may be adversely impacted by the penny stock rules.

The sale or transfer of the Company common shares by shareholders in the United States may be subject to the so-called "penny stock rules." Under Rule 15g-9 of the Exchange Act, a broker or dealer may not sell a "penny stock" (as defined in Rule 3a51-1) or effect the purchase of a penny stock by any person unless:

(a)

Such sale or purchase is exempt from Rule 15g-9;

(b)

Prior to the transaction the broker or dealer has (1) approved the person's account for transaction in penny stocks in accordance with Rule 15g-9, and (2) received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased; and

(c)

The purchaser has been provided an appropriate disclosure statement as to penny stock investment.

The SEC adopted regulations generally define a penny stock to be any equity security other than a security excluded from such definition by Rule 3a51-1. Such exemptions include, but are not limited to (1) an equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operations for at least three years, (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average revenue of at least $6,000,000 for the preceding three years; (2) except for purposes of Section 7(b) of the Exchange Act and Rule 419, any security that has a price of $5.00 or more; and (3) a security that is authorized or approved for authorization upon notice of issuance for quotation on the NASDAQ Stock Market, Inc.'s Automated Quotation System. It is likely that the Company’s common shares, assuming a market were to develop in the US, will be subject to the regulations on penny stocks. Consequently, the market liquidity for the common shares may be adversely affected by such regulations limiting the ability of broker/dealers to sell the Company’s common shares and the ability of shareholders to sell their securities in the secondary market in the US Moreover, the Company shares may only be sold or transferred by the Company shareholders in those jurisdictions in the US in which an exemption for such "secondary trading" exists or in which the shares may have been registered.

There is no guarantee that there is a market for the Company’s common shares in the United States.

Although the Company’s common shares were added to the OTC Bulletin Board System on April 20, 2009 under the symbol “APCSF”, trading of the company’s shares is very limited. The Company cannot guarantee that there will be a market for the Company’s common shares in the United States or that there will any significant amount trading in the company’s shares for the foreseeable future The Company cannot guarantee that it will continue to maintain a listing in

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the United States or that it will not be found in default of existing regulations or new regulations and be suspended from trading or delisted.

Risks Pertaining to the Industry

Registration of products may not occur in a timely manner which could lead to delays in product introductions, reduced revenue expectations and extra costs to conduct further tests to satisfy regulatory agencies.

Government agencies, such as the EPA and the Food and Drug Administration (“FDA”) in the United States and Health Products and Food Branch in Canada, need to provide approvals of the Company’s products prior to any sales of these products. To obtain such approvals, the Company must submit extensive amounts of information on the efficacy, toxicology, carcinogenicity, mutagenecity and other testing of the products that it is trying to register. After all of the information is provided, the agencies can request supplemental information and further testing. Once all of the requirements for documentation are satisfied, the agencies can take an indeterminate amount of time to provide approvals for the Company to market its products. Significant delays could lead to slower revenue growth than anticipated. In addition, regulatory delays can allow time for competitors to devise strategies to prevent or reduce market penetration. There is no assurance that government agencies will accept for registration any of the Company’s products.

The Company is very dependent on the registration and sale of its commercial, retail and therapeutic products.

If the Company is not successful in achieving regulatory approval of its products, its ability to generate revenues will be impaired. Even if registrations are successful, there is no guarantee that the Company will be able to maintain the registrations or be able to pass inspections by the regulatory authorities that permit the sale of the Company’s products. In the event of a failed inspection, it is possible that the Company may be ordered to stop the sale of its products or undertake a recall of products that the regulatory authorities deem to be non-compliant with existing regulations. If the Company is ordered to recall or stop the sale of any of its products, the ability of the Company to generate revenues will be impaired. If such a recall or suspension of sales occurs, there is no guarantee that the Company will, at any future date, be able to resume the sale of the suspended or recalled products.

There is a risk that the Company’s intellectual property infringes upon the rights of other companies, which could lead to reduced revenues, reduced margins due to sanctions against the Company, outright withdrawal or prohibition of products or trademarks from the market and significant costs for legal defense against infringement claims, re-branding of products and revised marketing materials.

The Company is unaware of any infringement claims being made against the Company or its products or processes at the time of writing. In the future, there can be no assurances that third parties will not assert infringement claims in the future or require the Company to obtain a license for the intellectual property rights of such third parties. There can be no assurance that such a license, if required, will be available on reasonable terms or at all. If the Company does not obtain such a license, it could encounter delays in the introduction of products or could find that the development, manufacture or sale of products requiring such a license could be prohibited.

There is a risk that earlier inventions may exist that invalidate the Company’s patent applications so that the Company may not be able to sell any infringing products.

Since patent applications are maintained in secrecy for a period of time after filing, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, the Company cannot be certain that it was the first creator of inventions covered by pending patent applications, or that it was the first to file patent applications for such inventions. The Company might have to participate in interference proceedings in U.S., Canadian or patent offices in other jurisdictions to determine priority of invention, at substantial cost, particularly if such actions are required overseas. There can be no assurance that the Company’s patents, if issued, would be held valid or enforceable by a court. The Company has patents issued in the United States, China and Australia and patent applications filed in the European Union and Canada. These patent applications seek intellectual property protection for the basic formulation of the T ³ 6 ^® formulation, the method for making it and certain therapeutic uses of the formulation.

There may be limited ability to defend the patents if and when they are issued, leading to loss of sales that might otherwise be realized if the Company was in a position to defend its patents.

Litigation among pharmaceutical companies can be intense and costly. The Company might not have the financial ability to defend its patents, if issued, against larger industry players. Litigation may be necessary to enforce patents issued or assigned to the Company, or to determine the scope and validity of a third party's proprietary rights. Additionally, there can be no assurances that the Company would prevail in any such action. An adverse outcome in litigation or as part of an interference or other proceeding in a court or patent office could subject the Company to significant liabilities, require disputed rights to be licensed from other parties or require the Company to cease using certain technology or products, any of which could have a material adverse effect on the Company’s business.

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4.A.  History and Development of the Company

Capital Pool Company

The Company was incorporated by registration of its Memorandum and Articles under the BC Companies Act on May 30, 2000 under the name “Duft Biotech Capital Ltd.” and was classified as a Capital Pool Company (“CPC”) on the TSX Venture Exchange. Under the policies of the TSX Venture Exchange, the principal business of a CPC is to identify and evaluate opportunities for acquisition. The completion of such an acquisition is referred to as a Qualifying Transaction. A CPC does not carry on any business other than the identification and evaluation of assets or businesses in connection with potential Qualifying Transactions, does not have business operations or assets other than seed capital and has no written or oral agreements for the acquisition of an asset or business at the time of formation.

A “Qualifying Transaction”, pursuant to the policies of the TSX Venture Exchange, is a transaction whereby a capital pool company:

(a)

Issues or proposes to issue, in consideration for the acquisition of significant assets or businesses, common shares or securities convertible, exchangeable or exercisable into common shares, which, if fully converted, exchanged or exercised would represent more than 25 percent of its common shares issued and outstanding immediately prior to the issuance;

(b)

Enters into an arrangement, amalgamation, merger or reorganization with another issuer with significant assets, whereby the ratio of securities which are distributed to the security holders of the capital pool company and the other issuer results in the security holders of the other issuer acquiring control of the resulting entity; or

(c)

Otherwise acquires significant assets other than cash.

Qualifying Transaction

On November 13, 2003, the Company completed its Qualifying Transaction, which was the acquisition of the assets of API, a private company founded in 1996 and since renamed 513947 BC Ltd. (“513947”). The transaction was approved by the TSX Venture Exchange as a valid Qualifying Transaction.

To support the acquisition of API as its Qualifying Transaction, the Company had an independent valuation of API conducted. From the valuation, direct development costs were estimated to be $378,000 as follows.

These direct development costs were discounted by 20% to $302,400. Estimated administrative costs of $45,000 and unpaid salaries of $192,551 were added to the discounted direct development costs to arrive at a total value of $539,951. This value was rounded up to $540,000 and $15,000 worth of inventories of completed T ³ 6 ^® Disinfectant and raw materials brought the total to $550,000.

The Company purchased these assets of API with 3,711,263 shares of the Company plus forgiveness of loans and accrued interest of $57,747.40 advanced to API by the Company prior to completion of the Qualifying Transaction. The Company purchased only the assets and not the liabilities of API except for the trademark litigation undertaken by JohnsonDiversey Inc. against API. This litigation was subsequently settled and is discussed elsewhere. As a result of the asset purchase, API became the registered owner of the shares of the Company. The Company also acquired the intellectual property and $17,500 worth of inventory from API. The intellectual property consisted of one patent application, #PCT/CA2002/001284, “A wide spectrum disinfectant”, filed on August 20, 2002 under the Patent Cooperation Treaty (PCT), described in more detail below. two Drug Identification Numbers (“DIN’s”, i.e.,02245056 for T ³ 6 ^® Disinfectant under its previous name, “Spritz” and 02231344 for the same product renamed, “Viralex” and subsequently renamed to “T ³ 6 ^® Disinfectant”),  provided to the Company by Health Canada and the pending trademarks for “Viralex”, “T ³ 6” and a logo displayed with the name, “ALDA Pharmaceuticals”. (described under

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“Trademarks” in Section “4.B. Business Overview”), customer lists and contacts, products under development (also described in “4.B. Business Overview”), marketing materials, technical bulletins, and instructions for customers and technical studies.

Agreements that still remain in effect as a result of the asset purchase are the appended Voting Agreement and the Non-Competition Agreement.

Voting Agreement (Exhibit 3.)

The parties to the Voting Agreement, dated November 13, 2003 and established as a condition of completing the Qualifying Transaction, are API, Allan Shapiro (“Shapiro”), Michael Wilby (“Wilby”), the Company, Terrance Owen (“Owen”), Peter Chen (“Chen”) and Bruce Schmidt (“Schmidt”).

Under the terms of the agreement, API, Shapiro and Wilby will vote their shares of the Company in favour of the number of directors of the Company not to exceed six directors with one director being independent of API and the election of Owen, Chen and Schmidt as directors of the Company provided they have been nominated by the Company for election to the Board of the Company;

Until termination of this Agreement, the Company will nominate Owen, Chen and Schmidt for election to the Board at each Meeting provided each person consents to continuing as a director of the Company, is not then prohibited by law from serving as a director of the Company and that each nomination and election is acceptable to the TSX Venture Exchange and all other applicable securities regulatory authorities.

Subject to restrictions imposed under applicable securities legislation, API, Shapiro or Wilby may sell shares of the Company through a stock exchange. If any of them proposes to sell in excess of 200,000 shares of the Company in an “off-market” transaction they will require the purchaser to agree to be bound by the terms of the Voting Agreement.

If a take-over bid or other offer is made to shareholders of the Company by an arms-length third party for all or a portion of the shares of The Company, API, Shapiro and Wilby will be free to tender to such bid or offer any shares owned by them and will not be required to comply with the selling restrictions described above.

The Voting Agreement will terminate with respect to Wilby, at the earlier of:

·

such time as API, Shapiro and Wilby collectively cease to hold, directly  or indirectly, less than 10% of the issued voting shares of The Company;

·

such time as Wilby ceases to hold directly or indirectly, or control at least 5% of the issued  voting shares of The Company; and

·

5 years from the date of the execution and delivery of this Agreement.

The Voting Agreement will not terminate with respect to API and Shapiro, except with the consent of the TSX Venture Exchange. As of June 30, 2008, the Voting Agreement was no longer in effect for Wilby since his personal shareholdings were below 5% of the issued voting shares of the Company.

On November 1, 2004, the Voting Agreement was amended. The parties to the Amendment are API, Shapiro, Wilby, the Company, Owen, Chen and Schmidt.

The Amendment was entered into because of the name changes undertaken by the Company and API after completion of the Qualifying Transaction and the resignation of Schmidt as a director of the Company. The Amendment also changed references to Owen, Chen and Schmidt to “Owen Nominee”, “Chen Nominee” and “Schmidt Nominee”, respectively, so that, if any one of Owen, Chen or Schmidt does not consent to being nominated as a director of APC, another person acceptable to the TSX Venture Exchange and to the other nominees would become a party to the Voting Agreement. On October 4, 2004, Eugene Hodgson was appointed as a director and became the “Schmidt nominee” on completion of the Amendment.

This agreement was terminated for Mr. Chen when he resigned on April 12, 2012.

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Non-Competition Agreement (Exhibit 4.i.)

The parties to the Non-Competition Agreement, dated November 13, 2003 and established as a condition of completing the Qualifying Transaction, are API, Shapiro and the Company.

Under the terms of the Agreement, API and Shapiro agree that neither Shapiro nor API will compete with the Company in any way. In the case of API, the Agreement expired after one year on November 13, 2004. In the case of Shapiro, the Agreement stays in place until January 31, 2012 which is a period of one year after his services for the Company came to an end. Competition, as defined in the Agreement, includes, but is not limited to, the solicitation of customers or the sale of any products or services that are in any way similar to those offered by the Company or inducement of any employees of the Company to leave the Company.

Shapiro agrees that any breach of the agreement by him could cause irreparable harm to the Company and that the Company can take any action that it deems necessary to end the breach and be compensated for the breach.

Change of Business.

As a consequence of completing the Qualifying Transaction, the Company entered into the business of developing and marketing disinfectant products.

On November 26, 2003 the Company changed its name to ALDA Pharmaceuticals Corp. The Company is still registered in British Columbia, Canada only.

In October, 2010, the head office of the Company moved to Unit 170 – 4320 Viking Way, Richmond, BC V6V 2L4. The Company’s telephone number is (604) 521-8300. The contact person is: Mr. Terrance Owen, President and CEO or Mr. Peter Chen, CFO and Secretary. The Company’s common shares have been listed for trading on the TSX Venture Exchange since July, 2001.

On June 24, 2013 the Company changed its name to Nuva Pharmaceuticals Inc. The Company is still registered in British Columbia only.

In August 2013, the head office of the Company moved to Unit 152 – 11782 River Road, Richmond, BC V6X 1Z7. The Company’s telephone number is (604) 303-9180. The contact person is: Mr. Arun Nayyar CEO or Mr. Jamie Lewin, CFO or Mr. Eugene Beukman Secretary.

The Company’s common shares have been listed for trading on the TSX Venture Exchange since July, 2001

The Company is now focused on the licensing and sales of pharmaceuticals that can be registered as natural products, OTC’s and generics.

Financings

The Company has financed its operations since inception through funds raised in a series of private placements of common shares:

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4.B. Business Overview

The Company was established in order to develop and commercialize disinfectant products. The Company has called the disinfectant technology “T ³ 6 ^® ”. T ³ 6 ^® is a mixture of ethanol, o-phenylphenol (“OPP”), benzalkonium chloride (“BZK”), chlorhexidine gluconate (“CHG”) and other ingredients, including Nonoxynol-9 (“N-9”), water and, optionally, lemon or orange fragrances. All of these component chemicals are bio-degradable.

The Company has secured patents and has additional patents pending for the specific combination of these products although the ingredients are all common chemical compounds.

During its first five years, Company’s primary focus was on product development. In April, 2009, the Company completed a line of products that included T ³ 6 ^® Disinfectant, T ³ 6 ^® Antiseptic Hand Sanitizers and T ³ 6 ^® Disinfectant Cleaner CONCENTRATE.

T ³ 6 ^® Disinfectant

The Company’s first product, an Intermediate Level Disinfectant called “Viralex” and subsequently renamed “T ³ 6 ^® Disinfectant”, was launched in September of 2001, prior to the acquisition of API. It is being sold primarily to (i) “First Responder” organizations including ambulance, fire fighters and police forces in Canada, (ii) dental clinics, and (iii) beauty and hair care salons and spas. T ³ 6 ^® Disinfectant has been issued a Drug Identification Number (“DIN”) by Health Canada for its use on any hard, inanimate non-porous surfaces. This includes, but is not limited to, counter tops, cutting boards, sinks, tubs, scissors and other non-critical equipment used in beauty salons, spas,  dental offices, and medical clinics and equipment used by firefighters, police and paramedics. T ³ 6 ^® Disinfectant is also permitted to be used in restaurants and other facilities where food is prepared.

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Efficacy studies - T ³ 6 ^® Disinfectant

Efficacy studies refer to proving a drug's effectiveness (in this case as a disinfectant) in producing a desired result (bactericidal, virucidal, fungicidal or tuberculocidal). In studies conducted by independent laboratories in Canada and the United States, T ³ 6 ^® Disinfectant has demonstrated efficacy against bacteria, fungi and viruses. The types of surfaces tested were hard non-porous surfaces unless otherwise noted.

1.

An efficacy study, dated February 10, 1997, was conducted by British Columbia Research Inc. (Vancouver, Canada) under the supervision of Dr. Ernie Lee. The organisms tested were four strains of bacteria ( Staphylococcus epidermis, Pseudomonas aeruginosa, Serratia marcescens, and Mycobacterium tuberculosis) one strain of yeast ( Candida albicans) , spores from one strain of fungus ( Aspergillus fumigatus) and two strains of viruses ( Herpes Simplex Virus-1 and Poliovirus-1) in compliance with test standards accepted by Health Canada’s Therapeutic Product Directorate Twenty five replicates of each organism at low levels, ranging from 38 to 177 cfu’s/ml (colony forming units/ml) were dried on microscope cover slips and exposed to T ³ 6 ^® Disinfectant for varying times. The studies demonstrated that no growth occurred for any of the replicates. It was concluded that T ³ 6 ^® Disinfectant was 100% effective against all five organisms after 10 minutes or longer contact times. At shorter contact times, the kill rate for all 5 organisms ranged from 95.5% to 97.2% after a 1 minute exposure and 98.7 and 99.0% after a 5 minute exposure.

2.

An efficacy study, dated June 6, 1997, was conducted by Dr. Richard Stokes of the University of British Columbia in conjunction with the British Columbia Children’s Hospital. Twenty replicates of Mycobacterium tuberculosis at approximately 10 ⁷ cfu’s/ml were dried on microscope cover slips and exposed to T ³ 6 ^® Disinfectant for varying times. The studies demonstrated that the kill rate was 99.99997% (a reduction of log ₁₀ = 6.46) and 99.99998% (a reduction of log ₁₀ = 6.59) after a 10 minute exposure. The requirement for a disinfectant to be designated as “Tuberculocidal” by Health Canada is a log ₁₀ reduction of 6.0 or greater.

3.

Efficacy studies were conducted by Viromed Biosafety Laboratories of Minneapolis, Minnesota, completed on February 23, 2000. The organisms tested were Staphylococcus aureus, Pseumomonas aeruginosa, Salmonella choleraesuis , Human Immunodeficiency Virus Type I, Herpes simplex Virus Type 1, Trichophyton mentagrophytes and Poliovirus Type 1, in compliance with test standards accepted by the Environmental Protection Agency (“EPA”) of the United States.

·

For each of the bacteria, Staphylococcus aureus, Pseumomonas aeruginosa, Salmonella choleraesuis , 180 replicates at 6.1 x10 ⁶ cfu/ml (log ₁₀ = 6.79), 1.9 x 10 ⁶ cfu/ml (log ₁₀ = 6.28) and 1.7 x 10 ⁴ cfu/ml (log ₁₀ = 4.23), respectively, were dried on microscope slides and exposed to T ³ 6 ^® Disinfectant for 3 minutes. For both Staphylococcus aureus and Pseumomonas aeruginosa , growth was observed on only 1 replicate out of 180. For Salmonella choleraesuis , none of the 180 replicates showed any growth. These results met the requirement that no more than 1 replicate out of 60 can show growth and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against all three bacteria.

·

For Human Immunodeficiency Virus Type I, six replicates at 1.77 x10 ⁵ cfu/ml (log ₁₀ = 5.25), were dried on the bottom of Petri dishes. After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against HIV.

·

For Herpes simplex Virus Type 1, six replicates at 5.6 x10 ⁶ cfu/ml (log ₁₀ = 6.25), were dried on the bottom of Petri dishes, After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against the Herpes virus.

·

For Poliovirus Type 1, six replicates at 5.6 x10 ⁵ cfu/ml (log ₁₀ = 5.75), were dried on the bottom of Petri dishes. After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against the Polio virus.

·

For the fungus, Trichophyton mentagrophytes, twenty replicates at 4.6 x10 ⁴ cfu/ml (log ₁₀ = 4.66), were dried on microscope slides. After being exposed to T ³ 6 ^® Disinfectant for 3 minutes, none of the replicates showed any viral activity and T ³ 6 ^® Disinfectant was deemed to demonstrate efficacy against Trichophyton mentagrophytes .

The above studies demonstrated that T ³ 6 ^® Disinfectant was effective in inactivating polio viruses within 3 minutes and tuberculosis mycobacteria within 5 minutes. Polio and tuberculosis are benchmark micro-organisms because they are among the most difficult to kill with disinfectant products. Efficacy against polio and tuberculosis demonstrates a high

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level of disinfection capability. In order to make a virucidal claim and a tuberculocidal claim, a disinfectant product must demonstrate its ability to destroy the poliomyelitis type 1 virus, and Mycobacterium bovis or tuberculosis mycobacteria within a specified time. This is mandated in Canada by the Canadian General Standards Board, “Assessment of Efficacy of Antimicrobial Agents for Use on Environmental Surfaces and Medical Devices”, CAN/CGSB -2.161-97, p.4, and the Therapeutic Products Programme Guidelines on Disinfectant Drugs, 1999 Edition, Appendix II on page 23.

In all of the testing described above, controls were used to validate the testing protocols. A positive test result required complete inactivation of the tested viruses and complete efficacy against the fungi and bacteria as required by the U.S. EPA for disinfectant label claims. The results from BCRI demonstrated efficacy in excess of Log10 4.0 (i.e. 10,000 times reduction in micro-organisms) in compliance of the standards required in Canada. The tuberculocidal studies demonstrated results in excess of Log ₁₀ 6.0 (1,000,000 times reduction in micro-organisms).

Toxicology studies

Toxicology is the study of the adverse effects of chemical, physical or biological agents on living organisms and the ecosystem, including the prevention and amelioration of such adverse effects. The toxicology studies listed below were conducted with T ³ 6 ^® Disinfectant in the United States by Product Safety Labs in East Brunswick, New Jersey, USA and completed in November, 1999.

·

Acute Oral Toxicity Study in Rats - This test determines the amount of a substance that kills 50% of the test population of experimental animals when administered as a single dose. Five thousand milligrams of T ³ 6 ^® Disinfectant per kilogram of bodyweight was administered orally to ten healthy rats. The animals were observed for mortality, signs of gross toxicity, and behavioral changes at least once daily for 14 days. Bodyweights were recorded prior to administration and again on Days 7 and 14. Necropsies were performed on all animals at terminal sacrifice. All animals survived and gained weight during the study. Following administration, most animals exhibited piloerection (erection of the hair), hunched posture and/or were hypoactive. Apart from one female that exhibited reduced fecal volume between Days 0 and 5, all affected animals recovered from the above symptoms. Based on the results of this study, the single dose acute oral LD ₅₀ of T ³ 6 ^® Disinfectant is greater than 5,000 mg/kg of bodyweight

·

Primary Skin Irritation Study in Rabbits - This test determines the potential for a substance to produce irritation after a single topical application. Five-tenths of a milliliter of T ³ 6 ^® Disinfectant was applied to the skin of three healthy rabbits for 4 hours. Following exposure, dermal irritation was evaluated and no dermal irritation was noted at any dose site during the study. Based on the results of this study, T ³ 6 ^® Disinfectant is classified as non-irritating to the skin.

·

Primary Eye Irritation Study in Rabbits - This test determines the potential for a substance to produce irritation from a single dose to the eye. One-tenth of a milliliter of T ³ 6 ^® Disinfectant was placed into the right eye of six healthy rabbits. The treated eyes of three rabbits were rinsed with physiological saline after instillation. The eyes of the remaining three rabbits were not rinsed. The left eye remained untreated and served as a control. Ocular irritation was evaluated and, based on the results of this study. T ³ 6 ^® Disinfectant is classified as moderately irritating to the unrinsed eye and severely irritating to the rinsed eye.

·

Acute Inhalation Toxicity Study in Rats - This test determines the potential for a substance to produce toxicity from a single exposure via the inhalation route. Ten healthy rats were exposed to T ³ 6 ^® Disinfectant vapours at a closed chamber at a concentration 2.02 mg/L for 4 hours. The animals were observed for mortality, signs of gross toxicity, and behavioral changes at least once daily for 14 days thereafter. Bodyweights were recorded prior to exposure and again on Days 7 and 14. All animals survived exposure to the test atmosphere and gained bodyweight over the 14-day observation period. During the exposure, the rats Exhibited ocular and nasal discharge, shortness of breath, irregular respiration, shallow respiration, hunched posture and hypoactivity. With the exception of ocular and nasal discharge and shallow respiration, similar clinical signs persisted in all animals upon removal from the exposure chamber. Some animals also developed noisy breathing, reduced fecal volume and/or a prone posture, but all rats recovered from these symptoms by Day 11 and appeared active and healthy for the remainder of the study. Necropsy findings at terminal sacrifice were unremarkable. Based on the results of this study, the single exposure acute inhalation LC ₅₀ of T ³ 6 ^® Disinfectant is greater than 2.02 mg/L.

·

Acute Dermal Toxicity Study in Rats - This test determines the health hazards likely to arise from a short-term exposure to a substance from a single topical application to the skin. Two thousand milligrams per kilogram of bodyweight of T ³ 6 ^® Disinfectant was applied to the skin of ten healthy rats for 24 hours. The animals were observed for mortality, signs of gross toxicity, and behavioral changes at least once daily for 14 days. Bodyweights were recorded prior to application and again on Days 7 and 14. Necropsies were performed on all animals at terminal

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sacrifice. All animals survived, gained weight and appeared active and healthy. There were no signs of gross toxicity, adverse pharmacologic effects or abnormal behavior. Gross necropsy findings at terminal sacrifice were unremarkable. Based on the results of this study, the single dose acute dermal LD50 of T ³ 6 ^® Disinfectant is greater than 2,000 mg/kg of bodyweight.

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Dermal Sensitization Study in Guinea Pigs - This test determines the potential for a substance to produce sensitization after repeated topical applications. T ³ 6 ^® Disinfectant was topically applied to twenty healthy test guinea pigs, once each week for a three week induction period. Twenty-seven days after the first induction dose, a challenge dose of T ³ 6 ^® Disinfectant at its highest non-irritating concentration (100%) was applied to a new site on each guinea pig. Ten untreated animals were maintained under the same environmental conditions and treated with T ³ 6 ^® Disinfectant at challenge only. Approximately 24 and 48 hours after each induction and challenge dose, the animals were scored for erythema (redness of the skin). Based on the results of this study, T ³ 6 ^® Disinfectant is not considered to be a contact sensitizer.

The efficacy and toxicology studies described above, although completed some time ago, are still valuable assets of the Company because they are being used to support further regulatory approvals of the T ³ 6 ^® formulation. For example, the studies were incorporated into the pre-IND package that was presented to the FDA on July 15, 2008 and into the pre-CTA (pre-Clinical Trial Application) that was presented to Health Canada on July 22, 2009. These studies were also included in the IND submission, described below, that was presented to the FDA on September 8, 2009 and, after receiving a response from the FDA, was re-submitted with additional information on January 4, 2010. The studies above will also be included in a CTA for Health Canada when it is submitted.

There were no p-values nor other estimates of statistical significance employed in the studies because such measurements are not required by Health Canada or the EPA and, therefore, are not part of the standard protocols. There were no further requirements for the Company to undertake further studies to sell T ³ 6 ^® Disinfectant in Canada. The studies described above were conducted according to the requirements of the EPA. EPA registration of T ³ 6 ^® has not been pursued to date and it is uncertain if EPA registration for T ³ 6 ^® will be pursued in the future. However, if the Company does decide to pursue EPA registration in the future, the following requirements apply.

Disinfectant products are classified by the EPA as pesticides under the authority of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Federal law requires that, before selling or distributing a disinfectant in the United States, a registration, or license, must be obtained from the Environmental Protection Agency (“EPA”). The process of registering a pesticide is a scientific, legal, and administrative procedure through which EPA examines the ingredients of the disinfectant, how it is to be used, the amount, frequency, and timing of its use, storage and disposal practices and potential human health and environmental effects associated with use of the product. In order to accomplish this, potential registrants must generate scientific data necessary to address concerns pertaining to the identity, composition, potential adverse effects and environmental fate of each disinfectant. These data allow the EPA to evaluate whether a pesticide has the potential to cause harmful effects to non-target organisms and the environment including humans, wildlife, plants and surface water or ground water.

The tests required for EPA approval of a disinfectant are described above in the sections above entitled “Efficacy studies” and “Toxicology studies”. These tests adhere to the standards established by the AOAC (Association of Analytical Communities) International, an organization that provides over 3,000 analytical methods in its publication “Official Methods of Analysis of the AOAC International”. For disinfectants, such as T ³ 6 ^® Disinfectant, the AOAC standards that apply include the AOAC Use-Dilution Method, the AOAC Germicidal Spray Products Test, the AOAC Fungicidal Test and the AOAC Tuberculocidal Activity Method. Storage and stability studies and proof that the manufacturing process is reliable must also be provided to the EPA.

After completion, the efficacy and toxicology studies are submitted to the EPA according to specific templates that are provided by the EPA and available on the website of the EPA. These templates ensure that the testing results are submitted in standard formats to facilitate the review of the information by the EPA.

A disinfectant can only be used legally according to the directions on the labeling accompanying it at the time of sale. Accordingly, the content of product labels is also subjected to review and must be approved by the EPA to ensure full and accurate disclosure of such matters as the concentrations of ingredients, instructions for use, precautions, any hazards to health or the environment, treatments for exposure, disposal instructions, manufacturer and the registrant. Most states also conduct a review of the disinfectant label to ensure that it complies with federal labeling requirements and any additional state restrictions of use.

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Once all of the tests and the label for a product have been approved by the EPA a "registration" or license that permits a disinfectant’s manufacture, distribution, sale, and use is granted. A manufacturer must have an EPA Establishment License because the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) requires that production of disinfectants be conducted in a registered “Pesticide-Producing Establishment”. In this case, “Production" includes formulation, packaging, repackaging, and re-labeling. Production in an unregistered establishment is a violation of the law. The EPA assigns a unique number to each establishment that produces any pesticide or device. Each company must submit EPA Form 3540-8 to request an establishment number. FIFRA requires that each producing establishment must place its EPA establishment number on the label or immediate container of each disinfectant, device or active ingredient produced.

After a disinfectant is registered by the EPA, the Company, its manufacturers, distributors and independent testing facilities must maintain full and complete records for review by the EPA if an inspection is required. These records include such matters as information on manufacturing, quality control of ingredients and finished goods, inventory, shipping, receiving and disposal.

Products registered in Canada

The Company is also selling or in various stages of development of other products describe below. Unless otherwise indicated, the Company has not determined, for any of these products that are not already being sold, when or if manufacturing will be started, revenues will be realized, any further testing will be conducted or registrations will be pursued in any jurisdiction outside Canada. If any further testing or registrations are undertaken, it is not known how much time or funding such testing would require or how long it will take the regulatory bodies to approve the products for marketing by the Company or if the regulatory bodies will approve the products at all. There are active competitors that are already well established in the markets selected by the Company. Delays may allow even more competition to develop comparable products, which will make market penetration more difficult which would, in turn, lead to reduced revenues.

·

T ³ 6 Disinfex ^TM Spray and Wipes: This product, formerly named, “Viralex”, then, “T ³ 6 ^® Disinfectant”, has been re-named as, “T ³ 6 Disinfex ^TM ”, and is manufactured and marketed as a liquid in 60, 480 and 4,000 ml bottles and as wipes in canisters.

·

T ³ 6 Disinfex ^TM Disinfectant Cleaner Wipes: This product has been recognized by Health Canada as being able to kill bacteria, fungi and viruses on hard surfaces within 10 minutes (compared to the 3 to 5 minute time for T ³ 6 ^® Disinfectant). It has also passed internal company efficacy and cleaning testing. This product is intended for use in hospitals, cruise lines, airlines and consumer applications that don’t require a disinfectant product that is as fast acting as T ³ 6 ^® Disinfectant, but need a more economical product that also cleans surfaces. The Health Canada DIN for this product is 02272989. On July 17, 2008, the Company received DIN 02314134 for this same product but renamed to “T ³ 6 Disinfex ^TM Disinfectant Cleaner. As of the date of this report, this product has not been manufactured or sold.

·

T ³ 6 ^® Disinfectant Cleaner CONCENTRATE: This product (DIN 02278820) is intended to be used at dilutions up the 1/64 for large scale applications, such as floors and walls and has been on the market since November, 2008.

·

T ³ 6 ^® Antiseptic Hand Sanitizer Gel, Liquids and Wipes:  On July 23, 2008, the Company was issued DIN 02314320 for a new Antiseptic Hand Sanitizer Gel. This new DIN allowed the Company to sell its first product for human use. This product consists of 0.15% BZK in 70% ethanol and, unlike standard 62% ethanol hand sanitizers, has been demonstrated in testing conducted by ATS Labs in Eagan, MN to be effective against Norwalk-like viruses as announced by the Company in a news release dated January 30, 2009. In the testing, Feline Calicivirus was grown to a log ₁₀ titer of 6.5 and exposed to the product for up to 5 minutes. After 5 minutes, the Company’s product reduced the viral titer by 98.2%. The 62% ethanol product had no measurable effect in the same time period.

The product also kills the H1N1 influenza virus within 15 seconds in testing conducted by Bioscience Laboratories, Inc. in Bozeman, MT as announced by the Company in a news release dated August 7, 2009. In this testing, H1N1 Virus (Swine-like H1N1 Influenza A virus Strain A/California/04/2009) was grown to a log ₁₀ titer of 6.75 and exposed to the Company’s product for up to 1 minute. The maximum measurable kill rate of 99.994%, a log ₁₀ reduction of 4.75, was achieved in 15 seconds.

Testing has also shown that T ³ 6 ^® Antiseptic Hand Sanitizer is effective against two new strains of antibiotic resistant bacteria that have taken genes from other bacteria that have the ability to digest nearly all antibiotics, including penicillin-like antibiotics that possess broad spectrum antibacterial properties and are typically used as a last resort. Such genetic “swapping” is common among bacteria and is a major cause of antibiotic

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resistance. The testing was conducted by Bioscience Laboratories, Inc. in Bozeman, MT as announced by the Company in a news release dated December 2, 2010 using clinical isolates. In this testing Escherichia coli, Extended-Spectrum Beta Lactamase, Carbapenemase-Producing and Klebsiella pneumoniae, KPC2 positive, Carbapenemase-Producing were grown to a log ₁₀ titer of 8.91 and 8.85, respectively and exposed to the Company’s product for up to 1 minute. The maximum measurable kill rate for E. coli was 99.99988%, a log ₁₀ reduction of 5.91 in 15 seconds and, for K. pneumoniae, 99.99986%, a log ₁₀ reduction of 5.85 also in 15 seconds.

The gel form of the T ³ 6 ^® Antiseptic Hand Sanitizer is being sold in various sizes of bottles and provided in automatic dispensers. On January 2, 2009, DIN 02321424was issued for T ³ 6 ^® The Liquid Antiseptic Hand Sanitizer. On January 24, 2009, DIN 02322153 was issued for T ³ 6 ^® Antiseptic Hand Sanitizer Spray. Both of these products are manufactured in liquid form, rather than as a gel, for use  in spray bottles and automatic dispensers. On January 20, 2009, DIN 02321947 was issued for T ³ 6 ^® Antiseptic Hand Sanitizer Wipes which incorporate the liquid forms of T ³ 6 ^® Antiseptic Hand Sanitizer into wipes contained in canisters.

The following table summarizes the DIN”s and NPN’s that have been received from Health Canada.

DIN’s

NPN’s

On January 2, 2012, the Company licensed the rights to manufacture and market T 3 6 ® disinfectant and hand sanitizer products in Canada to Proterra Management Group Inc. (formerly 612480 BC Ltd.),a company controlled by Peter Chen, a former Director and CFO, in settlement of management fees of $125,440 owed to Proterra Management Group Inc. No rights to any other products or territories were provided to Proterra. ALDA retains a Right of First Refusal to reacquire the rights if Proterra receives a valid third party offer for nay portion of the rights provided to Proterra. ALDA retains all of the intellectual property including the DIN's NPN's, patents and trademarks. Management is of the opinion that the rights provided to Proterra were fairly priced since the Company had moved from its warehouse, could no longer support the manufacturing and marketing of disinfectants or hand sanitizers and was unable to maintain its Drug Establishment License that is required to sell hand sanitizer products. The Company also offered the rights to competing companies and to third party manufacturers and received no offers except one that was for the forgiveness of approximately $10,000 in debt owed by the Company.

Products registered in the US.

The Company has abandoned the maintenance of its patents in the US.

Products registered in the EU.

The Company has abandoned the maintenance of its patents in the EU.

Products registered in Australia.

The Company has abandoned the maintenance of its patents in Australia.

Products registered in China.

The Company has maintained its patents in China and has signed a joint venture MOU with a Chinese company for the commercialization of its products in China..

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Testing for of the T ³ 6 ^® formulation for therapeutic indications

There is competition in all of the therapeutic markets that the Company has targeted. However, the T ³ 6 ^® formulation is not expected to be expensive to manufacture and can be used in a broad variety of infection-control products. Toxicology and efficacy studies have already demonstrated that the T ³ 6 ^® formulation is not toxic and is effective at killing all bacteria, viruses and fungi. The intended applications are topical, except for the vulvovaginitis treatment. Rather than disrupting metabolic pathways, the T ³ 6 ^® formulation consists of four anti-microbial ingredients in relatively low concentrations that act synergistically to disrupt the physical structure of the infectious agents. This approach prevents microbial resistance from developing. None of the active ingredients are known to have any significant side effects on humans.

The Company has competed preliminary studies required by Health Canada, the US Food and Drug Administration (“FDA”) and the European Medicines Agency (“EMeA”) for the targeted applications. These studies, conducted at Bioscience Laboratories, Inc. (“BSI”) located in Bozeman, Montana, are summarized below.

·

Six species of bacteria were completely killed after 30 seconds of exposure, including VRE (Vancomycin-Resistant Enterococcus ), MRSA (Methicillin-Resistant Staphylococcus aureus ) and MDR (Multi-Drug Resistant) Enterococcus faecium . These three species of bacteria are critical concerns in hospitals, nursing homes and other medical facilities based on their resistance to many antibiotics and other treatments. The clinical testing was completed according to the standards required by the FDA in the US, Health Canada and the European Medicines Agency, which included exposure of the bacteria to T ³ 6 ^® for periods ranging from 30 seconds to 30 minutes. In other tests that were conducted for internal purposes, Staphylococcus aureus and Pseudomonas aeruginosa were completely killed by T ³ 6 ^® with 15 seconds.

·

The fungus, Candida albicans, was completely killed after 5 minutes exposure , again, the shortest time required by the FDA, Health Canada and the European Medicines Agency. C. albicans is a major cause of yeast infections which account for one-third of all vulvovaginal infections (“VVI’s”). Bacteria are a second major cause of VVI’s and combinations of bacteria and fungi cause most of the remaining cases. The effectiveness that T ³ 6 ^® has demonstrated against both fungi and bacteria provides important evidence that ALDA’s T ³ 6 ^® VVI Treatment will provide an effective means to treat all types of VVI’s. A second fungus, Aspergillus niger , was completely killed within 15 minutes, also well within the 60 minute kill time required by the US, EU and Canadian regulatory agencies. A. niger is a causative agent for upper respiratory infections.

·

Two mycobacteria, Mycobacterium avium and Mycobacterium terrae were completely killed by the T ³ 6 ^® formulation within 5 minutes, also the shortest time required by the FDA, Health Canada and the European Medicines Agency (“EMA”). Mycobacteria are among the most difficult bacteria to kill and are used as benchmark organisms to test the effectiveness of anti-microbial formulations.

·

Two species of fungi responsible for athlete’s foot, Trichophyton mentagrophytes and Trichophyton rubrum were completely killed by the T ³ 6 ^® formulation within 5 minutes, also the shortest time required by the FDA, Health Canada and the EMA. The Company intends to pursue registration of the T ³ 6 ^® formulation containing anti-inflammatory compounds for use against athlete’s foot which is relatively easy to test, represents a large market and will allow physicians to prescribe the product ‘off-label’ for other topical infections once it has been approved. In other tests that were conducted for internal purposes, Trichophyton mentagrophytes was completely killed by T ³ 6 ^® with 15 seconds.

·

Ten different types of viruses were killed completely by the T ³ 6 ^® formulation. Of these, 5 types were killed within the minimum 30-second time required by the FDA, including Herpes Types I and II and Influenza B. The remaining 5 types, including Polio and Hepatitis A, the hardiest viruses, were killed within 1 to 3 minutes.

Testing required for therapeutic registrations

Having completed these preliminary clinical tests, Investigational New Drug (“IND”) application #102,487 was submitted to the FDA which has responded with its requirements for pre-clinical and clinical tests. In consultation with its advisors, the Company is preparing a clinical plan and the following studies are understood to be required.

In-vitro studies

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Time Kill Evaluation – In these tests, dozens of different species of infectious micro-organisms are exposed to each of the active ingredients of a test substance and the complete test substance formula for periods of time ranging from 15 seconds to 30 minutes to determine the time required for each ingredient of a test substance and the complete test substance formulation to completely kill the selected species. The objectives of the testing are to determine the

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effective exposure times required for the test substance to be effective and if the individual ingredients have an additive, subtractive or synergistic effect.

·

MIC (Minimum Inhibitory Concentration) Evaluation – Each ingredient of a test substance, the complete test substance formula and a known antiseptic product are tested against hundreds of micro-organisms in suspension tests. The objectives of the tests are to quantify the minimum concentration that is required for each of the test substances to have a measurable effect on the tested species, compare those results to the known antiseptic product and determine if the individual ingredients have an additive, subtractive or synergistic effect. This protocol has been approved by the FDA with minor modifications.

·

Percutaneous Absorption and Cutaneous Disposition (“AD studies”)- Fresh human skin samples are incubated for 24 hours with the epidermal surface exposed to each ingredient of a test substance and the complete test substance formula in a flow-through diffusion cells. The amount of each test article absorbed across the skin into the receptor fluid is determined by liquid chromatography and tandem mass spectrometry. Disposition of each of the test substances in the various skin layers is also determined using the same methods. These tests evaluate the rate and amount of each test substance absorbed across viable human skin after in vitro exposure and the disposition of each test substance in layers (stratum corneum, epidermis, and dermis) of viable human skin.

·

Genotoxicity – This test is required to measure an agent’s ability to cause genetic damage. A standard battery of tests typically involves an in vitro test for gene mutation in bacteria, e.g., the Ames test, and an in vitro test with cytogenetic evaluation of chromosomal damage with mammalian cells or an in vitro mouse lymphoma thymidine kinase (tk) assay prior to the first human exposure. Prior to the initiation of  Phase II clinical studies, an in vivo test for chromosomal damage using rodent hematopoietic cells should be conducted. Such tests are routine, are relatively inexpensive, have high statistical power, are generally reproducible and detect a variety of genotoxic effects.

If there is little or no adsorption into or through the skin, the genotoxicity test described above and the carcinogenicity and reproductive toxicology tests described below may not be required since all of these effects rely on ingestion of an agent and T ³ 6 ^® is a topical preparation. However, for completeness, descriptions of these tests are provided in the event they are required by the regulatory agencies.

Animal studies

·

Carcinogenicity - The three major ways of testing for carcinogens are animal tests, epidemiological studies and bacterial tests to assess if a chemical or physical agent increases the risk of cancer. The traditional study designs involve exposure of rodents to the test substance for up to two years, with an extensive pathological examination at the end of the study to detect any tumours that may be present in the tissues of the animals. It is reported that O-Phenylphenol has a TD ₅₀ of 232 mg/kg per day where TD ₅₀ is the chronic dose rate (expressed in milligrams per kilogram of bodyweight per day) which would induce tumors in half of the number of test animals at the end of the standard lifespan for the species. T ³ 6 ^® contains 2,800 mg/liter so the TD ₅₀ implies that a 100 kg person would have to consume over 8 liters of T ³ 6 ^® each day to reach the TD ₅₀ level.

·

Reproductive toxicology - The main objective of this testing is to identify the effects caused by exposure to chemical substances on mammalian reproductive functions in all stages within the development process including gonadal function, conception, birth, and the growth and development of the offspring. The testing is usually done in rats at levels that are toxic but not lethal down to non-toxic levels through the 21 ^st day of the third generation.

·

Dermal irritation and dermal toxicity – This study is to be conducted with an appropriate animal model, such as mini-pigs, for a dosage time that is at least as long as the intended duration of exposure of the T ³ 6 ^® formulation to the skin. Since hand sanitizers are used continuously for indefinite periods of time, the maximum exposure time required by the regulatory agencies will be used. A protocol for this study is required.

Human studies

Single dose irritation study – To assess the safety of the T ³ 6 ^® formulation, a single dose study must be conducted to determine if there is any irritation or adsorption of the product when used on human subjects.

The following test will be required since it specifically measures the effects of topical preparations.

Ÿ

Photosensitivity - The photo-patch test is conducted to examine the influence of rays when a chemical substance is placed on the skin. Twenty four to 48 hours after a material that is suspected of causing photosensitive disease is pasted on the skin, the site is exposed to UV rays. If reddening or swelling occurs within 24 hours, the test is considered to be positive for such disease.

·

21-Day Cumulative Irritation Patch Test (“Irritation Test”) - If the single dose irritation study above verifies the safety of T ³ 6 ^® , a longer irritation study is permitted. The objective of this test is to assesses the irritation caused by

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topical products and chemicals over 21 days of continuous exposure of the skin. The test substance is incorporated into patches that remain on the skin for a period of time and are replaced from time to time to maintain continuous exposure to the skin.

·

Multi-dose dermal irritation – In these tests, the objective is to evaluate the effect, if any, of prolonged and repeated exposure of the skin to the test substance. The “Induction Phase” of this study incorporates the test substance into a series of patches that are applied to the skin of 50 subjects repeatedly for periods of time and then removed. After a rest period, new patches are applied. This process is repeated over a period of time with a number of new patches and after completion of this phase, the reaction of the skin is evaluated. The “Challenge Phase” takes place some time after application of the final induction patch. Challenge patches are applied to previously untested sites, adjacent to the original induction patch sites. The reaction of the skin is evaluated 24 to 48 hours after application and the subjects are asked to report any delayed reactions which might occur after the final challenge patch reading.

·

Sensitivity test – This test is conducted on up to 350 individuals to determine if there are any deleterious effects or resistance to antibiotics. It has also been observed that resistance to certain microbicides, such as benzalkonium chloride (“BZK”), also occurs and that BZK-induced resistance to can lead to resistance to certain antibiotics, such as oxacillin. All of the T ³ 6 ^® products provided by the Company contain BZK. It is therefore necessary to determine if T ³ 6 ^® products may cause bacterial resistance, particularly with Methicillin-Resistant Staphylococcus aureus (“MRSA”). As discussed above, In microbiology, Minimum Inhibitory Concentration (“MIC”) is the lowest concentration of an antimicrobial agent that will inhibit the visible growth of a microorganism after overnight incubation. MICs of BZK for resistant MRSA are very low compared to the BZK content of T ³ 6 ^® products. If used as directed, it is expected that T ³ 6 ^® products will completely kill resistant MRSA.

To summarize, the following tests are required prior to clinical trials being conducted.

·

In-vitro studies

·

Time Kill Evaluation ^F

·

MIC (Minimum Inhibitory Concentration) Evaluation ^FH

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Percutaneous Absorption and Cutaneous Disposition ^FH

·

Genotoxicity (May not be needed if there is little or no absorption) ^FH

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Animal studies

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Carcinogenicity (May not be needed if there is little or no absorption) ^F

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Reproductive toxicology (May not be needed if there is little or no absorption) ^FH

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Dermal irritation and dermal toxicity ^FH

·

Human studies

·

Single dose irritation study ^FH

·

Photosensitivity ^H

·

21-Day Cumulative Irritation Patch Test (“Irritation Test”) ^F

·

Multi-dose dermal irritation ^F

·

Sensitivity test ^FH

^F Required by FDA

^H Required by Health Canada

Clinical trials

Full clinical trials will be required for use of T ³ 6 ^® for the treatment of Athlete’s foot and VVI’s. The full extent and cost of testing cannot be determined until many of the test above have been conducted to allow the evaluation of efficacy and toxicity under clinical conditions. However, the testing that is generally required is described below.

·

Pilot Clinical Evaluation - This study evaluates the antimicrobial efficacy of a disinfectant in two different applications when used as patient preoperative skin preparation on 10 subjects. A disinfectant must achieve a log ₁₀ microbial reduction of 3 or greater on skin of the groin and a log ₁₀ microbial reduction of 2 or greater on skin of the abdomen at ten minutes post-application. The objective of the testing is to obtain an preliminary evaluation of the efficacy of the test substance when used on humans.

·

Full pre-operative clinical evaluation - The study evaluates the immediate and persistent antimicrobial properties of a disinfectant when used as a preoperative skin preparation. A known active control, e.g., 4% chlorhexidine, and a placebo, e.g., sterile saline, are also evaluated. All treatments are assessed for their potential to cause skin irritation. One-hundred subjects are screened in order to obtain at least forty subjects having sufficient number of resident bacterial flora to permit evaluation of the efficacy of the test products. The objective of this test is to further evaluate the efficacy of a test substance when used on humans.

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·

Phase I Clinical Trials: This is the first stage of testing of a new therapeutic in human subjects, normally with a small group (20-60) of healthy volunteers. The objective is to assess the safety and tolerability of the product as a therapeutic, as well as to determine the effects of various doses of the product. For externally administered agents, the testing is simpler than for injected or internally administered agents. However, Phase 1 trials can require up to 2 years to complete, including analysis of the collected data, preparation of the Phase I report for submission to the FDA and the time until a response is received. If these results of Phase I are accepted by the FDA, then the clinical trial can proceed to Phase II.

·

Phase II Clinical Trials: This second phase tests the therapeutic on a larger group and evaluates both the required dose (i.e. different quantities of the therapeutic) and efficacy (i.e. how well the therapeutic works for the specified indication). Phase II trials can take up to 3 years. However, some trials can combine Phase I and Phase II, which can reduce the total time required.

·

Phase III Clinical Trials: This third phase of clinical trial depends on the indications for which the therapeutic is being tested. For most agents Phase III trials are a randomized, controlled, multi-center trial with large patient groups (often more than 300), with the objective of confirming that the therapeutic is as effective or more effective than the current “gold standard” for the same application. Phase III trials can take up to 5 years or more to complete. If the results of the Phase III trial are approved by the FDA, then product is approved for marketing for the specific indications that were tested.

The budget and timetable for all of the testing that may be required has not yet been established and it is not known how long the testing may take. After the results are obtained from the non-human tests and are reported to the regulatory agencies, there is no certainty that permission will be granted to undertake human trials or that further pre-clinical testing will not be required. In addition to the testing that is described above, the regulatory agencies may require other tests that have not been considered by the Company or change their requirements. If additional testing is required, it is not known how long it will take for the Company to prepare, submit and modify the protocols and undertake such testing, how much the additional testing will cost or how much additional time will be required.

The three phases of clinical trials can require a number of years to complete. The total time required is dependant on the nature of the therapeutic product, the condition being treated, the design of the protocols, the time to recruit patients and the review process conducted by the regulatory agencies. The registration time for products taken internally can take much longer than for topical agents. The costs of a complete clinical trial can be significant, depending on the intended application. The Company may not conduct any clinical trials itself, but may enter into strategic alliances or licensing agreements with larger companies, which can support the costs of such trials.

In other parts of the world, FDA or EMA testing is generally accepted for registration applications. If the company decides to register the products in China, it is likely that the testing will have to be repeated in China unless there is harmonization of the requirements in the meantime. In the People’s Republic of China (“China”), the Company must have its products tested for toxicology and efficacy at the Centers for Disease Control (“CDC”). The Chinese CDC should not be confused with the CDC in Atlanta, Georgia, although both organizations share the same name. Upon completion of successful testing at the CDC, products can be registered for sale within China.

The Company does not keep separate records of the cost of the development and registration for each product for a number of reasons. First, much of the development had already been done on the products before the Company acquired the assets of API in November, 2003 and API did not keep such records. Second, the Company’s expenditures after completing the acquisition of the assets of API have mostly involved registration, intellectual property protection and some testing. These expenses are recorded in separate categories from research and development in the financial statements but are not segregated for each product. Third, the level of expenditures by the Company would be relatively small if they were allocated to individual products and would not be considered to be material if expenditures on each product were considered on their own. Finally, the cost of accounting for such a variety of expenditures on such a number of products is not considered to be financially justified.

Limited information has been provided on the estimated time of completion for individual products and for the estimated time of material net cash inflows for a number of reasons. Testing in the US for applications to the FDA or the EPA, in Canada for Health Canada and in Europe for the European Medicines Agency, is dependent on financing to support these tasks. The timing of financing and even the availability of financing is uncertain, which mean that completion dates and the time required to achieve material net cash flows are also uncertain. Even when the financing is available to complete testing and prepare the required submissions to the regulatory bodies, the time taken by the regulatory agencies to review the submissions is unpredictable.

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Further, the regulatory agencies may identify deficiencies in the submission and request more documentation or possibly even more testing before providing an approval for a product, if such approval is granted at all. Since the timing to secure product registration and market approval is uncertain and delays can lead to the entrenchment of competitors and make the penetration of markets more difficult, even more uncertainty is added to the estimates of time required to time to arrive at material net cash flows. For these reasons, the Company believes that it is more prudent to not project the times or costs of market approval for individual products.

Accelerated therapeutic product strategy

Typically, a number of common skin conditions, from boils to pimples, scrapes and athlete’s foot, share two common characteristics:  the presence of an infective agent, such as a bacteria or fungus, and the body’s inflammatory response to it. A combination of the T ³ 6 ^® formula and 0.5% hydrocortisone would address both issues in a single treatment, making the prescription or recommendation process easier for the physician and the application easier for the patient. At this time, there are few combinations of antiseptics with anti-inflammatories on the market and any such products may not be effective against all types of infections. For example, products that contain only antibiotics as the anti-infective agent may not be effective on fungi or on all types of bacteria. As described above, the Company is pursuing combinations of T ³ 6 ^® with anti-inflammatories and other additives but the introduction of new therapeutic products can be a lengthy, expensive and uncertain process.

As a way to reduce time, costs and unpredictability and to accelerate the Company’s entry into the therapeutics market, the Company is pursuing a strategy that introduces Monograph products for topical use. In Canada, 0.5% hydrocortisone, a common anti-inflammatory product, described in the monograph, “Hydrocortisone Topical” published by Health Canada on January 22, 2007, can be sold as an OTC topical anti-inflammatory under a Natural Product Number (“NPN”). On September 8, 2011, the Company announced that NPN 80026033 had been issued for T ³ 6 ^® 0.5% Hydrocortisone Ointment.

Separate products can be bundled in a single package with each product to be applied sequentially. For marketing, internet-based direct-to-consumer strategies can be pursued based on a number of premises:

·

The targeted conditions are extremely common.

·

Patients often seek out over-the-counter remedies for them, many of which are much less supported by data than either T ³ 6 ^® products or 0.5% Hydrocortisone.

·

Anecdotal and credible evidence of benefits of this approach can be obtained and publicized.

·

Support of selected health care providers can be sought and published.

Plan of Operations

Anticipated Changes to Facilities/Employees

In August, 2013, the Company moved to 152 – 11782 River Road, Richmond, BC, Canada in order to consolidate its offices and warehouse facilities at one location. In addition, the Company has a Registered Office at: 615 – 800 West Pender St, Vancouver, BC V6C 2V6. The Company Secretary, Mr. Eugene Beukman is located at this office.

United States vs. Foreign Sales/Assets

All of the Company’s assets are located in Canada.

All of the Company’s sales to date have been in Canada.

Material Effects of Government Regulations

At this time, the Company’s sales are primarily in Canada and, as a result, government regulations in Canada affect the Company most significantly. However, the Company hopes to commence sales in the United States, China, Europe and other jurisdictions in the future and, as a result, we have summarized the government regulations in these markets that may affect the Company in the future. The Company’s products and future planned products can be categorized either as disinfectant products or therapeutic products, depending on the intended use. A summary is provided on the government regulations for both of these product categories.

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1.

Canada: In order to market and sell a disinfectant, which is classified as a drug in Canada, the product must be approved by Health Canada, a federal government department responsible for the oversight of drugs and certain other medical products. The Therapeutics Product Directorate (TPD) is the department of Health Canada that issues the DIN (Drug Identification Number) for registered products. A company can apply for a DIN by submitting the appropriate fee, a draft label and, in most cases, copies of completed efficacy and safety studies to support the claims made on the label. The descriptions of the tests required for Health Canada approval of a disinfectant are described above in the sections entitled “Efficacy studies” and “Toxicology studies”. The TPD generally takes up to 12 months or more for review and completion prior to the issuance of a DIN. However, if further documentation or studies are required, the time taken to obtain approval for a new product can be longer.

T ³ 6 ^® Disinfectant has received approval from Health Canada as a disinfectant, disinfectant cleaner, sanitizer and deodorizer. The DIN for T36 Disinfectant is 02231344, which permits its sale in Canada for these applications. T ³ 6 ^® Disinfectant has also been approved in Canada by the Canadian Food Inspection Agency for use in “Registered Establishments”, which include meat processing plants, restaurants, breweries, wineries and other commercial food processing establishments.

Canada has a number of “Category IV” monographs. Under these monographs, products may be approved if they meet well-established criteria for minimum concentrations of active ingredients and meet certain labelling requirements. For example, T ³ 6 ^® Disinfectant Cleaner CONCENTRATE and T ³ 6 Disinfex ^TM Disinfectant Cleaner had DIN’s issued for meeting the criteria in the monograph entitled, “Hard Surface Disinfectants”. The T ³ 6 ^® Antiseptic Hand Sanitizer products received DIN’s for meeting the requirements of the monograph, “Antiseptic Skin Cleansers” and T ³ 6 ^® 0.5% Hydrocortisone Ointment was provided with a NPN under the monograph, “Hydrocortisone Topical”.

United States: Patents are no longer being maintained in the US.

2.

China: In the People’s Republic of China (“China”), the Company must have its products tested for toxicology and efficacy at the Centers for Disease Control (“CDC”). The Chinese CDC should not be confused with the CDC in Atlanta, Georgia, although both organizations share the same name. The studies required by the CDC in China include the following tests.

·

Kill tests against Staphylococcus aureus, Escherichia coli and Pseudomonas aeruginosa – In a suspension test, the disinfectant must provide a log ₁₀ reduction in bacterial population of 5.0 or more within a test time designated by the supplier of the disinfectant. A suspension test involves adding the bacteria to the disinfectant, usually at a ratio of 0.1 to 2 parts bacterial suspension to 9.9 to 8 parts disinfectant, respectively.

·

Field disinfecting test on general hard surfaces – General bacterial counts are first determined on table surfaces and the window frame surfaces, maintained at 19 to 21 ^o C, by taking sample swabs and culturing the bacteria. The same surfaces are then wiped with the disinfectant and sampled after a test time designated by the supplier of the disinfectant. The disinfectant must provide a average log ₁₀ reduction in bacterial population of 2.0 or more in this test.

·

Metal corrosion test - Metal plates made of stainless steel, carbon steel, copper and aluminum are immersed continuously for 72 hors in the disinfectant. The corrosion rate, measured in millimeters per annum, is then determined for each metal.

·

Acute oral toxicity test - Four dosage groups receive 1,000, 2,150, 4,640, and 10,000 mg/kg of disinfectant administered orally with 10 animals in each group and comprised of half females and half males. After exposure to the disinfectant, the general conditions, symptoms of toxicity, and deaths of animals are observed over a period of 2 weeks. After the tests are finished, all animals are dissected and gross pathological changes of animals are recorded. Acute toxicities are measured in terms of the LD ₅₀ , the dose at which 50% of the animals die.

·

Bone marrow erythrocyte micronucleus test - Rats are given a dose of 500, 2,000, and 5,000 mg/kg of disinfectant by gastric lavage. Each group consists of 5 females and 5 males. Thirty hours later, the rats are given a second dose that is identical to the first. Six hours later, the rats are killed and dissected. Bone marrow from the sternum is removed, smeared on microscope slides, stained and examined for signs of chromosomal mutations.

·

Skin irritation test - Twenty-four hours before testing, a 3 cm x 3 cm area beside both sides of spinal cords on the backs of three New Zealand rabbits is shaved. On the next day, a testing area of 2.5 cm x 2.5 cm on the shaved skin on the left side is marked and 0.5 ml of disinfectant is smeared evenly on the test area, covered by 2 to 4 layers of gauze the same size as the test area and one layer of cellophane which is a little bigger than

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testing area for each animal. The test area is directly exposed to the disinfectant in this way for 4 hours. The shaved area on the right side is exposed to saline as a negative control using the same procedure. After the 4 hour exposure, the dressings are removed and shaved areas are washed using warm water to remove any residual saline or disinfectant. After 1, 24, and 48 hrs the level of skin irritation is observed and recorded.

On June 8 ^th , 2013 the Company established a joint venture MOU with Hangzhou Kangjiale Tourism Articles Co. Ltd. of Hangzhou, China for the commercialization of T3/6 technologies.

Dependency upon Patents/Licenses/Contracts/Processes

There is no guarantee that the Company’s patents or trademarks do not infringe on another company’s patents or trademarks or that the Company’s patents or trademarks will be upheld if challenged. If the Company’s patents or trademarks are found to be in violation of the patents or trademarks of another company, there is no guarantee that the Company will be able to obtain a license at an acceptable price or at all from the successful challenger to be continue to sell products. Also, if the Company is unable to defend its patents, it is possible that new or existing competitors will enter the markets the Company is pursuing. The Company may be required to enter into contracts with other agencies to provide, as examples but not limited to, manufacturing, sales and marketing activities. There is no guarantee that either the Company or the other agencies will be able to fulfill their obligations. If the Company or the other parties fail to meet their requirements under the terms of the contracts, it is possible that the Company may not be able to find suitable providers that are able or willing to meet its needs in the future. If the Company cannot live up to its obligations under such agreements, it is possible that the reputation of the Company will be damaged to the extent that it will not be able to supply its customers. The Company is dependent on certain processes that are, in turn, dependent on a stable and reliable supply of equipment and materials. If, for any reason, the equipment or materials required for the Company to operate are not available, it is possible that the Company may not be able to manufacture its products. Any of the adverse events described above could cause the Company to lose revenues or go out of business.

Patents and patent applications

Canada

On February 18, 2005 the Canadian Intellectual Property Office (“CIPO”) received the PCT patent application and assigned it Patent Application Number 2,495,938. On August 17, 2007, the Company filed a Request for Examination with CIPO. On September 24, 2007 the Company filed a Voluntary Amendment to the patent application filed with CIPO. The proposed amendments expanded the claims to include a number of therapeutic applications of the T ³ 6 ^® formulation, including its use in cosmetics and in a microbicidal gel to prevent the transmission of sexually transmitted infections (“STI’s”). On October 4, 2007, the Company was notified that CIPO had acknowledged a request by the Company to examine the patent application. Since the process of examination can take two years, for a fee of $500, the Company requested an Expedited Examination on November 7, 2007 to reduce the response time to approximately three months. On April 8, 2008, CIPO provided an Office Action in which a number of questions were posed to the Company. Many of the same questions had already been posed by the Examiner for the EPO and the Company was advised that a response was required by October 8, 2009. On the advice of the Company’s patent lawyers, the Company decided to temporarily abandon the Canadian patent application to defer costs and the abandonment was deemed effective by CIPO on October 8, 2008. However, the patent application was reinstated and a response to the Office Action was submitted to CIPO prior to the revised deadline of October 8, 2009. On November 16, 2009, CIPO issued a Notice of Reinstatement to the Company. On June 29, 2010, CIPO issued a second Office Action which required a response by December 29, 2010. On August 17, 2010, the Company provided its response to the second Office Action. On April 6, 2011, the Company announced in a news release that the Canadian patent had been allowed. All maintenance fees were paid in 2013.

European Union

Maintenance of patents with the European Union has been abandoned.

China

On February 6, 2008, the Company announced that Certificate of Invention Patent Number ZL02829642.7 had been issued by the State Intellectual Property Office of the People’s Republic of China. The patent provides protection for the composition and production methods for ALDA’s T ³ 6 ^® formulation until August 20, 2022. On November 25, 2010 the Company was advised that the above patent became vulnerable to an application for a compulsory license on October 17, 2010. Under Chinese patent practice, it is possible for a third party to apply for the grant of a compulsory license

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should the invention not have been “worked” or otherwise been impeded from being worked, three years from the grant of a Patent. This may take into account circumstances where the conditions attached to the licensing of the invention are unreasonable, or the demand for the invention is not reasonably being met. The government body responsible for considering applications for a compulsory license will consider a multitude of factors before granting such a license and there may be mechanisms available for patentees to respond, or comment, on such applications.

Amendments to the original patent application were also drafted by the Company. As in the case of the amendments prepared for CIPO, the proposed amendments to the original Chinese patent application expanded the original claims to include a number of therapeutic applications of the T ³ 6 ^® formulation, including its use in cosmetics and in a microbicidal gel to prevent the transmission of sexually transmitted infections (“STI’s”). On October 10, 2007, the Company was advised that the amended claims had been submitted to the Chinese Patent Office. On January 30, 2008 the Chinese Patent office assigned Chinese Divisional Patent Application No. 200710142798.3 to the new application which was published in the Chinese Patent Gazette, under Publication No. CN101112624A. On April 13, 2010, the Company received an Office Action from the Chinese Patent Office and a response was filed by the Company prior to the deadline of June 11, 2010. A second Office Action was received on September 23, 2010 and a response was filed prior to the deadline of October 16, 2010. A third Office Action was received by the Company on February 1, 2011. The Company chose not to respond to this Office Action and abandoned this application. All required maintenance fees were paid in 2013.

United States

Maintenance of patents with the US has been abandoned.

Australia

Maintenance of Australian patents has been abandoned.

Trademarks:

In Canada, trademark applications are advertised in the Trade-marks Journal. For a period of two months after a trademark is advertised in this manner, opposition to the proposed trademark can be filed. If CIPO receives notification within the two month period that a statement of opposition is to be filed, an extension may be granted to allow the submission of a formal statement of opposition. If a statement of opposition is received by CIPO, the applicant is obliged to respond with a counter statement within one month. Such trademark disputes can delay the allowance of a trademark for years or prevent the trademark from being allowed at all. In Canada, trademark registrations are granted for an initial period of 15 years from the date of the registration after which the trademark may be renewed for further periods of 15 years.

In the United States, the Principal Register of the US Patent and Trademark Office (“USPTO”) conveys the important substantive rights that most people associate with federal registration and, as a result, it is the preferred method of federal trademark protection. Probably the most important benefit of placing a mark on the Principal Register is that anybody who later initiates use of the same or a confusingly similar trademark may be presumed by the courts to be a "willful infringer" and therefore liable for damages. In the US, for a trademark registration to remain valid, an Affidavit of Use (Section 8 Affidavit) must be filed: (1) between the fifth and sixth year following registration, and (2) within the year before the end of every ten-year period after the date of registration. The registrant may file the affidavit within a grace period of six months after the end of the sixth or tenth year, with payment of an additional fee. The registrant must also file a Section 9 renewal application within the year before the expiration date of a registration, or within a grace period of six months after the expiration date, with payment of an additional fee. Assuming that an Affidavit of Use is filed on time, registrations granted after November 16, 1989 have a 10-year term. This is also true for the renewal periods which have a 10-year term if the registration was granted on or after November 16, 1989.

Although the Company’s management conducts due diligence before attempting to register any trademarks in order to avoid infringement on any existing trademarks or trademarks for which applications have been submitted, there is no guarantee that trademarks will be issued or that trademarks will not infringe on the trademarks of other companies or that other companies will not take action against the Company for trademark infringement.

“T ³ 6 ^® ”

The Company successfully trademarked “T ³ 6 ^® ” and the design of the T ³ 6 ^® logo in Canada on April 22, 2004 (Registration No. TMA608308) for “pharmaceuticals, namely a disinfectant agent”, and in the United States as a

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Principal Register mark on November 2, 2004 (Registration No. 2898506) for a “pharmaceutical agent for use as an ingredient in disinfectants in liquid, spray, cream, ointment or gel for the prevention of infectious diseases”. Prior to November 2, 2010, the Company  requested and received a 6 month extension to April 2, 2011 to file the Affidavit of Use which was filed prior to April 2, 2011. On July 11, 2011, the Company was notified that the Declaration and Specimen of Use filed for T ³ 6 ^® had been accepted by the United States Patent and Trademark Office. This registration remains in force and will be due for renewal on January 18, 2015.

“ALDA Pharmaceuticals” logo

The Company also successfully trademarked a logo on July 16, 2004 (Registration No. TMA615064) for “pharmaceutical preparations, namely anti-fungals, anti-infectives and anti-hypersensitives, vitamins and mineral supplements, and diagnostic reagents, for medical use” and in the United States on January 18, 2005 (Registration No. 2918352 ) , also as a Principal Register mark for “pharmaceutical preparations, namely anti-fungals, anti-infectives and anti-hypersensitives, vitamins and mineral supplements, and diagnostic reagents, for medical use”. The trademark remains in force in Canada but is no longer used in Canada. An Affidavit of Use was not filed for this trademark in the US so  that particular trademark is considered to be abandoned in the US.

“ICEN ^® ”

On November 2, 2009, “ICEN ^® ” became a registered trademark of the Company in Canada (Registration No. TMA751,878) for “antiseptic preparations; personal disinfectant sprays; disinfectants for household, commercial and institutional use; disinfectant wipes; disinfectant cleaning preparations for household, commercial and institutional use”. At the time of this report, the trademark has not been used.

“T ³ 6 Disinfex ^® ”

On December 2, 2009, “T36 Disinfex” became a registered trademark of the Company (Registration No. TMA TMA754,444) for “antiseptic preparations, personal disinfectant sprays, disinfectants for household, commercial and institutional use, disinfectant wipes, disinfectant cleaning preparations for household, commercial and institutional use”.

Sources/Availability of Raw Materials and Production

T ³ 6 ^® is comprised of ethanol, o-phenyl phenol, benzalkonium chloride and other ingredients, including lemon fragrance and water. All of these chemical raw materials are commonly produced in industrialized countries by a number of manufacturers and are generally considered safe to transport. However, they have a low value to weight ratio which means it is likely cheaper to source raw materials from local producers than shipping raw materials from other markets. As a result, the Company does not believe that it is vulnerable to raw materials shortages or to loss of access to supply from any one producer but cannot guarantee that supplies will always be available in the quantities or quality required or that its manufacturers will always be able to meet its needs in a timely manner or at all.

The Company does not have production facilities.

Principal markets and Potential Product Markets

As of June 8, 2013 the company has abandoned all distribution channels and is relying solely on the pending JV with Hangzhou.

On January 2, 2012, the Company licensed the rights to manufacture and market T 3 6 ® disinfectant and hand sanitizer products in Canada to Proterra Management Group Inc. (formerly 612480 BC Ltd.),a company controlled by Peter Chen, a former Director and CFO, in settlement of management fees of $125,440 owed to Proterra Management Group Inc. No rights to any other products or territories were provided to Proterra. ALDA retains a Right of First Refusal to reacquire

the rights if Proterra receives a valid third party offer for nay portion of the rights provided to Proterra. ALDA retains all of the intellectual property including the DIN's NPN's, patents and trademarks. Management is of the opinion that the rights provided to Proterra were fairly priced since the Company had moved from its warehouse, could no longer support the manufacturing and marketing of disinfectants or hand sanitizers and was unable to maintain its Drug Establishment

License that is required to sell hand sanitizer products. The Company also offered the rights to competing companies and to third party manufacturers and received no offers except one that was for the forgiveness of approximately $10,000 in debt owed by the Company.

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4.C. Organization structure

The Company is not part of a group and has only one wholly owned subsidiary, Nuva Marine Pharmaceuticals Inc., a Company incorporated in British Columbia. It is currently inactive.

.

4.D. Property, Plant and Equipment

The Company has no facilities.

The Company uses outside manufacturers for its production needs..

No disclosure necessary.

This discussion should be read in conjunction with the audited financial statements of the Company and related notes included therein.

5.A. Operating Results of the Company

Overview

Over the course of the Company’s operating history, the Company has secured the required government and regulatory approvals to market and sell T ³ 6 ^® Disinfectant, Disinfectant Wipes, T ³ 6 ^® Antiseptic Hand Sanitizer Gel, Spray and Wipes and T ³ 6 ^® Disinfectant Cleaner CONCENTATE in Canada resulting in the sales described in Results of Operations below. To date, all of the Company’s sales have been solely in Canada which, while a developed industrial economy, is not a particularly large market relative to economies such as the United States, China or the European Union (“EU”). The Company has secured a National Drug Code (“NDC”) Labeler Code for hand sanitizer products in the US but has not yet sold products there. Registration of products in the EU is also being investigated. Although sales in Canada increased significantly during the 2010 fiscal year, much of the increase was due to public concern over the expected H1N1 pandemic. Due to increased material costs that resulted from a shortage of materials, higher sales costs and increased storage costs, gross margins declined from 20.4% in the 2009 fiscal year to 14.3%. The Company has always been reliant on third party manufacturers and this has impeded the ability of the Company to improve its margins and manage its inventories and has affected its competitiveness. During the 2011 fiscal year, sales of hand sanitizers collapsed and the global market conditions made financing unavailable or unattractive and the Company experienced a sever shortage of working capital. This has halted the Company’s quest to continue investing in clinical testing and registration of its therapeutic products in Canada, the EU and the US through Health Canada, the EMA and the FDA, respectively

To accomplish these goals now, the Company will need to raise significant amounts of new funding.

1.4

RESULTS OF OPERATIONS

Sales

From the sale of T ³ 6 Disinfex ^® and T ³ 6 ^® Antiseptic Hand Sanitizer through its distributors to the first responder, dental, beauty, commercial and consumer markets, the Company recorded sales of $nil in 2013 compared to  $83,361 in 2012.

Cost of Sales

For the year ended June 30, 2013 and 2012, the cost of sales incurred was $ nil and  $77,993,

Gross (Loss)/ Profit

For the year ended June 30, 2013 and 2012, the Company recorded a gross profit of $nil and $5,368.

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Advertising and Promotion

Advertising and promotion costs were $nil due to the ceasing of organized sales. This contrasts with the same period in (2012 - $1,639).

Consulting

Consulting fees for the year ended June 30, 2013 and 2012 were $ 65,778 and $152,302 respectively. During the 2013 and 2012 fiscal years no non-cash stock-based compensation was recognized for consultants. During 2013 management fees amounting to $39,760 was settled for shares valued at $0.10 each. During 2012 $124,440 of consulting fees due were settled with Proterra in exchange for the Canadian license for T3/6. Subsequent to year end an additional

Investor Relations

Investor relations activities amounted to $ nil and 18,196 for the years ended June 30, 2013 and 2012 respectively.

Legal and Accounting Fees

In 2013, legal and accounting fees of $12,089 (2011 - $29,915) were lower due to relatively less legal work being required. Legal fees incurred in the periods generally consist of advising the Company on general legal matters, attending to preparation of required and revised documentation to the TSX Venture Exchange and the securities commissions, the preparation of documentation required for private placements and attending to the closing of the private placements. Accounting fees consisted of  auditing of the Company’s annual financial statements.

Product Registration and Development Costs

Total costs incurred in this category for the year ended June 30, 2013 and 2012 were $10,162 and $31,886, respectively. The expenses related to research and development activities, which do not meet generally accepted criteria for deferral, are expensed as incurred. Costs in this category include continuation of patent applications, ongoing registration of “T36”. During the 2013 year, costs were lower due to less activity in product registration, development and patenting.

Wages and Benefits

Wages and benefits were $nil and $63,017for the years ended June 30, 2013 and 2012.

Income/(Loss) and Comprehensive Income/(Loss) for the Year

During fiscal 2013 the Company realized Net Comprehensive Income of $283,432 while for the same period in 2012 it incurred a loss of $306,565. The difference can be attributed to a $475,007 gain on settled liabilities in 2013.

5. B. Liquidity and capital resources

Liquidity

Although the Company generates revenues from the sale of its T ³ 6 ^® products, sales are mainly occurring in Canada. The Company has also established a plan to introduce products to other markets in the US and the EU and for the development, testing, registration and marketing of therapeutic applications of the T ³ 6 ^® formulation. Management has been and continues to evaluate the possibility of acquiring technologies that are complementary to T ³ 6 ^® technology and launching similar types of product lines in the near future. The Company will need to undertake further financings in order to carry out these plans. These financings will lead to the dilution of current shareholders of the Company.

Capital resources

During the year ended June 30, 2013, no warrants and options were exercised

On June 12, 2013 the Company closed a non-brokered private placement of 8,000,000 units of the Company’s common shares at a price of $0.10 per unit, for proceeds of $800,000. Each Unit will be exchangeable for one common share of the Company and one share purchase warrant.

Each warrant will entitle the holder to purchase one additional common share of the Company for a period of 36 months at a price of $0.30 per common share in the first year, $0.40 in the second year and $0.50 in the third year. The Units cannot be exchanged for shares and warrants during the first year unless the holder either simultaneously

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exercises or forgoes the warrants. The warrants will be subject to an accelerated exercise provision in the event that the shares trade more than $0.10 above the exercise price for ten consecutive trading days.

The private placement was subject to a TSX-V hold period expiring on October 12, 2013. As of June 30, 2013, the private placement was classified as Share Subscriptions. Legal fees of $850 and finders’ fees of $57,600 were charged against share capital in connection with the private placement.  The fair value of the warrants issued as part of the private placement is $663,834.

On January 12, 2011, the Company completed a private placement of 2,000,000 units of the Company at a price of $0.10 per unit for gross proceeds of $200,000. Each unit consists of one common share of the Company and one share purchase warrant. Each warrant entitles the holder to acquire one additional common share at a price of $0.20 per share until January 12, 2013 with a forced exercise provision attached to each warrant providing that if, for ten consecutive trading days, the closing price of the listed shares of the Company exceeds $0.40 then the exercise period of the warrants will be reduced to a period of 10 days following such trading days. Legal fees of $5,626 were charged against share capital in connection with the private placement. Warrants were valued at $18,676.

On September 7, 2010, the Company completed a private placement of 3,275,000 units of the Company at a price of $0.10 per unit for gross proceeds of $327,500. Each unit consists of one common share of the Company and one share purchase warrant. Each warrant entitles the holder to acquire one additional common share at a price of $0.20 per share until September 7, 2012 with a forced exercise provision attached to each warrant providing that if, for ten consecutive trading days, the closing price of the listed shares of the Company exceeds $0.40 then the exercise period of the warrants will be reduced to a period of 10 days following such trading days. Finders’ fees of $2,250 and legal fees of $15,887 were charged against share capital in connection with the private placement. Warrants were valued at $57,581.

On September 9, 2009, the Company completed a private placement of 6,000,000 units of the Company at a price of $0.25 per unit for gross proceeds of $1,500,000. Each unit consists of one common share of the Company and one share purchase warrant. Each warrant entitles the holder to acquire one additional common share at a price of $0.40 per share until September 11, 2010 with a forced exercise provision attached to each warrant providing that if, for ten consecutive trading days, the closing price of the listed shares of the Company exceeds $0.80 then the exercise period of the warrants will be reduced to a period of 10 days following such trading days. Finders’ fees and legal fees in the amount of $53,523 were charged against share capital in connection with the private placement. On August 13, 2010, the TSX Venture Exchange accepted the extension of the warrants by the Company to September 16, 2011 at the same price and with the same forced conversion conditions. At the time of this report, the warrants expired and none were exercised.

On October 15, 2009, the Company granted options to acquire 750,000 common shares of the Company to directors, consultants, officers, employees and investor relations. The options have an exercise of $0.55 with an exercisable term of five years expiring on October 15, 2014. Of these, 700,000 options vested immediately with an estimate fair value of $0.46 per share resulting $324,935 in stock based compensation expense being recognized. The remaining 50,000 options were vested in equal quarterly installments over a period of 12 months from the date of grant. No options were granted during the 2010 or 2011 fiscal years. However, during the year ended June 30, 2010, options granted to a consultant and an employee to acquire a total of 270,000 common shares of the Company were cancelled due to the termination of the consultant and the departure of an employee.

As at June 30, 2011, the Company had 63,996,799 outstanding common shares and a total of 11,275,000 outstanding warrants exercisable at an exercise price of $0.20 or at $0.40 if there is a forced conversion before the date of expiration. The outstanding stock options as at June 30, 2011 were 2,880,000 at an exercise price range of $0.20 to $0.55 per option. Upon the exercise of outstanding warrants and exercisable options, the Company will have fully diluted outstanding common shares of 78,151,799,

At the time of this report, the Company does not have sufficient working capital to pursue its development plans. There can be no guarantee that the Company will derive any proceeds from the exercise of outstanding warrants and options. There is no assurance that additional funding will be made available to the Company to fulfill its business objectives. In addition, there can be no assurance that the Company will be able to obtain adequate financing in the future to fulfill its business objectives or that the terms of such financing will be favourable.

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The Company may seek such additional financing through debt or equity offerings, which might alter the capital structure of the Company, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company’s shareholders and may result in dilution to the value of such interests.

Critical Accounting Policies

The consolidated financial statements of the Company comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported of assets and liabilities, the disclosure of contingent assets and liabilities at the date of financial statements and the amounts of revenues and expenses for the reporting period. The areas of estimation are the stock-based compensation, estimated useful lives of depreciable assets, and intellectual property. The Company believes that the estimates and assumptions upon which it relies are reasonable and are based on information available to the Company at the time that estimates and assumptions are made. Actual results could differ from those estimates.

Changes in Significant Accounting Policies

(a) IFRS 9 Financial instruments (“IFRS 9”) was issued by the IASB in October 2010 and will replace IAS 39 - Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2013.  IASB has proposed to move the effective date of IFRS 9 to January 1, 2015.

(b) IFRS 10 ‘Consolidated Financial Statements’ – effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

(c) IFRS 11 Joint arrangements (“IFRS 11”) was issued by the IASB in May 2011 and will replace IAS

31 - Interests in Joint ventures and SIC 13 – Jointly Controlled Entities – Non-Monetary Contributions by Ventures. IFRS 11 is effective for annual period beginning on or after January 1, 2013.

(d) IFRS 12 ‘Disclosure of Interests in Other Entities’ - effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows.

(e) IFRS 13 ‘Fair Value Measurement’ - effective for annual periods beginning on or after January 1,

2013, with early adoption permitted, provides   the guidance on the measurement of   fair value and related disclosures through a fair value hierarchy.

5.C. Research and development, patents and licenses etc.

The Company won’t be devoting resources to research, development and patents going forward. The Company is now focused on the licensing and sales of pharmaceuticals that can be registered as natural products, OTC’s and generics.

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5.D.  Trend information

There are significant market swings away from branded pharmaceuticals towards low cost generics. The Company will attempt to integrate itself into this shift.

5.E. Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements.

5.F. Tabular disclosure of contractual obligations

The Company does not have any long-term debt obligations, capital (finance) lease obligations, operating lease obligations, purchase obligations or other long-term liabilities reflected on the Company’s balance sheet.

5.G. Safe Harbor

This Annual Report on Form 20-F contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, principally in ITEM #4, “Information on the Company” and ITEM #5. These statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends. In particular, these include statements about the Company’s strategy for growth, future performance or results of current sales and production, interest rates, foreign exchange rates, and the outcome of contingencies, such as acquisitions and/or legal proceedings and intellectual property issues.

Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors, including, among other things, the factors discussed in this Annual Report under ITEM #3, “Key Information, Risk Factors” and factors described in documents that the Company may furnish from time to time to the Securities and Exchange Commission. The Company undertakes no obligation to update publicly or revise any forward-looking statements because of new information.

A. Directors and Senior Management

The following table sets forth certain information as of June 30, 2013 about the Company’s current directors and senior management. There have been no subsequent changes to the Company’s current directors and senior management, except as footnoted below:

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Table No. 6 :

Directors and Senior Management:

*On June 10 2013 Terrance Owen ceased to be President  & CEO and on June 28, 2013 ceased to be a Director.

o

Jamie A Lewin – CFO, Secretary :  BA (Economics) Western University, 1972; LLB Laval University, 1984; MBA City University, 1992; Certified Management Accountant (CMA), 2003; Chief Financial Officer of: Grand Peak Capital Corp. since 2009, Lucky Minerals Inc. since 2010, Grenville Gold Corp. since 2011, Orofino Minerals Inc. since 2011 and Innovative Properties Inc. since 2011.  Abenteuer Resources Corp., from 2006 to 2011, Dussault Apparel, Inc., from 2007 to 2008; Musgrove Minerals Corp. 2011 – 2012, Acana Capital Corp. from 2011 to 2012. In addition he has been a Director at:  Choice Gold 2012 – current, Abenteuer Resources 2006 – 2011, Lucky Minerals 2010 – 2011 and Innovative Properties 2011 – 2012.

o

Mr. Eugene Beukman, Director: has been a corporate consultant to public companies in Canada since January 1994, primarily involved in the acquisition of assets and joint ventures.  Mr. Beukman graduated from Rand University of Johannesburg, South Africa, with a Bachelor of Law Degree and a Bachelor of Law Honors Postgraduate Degree.

Overall he has over thirty years’ experience in the acquisition of assets and joint venture agreements.  Mr. Beukman is an Advocate of the Supreme Court of South Africa.  He is a director and/or officer of several reporting companies listed on the TSX Venture Exchange and CNSX

o

Mr. Kennedy, Director: is a graduate of the University of British Columbia having received his Bachelor of Commerce & Business Administration degree in 1973 and his Juris Doctor degree in 1974. Mr. Kennedy was admitted to the British Columbia Bar in 1975 and has practiced law for 38 years. After 7 years of employment with the Canadian Federal Department of Justice, Mr. Kennedy has primarily focused as a legal, financial and business consultant to publicly-traded companies.

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Mr. Kennedy is currently a member of the Law Society of British Columbia, the Canadian Bar Association and the British Columbia Bar Association, and an Associate member of the American Bar Association. Mr. Kennedy is currently an officer of a TSX-listed company focused on mineral exploration. Mr. Kennedy is also an officer and/or director of several TSX Venture Exchange and CNSX publicly traded companies, primarily focused on mineral exploration, oil and gas exploration, and pharmaceuticals.

The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.

The senior management serves at the pleasure of the Board of Directors.

No Director and/or member of senior management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or member of senior management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.

There are no family relationships between any two or more Directors or members of senior management.

There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.

6.B. Compensation

Cash Compensation

Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during the year ended June 30, 2013 and previous years are detailed in Table No. 7 below:

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Table No. 7

Annual Compensation of Senior Management

⁽¹⁾

Consulting/management fees were paid to a management consulting company owned by Terrance Owen;

⁽²⁾

Jamie Lewin invoices on a fee-for services basis at $60 an hour through his proprietorship Best Fit Consulting.

Table No. 8

Director Stock Option at June 30, 2013

^{(1)  All options were canceled when Terrance Owen resigned on June 28, 2013}

⁽²⁾ See Notes 7.(b)(i), (ii) and (iv)of the accompanying financial statements for the year ended June 30, 2013.

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The following table gives certain information concerning stock option exercises during Fiscal 2013 by the Company’s Senior Management and Directors. It also gives information concerning stock option values.

Table No. 9

Aggregated Stock Options Exercises in Fiscal 2013

Fiscal Year-end Unexercised Stock Options

Fiscal Year-end Stock Option Values

Senior Management/Directors

Director Compensation: The Company has no formal plan for compensating its Directors for their service in their capacity as Directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors. The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director. Other than indicated below no Director received any compensation for his services as a Director, including committee participation and/or special assignments.

Stock Options :  The Company may grant stock options to Directors, Senior Management and employees. Refer to ITEM #6.E., "Share Ownership" and Table No. 8 for information about stock option grants. During the fiscal year ended June 30, 2013 no options were granted..

Change of Control Remuneration :  On June 1, 2008,  the Company established agreements to provide remuneration received by the President & CEO, Terrance Owen, and his respective consulting company to compensate in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Senior Management (filed with  the 2008 Form 20-F as Exhibits 4.j and 4.k).

Other Compensation: No Senior Manager or Director received “other compensation” in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Managers or Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.

Bonus/Profit Sharing/Non-Cash Compensation: Except for the stock option program discussed in ITEM #6.E., the Company had no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company's Directors or Senior Management.

Pension/Retirement Benefits: No funds were set aside or accrued by the Company during Fiscal 2009 to provide pension, retirement or similar benefits for Directors or Senior Management.

6.C. Board Practices

6.C.1. Terms of Office.

At every Annual General Meeting of the Company, the Directors are elected by the shareholders and serve as Directors until the next Annual General Meeting is held.

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6.C.2. Directors’ Service Contracts.

Employment agreements (filed with  the 2008 Form 20-F as Exhibits 4.j and 4.k) dated June 1, 2008 were entered into with Terrance Owen (“the Officer”) who provide their services to the Company through their respective holding companies, 503213 BC Ltd. and 612480 BC Ltd., respectively  The material terms of these contracts are as follows.

The Company retains the Officer as independent consultants. The Company will not be required to make contributions for employment insurance, Canada Pension, workers’ compensation or other similar levies in respect of the fee for services to be paid to the Officers. The Officers agree to pay all required contributions and deductions for income taxes, workers’ compensation and employment insurance and shall indemnify and save the Company harmless from and against all claims, actions, losses, expenses, costs or damages which the Company or its officers, employees or agents may suffer as a result of the Consultant’s non-compliance with this requirement.

The Officer agrees to provide sufficient time and attention to the business and affairs of the Company, to advise and counsel the Board and to channel to the Company all knowledge, business and customer contacts and any other information that could concern or be in any way beneficial to the Company. All information communicated to the Company will be the property of the Company. The Officers acknowledge that each is a “person in a special relationship”, as that expression is defined in the securities laws of various provinces of Canada, and may receive material information concerning the business and affairs of the Company that has not been generally disclosed, and covenant and agree that they will not purchase or sell any securities of the Company until such information has been generally disclosed. The Company is aware that the Officers may provide services to certain other companies from time to time as disclosed above. The Officers agree that they will not provide services to any other companies without the written approval of the Company.

The Company will pay a consulting fee in the amount of (Cdn)$15,000.00 per month to the holding company of Terrance Owen. The fees payable will be reviewed annually, and may be adjusted by the Company in consultation with the Officers to reflect general economic conditions, changes in the duties provided under this Agreement or performance by the Officers. The Officers are entitled to participate in the Company’s incentive stock option plan (Exhibit 4.m) . The Company will reimburse the Officers for all reasonable travelling and other out-of-pocket expenses incurred in connection with services provided to the Company. The Officers will be entitled to participate in any benefit programs established by the Company. To date, no such plans are in place.

Inventions of any type made by the Officers become the sole property of the Company which will hold all intellectual property rights for such inventions. If the Company chooses to patent, copyright, trademark or otherwise protect the inventions, the Officers will assign their rights to the Company. The Officers will treat all information of the company as confidential except any information that is presently in the public domain, any information that subsequently becomes part of the public domain, any information obtained by the Officers from a third party with a valid right to disclose it or any information that was independently developed by the Officers or was in their possession prior to receipt from the Company.

The Officers agree that they shall not engage in any activity that is contrary to or detracts from the performance of the business of the Company, will not receive and personal benefit from any party having business with the Company without the approval of the Board and, during the term of the agreement and for a period of one year afterwards, will not compete with the Company or solicit customers or employees of the Company

The Officers may terminate this Agreement by giving thirty (30) days written notice to the Company. The Company may waive such notice and, if it does so, this Agreement will cease on the date the Company waives such notice. The Company may terminate this Agreement without notice or payment in lieu of notice for breach of the agreement. The Company may terminate this Agreement at its sole discretion and for any reason upon giving the Consultant written notice of termination provided that the Company pays, in lieu of notice, twelve (12) months fee severance. The Company may terminate this Agreement without notice or payment in lieu of notice upon a change of control of the holding company of the Officer or the death or permanent disability of the Officer. Upon termination of this Agreement, the Consultant will promptly return all property. This Agreement may be subject to the acceptance by TSX Venture Exchange and a refusal to do so shall not constitute a default of the Company.

Jamie Lewin currently invoices on a fee-for services basis at $60 an hour through his proprietorship Best Fit Consulting.

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6.C.3. Board of Director Committees.

The Company has an Audit Committee, which is governed by an Audit Committee Charter (filed as Exhibit 11 with the amended 2007 Form 20-F filed on December 3, 2008.), recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Company’s audits, the Company’s internal accounting controls, and the professional services furnished by the independent auditors to the Company. The current members of the Audit Committee are: Peter Chen (the Company’s CFO), Eugene Hodgson (non-management Director) and Linda Allison (non-management Director). The Audit Committee met four times during the year ended June 30, 2011 to discuss and approve the Company’s audited and quarterly financial statements. The Audit Committee also met subsequent to the Company’s last Annual General Meeting of shareholders.

6.D. Employees

As of the date of this report, the Company had no employees except for the two Officers, President & CEO, Terrance Owen and CFO, Jamie, who invoices on a straight fee-for-services basis at $60 an hour.

6.E. Share Ownership

Table No. 10 lists, as of June 30, 2013, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.

Table No. 10

Shareholdings of Directors and Senior Management

Stock Options: The terms of incentive options grantable by the Company are done in accordance with the rules and policies of the TSX Venture Exchange and the British Columbia Securities Commission, including the number of common shares under option, the exercise price and expiry date of such options and any amendments thereto. The Company adopted a formal written stock option plan (the "Plan") on December 13, 2005. (A copy of the Company’s Stock Option Plan was filed with the 2005 Form 20-F as Exhibit 4.e.) At every Annual General Meeting of the Company, the Plan is presented to and voted on by the shareholders of the Company. If approved, the terms and conditions of the Plan remain in force for the subsequent year. The Stock Option Plan was amended and passed by a majority of shareholders at the Annual General Meeting held on April 26, 2013. A copy of the amended Stock Option Plan is provided as Exhibit 4.m. It will remain in effect until the next Annual General Meeting of Shareholders.

Such “terms and conditions”, including the pricing of the options, expiry and the eligibility of personnel for such stock options, are described below. The terms of the original Stock Option Plan and the major changes in the Stock Option Plan as amended in 2013 (“the 2012 Plan”) are described below and provided as Exhibit 4.m.

The principal purposes of the Company’s stock option program are to (a) assist the Company in attracting, retaining, and motivating directors, officers and employees of the Company and, (b) to closely align the personal interests of such directors, officers and employees with the interests of the Company and its shareholders.

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The Plan provides that stock options may be granted to service providers for the Company. The term “service providers” means:

(a)

Any full or part-time employee or Officer, or insider of the Company or any of its subsidiaries;

(b)

Any other person employed by a company or individual providing management services to the Company;

(c)

Any other person or company engaged to provide ongoing consulting services for the Company or any entity controlled by the Company or

(d)

Any individual engaged to provide services that promote the purchase or sale of the issued securities (any person in (a), (b), (c) or (d) hereinafter referred to as an “Eligible Person”); and

(e)

Any registered retirement savings plan established by such Eligible Person, or any corporation controlled by such Eligible Person, the issued and outstanding voting shares of which are, and will continue to be, beneficially owned, directly or indirectly, by such Eligible Person and/or spouse, children and/or grandchildren of such Eligible Person.

For stock options to Employees, Consultants or Management Company Employees, the Company must represent that the optionee is a bona fide Employee, Consultant or Management Company Employee as the case may be. The terms “insider” “Controlled” and “subsidiary” shall have the meanings ascribed thereto in the Securities Act (Ontario) from time to time. Subject to the foregoing, the board of directors or Committee, as applicable, shall have full and final authority to determine the persons who are to be granted options under the Plan and the number of shares subject to each option.

The Plan shall be administered by the board of directors of the Company or a committee established by the board of directors for that purpose. Subject to approval of the granting of options by the board of directors or Committee, as applicable, the Company shall grant options under the Plan.

The Plan provides that the aggregate number of shares of the Company, which may be issued and sold under the Plan, will not exceed 10% of the issued shares of the Company. The Company shall not, upon the exercise of any option, be required to issue or deliver any shares prior to (a) the admission of such shares to listing on any stock exchange on which the Company’s shares may them be listed, and (b) the completion of such registration or other qualification of such shares under any law, rules or regulation as the Company shall determine to be necessary or advisable. If any shares cannot be issued to any optionee for whatever reason, the obligation of the Company to issue such shares shall terminate and any option exercise price paid to the Company shall be returned to the optionee.

If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Plan. Any stock option outstanding when the Plan is terminated will remain in effect until it is exercised or it expires. The Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:

(a)

Options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holder’s death;

(b)

Under the revised 2012 Plan, options may be exercisable for a maximum of ten years from grant date rather than five years;

(c)

Under the revised 2012 Plan, options to acquire more than 5% of the issued shares of the Company may be granted to any one individual in any 12-month period the approval of the disinterested shareholders of the Company;

(d)

Options to acquire no more than 2% of the issued shares of the Company may be granted to any one consultant in any 12-month period;

(e)

Options to acquire no more than an aggregate of 2% of the issued shares of  the Company may be granted to an employee conducting investor relations activities (as defined in TSX Venture Exchange Policy 1.1), in any 12 month period;

(f)

Options to acquire no more than 10% of the issued shares of the Company may be granted to any insiders in any 12-month period;

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(g)

Under the revised 2012 Plan, options held by an option holder who is a director, employee, consultant or management company employee are no longer required to expire within 90 days after the option holder ceases to be a director, employee, consultant or management company employee;

(h)

Under the revised 2012 Plan, options held by an option holder who is engaged in investor relations activities are no longer required expire within 30 days after the option holder ceases to be employed by the Company to provide investor relations activities; and

(i)

In the event of an option holder’s death, the option holder’s personal representative may exercise any portion of the option holder’s vested outstanding options for a period of one year following the option holder’s death.

The Plan provides that other terms and conditions may be attached to a particular stock option, such terms and conditions to be referred to in a schedule attached to the option certificate. Stock options granted to directors, senior officers, employees or consultants will vest when granted unless otherwise determined by the Board on a case by case basis, other than stock options granted to consultants performing investor relations activities, which will vest in stages over 12 months with no more than one-fourth of the options vesting in any three month period.

The price at which an option holder may purchase a common share upon the exercise of a stock option will be as set forth in the option certificate issued in respect of such option and in any event will not be less than the discounted market price of the Company’s common shares as of the date of the grant of the stock option (the “Award Date”). The market price of the Company’s common shares for a particular Award Date will typically be the closing trading price of the Company’s common shares on the day immediately preceding the Award Date, or otherwise in accordance with the terms of the Plan. Where there is no such closing price or trade on the prior trading day “market price” shall mean the average of the most recent bid and ask of the shares of the Company on any stock exchange on which the shares are listed or dealing network on which the shares of the Company trade.

In no case will a stock option be exercisable at a price less than the minimum prescribed by each of the organized trading facilities or the applicable regulatory authorities that would apply to the award of the stock option in question.

Common shares will not be issued pursuant to stock options granted under the Plan until they have been fully paid for by the option holder. The Company will not provide financial assistance or loans to option holders to assist them in exercising their stock options.

The names and titles of the Directors/Executive Officers/Employees of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options is set forth in Table No. 11 as of June 30, 2012, as well as the number of options granted to them. There are outstanding stock options granted to consultants, scientific advisors and investor relations.

Table No. 11

Stock Options Outstanding

7.A. Major Shareholders

As of June 30, 2013, all shareholders have the same voting rights attached thereto as all other common shares of the Company except that, under the terms of the Voting Agreement described above and attached as Exhibit 3 to the amended 2007 Form 20-F filed on December 3, 2008. As of June 30, 2013, no shareholder held more than 5% of the Issued and Outstanding Common Shares.

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⁽¹⁾ Based on 21,617,075 shares outstanding

7.A.1.a. Holdings By Major Shareholders.

Refer to ITEM #6.E and Table No. 10.

7.A.1.b. Significant Changes in Major Shareholders’ Holdings.

---No Disclosure Required---

7.A.1.c. Different Voting Rights.

The Company’s major shareholders do not have different voting rights except as described in the Voting Agreement (Exhibit 3 filed with the amended 2007 Form 20-F on December 3, 2008) which is summarized in Section 4.A., “History and Development of the Company.

7.A.2. Canadian Share Ownership.

On June 30, 2013, the Company’s shareholders’ list showed 21,617,075 common shares outstanding, an estimated 70 registered shareholders. The Company has researched the indirect holding by depository institutions and other financial institutions estimates that there are: 33 holders of record  resident in Canada, holding approximately 21,531,041 common shares; 2 holders of record resident in the USA, holding 24,000 common shares and 3 holders of record resident elsewhere holding 62,034 common shares.

7.A.3. Control of the Company

The Company is a publicly owned Canadian corporation, the shares of which are owned primarily by Canadian residents and other foreign residents. The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., “History and Growth of the Company”, and ITEM #6.E., “Share Ownership”.

7.A.4. Change of Control of Company Arrangements

---No Disclosure Necessary---

7.B. Related Party Transactions

Effective June 1, 2008, the Company entered into consulting agreements with the management of the Company (filed as Exhibits, 4.j and 4.k with the 2008 Form 20-F on March 27, 2009.).

During the year ended June 30, 2013, the Company was invoiced for consulting fees of $65,778 (2012: $155,305) from companies controlled by directors of the Company.

During the year ended June 30, 2012, the Company paid $Nil of rent (2011: $9,572; 2010: $38,259) to a company controlled by a director of the Company. On October 13, 2011, the company moved from the premises owned by the director as a result of the corporate office relocation.

During the year ended June 30, 2013, the Company received financial loans in the amount of $nil (2012: $29,000) from companies controlled by the directors of the Company.

Accounting Fees

For the annual statements dated June 30, 2013 and 2012 the Company paid accounting fees of $16,000 and  $16,000 to Meyers Norris Penny LLP and, for the annual statements dated June 30, 2013.

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Indirect Payments

---No Disclosure Required---

Shareholder Loans

---No Disclosure Required---

Amounts Owing to Senior Management/Directors

As if the date of this report, $106,000 is owing to Terrance Owen, President, CEO and Director by the way of Promissory Notes for funds advanced to the Company. Also as noted above, as of October 31, 2011, companies controlled by Terrance Owen, had accrued management fees of $82,444. There is no money owing to any other members of senior management or members of the Board of Directors.

There have been no transactions since June 30, 2005, or proposed transactions, which have materially affected or will materially affect the Company in which any director, executive officer, or beneficial holder of more than 5% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest other than those already disclosed.

7.C. Interests of Experts and Counsel

---No Disclosure Required---

8.A. Consolidated Statements and Other Financial Information

The consolidated financial statements of the Company comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported of assets and liabilities, the disclosure of contingent assets and liabilities at the date of financial statements and the amounts of revenues and expenses for the reporting period. The areas of estimation are the stock-based compensation, estimated useful lives of depreciable assets, and intellectual property. The Company believes that the estimates and assumptions upon which it relies are reasonable and are based on information available to the Company at the time that estimates and assumptions are made. Actual results could differ from those estimates.

Changes in Significant Accounting Policies

(a) IFRS 9 Financial instruments (“IFRS 9”) was issued by the IASB in October 2010 and will replace IAS 39 - Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2013.  IASB has proposed to move the effective date of IFRS 9 to January 1, 2015.

(b) IFRS 10 ‘Consolidated Financial Statements’ – effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

(c) IFRS 11 Joint arrangements (“IFRS 11”) was issued by the IASB in May 2011 and will replace IAS

31 - Interests in Joint ventures and SIC 13 – Jointly Controlled Entities – Non-Monetary Contributions by Ventures. IFRS 11 is effective for annual period beginning on or after January 1, 2013.

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(d) IFRS 12 ‘Disclosure of Interests in Other Entities’ - effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows.

(e) IFRS 13 ‘Fair Value Measurement’ - effective for annual periods beginning on or after January 1,

2013, with early adoption permitted, provides   the guidance on the measurement of   fair value and related disclosures through a fair value hierarchy.

8.A.7. Legal/Arbitration Proceedings

There are no legal proceedings against the Company. Two Small Claims judgements by suppliers have been paid in full..

8.B. Significant Changes

The Company has abandoned all patent, maintenance except for Canada and China.

The Company is now focused on the licensing and sales of pharmaceuticals that can be registered as natural products, OTC’s and generics.

Terrance Owen, President, CEO and Director ceased all relation to the company when he resigned as Director on June 28, 2013.

9.A. Common Share Trading Information

The Company's common shares trade on the TSX Venture Exchange in Toronto, Ontario, Canada, under the symbol "NPH". The Company also trades on the OTCQB under the symbol “APCSF”.

Table No. 12 lists the high, low and closing sales prices on the TSX Venture Exchange for the last six months, last eight fiscal quarters, and last five fiscal years.

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Table No. 12

TSX Venture Exchange

Common Shares Trading Activity

Sale - Canadian Dollars

9.A.5. Common Share Description

Registrar/Common Shares Outstanding/Shareholders

Effective August 19, 2005, the authorized share capital of the Company was increased to an unlimited number of common shares without par value due to changes in the British Columbia Company Act which permitted this action.

There are no Indentures or Agreements limiting the payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.

Computershare Trust Company of Canada (located at 2nd Floor, 510 Burrard Street, Vancouver, British Columbia Canada V6C 3B9) is the registrar and transfer agent for the common shares.

Stock Options

Refer to ITEM 6.E., Table No. 9 (Aggregate Option Exercises) and Table No. 11 (Stock Options Outstanding) for additional information regarding the Company’s stock options.

Table No. 13 lists, as of June 30, 2013, share purchase warrants (options to purchase common shares) outstanding, the date the share purchase warrants were issued, the exercise price, and the expiration date of the share purchase warrants.

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These warrants were issued in conjunction with private placements of the Company’s securities and all holders of the Company’s warrants are resident in Canada.

Table No. 13

Share Purchase Warrants Outstanding

⁽¹⁾

Issued pursuant to a private placement which closed on April 27, 2012. Exercisable period of the warrants to April 27, 2014 at the exercise price of $0.10 per share with a forced exercise provision attached to each warrant.

⁽²⁾

Issued pursuant to a private placement which closed on June 12, 2013. Exercisable period of the warrants to June 12, 2015 at the exercise price of $0.10 per share with a forced exercise provision attached to each warrant.

9.A.6. Differing Rights

---No Disclosure Necessary---

9.A.7.a. Subscription Warrants/Right

---No Disclosure Necessary---

9.A.7.b. Convertible Securities/Warrants

---No Disclosure Necessary---

9.C. Stock Exchanges Identified

The common shares trade on the TSX Venture Exchange which is headquartered in Toronto, Ontario.

Refer to ITEM #9.A.4 for trading information and history. At this time, the Company is not seeking a listing on any other stock exchange.

10.A. Share Capital

10.A.1. Authorized/Issued Capital.

At June 30, 2013, there were an unlimited number of common shares authorized and 21,617,075 common shares issued and outstanding.

At June 30, 2012, there were an unlimited number of common shares authorized and 6,959,680 common shares issued and outstanding. On March 08, 2012 the Company consolidated its shares on a 10 to 1 basis

At June 30, 2011, there were an unlimited number of common shares authorized and 63,996,799 common shares issued and outstanding.

At June 30, 2010, there were an unlimited number of common shares authorized and 58,721,799 common shares issued and outstanding.

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At June 30, 2009, there were an unlimited number of common shares authorized and 51,341,799 common shares issued and outstanding.

At June 30, 2008, there were an unlimited number of common shares authorized and there were 49,511,799 common shares issued and outstanding.

At June 30, 2007, there were an unlimited number of common shares authorized and there were 32,192,404 common shares issued and outstanding.

At June 30, 2006, there were an unlimited number of common shares authorized and there were 20,800,404 common shares issued and outstanding.

Effective August 19, 2005, the authorized share capital of the Company was increased to an unlimited number of common shares without par value due to changes in the British Columbia Company Act which permitted this action.

As of June 30, 2005, there were 100,000,000 common shares authorized and 15,784,404 common shares issued.

As of June 30, 2004, there were 100,000,000 common shares authorized and 12,784,404 common shares issued.

As of June 30, 2003, there were 100,000,000 common shares authorized and 2,451,475 common shares issued.

As of June 30, 2002, there were 100,000,000 common shares authorized and 2,376,475 common shares issued.

As of June 30, 2001, there were 100,000,000 common shares authorized and 1,176,475 common shares issued.

During the last five years, less than 1% of the capital has been “paid for” with assets other than cash.

10.A.2. Shares Not Representing Capital.

---No Disclosure Necessary---

10.A.3. Shares Held By Company.

---No Disclosure Necessary---

10.A.4. Stock Options/Share Purchase Warrants

---Refer to Tables No. 8, No. 11 No. 13.---

10.A.5. Stock Options/Share Purchase Warrants

---Refer to Tables No. 8, No. 11 No. 13.---

10.A.6. History of Share Capital

The Company has financed its operations through funds raised in public and private placements of common shares and warrants and from revenues from the sale of its products:

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10.A.7. Resolutions/Authorizations/Approvals

---No Disclosure Necessary---

10.B. Memorandum and Articles of Association

The Company’s corporate constituting documents comprising the Notice of Articles and Articles are registered with the British Columbia Registrar of Companies under Incorporation No. BC0607937. A copy of the Articles was filed as an Exhibit 1 with the Company’s initial registration statement on Form 20-F.

The following is a summary of certain  provisions of the Company's  Notice of Articles and Articles and certain provisions of the British Columbia Business Corporations Act (the “BCA”), applicable to the Company:

Objects and Purposes

The Articles do not specify objects or purposes. Under both the BCA, a British Columbia corporation generally has all the legal powers of a natural person. British Columbia corporations may not undertake certain limited business activities such as operating as a trust company or railroad without alterations to its form of articles and specific government consent.

Share Capital

The authorized capital of the Company consists of an unlimited number of common shares without par value. All of the common shares must be fully paid and are not subject to any future call or assessment. All of the common shares of the Company rank equally as to voting rights, participation in a distribution of the assets of the Company on a liquidation, dissolution or winding-up of the Company and the entitlement to dividends. The holders of the common shares are entitled to receive notice of all shareholder meetings and to attend and vote at such meetings. Shareholders are not entitled to cumulative voting. Each common share carries with it the right to one vote. The common shares do not have

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preemptive or conversion rights. In addition, there are no sinking fund or redemption provisions applicable to the common shares or any provisions discriminating against any existing or prospective holders of such securities as a result of a shareholder owning a substantial number of shares.

Share Certificates

Under the Articles, a shareholder is entitled to a share certificate representing the number of shares of the Company held or a written acknowledgement of the shareholder’s right to obtain such a share certificate.

No Limitation on Foreign Ownership

There are no limitations under the Company’s Articles or in the BCA on the right of persons who are not citizens of Canada to hold or vote common shares.

Dividends

Dividends may be declared by the Board out of available assets and are paid rateably to holders of common shares. No dividend may be paid if the Company is, or would thereby become, insolvent.

Voting Rights

Each of the Company’s common share is entitled to one vote on matters to which common shares ordinarily vote including the annual election of directors, appointment of auditors and approval of corporate changes. There are no cumulative voting rights applicable to the Company.

Borrowing Powers

The Company, if authorized by the directors, may: (a) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate; (b) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate; (c) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and (d)mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

Indemnity Provisions

Under the Articles and the BCA, the Company is now permitted (and is, in some circumstances, required) to indemnify a past or present director or officer of the Company or an associated corporation without obtaining prior court approval in respect of an “eligible proceeding”. An “eligible proceeding” includes any legal proceeding relating to the activities of the individual as a director or officer of the Company. However, under the BCA, the Company will be prohibited from paying an indemnity if: (a) the party did not act honestly and in good faith with a view to the best interests of the Company; (b) the proceeding was not a civil proceeding and the party did not have reasonable grounds for believing that his or her conduct was lawful; and (c) the proceeding is brought against the party by the Company or an associated corporation.

Directors – Number and Qualification

The Company’s Articles do not specify a maximum number of directors. The minimum under British Columbia law for a public company is three. The number of directors shall be the number of directors fixed by the directors annually or the number that are actually elected at a general shareholders meeting under the Existing Articles. The number of directors is determined, annually, by shareholders at the annual shareholders meeting and all directors are elected at that time. Under the Articles the directors are entitled between successive annual general meetings to appoint one or more additional directors but not more than one-third of the number of directors fixed at a shareholders’ or actually elected at the preceding annual shareholders’ meeting. Directors automatically retire at the commencement of each annual meeting but may be re-elected thereat.

Directors must be of the age of majority (18), and meet eligibility criteria including being mentally competent, not an un-discharged bankrupt, no fraud related convictions in the previous five years. There are residency requirements and there is no mandatory retirement age either under the Articles or under the BCA. Directors need not own any shares of the Company in order to qualify as directors.

Directors - Powers and Limitations

Directors must manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers which are not required to be exercised by the shareholders as governed by the BCA.

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Directors may, by resolution, create and appoint an executive committee consisting of the director or directors that they deem appropriate. This executive committee has, during the intervals between meetings of the Board, all of the directors’ powers, except the power to fill vacancies in the Board, the power to remove a Director, the power to change the membership of, or fill vacancies in, any committee of the Board and any such other powers as may be set out in the resolution or any subsequent directors’ resolution. Directors may also by resolution appoint one or more committees other than the executive committee. These committees may be delegated any of the directors’ powers except the power to fill vacancies on the board of directors, the power to remove a director, the power to change the membership or fill vacancies on any committee of the directors, and the power to appoint or remove officers appointed by the directors.

Under the BCA, directors are obligated to abstain from voting on matters in which they may be financially interested after disclosing in writing such interest. Directors’ compensation is not a matter on which they must abstain. Directors’ borrowing powers are not generally restricted where the borrowing is in the Company’s best interests, but the directors may not authorize the Company to provide financial assistance for any reason where the Company is insolvent or the providing of the guarantee would render it insolvent.

Amendment of Articles and Notice of Articles; Special Transactions

The Articles provide that the general authority required to amend all provisions of the Company’s Articles and the Notice of Articles relating to the authorized share structure is a resolution of the directors and the attachment of special rights and restrictions thereto, including any changes therein, an ordinary resolution. If the amendment prejudices or interferes with the rights or special rights attached to any class of issued shares, by the provisions of the BCA, the consent of the holders of that class of shares by a special separate resolution is also required.

Certain corporate changes or proposed transactions including amalgamation with another company, sale of substantially all of the Company’s assets, re-domiciling out of the jurisdiction of British Columbia, creation of new classes of shares not only require the consent of the holders of common shares by a special separate resolution but generally also give rise to a dissent right which is the right to be paid the fair value of the stockholder’s shares in cash if the required special resolution is actually passed and the Company elects to proceed with the matter notwithstanding receipt of dissent notices. A notice of a shareholders meeting at which such a change or proposed transaction is intended to be considered must include a prominent notice of the dissent right. Dissent provisions are governed by the BCA and not by the Articles of the Company.

Under the Articles, a special separate resolution requires a majority of three-quarters of the votes cast.

Shareholders’ Meetings

In addition to reflecting the present notice and other provisions of the BCA relating to shareholders’ meetings, the Articles provide that shareholders’ meetings may be held at such place as is determined by the directors. Shareholders meetings are governed by the Articles of the Company but many important protections and procedures are contained within the BCA and the Securities Act (British Columbia) and the Securities Act (Alberta) and the respective regulations and rules thereto and the policy statements, notices and blanket orders of the respective commissions of each of British Columbia and Alberta, together with the national policy statements, and national instruments applied by the such commissions (collectively, “Applicable Canadian Securities Law”). The Articles provide that the Company will hold an annual shareholders’ meeting, will provide at least 21 days’ notice and will provide for certain procedural matters and rules of order with respect to conduct of the meeting. The BCA and Applicable Canadian Securities Law superimpose requirements that generally provide that shareholders meetings require not less than a 60 day notice period from initial public notice and that the Company makes a thorough advanced search of intermediary and brokerage registered shareholdings to facilitate communication with beneficial shareholders so that meeting proxy and information materials can be sent via the brokerages to unregistered but beneficial shareholders. The form and content of information circulars and proxies and like matters are governed by Applicable Canadian Securities Law and includes the specifies relating to disclosure requirements for the proxy materials and various corporate actions, background information on the nominees for election for director, executive compensation paid in the previous year and full details of any unusual matters or related party transactions.

The Company must hold an annual shareholders meeting open to all shareholders for personal attendance or by proxy at each shareholder’s determination. The meeting must be held within 13 months of the previous annual shareholders meeting and must present audited statements which are dated no more than six months prior to such meeting.

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Change in Control

The Company has not implemented any shareholders’ rights or other “poison pill” protection against possible take-overs. The Company does not have any agreements which are triggered by a take-over or other change of control. There are no provisions in its articles triggered by or affected by a change in outstanding shares which gives rise to a change in control. There are no provisions in the Company’s material agreements giving special rights to any person on a change in control.

Insider Share Ownership Reporting

The Articles of the Company do not require disclosure of share ownership. Share ownership of director nominees must be reported annually in proxy materials sent to the Company’s shareholders. There are no requirements under the BCA to report ownership of shares of the Company but Applicable Canadian Securities Law requires disclosure of trading by insiders (generally officers, directors and holders of 10% of voting shares) within 10 days of the trade. Controlling shareholders (generally those in excess of 20% of outstanding shares) must provide seven days advance notice of share sales.

Applicable Canadian Securities Law

Applicable Canadian Securities Law governs matters typically pertaining to public companies such as continuous quarterly financial reporting, immediate disclosure of material changes, insider trade reporting, take-over protections to ensure fair and equal treatment of all shareholders, exemption and resale rules pertaining to non-prospectus securities issuances as well as civil liability for certain misrepresentations, disciplinary, appeal and discretionary ruling matters. All of the Company’s shareholders regardless of residence have equal rights under this legislation except as provided for in the Voting Agreement (Exhibit 3.a.).

10.C. Material Contracts

There are currently no material contracts.

10.D. Exchange Controls

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company’s securities, except as discussed in ITEM 10, ”Taxation" below.

Restrictions on Share Ownership by Non-Canadians:  There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians. If a “non-Canadian” (for example, a US resident acquirer) were to acquire such a control position, they would not be required to do any filings or provide any notices to the Ministry of Industry (Canada) unless notified first by that Ministry that their acquisition of control was under review.

Canada has, as does the United States, competition laws designed to promote competition in industry and markets. The Competition Act (Canada) provides Canada’s federal government with the power to review or prevent business transactions, such as acquiring a controlling interest in a company similar to the Company , if it is found that the acquisition of control would reduce competition in a given market or industry. Since the market that the Company competes in is extremely competitive, no single company, including the Company, seems to have significant market power. Acquisition of the Company, therefore, would not lead to reduced competition.

10.E. Taxation

Canadian Federal Income Tax Considerations:

The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of common shares of the Company (a "U.S. Holder") who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the "Act") and the Canada – United States Income Tax Convention (the "Treaty"), is at all relevant times resident in the United States, is not and is not deemed to

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be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.

Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 5% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares. The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.

In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the common shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada. For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.

The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended December 31, 2009 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.

Dividends:

A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on common shares. Under the Canada-U.S. Income Tax Convention (1980) as amended by the Protocols signed on 6/14/1983, 3/28/1984, 3/17/1995, and 7/29/1997 (the "Treaty"), the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States and who is the beneficial owner of the dividend, is 5%. If the Holder is a company that owns at least 10% of the voting stock of the Company paying the dividend, and, in all other cases, the tax rate is 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.

Disposition of Common Shares:

A Holder who disposes of a common share, including by deemed disposition on death, will not normally be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted "taxable Canadian property" as defined by the Tax Act . Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder if the share is listed on a prescribed stock exchange unless the Holder or persons with whom the Holder did not deal at arm's length alone or together held or held options to acquire, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company. The Canadian Venture Exchange is a prescribed stock exchange under the Tax Act . A Holder who is a resident of the United States and realizes a capital gain on a disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless:

(a)  More than 50% of the value of the common shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resource properties,

(b)

The common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 month period preceding the disposition, or

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(c)

The Holder is an individual who (i) was a resident of Canada at any time during the 10 years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the common share when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital gain realized on a disposition of a common share must include three quarters of the capital gain (taxable capital gain) in computing the Holder's taxable income earned in Canada. The Holder may, subject to certain limitations, deduct three-quarters of any capital loss (allowable capital loss) arising on a disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains realized in any of the three preceding years or any subsequent year.

United States Taxation:

For federal income tax purposes, an individual who is a citizen or resident of the United States or a domestic corporation ("U.S. Taxpayer") will recognize a gain or loss on the sale of the Company's common shares equal to the difference between the proceeds from such sale and the adjusted tax basis of the common shares. The gain or loss will be a capital gain or capital loss if the Company's common shares are a capital asset in U.S. Taxpayer's hands.

For federal income tax purposes, a U.S. Taxpayer will be required to include in gross income dividends received on the Company's common shares. A U.S. Taxpayer who pays Canadian tax on a dividend on common shares will be entitled, subject to certain limitations, to a credit (or alternatively, a deduction) against federal income tax liability. A domestic corporation that owns at least 10% of the voting shares should consult its tax advisor as to applicability of the deemed paid foreign tax credit with respect to dividends paid on the Company's common shares.

Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return. Other filing requirements may apply. United States Investors should consult their own tax advisors concerning these requirements.

The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company. A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended December 31, 2009 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.

10.F. Dividends and Paying Agents

The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.

Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders. The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.

10.G. Statement by Experts

The Company’s auditor for its financial statements for fiscal year ended 2013 was Meyers Norris Penny LLP. Their audit report for Fiscal 2013 is included with the related financial statements in this Annual Report with their consent attached hereto as an exhibit.

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10.H. Document on Display

--- No Disclosure Necessary ---

--- No Disclosure Necessary ---

12.A. Debt Securities

--- No Disclosure Necessary ---

12.B. Warrants and Rights

--- No Disclosure Necessary ---

12.C. Other Securities

--- No Disclosure Necessary ---

12.D. American Depository Shares

-- No Disclosure Necessary ---

--- No Disclosure Necessary ---

--- No Disclosure Necessary ---

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the President concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic SEC filings, and that information is recorded, processed, summarized and reported as and when required.

There was no significant change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal year ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Nor were there any significant deficiencies or material weaknesses in the Company's internal controls requiring corrective actions.

Jamie Lewin, is a financially literate member of the Company’s Audit Committee. Eugene Beukman and Tom Kennedy are considered “independent” and “financially literate”, as those terms are defined in applicable securities legislation.

Jamie A Lewin – CFO, Secretary:  BA (Economics) Western University, 1972; LLB Laval University, 1984; MBA City University, 1992; Certified Management Accountant (CMA), 2003; Chief Financial Officer of: Grand Peak Capital Corp. since 2009, Lucky Minerals Inc. since 2010, Grenville Gold Corp. since 2011, Orofino Minerals Inc. since 2011 and Innovative Properties Inc. since 2011.  Abenteuer Resources Corp., from 2006 to 2011, Dussault Apparel, Inc., from 2007 to 2008; Musgrove Minerals Corp. 2011 – 2012, Acana Capital Corp. from 2011 to 2012. In addition he has been a Director at:  Choice Gold 2012 – current, Abenteuer Resources 2006 – 2011, Lucky Minerals 2010 – 2011 and Innovative Properties 2011 – 2012.

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The company has not adopted a formal code of ethics because, as a TSX Venture Exchange issuer, the Company is only required have an audit committee. The audit committee is composed of a majority of independent members as discussed above under the heading “Item 16.B. Audit Committee Financial Experts”.

In lieu of a code of ethics, the Company has adopted the following methodology with respect to corporate governance.

The management of NUVA is responsible for establishing and maintaining disclosure controls and procedures for information relating to the Company, including its consolidated subsidiaries. The Company’s management is also responsible for establishing and maintaining adequate internal control over financial reporting.

NUVA’s Board of Directors facilitates its exercise of independent supervision over management by ensuring that the Board is composed of a majority of independent directors. The Board, at present, is composed of three directors, all of which are considered to be independent except for Mr. Lewin who is also a senior officer. In determining whether a director is independent, the Board considers, for example, whether the director has a relationship, which could, or could be perceived to, interfere with the director's ability to objectively assess the performance of management.

The Board monitors the ethical conduct of NUVA and its management and ensures that it complies with applicable legal and regulatory requirements, such as those of relevant securities commissions and stock exchanges. The Board has found that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law, as well as the restrictions placed by applicable corporate legislation on the individual director’s participation in decisions of the Board in which the director has an interest, have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.

The Board is specifically responsible for approving long-term strategic plans and annual operating plans and budgets recommended by management. Board consideration and approval is also required for all material contracts, business transactions and all debt and equity financing proposals. The independent directors on the Board are also responsible for approving senior executive compensation and retirement plans.

The Board delegates to management, through the offices of President and Chief Executive Officer and Chief Financial Officer, responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on the Company’s business in the ordinary course, managing the Company’s cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board also looks to management to furnish recommendations respecting corporate objectives, long-term strategic plans and annual operating plans.

Given the relatively static composition of the Board of Directors and the Company’s management over the last several years, the Board has not appointed a corporate governance committee and these functions are currently performed by the Board as a whole.

External Auditor Service Fees

During the financial year ending June 30, 2013,the Company’s auditors were Meyers Norris Penny LLP. The following table sets out the aggregate fees billed by Meyers Norris Penny LLP, Chartered Accountants in 2012 and 2013.

⁽¹⁾ Related to assurance and related services that are reasonably related to the performance of the audit and review of the Company’s financial statements and not included in the amounts noted under Audit Fees .

^{(2 )} Related to fees billed by the Company’s external auditor for professional services rendered for tax compliance, tax advice and tax planning.

⁽³⁾ Related to other accounting services that is excluded from the Audit Fees .

Pre-Approval Policies and Procedures

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The Audit Committee has adopted an Audit Committee Charter (“Exhibit 11”) governing the provision of audit and non-audit services by the external auditor. This charter requires the Audit Committee to:

1.

recommend to the Board of Directors the external auditor to be nominated by the Board of Directors and the compensation of the external auditor (see 4.1.(a) and (b), Exhibit 11) and

2.

to pre-approve all non-audit services provided by the external auditor (see 4.1.(n), Exhibit 11).

---Not applicable---

---Not Applicable---

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report. The audit report of Meyers Norris Penny LLP, Charted Accountants, is included herein immediately preceding the audited financial statements.

Audited Financial Statements

-- see exhibits

The Company has elected to provide financial statements pursuant to ITEM #17.

The financial statements thereto as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report. The report of the Company’s independent auditors for the audited financial statements are included herein immediately preceding the audited financial statements.

(A) Financial information

(i)

Audited Consolidated Financial Statements for the fiscal years ending June 30, 2012 and 2011.

1.

Auditor’s Report, dated October 28, 2013.

2.

Consolidated Statements of Financial Position at June 30, 2013 and June 30, 2012.

3.

Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ending June 30, 2013 and 2012.

4.

Consolidated Statements of Changes In Equity as at: June 30, 2013 and June 30, 2012.

5.

Consolidated Statements of Cash Flows for the fiscal years ending June 30, 2013 and 2012.

6.

Notes to Consolidated Financial Statements.

7.

Management Discussion and Analysis dated October 28, 2013

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(B)  Index to Exhibits:

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Nuva Pharmaceuticals Inc.

(Formerly ALDA Pharmaceutical Corp.)

Consolidated Financial Statements

For The Years Ending

June 30, 2013 and 2012

(Expressed In Canadian Dollars)

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_{Management’s Responsibility}

To the Shareholders of Nuva Pharmaceuticals Inc.:

Management is responsible for the preparation and presentation of the accompanying consolidated financial statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards and ensuring that all information in the annual report is consistent with the statements. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required.

In discharging its responsibilities for the integrity and fairness of the consolidated financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of consolidated financial statements.

The Board of Directors and Audit Committee are composed primarily of Directors who are neither management nor employees of the Nuva Pharmaceuticals Inc.. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial information included in the annual report. The Audit Committee has the responsibility of meeting with management and external auditors to discuss the internal controls over the financial reporting process, auditing matters and financial reporting issues. The Committee is also responsible for recommending the appointment of the Nuva Pharmaceuticals Inc.'s external auditors.

MNP LLP is appointed by the Shareholders to audit the consolidated financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Audit Committee and management to discuss their audit findings.

October 28, 2013

“Eugeue Beukman”

“Jamie Lewin”

Director

Chief Financial Officer

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Auditor’s Report

INDEPENDENT AUDITORS' REPORT

To the Shareholders of NUVA Pharmaceutical Inc.:

We have audited the accompanying consolidated financial statements of Nuva Pharmaceuticals Inc. and its

subsidiaries, which comprise the consolidated statements of financial position as at June 30, 2013 and 2012, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in

accordance with International Financial Reporting Standards, and for such internal control as management

determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We

conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the

assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of

Nuva Pharmaceuticals Inc. and its subsidiaries as at June 30, 2013 and 2012, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 of these consolidated financial statements, which states that Nuva Pharmaceuticals Inc.. incurred significant losses from operations, negative cash flows from operating activities and has an accumulated deficit. This, along with other matters described in Note 1, indicates the existence of a material uncertainty which may cast doubt about the ability of Nuva Pharmaceuticals Inc. to continue as a going concern.

October 28, 2013

Vancouver, BC                                                                                                        Chartered Accountants

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Nuva Pharmaceuticals Inc. (Formerly ALDA Pharmaceuticals Corp.)

Consolidated Statements of Financial Position

For The Years Ended June 30, 2013 and 2012

(Expressed In Canadian Dollars)

*See accompanying notes to the consolidated financial statements

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Nuva Pharmaceuticals Inc. (Formerly ALDA Pharmaceuticals Corp.)

Consolidated Statements of Comprehensive Income / (Loss)

For The Years Ended June 30, 2013 and 2012

(Expressed In Canadian Dollars)

*See accompanying notes to the consolidated financial statements

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Nuva Pharmaceuticals Inc. (Formerly ALDA Pharmaceuticals Corp.)

Consolidated Statements of Changes in Equity

For The Years Ended June 30, 2013 and 2012

(Expressed In Canadian Dollars)