10-K

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                                   (Mark One)

                   |X| ANNUAL REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal years ended......................................October 31, 2007

                 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


         For the transition period from ______________ to ______________

                         COMMISSION FILE NUMBER 0-22011

                 -----------------------------------------------

                         SYNOVICS PHARMACEUTICALS, INC.

             (Exact name of the Company as specified in its charter)

                 -----------------------------------------------


            Nevada                                               86-0760991
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

5360 Northwest 35th Avenue, Ft. Lauderdale, FL                     33309

(Address of principal executive offices)                         (zip code)

              The Company's telephone number, including area code:
                                 (954) 486-4590

                 -----------------------------------------------

         Securities registered under Section 12(b) of the Exchange Act:

                                      None.

         Securities registered under Section 12(g) of the Exchange Act:

                    Common Stock, $0.001 par value per share
                    -----------------------------------------
                                (Title of Class)



Indicate by check mark whether the Company is a well-known seasoned issuer, as
defined by Rule 405 of the Securities Act. Yes [ ] No [X].

Indicate by check mark if the Company is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act. Yes [ ] 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 [ ] No [X].

Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of the Company's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ].

Indicate by check mark whether the Company is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
file and larger accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).

              Yes [ ]   No [X]

The aggregate market value of the voting common equity held by non-affiliates of
the registrant as of April 30, 2007 was approximately $13,760,285 based upon
the closing price of the registrant's Common Stock on the OTC Bulletin Board, on
April 30, 2007. (For purposes of determining this amount, only directors,
executive officers, and, based on Schedule 13(d) filings on April 30, 2007 10%
or greater stockholders and their respective affiliates have been deemed
affiliates).

As of January 31, 2008, there were 19,177,186 shares of common stock
outstanding (not including 10,661,000 shares in treasury).


                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE


                                       2



                           FORWARD-LOOKING STATEMENTS

     Certain statements made in this Annual Report on Form 10-K are
"forward-looking statements" (within the meaning of the Private Securities
Litigation Reform Act of 1995) regarding the plans and objectives of management
for future operations. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements of Synovics, Inc., a Nevada corporation (the "Company"), to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based,
in part, on assumptions involving the continued expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes its assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove inaccurate and, therefore, there
can be no assurance the forward-looking statements included in this Report will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.


                                       3


                                TABLE OF CONTENTS

                                 Form 10-K Index

                                     PART I

                                                                            PAGE

Item 1.    Business ........................................................   5
Item 1A.   Risk Factors.....................................................  16
Item 1B.   Unresolved Staff Comments........................................  27
Item 2.    Properties ......................................................  27
Item 3.    Legal Proceedings ...............................................  27
Item 4.    Submission of Matters to a Vote of Security Holders .............  27

                                    PART II

Item 5.    Market for the Registrant's Common Equity and
               Related Stockholder Matters .................................  28
Item 6.    Selected Financial Data..........................................  32
Item 7.    Management's Discussion and Analysis of Financial ...............  33
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.......  39
Item 8.    Financial Statements and Supplementary Data .....................  39
Item 9.    Changes in and Disagreements with Accountants
               on Accounting and Financial Disclosure ......................  40
Item 9A.   Controls and Procedures .........................................  40
Item 9B.   Other Information ...............................................  40

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant ..............  43
Item 11.   Executive Compensation ..........................................  46
Item 12.   Security Ownership of Certain Beneficial Owners
               and Management and Related Stockholder Matters ..............  56
Item 13.   Certain Relationships and Related Transactions ..................  59
Item 14.   Principal Accountant Fees and Services...........................  64
Item 15.   Exhibits ........................................................  64


                                       4


                                     PART I

ITEM 1.  BUSINESS

GENERAL

         Synovics Pharmaceuticals, Inc. was incorporated on December 22, 1990
under the laws of the State of Nevada. On April 11, 2006, we name changed our
corporate name from Bionutrics Inc. to our current name.

         Since our incorporation, we engaged in various lines of business in
pharmaceutical and dietary supplement products. In May 2006, Synovics acquired
Kirk Pharmaceuticals, LLC ("KIRK") and its affiliate, ANDAPharm LLC
("ANDAPHARM"), both Florida limited liability companies. Synovics has one
additional operating subsidiary, Synovics Labs. Inc. ("SYNOVICS LABS").

         Synovics has six non-operating subsidiaries, LipoGenics, Inc.,
Bionutrics Health Products, Inc., Nutrition Technology Corporation, InCon
International Ltd. and Cosmedics, Inc.

         Synovic's principal offices are located at 5360 NW 35 Avenue, Fort
Lauderdale, FL 33309. The phone number is 954 486 4590. During fiscal year ended
October 31, 2007, we relocated our principal offices to Fort Lauderdale, Florida
from Phoenix, Arizona.

         Except as otherwise indicated, all references in this Form 10-K to
"we", "us", "our", "Synovics" or the "Company" refer to Synovics
Pharmaceuticals, Inc. and our subsidiaries.

BUSINESS OVERVIEW

         We are a specialty pharmaceutical company implementing what is referred
to as an off shore "Front-End" growth strategy - the core of our business model.
This strategy incorporates targeting a series of partnering relationships with
Indian pharmaceutical companies to supply us with low-cost competitive
pharmaceutical products, both active pharmaceutical ingredients ("APIS") and
finished dosage forms. As a result of the acquisition of Kirk and ANDAPharm in
May 2006, we have a facility in Ft. Lauderdale operating under cGMP (current
good manufacturing practices) guidelines for the manufacturing and distribution
of over-the-counter ("OTC") private label drugs and prescription drugs (Rx).

          We have initiated our Front-End strategy, which sources products
developed and manufactured in India, and packages and distributes to our
customers through our Florida operation. Our access to low-cost raw materials
and manufacturing is the cornerstone of the Front-End strategy and key to our
dual objectives of growing our OTC business and introducing a pipeline of Rx
generic drugs. A critical key to this strategy and its implementation is our
alliance with Harcharan (Harry) Singh, of Glopec International, a pharmaceutical
industry veteran with a 20 year proven track record of sourcing competitive
pharmaceuticals products for North America from Asia and Europe.


                                       5


         Our key assets can be summarized as:

         o   Private label OTC drug manufacturer - Kirk Pharmaceuticals, Fort
             Lauderdale, Florida;

         o   DEA licensed for controlled substances, Schedule 2, 3, 3N, 4, 5 and
             List 1 chemicals;

         o   Containment suites for manufacture of highly regulated/toxic
             substances (e.g. hormones and anti-cancer);

         o   Robust pipeline of prescription Rx and OTC generic drug products;

         o   Access to difficult to source competitive APIs;

         o   Manufacture in both U.S. and India - Package and Distribute in U.S;

         From 2005 to mid-2007, our focus for revenue growth was the development
of oral controlled-release generic drug formulations utilizing proprietary drug
formulations and delivery technologies under license from Nostrum
Pharmaceuticals, Inc. ("NOSTRUM"). During 2007, the focus and business model
changed resulting from the impact of two factors: first, our disassociation from
Nostrum following the July 2007 settlement of the Nostrum legal actions; second,
our strategic alliance with Harry Singh established in April 2007. This alliance
is principally designed to assist us in sourcing low-cost APIs and generic drug
applications (abbreviated new drug applications - ANDAs), submitted by Indian
pharmaceutical companies to the United States Food and Drug Agency ("FDA") and
approved for sale in the United States drug market and is the foundation of our
current business model.

         We are firstly a manufacturer, packager and distributor of private
label, or store brand, OTC products to chain drug stores, wholesalers and
distributors throughout the United States. The US market for manufacturing and
distribution of OTC drugs, approximately $3.5 billion in size, is dominated by
Perrigo Company, with sales approximating 50% of the total store brand or
private label market. Recently, two large OTC manufacturers, Leiner Health
Products and Pharmaceutical Formulations, Inc. (PFI), representing approximately
$800 million in US sales, ceased to supply the store brand OTC market. We
believe that with our focus on competitive pricing and customer service and with
adequate capitalization, we can continue to grow our OTC business in the US
substantially.

         Our OTC product categories include analgesics, cough cold,
antihistamines, asthma relief and laxatives. Executing our Front-End strategy,
Kirk has initiated the shifting of manufacturing of its high-volume commodity
OTC drugs to India to effect cost savings and maintain competitiveness. These
products are shipped in bulk from India to Ft Lauderdale for packaging and
distribution to our customers. Our OTC products are subject to control by the
United Stated Drug Enforcement Administration ("DEA") and will continue to be
manufactured (as well as packaged and distributed) through our Ft Lauderdale
facilities.

         In addition to the OTC business, we are a manufacturer, packager and
distributor of private label solid dosage Rx products. These products are sold
through several distribution channels under exclusive or semi exclusive
agreements. These agreements include minimum sales requirements.


                                       6


         Our Front-End strategy is the source of our pipeline of 17 targeted
in-licensed generic Rx drug (FDA approved) candidates. The Front-End strategy is
founded on the fact that a variety of first-quality small to medium Indian
pharmaceutical companies, well financed with state of the art manufacturing
facilities, have developed and in many cases filed ANDAs with the FDA for the US
market, but have no marketing - distribution presence in the US market, i.e. no
front-end. Harry Singh has long standing business relationships with many of
these companies (and their ownership) and is directing our initial steps of
arranging agreements for ANDA in-licensing, low-cost APIs and contract
manufacturing. We will source finished product from India, then package and
distribute through Florida - the customer belongs to Synovics.

         Our operations in Fort Lauderdale, Florida are highly scalable, in
three separate leased facilities encompassing approximately 80,000 square feet.
Our facilities contain manufacturing, warehousing, laboratory and administrative
spaces in these facilities. We employ approximately 140 people in all our
companies.

OUR OTC PRODUCTS

         The products that Kirk develops for store brands are considered
National Brand Equivalent ("NBE") and either meet or exceed the quality
standards of the comparable brands.

PRODUCT DESCRIPTION                                      NATIONAL BRAND
- -------------------                                      --------------

ANALGESICS
     Acetaminophen 500mg Caplets                         Tylenol(R)
     Acetaminophen PM Caplets                            Tylenol(R) PM
     Acetaminophen 325mg Tablets                         Tylenol(R)
     Acetaminophen 500mg Tablets                         Tylenol(R)
     Child Chew 81mg Aspirin Tab - Orange                Bayer(R)/St. Joseph(R)
     Enteric Coated 81mg Aspirin Tab                     Bayer(R) Enteric 81mg
     Ibuprofen 200mg Brown Caplet                        Advil(R)
     Ibuprofen 200mg Brown Tablet                        Advil(R)
     Ibuprofen 200mg Orange Tablet                       Motrin(R)
     Ibuprofen 200mg Orange Caplet                       Motrin(R)

COUGH/COLD/ALLERGY
     Asthma Aid Tablets                                  Bronkaid(R)
     Bronchial Asthma Tablets                            Primatene(R)
     Chlorpheniramine 4mg Tablets                        Chlor-Trimeton(R)
     Cough & Cold HBP Tablets                            Coricidin HBP(R)
     Diphenhydramine 25mg Caplets                        Benadryl(R) Ultra-Tabs
     Diphenhydramine 25mg Capsules                       Benadryl(R)
     Diphenhydramine 50mg Capsules                       Benadryl(R)

LAXATIVES & ANTACIDS
     Senna 8.6mg Tablets                                 Senokot(R)


                                       7


     Senna 8.6mg + Doc Sodium Tablets - Orange           Senokot-S(R)
     Senna 8.6mg + Doc Sodium Tablets - Red              Peri-Colace(R)

SLEEP/ALERT REMEDIES
     APAP PM Caplets                                     Tylenol(R) PM
     Rest Simply Tablets                                 Simply Sleep(TM)

         In March of 2007, we announced an agreement for exclusive, world-wide
rights to develop and commercialize PharmPro Division of Fluid Air Inc.'s
proprietary over-the-counter (OTC) version of omeprazole. The OTC branded market
sales for omeprazole at the beginning of 2008 were approximately $800 million.
We expect to file for FDA approval of this product, subject to completion of
development and trials, later in 2008. Perrigo Company has announced that they
are launching a generic version of the omeprazole brand Prilosec OTC(R) in the
first quarter of 2008 and expects full year annual sales for the product to be
in the range of $150 - $200 million.

OUR RX PRODUCTS

         Presently, we are selling under contract one RX product, Estratest, a
product used by post-menopausal women. We are currently awaiting ANDA approval
for our second RX product.

SETTLEMENT OF NOSTRUM DISPUTE

         We previously entered into a technology development agreement with
Nostrum Pharmaceuticals Inc. ("NOSTRUM") dated as of June 16, 2004 which was
subsequently replaced in its entirety by a Technology License Agreement dated as
of March 16, 2005, as amended (the "TECHNOLOGY LICENSE AGREEMENT"), and an ANDA
Ownership Transfer and Product License Agreement, dated May 17, 2006 (the "ANDA
AGREEMENT"). The sole owner of Nostrum is Nirmal Mulye who was formerly our
largest shareholder and was formerly our Chief Scientific Officer and a member
of our Board of Directors.

         The Technology Agreement granted us an exclusive license under
Nostrum's oral controlled release proprietary technology to develop, make and
sell exclusively and worldwide, ten generic and ten 505(b)(2) drugs (improved
formulations of previously approved drugs) which drugs were to be designated by
us. The ANDA Agreement transferred ownership of an abbreviated new drug
application ("ANDA") to an AB rated, generic 500mg equivalent (Metformin ER) of
the branded product Glucophage-XR (the "METFORMIN Drug") and additionally
granted us an exclusive license under Nostrum's technology to develop, make and
sell the Metformin Drug and an additional strength version of the Metformin Drug
in the United States.

         In September, October and November 2006, we received a series of
written notices from Nostrum purporting to terminate: (i) our rights to four
drugs designated by us under the Technology Agreement, and (ii) the ANDA
Agreement. The notices also purported to terminate five other drugs allegedly
covered by the Technology Agreement. Mr. Mulye resigned from his


                                       8


positions with us as a Director in September 2006 and as Chief Scientific
Officer in January 2007.

         On November 17, 2006, we commenced an action in the United States
District Court for the Southern District of New York against Nostrum.

         On December 4, 2006, we filed a demand for arbitration with the
American Arbitration Association, pursuant to the terms of the Technology
Agreement, challenging the propriety of the purported terminations, which we
maintained were without merit. On January 11, 2007, we amended our statement of
claim with the American Arbitration Association to include the claims related to
the improper attempt to terminate the ANDA Agreement, and to add our subsidiary,
Synovics Labs, as a party.

         Synovics Labs, on January 12, 2007, filed a complaint with the United
States District Court for the Southern District of New York seeking to enjoin
Nostrum from terminating the ANDA Agreement. That action was consolidated with
the previously-filed action relating to the Technology Agreement.

         On March 2, 2007, we commenced a lawsuit in the United States District
Court for the District of New Jersey against Dr. Mulye, Anil Anand ("ANAND") and
Nostrum. Dr. Mulye is a former member of our Board of Directors and our former
Chief Scientific Officer. As part of the lawsuit, we alleged that Dr. Mulye
introduced Anand to us without disclosing the background of Anand, a confessed
felon in a $700 million bank fraud. In the action, the registrant alleged, among
other things, that (i) Mulye breached fiduciary duties and usurped corporate
opportunities as a member of the Board and Chief Scientific Officer and that
Anand and Nostrum aided and abetted Dr. Mulye in such actions, (ii) Dr. Mulye,
Anand and Nostrum tortiously interfered with prospective contractual
relationships of the registrant, (iii) Dr. Mulye fraudulently induced us to
enter in certain financial transactions, and (iv) Dr. Mulye, Anand and Nostrum
conspired to breach fiduciary duties and steal valuable corporate opportunities.
We requested a jury trial and sought compensatory and punitive damages and a
constructive trust over corporate opportunities usurped from us.

         On July 31, 2007, we together with Synovics Labs entered into a
settlement agreement with all parties to the various actions. Under the terms of
the settlement agreement, all pending actions and proceedings between the
parties were dismissed with prejudice, the parties mutually released one another
and all pre-settlement agreements were terminated, including the Technology
License and ANDA Agreement. In connection with the termination of the ANDA
Agreement, the Company and Synovics Labs assigned to Nostrum the Abbreviated New
Drug Application for the Metformin Extended Release 500mg.

         As part of the settlement, 10,661,000 shares of our common stock that
are owned by Nostrum have been placed in escrow pursuant to a separate escrow
agreement (the "ESCROW SHARES"). If the guarantees of Dr. Mulye and Nostrum to
the Bank of India ("BOI") in connection with our credit facility with BOI are
extinguished in full or in part by May 1, 2008, the Escrow Shares will be
released to us in an amount proportionate to the amount by which the guarantees
have been extinguished. If by May 1, 2008, any Escrow Shares have not been
released to us or if


                                       9


we fault on our credit facility with BOI and such default remains uncured for
more than sixty days, any remaining Escrow Shares will be released to Nostrum.
If the Escrow Shares are released to Nostrum and during the escrow period we
issue additional shares of common stock or common stock equivalents to cause the
Escrow Shares to represent less than 32% of our outstanding shares on a fully
diluted basis, then we are required to issue to Nostrum additional shares of
common stock so that the Escrow Shares together with the additional shares
constitute 32% of our outstanding shares on a fully diluted basis. Such
additional shares will be reduced proportionately if any of the Escrow Shares
are released to us during the escrow period. As of the date hereof, the current
amount of the outstanding principal loan balance with BOI is $7,200,000.

RESEARCH AND DEVELOPMENT

         As previously discussed, on July 31, 2007, both the Technology License
Agreement and ANDA Agreement terminated. Up until that date, the drug candidates
under development pursuant to those agreements were our primary drug candidates
in development.

         We currently have agreements with several companies for the development
of a number of OTC and prescription pharmaceutical products. Our role in these
drugs varies depending on the agreement from development to transfer of existing
FDA approved products for manufacture in our facilities. Some of these projects
will require further filings with and approval by the FDA.

         We plan to continue to enter into agreements for the development of
products and will especially focus on those products that provide a unique
opportunity in the market that provide leverage of the Front-End strategy.

         Kirk plans to expand its OTC line by growing the categories it is
currently producing with new generic versions of OTC brands in those categories.
There are also plans to expand products by adding doses and container counts to
existing products.

         As noted above, in March 2007, we announced an agreement for exclusive,
world-wide rights to develop and commercialize PharmPro Division of Fluid Air
Inc.'s proprietary over-the-counter (OTC) version of omeprazole. Development is
ongoing with a target of filing with the FDA later in 2008. In addition, we are
awaiting FDA approval for an ANDA submitted for our second RX product.

         We also plan to continue to execute our Front-End strategy via
in-licensing 17 targeted ANDAs owned by Indian pharmaceutical companies and
approved by the FDA. Licensing and marketing of these products will be subject
to capital available to us over the next 18 months and, if such capital is
available, for which there can be no assurances, we would not expect to have
these products in the US market prior to 2010.

PATENTS AND TRADEMARKS

         Prior to the enactment in the United States of new laws adopting
certain changes mandated by the General Agreement on Tariffs and Trade ("GATT"),
the exclusive rights afforded by a U.S. Patent were for a period of 17 years
measured from the date of grant. Under


                                       10


GATT, the term of any U.S. Patent granted on an application filed subsequent to
June 8, 1995 terminates 20 years from the date on which the patent application
was filed in the United States or the first priority date, whichever occurs
first. Future patents granted on an application filed before June 8, 1995 will
have a term that terminates 20 years from such date, or 17 years from the date
of grant, whichever date is later.

         Under the Drug Price Competition and Patent Term Restoration Act, a
U.S. product patent or use patent may be extended for up to five years under
certain circumstances to compensate the patent holder for the time required for
FDA regulatory review of the product. The benefits of this Act are available
only to the first approved use of the active ingredient in the drug product and
may be applied only to one patent per drug product. There can be no assurance
that we will be able to take advantage of this law.

         Though we own a handful of patents, at this time, we are not relying on
any patented products for our operations. We rely upon unpatented proprietary
and trade secret technology that we seek to protect, in part, by confidentiality
agreements with our collaborative partners, employees, consultants, outside
scientific collaborators, sponsored researchers, and other advisors. There can
be no assurance that these agreements provide meaningful protection or that they
will not be breached, that we will have adequate remedies for any such breach,
or that our trade secrets, proprietary know-how, and technological advances will
not otherwise become known to others. In addition, there can be no assurance
that, despite precautions taken by us, others have not and will not obtain
access to our proprietary technology.

GOVERNMENT REGULATION AND APPROVAL

         The manufacturing, processing, formulation, packaging, labeling,
testing, storing, distributing and sale of our products are subject to
regulation by one or more U.S. agencies, including the FDA and the DEA as well
as several state and local agencies. In addition, we manufacture and market
certain products in accordance with standards set by the United States
Pharmacopoeial Convention, Inc. (USP). We believe that our policies, operations
and products comply in all material respects with existing regulations.

U.S. FOOD AND DRUG ADMINISTRATION

         The FDA has jurisdiction over our marketing of our drug products. The
FDA's jurisdiction extends to the manufacturing, testing, labeling, packaging,
storage and distribution of these products.

         Some of our OTC pharmaceuticals are regulated under the OTC Monograph
System and subject to certain FDA regulations. Under the OTC Monograph System,
selected OTC drugs are generally recognized as safe and effective and do not
require the submission and approval of an ANDA or NDA prior to marketing. The
FDA OTC Monograph System includes well-known ingredients and specifies
requirements for permitted indications, required warnings and precautions,
allowable combinations of ingredients and dosage levels. Drug products marketed
under the OTC Monograph System must conform to specific quality and labeling
requirements; however, these products generally can be developed with fewer
regulatory hurdles than those products that require the filing of an ANDA or
NDA. It is, in general, less costly to develop and


                                       11


bring to market a product produced under the OTC Monograph System. From time to
time, adequate information may become available to the FDA regarding certain
ANDA or NDA drug products that will allow the reclassification of those products
as no longer requiring the approval of an ANDA or NDA prior to marketing. For
this reason, there may be increased competition and lower profitability related
to a particular product should it be reclassified to the OTC Monograph System.
In addition, regulations may change from time to time, requiring formulation,
packaging or labeling changes for certain products.

         Other of our products are marketed without approved applications. These
products must meet certain manufacturing and labeling standards established by
the FDA. The FDA's policy with respect to the continued marketing of unapproved
products is stated in the FDA's June 2006 compliance policy guide, titled
"Marketed New Drugs without Approved NDAs or ANDAs." Under this policy, the FDA
has stated that it will follow a risk-based approach with regard to enforcement
against such unapproved products. The FDA evaluates whether to initiate
enforcement action on a case-by-case basis, but gives higher priority to
enforcement action against unapproved drugs in certain categories, such as those
marketed unapproved drugs with potential safety risks or that lack evidence of
effectiveness. The FDA recognizes that certain unapproved products, based on the
introduction date of their active ingredients and the lack of safety concerns,
among other things, have been marketed for many years and, at this time, might
not be subject to immediate enforcement action.

         We also have our first drug candidate that requires approval by the FDA
through its ANDA process before it can be commercialized. Based on current FDA
regulations, ANDAs and NDAs provide information on chemistry, manufacturing and
control issues, bioequivalence, packaging and labeling. The ANDA process
generally requires less time and expense for FDA approval than the NDA process.
For approval of an ANDA, we must demonstrate that the product is bioequivalent
to a marketed product that has previously been approved by the FDA and that our
manufacturing process meets FDA standards. This approval process for an ANDA may
require that bioequivalence and/or efficacy studies be performed using a small
number of subjects in a controlled clinical environment and, for certain topical
generic products, full clinical studies. Approval time currently averages
seventeen months from the date the ANDA is submitted. Changes to a product
marketed under an ANDA or NDA are governed by specific FDA regulations and
guidelines that define when proposed changes, if approved by the FDA, can be
implemented.

         All our products that are manufactured, tested, packaged, stored or
distributed by us must comply with FDA cGMPs. The FDA performs periodic audits
to ensure that our facilities remain in compliance with all appropriate
regulations. The failure of a facility to be in compliance may lead to a breach
of representations made to store brand customers or to regulatory action against
the products made in that facility, including seizure, injunction or recall.

         During the past year, we had two inspections by the FDA, one for Kirk
and one for ANDAPharm. In each case, the FDA issued a Form 483 advising us of
deficiencies in our operations. We have responded to the FDA and have taken
measures to make corrections to our operations to ensure continued compliance
with the regulations of the FDA and cGMPs. To date, we have not had any company
initiated recalls or have had any punitive actions taken by the FDA.


                                       12


U.S. DRUG ENFORCEMENT AGENCY

         The DEA regulates certain drug products containing controlled
substances and List I chemicals pursuant to the federal Controlled Substances
Act (CSA). The CSA and DEA regulations impose specific requirements on
manufacturers and other entities that handle these substances including
registration, recordkeeping, reporting, storage, security and distribution.
Recordkeeping requirements include accounting for the amount of product
received, manufactured, stored and distributed. Companies handling either
controlled substances or List I chemicals are also required to maintain adequate
security and to report suspicious orders, thefts and significant losses. The DEA
periodically inspects facilities for compliance with its rules and regulations.
Failure to comply with current and future regulations of the DEA could lead to a
variety of sanctions, including revocation or denial of renewal of DEA
registrations, injunctions, or civil or criminal penalties.

         We are subject to the requirements the CSA and DEA regulations in the
handling of any controlled substances in schedules II - V or any of the List I
chemicals identified in the CSA. As a result of series of amendments to the CSA,
the DEA has imposed increased restrictions on the manufacture and distribution
of certain products used by us. For example, the Comprehensive Methamphetamine
Control Act of 1996 was enacted to authorize the DEA to monitor transactions
involving chemicals that may be used illegally in the production of
methamphetamine. The Comprehensive Methamphetamine Control Act of 1996
establishes certain registration and recordkeeping requirements for
manufacturers of OTC cold, allergy, asthma and diet medicines that contain
ephedrine, pseudoephedrine or phenylpropanolamine (PPA).

         More recently, the Reauthorization Act of 2005 was signed into law on
March 9, 2006. The Reauthorization Act of 2005 prevented the existing provisions
of the Patriot Act from expiring and also included the Combat Meth Act. This law
further amended the CSA and provided additional requirements on the sale of
pseudoephedrine products. Among the various provisions, this national
legislation places certain restrictions on the purchase and sale of all products
that contain ephedrine, pseudoephedrine, or phenylpropanolamine (List I Chemical
Products). Effective April 7, 2006, the Act imposed quotas on manufacturers
which limits the amount of product that can be manufactured. On July 10, 2007,
the DEA published an Interim Rule establishing regulations to implement the
import and production quotas for List I Chemicals. Our ability to import and
manufacture products may be limited by the annual quota granted by the DEA.

         The CSA, as amended, also imposed daily restrictions on the amount of
List I Chemical Products a retailer may sell to a consumer (3.6 grams per day)
and limitations on the amount of List I Chemical Products a consumer may
purchase (9.0 grams) over a 30-day period. Further, effective September 30,
2006, the Act requires that (a) retail sellers place all List I Chemical
Products behind the counter and maintain a logbook that tracks the sales of List
I Chemical Products to individuals, and (b) purchasers provide valid
identification in order to purchase List I Chemical Products. Many states have
also enacted legislation regulating the manufacture and distribution of List I
Chemicals. We are subject to these state requirements as well.


                                       13


CONSUMER PRODUCT SAFETY COMMISSION

         Under the Poison Prevention Packaging Act, the CPSC has authority to
designate that pharmaceuticals require child resistant closures to help reduce
the incidence of accidental poisonings. The CPSC has published regulations
requiring various products to have these closures and established rules for
testing the effectiveness of child resistant closures and for ensuring senior
adult effectiveness.

STATE REGULATION

         Most states regulate foods and drugs under laws that generally parallel
federal statutes. We are also subject to other state consumer health and safety
regulations which could have a potential impact on our business if we were ever
found to be non-compliant.

UNITED STATES PHARMACOPOEIAL CONVENTION

         The USP is a non-governmental, standard-setting organization. Its drug
monographs and standards are incorporated by reference into the Federal Food,
Drug and Cosmetic Act as the standards that must be met for the listed drugs,
unless compliance with those standards is specifically disclaimed. USP standards
exist for most Rx and OTC pharmaceuticals. The FDA typically requires USP
compliance as part of cGMP compliance.

COMPLIANCE WITH ENVIRONMENTAL LAWS

         We are subject to comprehensive federal, state and local environmental
laws and regulations that govern, among other things, air polluting emissions,
waste water discharges, solid and hazardous waste disposal, and the remediation
of contamination associated with current or past generation handling and
disposal activities, including the past practices of corporations as to which we
are the successor legally or in possession. We do not expect that compliance
with such environmental laws will have a material effect on our capital
expenditures, earnings or competitive position in the foreseeable future. There
can be no assurance, however, that future changes in environmental laws or
regulations, administrative actions or enforcement actions, or remediation
obligations arising under environmental laws will not have a material adverse
effect on our capital expenditures, earnings or competitive position.

SOURCES AND AVAILABILITY OF RAW MATERIALS AND SUPPLIERS

         The active pharmaceutical ingredients and other materials and supplies
used in Kirk's manufacturing operation and to be used in our pharmaceutical
manufacturing operations are generally available and purchased from many
different foreign and domestic suppliers. However, in some cases, the raw
materials used to manufacture products may be only available from a single
FDA-approved supplier. For our products previously approved by the FDA, any
change in a supplier not previously approved must be submitted through a formal
approval process with the FDA. A delay of six months or more in the manufacture
and marketing of the drug involved while a new supplier becomes qualified by the
FDA and its manufacturing process is determined to meet FDA standards could,
depending on the particular product, have a material


                                       14


adverse effect on our results of operations and financial condition. We will
attempt to mitigate the potential effects of any such situation by providing
for, where economically and otherwise feasible, two or more suppliers of raw
materials for the drugs we manufacture. In addition, we may attempt to enter
into a contract with a raw material supplier in an effort to ensure adequate
supply for our products.

COMPETITION

         We compete in the OTC and generic prescription drug markets. These
markets are highly competitive and are characterized by the frequent
introduction of new products. Our competitors include large and small
pharmaceutical companies such as Perrigo Company and Teva, many of which have
considerably greater financial and other resources and are not as highly
leveraged as we are. Our competitors may be better positioned to spend more on
research and development, employ more aggressive pricing strategies, utilize
greater purchasing power, build stronger vendor relationships and develop
broader distribution channels than us. The private label or generic category has
also become increasingly more competitive in certain of our product markets.

         The principal competitive factors in the our markets include: (i)
introduction of other manufacturers' products in direct competition with our
products, (ii) introduction of authorized products in direct competition with
our products, particularly during exclusivity periods, (iii) consolidation among
distribution outlets through mergers and acquisitions and the formation of
buying groups, (iv) ability of competitors to quickly enter the market after the
expiration of patents or exclusivity periods, diminishing the amount and
duration of significant products, (v) the willingness of customers, including
wholesale and retail customers, to switch among manufacturers, (vi) pricing
pressures and product deletions by competitors, (vii) a company's reputation as
a manufacturer and distributor of quality products, (viii) a company's level of
service (including maintaining sufficient inventory levels for timely
deliveries), (ix) product appearance and labeling and (x) a company's breadth of
product offerings. We believe that these factors and others will impact our
product selection, development decisions and research plans.

DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

         No customer of Kirk was responsible for more than 25% of our sales
revenues for the twelve months ended October 31, 2007. Sales to three customers
accounted in the aggregate for approximately 54% of its revenues.

EMPLOYEES

         On January 21, 2008, we had approximately 140 employees. Effective
February 11, 2008, David Coffin-Beach, President and Chief Operating Officer of
the Company resigned and will remain a consultant to the Company for technical
matters relating to the development of its omeprazole product. We are currently
recruiting for a replacement for this position. In addition, we intend to hire
for our developmental operations additional personnel with experience in
clinical testing, government regulation, marketing and business development when
the business warrants the expensem. Currently, our developmental operations
fulfill several of its


                                       15


management functions through the use of independent contractors. These functions
include scientific, regulatory, legal, and investor relations.

         We believe our relationship with employees is generally good. However,
our ability to achieve our financial and operational objectives depends in large
part upon our ability to attract, integrate, retain and motivate a qualified
person to direct our research operations and other highly qualified personnel,
when need for such personnel arises, and upon the continued service of our
senior management and key personnel.

WEBSITE ACCESS TO FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION

         We file periodic and current reports, proxy statements and other
materials with the Securities and Exchange Commission. You may read and copy any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, NE, Washington DC 20549. You may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains a web site at WWW.SEC.GOV that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC, including our filings.

ITEM 1A. RISK FACTORS

         In addition to the other information contained in this report, the
following risk factors should be considered carefully in evaluating an
investment in us and in analyzing our forward-looking statements.

RISKS RELATED TO OUR BUSINESS

         WE HAVE SUBSTANTIAL INDEBTEDNESS OUTSTANDING AND ARE LATE IN THE
         PAYMENT OF CERTAIN OUTSTANDING NOTES.

         In order to finance the acquisition of Kirk and our ongoing operations,
as of October 31, 2007, we incurred significant indebtedness of approximately
$23,154,000 (including accrued interest) including, but not limited to, a senior
secured credit facility from the Bank of India in the principal amount of
$7,200,000, a note in the principal amount of $2,000,000 held by our President,
Chief Operating Officer, Treasurer and Secretary of Kirk Pharmaceuticals, LLC
and AndaPharm, LLC, a note in the principal amount of $1,250,000 held by an
affiliate of Harcharan Singh, a note in the amount of $1,500,000 held by CB
Distributors, convertible bridge notes in the principal amount of $2,950,000
issued during fiscal year 2005 and convertible bridge notes in the principal
amount of $3,450,000 issued during fiscal year 2007. As of the date of this
Annual Report on Form 10-K, we are late in the payment of notes in the principal
amount of approximately $9,950,000.

         To date, two lawsuits have been brought against us by holders of
certain bridge notes for default in payment on the notes, both of which are
currently pending. In addition to our vulnerability to lawsuits, our substantial
indebtedness could have other adverse consequences such as the following:


                                       16


         o require the acceleration of payments under the applicable notes and
         cause the foreclosure on any collateral securing any of the notes.

         o require us to dedicate a substantial portion of our cash flow from
         operations to payments on our debt, which would reduce amounts
         available for working capital, capital expenditures, research and
         development, and other general corporate purposes;

         o limit our flexibility in planning for, or reacting to, changes in our
         business and the industries in which we operate;

         o increase our vulnerability to general adverse economic and industry
         conditions;

         o place us at a disadvantage compared to our competitors that may have
         less debt than we do;

         o make it more difficult for us to obtain additional financing that may
         be necessary in connection with our business;

         o make it more difficult for us to implement our business and growth
         strategies; and

         o cause us to have to pay higher interest rates on future borrowings.

         Furthermore, certain holders of convertible bridge notes issued during
the fiscal year ended 2007 may convert each share of Series B Preferred Stock
held by such holder into fifteen shares of our common stock which would have the
effect of diluting our shareholders.

         While we are seeking to repay such indebtedness from the offering of
equity and/or debt securities and future cash flow from our operations, there
are no assurances that we will raise adequate financing or generate sufficient
cash flow. Our failure to reduce the level of our indebtedness and to become
current on our outstanding indebtedness will have a material adverse effect on
our business prospects, financial condition and results of operations.

         WE ARE CONTINUING TO ACCRUE PENALTIES FOR FAILURE OF A REGISTRATION
         STATEMENT TO BE DECLARED EFFECTIVE.

         As part of a private placement conducted during the fiscal year ended
October 31, 2006, we committed to register the shares of common stock underlying
certain convertible bridge notes and placement agent warrants promptly following
the closing of the offering and to cause the registration statement to be
declared effective no later than 120 days following closing. Although we
subsequently filed a registration statement, it has not been declared effective
and, as a consequence, we are accruing a penalty of $149,374 each month. There
is no cap on the maximum amount of the penalties and we recognized penalties of
$2,195,064during the year ended October 31, 2007.

         In addition, as part of a private placement conducted during the fiscal
year ended October 31, 2007, we committed to register the shares of common stock
and shares of common stock underlying certain warrants within 30 days following
the final closing of the offering and to cause the registration statement to be
declared effective no later than 150 days following final


                                       17


closing. We have not filed a registration statement and as a consequence, as of
November 2007, we are accruing a penalty of $23,625 in the first month and
$15,750 for each month thereafter, capped at $141,750.

         WE WILL REQUIRE ADDITIONAL CAPITAL, AND IF ADDITIONAL CAPITAL IS NOT
         AVAILABLE, WE MAY HAVE TO CURTAIL OR CEASE OPERATIONS.

         To service our debt, fund research and development on an ongoing basis
and fund the expansion of our manufacturing and distribution operations we will
require substantial capital, which we may do through public or private equity or
debt financing. In addition, we are seeking additional capital to extinguish the
guarantees of Nostrum and Dr. Mulye to the Bank of India for our credit facility
with the Bank of India. No representation can be made that we will be able to
obtain additional financing or if obtained it will be on favorable terms, or at
all. No assurance can be given that any offering if undertaken will be
successfully concluded or that if concluded the proceeds will be material. Our
inability to obtain additional financing when needed would impair our ability to
continue our business.

         If any future financing involves the further sale of our securities,
our then-existing stockholders' equity could be substantially diluted. On the
other hand, if we incurred debt, we would be subject to risks associated with
indebtedness, including the risk that interest rates might fluctuate and cash
flow would be insufficient to pay principal and interest on such indebtedness.

         WE HAVE NOT BEEN PROFITABLE AND EXPECT FUTURE LOSSES.

         Since our inception in 1990, we have not been profitable. We may never
be profitable or, if we become profitable, we may be unable to sustain
profitability. We have sustained losses in each year since our incorporation in
1990. We incurred net losses of $20,198,000, $8,571,000, $2,211,000, $1,124,000
and $760,000, for the years ended October 31, 2007, 2006, 2005, 2004 and 2003,
respectively. As of October 31, 2007, our accumulated deficit was $73,601,000.
We expect to realize significant losses for the current year of operation and to
continue to incur losses until we are able to raise additional capital and
generate sufficient revenues to reduce our level of indebtedness and support our
operations and offset operating costs.

         OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS EXPRESSED
         SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

         Our independent registered public accounting firm in its audit opinion
issued in connection with our consolidated balance sheet as of October 31, 2007
and 2006 and our consolidated statements of operations, stockholder's equity and
cash flows for the years ended October 31, 2007, 2006 and 2005, has expressed
substantial doubt about our ability to continue as a going concern given our net
losses and negative cash flows. The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities and commitments in the normal course of
business.


                                       18


         OUR FAILURE TO EXTINGUISH THE GUARANTEES OF NOSTRUM AND DR. MULYE BY
MAY 1, 2008 MAY RESULT IN FURTHER DISAGREEMENTS BETWEEN MANAGEMENT AND NOSTRUM
AND DR. MULYE.

         According to the settlement agreement with Nostrum and Dr. Mulye, if by
May 1, 2008, the guarantees of Nostrum and Dr. Mulye on our Bank of India line
of credit are not extinguished in whole or in part, then up to 10,661,000 shares
of our common stock will be released from escrow to Nostrum, as adjusted
pursuant to the settlement agreement. Such an event would cause Nostrum to
become our largest shareholder and given the disagreements that management and
Nostrum and Dr. Mulye had in the past, we would expect this to result in further
disagreements in the procedural and substantive decision-making and operations
of our business which in turn could have a material adverse effect on our
operations and financial results.

         WE HAVE A RELATIVELY LIMITED OPERATING HISTORY, WHICH MAKES IT
         DIFFICULT TO EVALUATE OUR FUTURE PROSPECTS.

         Although we have been in operation since 1990, our business model has
evolved over time. Since the acquisition of Kirk in May 2006, our primary line
of business is the manufacturing and distribution of OTC and prescription drugs
and accordingly we have a relatively short operating history and limited
financial data upon which you may evaluate our business and prospects. In
addition, our business model is likely to continue to evolve as we attempt to
expand our product offerings. As a result, our potential for future
profitability must be considered in light of the risks, uncertainties, expenses
and difficulties frequently encountered by companies that are attempting to move
into new markets and continuing to innovate with new and unproven technologies.
Some of these risks relate to our potential inability to:

         o     develop new products;

         o     obtain regulatory approval of our products;

         o     manage our growth, control expenditures and align costs with
               revenues;

         o     attract, retain and motivate qualified personnel; and

         o     respond to competitive developments.

         If we do not effectively address the risks we face, our business model
may become unworkable and we may not achieve or sustain profitability or
successfully develop any products.

         A FAILURE TO LOCATE AND HIRE A SUITABLE CHIEF OPERATING OFFICER COULD
         HAVE A MATERIAL ADVERSE EFFECT ON OUR OPERATIONS AND FINANCIAL RESULTS.

         On February 11, 1008, David Coffin-Beach, President and Chief Operating
Officer resigned. We are actively searching for a replacement to fill this
position. No assurance can be given that we will be successful in locating and
hiring a suitable new Chief Operating Officer in


                                       19


the reasonable future. Failure to do so will have a material adverse effect on
our operations and financial results.

         MANY OF THE PRODUCTS MANUFACTURED BY US CONTAIN CONTROLLED SUBSTANCES,
         THE SUPPLY OF WHICH IS REGULATED.

         The raw materials used in many of our products are controlled
substances and are regulated by the U.S. Drug Enforcement Administration.
Consequently, their manufacture, shipment (including import and export),
storage, sale and use are subject to the highest degree of regulation and
accountability. Failure to comply with applicable laws and regulatory
requirements may result in action such as civil penalties, refusal to renew
necessary registrations, or proceedings to revoke those registrations and, in
certain circumstances, criminal proceedings. If our registration were revoked,
denied or suspended, or if the DEA or FDA were to rule against the
permissibility of any of the APIs used in our OTC products, we could no longer
lawfully possess or distribute controlled substances, or manufacture and
distribute products containing the disallowed API and thereby having a material
adverse effect on our operations.

         WE ARE DEPENDENT ON A SMALL NUMBER OF SUPPLIERS FOR OUR RAW MATERIALS
AND ANY DELAY OR UNAVAILABILITY OF RAW MATERIALS CAN MATERIALLY ADVERSELY AFFECT
OUR ABILITY TO PRODUCE PRODUCTS.

         The FDA requires identification of raw material suppliers in
applications for approval of drug products. If raw materials were unavailable
from a specified supplier, FDA approval of a new supplier could delay the
manufacture of the drug involved. In addition, some materials used in our
products are currently available from only one supplier or a limited number of
suppliers.

         Further, a significant portion of our raw materials may be available
only from foreign sources. Foreign sources can be subject to the special risks
of doing business abroad, including:

         o     greater possibility for disruption due to transportation or
               communication problems;

         o     the relative instability of some foreign governments and
               economies;

         o     interim price volatility based on labor unrest, materials or
               equipment shortages, export duties, restrictions on the transfer
               of funds, or fluctuations in currency exchange rates; and

         o     uncertainty regarding recourse to a dependable legal system for
               the enforcement of contracts and other rights.

         In addition, recent changes in patent laws in certain foreign
jurisdictions (primarily in Europe) may make it increasingly difficult to obtain
raw materials for research and development prior to expiration of applicable
United States or foreign patents. Any delay or inability to obtain raw materials
on a timely basis, or any significant price increases that cannot


                                       20


be passed on to customers, can materially adversely affect our ability to
produce products. This can materially adversely affect our business and
operations.

         OUR FAILURE TO COMPETE EFFECTIVELY MAY LIMIT OUR ABILITY TO ACHIEVE
         PROFITABILITY.

         Competition in the pharmaceutical area is intense, and our competitors
have substantially greater resources than the Company. Competition is based
primarily on price, quality and assortment of products, customer service,
marketing support and availability of new products. Competition also comes from
national brand companies and brand pharmaceutical companies. That competition
could be intensified should those companies lower prices or manufacture their
own store brand or generic equivalent products. Kirk's competition consists of
many companies who are independent pharmaceutical drug manufacturers on a
contractual basis and the pharmaceutical companies, which have manufacturing
capabilities, and facilities, many of which have substantially greater
financials and other resources.

         WE MAY FAIL TO ESTABLISH OR CULTIVATE STRATEGIC PARTNERSHIPS TO EXPAND
         OUR BUSINESS.

         We intend to develop its business model and build our business in part
through strategic partnerships such as the strategic relationship we have with
Glopec International. We may not be able to successfully form or manage such
other partnerships, and if not, our ability to execute its business plan will be
at risk.

         WE MAY BECOME SUBJECT TO INCREASED GOVERNMENTAL REGULATION, WHICH COULD
         INCREASE THE COSTS OR CAUSE THE COMPANY TO REVISE CERTAIN PRODUCT
         CLAIMS.

         The design, development, manufacturing and marketing of pharmaceutical
compounds, on which our success depends, is subject to extensive regulation by
the federal government, principally the FDA, and to a lesser extent, other
federal and state government agencies. The Controlled Substances Act and other
federal statutes and regulations govern the development, testing, manufacture,
safety/effectiveness, labeling, storage, record keeping, approval, advertising
and promotion of our products. Non-compliance with applicable regulations can
result in judicially and/or administratively imposed sanctions, including the
initiation of product seizures, injunction actions, fines and criminal
prosecutions.

         Administrative enforcement measures may involve the recall of products,
as well as the refusal of an applicable government authority to enter into
supply contracts or to approve new drug applications. The FDA also has the
authority to withdraw its approval of drugs in accordance with regulatory due
process procedures. The cost of complying with government regulations
substantially increases the cost of producing our products.

         WE HAVE A LIMITED HISTORY OF RESEARCH AND DEVELOPMENT OR
         COMMERCIALIZATION OF DRUG PRODUCTS.

         We are developing generic Rx and OTC products. We believe we can
successfully accomplish the development, manufacturing and launch of products by
raising additional capital


                                       21


to sustain our operations, hiring requisite competent and experienced management
and operational personnel, or teaming with other pharmaceutical companies to
create strategic partnerships at various stages of the process. There is no
assurance that any or all of this can be accomplished to the degree necessary to
ensure a successful drug development and commercialization operation.

         WE FACE PRODUCT LIABILITY RISKS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
         INSURANCE TO PROTECT IT AGAINST LOSSES.

         As a manufacturer and distributor of products that are intended to be
ingested by consumers, even if sold to the consumer by a third party company
and/or formulated in a third party's facility, we may be subject to various
product liability claims, including, among others, that our products contain
contaminants or include inadequate instructions as to use or inadequate warnings
concerning side effects and interactions with other substances. While no such
claims have been made to date, any future product liability claims and the
resulting adverse publicity could harm our business. If a successful product
liability claim or series of claims is brought against us for uninsured
liabilities or in excess of insured liabilities, our assets may not be
sufficient to cover such claims and our business operations could be impaired.

         IF KEY PERSONNEL WERE TO LEAVE US OR IF WE ARE UNSUCCESSFUL IN
         ATTRACTING QUALIFIED PERSONNEL, OUR ABILITY TO DEVELOP PRODUCTS COULD
         BE MATERIALLY HARMED.

         We are highly dependent on our management, particularly Dr. Ronald
Lane, a founder and our Chief Executive Officer. Our success depends in large
part on our ability to attract and retain highly qualified scientific, technical
and business personnel experienced in the development, manufacture and
distribution of OTC and prescription drugs. The loss of the services of Dr. Lane
or other key personnel could have a material adverse effect on our business.

         WE RELY ON TRADE SECRETS, UNPATENTED PROPRIETARY EXPERTISE AND
         CONTINUING INNOVATION TO PROTECT OUR PROPRIETARY INTERESTS.

         We rely particularly on trade secrets, unpatented proprietary expertise
and continuing innovation that we seek to protect, in part, by entering into
confidentiality agreements with licensees, suppliers, employees and consultants.
We cannot provide assurance that these agreements will not be breached or
circumvented. We also cannot be certain that there will be adequate remedies in
the event of a breach. Disputes may arise concerning the ownership of
intellectual property or the applicability of confidentiality agreements. We
cannot be sure that our trade secrets and proprietary technology will not
otherwise become known or be independently developed by our competitors or, if
patents are not issued with respect to products arising from research, that we
will be able to maintain the confidentiality of information relating to these
products. In addition, efforts to ensure our intellectual property rights can be
costly, time-consuming and/or ultimately unsuccessful. Our success also depends
in part on our continued ability to obtain patents, licenses and other
intellectual property rights covering our products. There can be no assurance
that our licenses, patents and patent applications are or will be sufficiently
comprehensive to protect these products. The process of seeking further patent
protection can be long and expensive, and there can be no assurance that we will
have


                                       22


sufficient capital reserves to cover the expense of patent prosecution for any
future applications or that all or even any patents will issue from any future
patent applications or that any of the patents when issued will be of sufficient
scope or strength to provide meaningful protection or any commercial advantage
to us.

         We may receive communications alleging possible infringement of patents
or other intellectual property rights of others. We believe that in most cases
we could obtain necessary licenses or other rights on commercially reasonable
terms, but we may be unable to do so. In addition, litigation could ensue or
damages for any past infringements could be assessed. Litigation, which could
result in substantial cost to and diversion of efforts by us, may be necessary
to enforce patents or other intellectual property rights of us or to defend us
against claimed infringement of the rights of others. The failure to obtain
necessary licenses or other rights or litigation arising out of infringement
claims could have a material adverse effect on us.

RISKS RELATED TO OUR COMMON STOCK

         OUR COMMON STOCK IS THINLY TRADED AND MAY EXPERIENCE PRICE VOLATILITY,
         WHICH COULD AFFECT A STOCKHOLDER'S ABILITY TO SELL OUR STOCK OR THE
         PRICE FOR WHICH IT CAN BE SOLD.

         There has been and may continues to be, at least for the immediate
future, a limited public market for our common stock. On July 18, 2001, our
common stock was delisted from quotation on the NASDAQ Small Cap Market due to
non-compliance with certain continuing listing requirements. From July 19, 2001
to February 28, 2003, our common stock was quoted on the OTC Bulletin Board
under the symbol BNRX.OB. From March 1, 2003 to July 12, 2005, our common stock
was quoted on the "Pink Sheets" under the symbol BNRX.PK". On July 13, 2005, our
common stock was approved by the NASD and appeared on the OTCBB with an unprimed
quote. Three business days later, on July 18, 2005, HDSN showed a priced quote
for BNRX.OB. Thirty days later, on August 15, 2005 all other market makers were
eligible to appear on the OTCBB with their quotes, and have been quoted there
through the present. The market price for our common stock, and for the stock of
pharmaceutical companies generally, has been highly volatile. The market price
of our common stock may be affected by:

         o     results of our clinical trials;

         o     approval or disapproval of abbreviated new drug applications or
               new drug applications;

         o     announcements of innovations, new products or new patents by us
               or by our competitors;

         o     governmental regulation;

         o     patent or proprietary rights developments;

         o     proxy contests or litigation;


                                       23


         o     news regarding the efficacy of, safety of or demand for drugs or
               drug technologies;

         o     economic and market conditions, generally and related to the
               pharmaceutical industry;

         o     healthcare legislation;

         o     changes in third-party reimbursement policies for drugs; and

         o     fluctuations in our operating results.

         FUTURE SALES OF COMMON STOCK OR THE ISSUANCE OF SECURITIES SENIOR TO
         OUR COMMON STOCK OR CONVERTIBLE INTO, OR EXCHANGEABLE OR EXERCISABLE
         FOR, OUR COMMON STOCK COULD MATERIALLY ADVERSELY AFFECT THE TRADING
         PRICE OF OUR COMMON STOCK, AND OUR ABILITY TO RAISE FUNDS IN NEW EQUITY
         OFFERINGS.

         Future sales of substantial amounts of our common stock or other
equity-related securities in the public market or privately, or the perception
that such sales could occur, could adversely affect prevailing trading prices of
our common stock and could impair our ability to raise capital through future
offerings of equity or other equity-related securities. We can make no
prediction as to the effect, if any, that future sales of shares of our common
stock or equity-related securities, or the availability of shares of common
stock for future sale, will have on the trading price of our common stock.

         RIGHTS TO ACQUIRE SHARES OF OUR COMMON STOCK MAY HAVE A NEGATIVE EFFECT
         ON THE TRADING PRICES OF OUR COMMON STOCK AS WELL AS A DILUTIVE EFFECT.

         We have issued and may continue to issue warrants, options and other
convertible securities at or below the current market price. As of October 31,
2007, we had outstanding 8,701,915 warrants and options as well as $2,950,000
bridge notes convertible at $3.00 per share, unless adjusted by formula per the
convertible promissory note agreements. During the terms of such options,
warrants and convertible securities, the holders thereof will have the
opportunity to profit from an increase in the market price of the common stock
with resulting dilution in the interests of holders of common stock. The
existence of such stock options, warrants and convertible notes could adversely
affect the terms on which we can obtain additional financing, and the holders
can be expected to exercise those exercise and conversion rights at a time when
we, in all likelihood, would be able to obtain additional capital by offering
shares of our common stock on terms more favorable to the Company than those
provided by the exercise or conversions of the securities. We also have the
authority to issue additional shares of common stock and shares of one or more
series of convertible preferred stock. The issuance of those shares could result
in the dilution of the voting power of outstanding shares of common stock and
could have a dilutive effect on earnings per share.

         IF PENNY STOCK REGULATIONS BECOME APPLICABLE TO OUR COMMON STOCK THEY
         WILL


                                       24


         IMPOSE RESTRICTIONS ON THE MARKETABILITY OF OUR COMMON STOCK AND THE
         ABILITY OF OUR STOCKHOLDERS TO SELL SHARES OF OUR STOCK COULD BE
         IMPAIRED.

         The SEC has adopted regulations that generally define a "penny stock"
to be an equity security that has a market price of less than $5.00 per share or
an exercise price of less than $5.00 per share subject to certain exceptions.
Exceptions include equity securities issued by an issuer that has (i) net
tangible assets of at least $2,000,000, if such issuer has been in continuous
operation for more than three years, or (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. Unless an exception is available, the regulations require that prior to
any transaction involving a penny stock, a risk of disclosure schedule must be
delivered to the buyer explaining the penny stock market and its risks. Our
common stock is currently trading at under $5.00 per share. Although we
currently fall under one of the exceptions, if at a later time we fail to meet
one of the exceptions, our common stock will be considered a penny stock. As
such the market liquidity for our common stock will be limited to the ability of
broker-dealers to sell it in compliance with the above-mentioned disclosure
requirements.

           You should be aware that, according to the SEC, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:

         o     Control of the market for the security by one or a few
               broker-dealers;

         o     "Boiler room" practices involving high-pressure sales tactics;

         o     Manipulation of prices through prearranged matching of purchases
               and sales;

         o     The release of misleading information;

         o     Excessive and undisclosed bid-ask differentials and markups by
               selling broker- dealers; and

         o     Dumping of securities by broker-dealers after prices have been
               manipulated to a desired level, which hurts the price of the
               stock and causes investors to suffer loss.

         We are aware of the abuses that have occurred in the penny stock
market. Although we do not expect to be in a position to dictate the behavior of
the market or of broker-dealers who participate in the market, we will strive
within the confines of practical limitations to prevent such abuses with respect
to our common stock.

         IT MAY BE DIFFICULT FOR A THIRD PARTY TO GAIN CONTROL OF US, EVEN IF
         THE ACQUISITION OF CONTROL WOULD BE IN THE BEST INTERESTS OF OUR
         STOCKHOLDERS.

         Our Restated Articles of Incorporation and the Nevada General
Corporation Law contain provisions that may have the effect of making more
difficult or delaying attempts by others to


                                       25


obtain control of us, even when those attempts may be in the best interest of
our stockholders. Nevada law also imposes conditions on certain business
combination transactions with "interested stockholders" (as defined therein).
The Restated Articles provide for a staggered board, which makes it more
difficult for the stockholders to change the majority of our directors. In
addition, our Restated Articles authorize the Board of Directors, without
stockholder approval, to issue one or more series of preferred stock, which
could have voting and conversion rights that adversely affect the voting power
of the holders of our common stock.

         On September 8, 2006, our Board of Directors adopted a Rights Plan, the
effect of which is to grant stockholders of record as of September 8, 2006, in
the event of a transaction which is not an exchange or tender offer to all the
stockholders and is on terms and price which a majority of certain members of
the Board does not determine to be adequate and in the best interests of the
Company, its stockholders and other constituencies the right to acquire during
the period ended September 8, 2011 for each share held of record one additional
share of common stock at a price equal to 33 1/3% of the then market price. The
transaction is the acquisition by an "Acquiring Person" or group of such shares
which would result in the person or group beneficially owing in excess of 20% of
the outstanding shares of our common stock or the acquisition of by a 20% or
more owner or group of owners of an additional 1% of the outstanding shares of
common stock. The Plan also provides that in the event of a merger or other
business combination in which the owners of all the outstanding shares prior to
the transaction are not the owners of all the voting powers of the surviving
corporation or in the event of a sale or transfer of more than 50% of our assets
or earning power our stockholders of are to receive upon payment of the purchase
price of $1,200 per share, shares of common stock of the acquiring company
having a value equal to two times the purchase price. The existence of such Plan
will have the effect of making us less attractive in the market to candidates
not approved by certain members of the Board and thus reduce the possibility of
a transaction being effected for the sale of our common stock or an asset or
stock transaction which would result at a higher price than if the Rights Plan
did not exist.

         OUR BY-LAWS HAVE BEEN RECENTLY AMENDED TO RESTRICT THE ABILITY OF
         STOCKHOLDERS TO PARTICIPATE IN THE ELECTION OF DIRECTORS AND THE
         PRESENTATION OF MATTERS AT STOCKHOLDER MEETINGS.

         On September 8, 2006,our By-laws were amended to provide that: (i)
nominees for director at the annual meeting by stockholders other than by the
Board can be made only by written notice to the Board delivered within a
designated period prior to the meeting and provided certain information as to
the nominee and the stockholder making such nomination is given to the Board in
such notice, and (ii) business at the annual meeting can be introduced by the
Board of Director or only by those stockholders who provide written notice not
less than 40 nor more than 90 days prior to the annual meeting, containing a
description of the business and reasons therefore and certain information as to
the stockholders. Such provisions restrict the ability of stockholders to
nominate directors and to introduce business as to the Company for consideration
of the stockholders.


                                       26


ITEM 1B. UNRESOLVED STAFF COMMENTS

         None.

ITEM 2.  PROPERTIES

FACILITIES AND EQUIPMENT

         We currently lease our principal offices and manufacturing and
distribution facilities of approximately 82,672 square feet, in Fort Lauderdale,
FL. These leases expire in December 31, 2010 and April 30, 2012, respectively.

         Our total rental expense for fiscal year 2005, 2006 and 2007 was
$25,967, $91,246 and $753,760 respectively.

ITEM 3.  LEGAL PROCEEDINGS.

         On January 18, 2008, we received a complaint filed by Bushido Capital
Master Fund, L.P. and BCMF Trustees, LLC against us in the United States
District Court, Southern District of New York. The complaint seeks recovery of
an amount of no less than $579,395 arising from a default by us of a Convertible
Promissory Note dated October 3, 2005 in the principal amount of $500,000. We
are presently evaluating our options with respect to responding to this
complaint.

         As previously reported, on May 11, 2007, we received from our agent for
service of process in Nevada a copy of a Summons (the "SUMMONS"), together with
a Notice of Motion, for Summary Judgment in Lieu of Complaint filed by Asia
Pacific Investment Holdings Limited ("Asia Pacific"). In the Summons, Asia
Pacific sought an order from the Supreme Court of the State of New York, County
of New York (the "COURT"), granting summary judgment with respect to claims
arising from an alleged default by us of the terms of a certain Convertible
Promissory Note issued to Asia Pacific on April 17, 2006, in the principal
amount of $1,500,000 (the "ASIA PACIFIC NOTE").

         On July 16, 2007, the Court issued a decision granting Asia Pacific's
Motion for Summary Judgment in Lieu of Complaint. On September 7, 2007, we paid
Asia Pacific $1,844,625 and on or around September 17, 2007, we paid a further
amount of $10,500, the amount due to Asia Pacific under the Asia Pacific Note.
Asia Pacific is still claiming from us its payment of attorneys' fees and the
parties have reached an agreement in principle with respect to the payment of
such fees.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


                                       27


                                     PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
         AND ISSUER PURCHASES OF EQUITY SECURITIES.

         On July 18, 2001, our common stock was delisted from quotation on the
NASDAQ Small Cap Market due to non-compliance with certain continuing listing
requirements. From July 19, 2001 to February 28, 2003, our common stock was
quoted on the OTC Bulletin Board under the symbol BNRX.OB. Our common stock was
quoted on the on the "Pink Sheets" from March 1, 2003 to July 12, 2005. On July
13, 2005 our common stock was approved by the NASD and appeared on the OTCBB
with an unpriced quote. Three business days later, on July 18, 2005, HDSN showed
a priced quote for BNRX.OB. Thirty days later, on August 15, 2005 all other
market makers were eligible to appear on the Nasdaq OTCBB with their quotes, and
have been quoted there through the present.

                                                         High             Low
                                                         ----             ----

Fiscal Year Ended October 31, 2007

Three months ended January 31, 2007                      2.00             1.30
Three months ended April 30, 2007                        1.60             1.00
Three months ended July 31, 2007                         1.55             0.85
Three months ended October 31, 2007                      1.01             0.65

Fiscal Year Ended October 31, 2006

Three months ended January 31, 2006                      3.50             1.90
Three months ended April 30, 2006                        4.50             2.25
Three months ended July 31, 2006                         4.60             3.50
Three months ended October 31, 2006                      3.70             1.60

         The foregoing quotations were provided by Etrade and the quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.

         As of January 31, 2008, there were 192 holders of record of our common
stock. This figure does not represent the actual beneficial owners of our common
stock because shares are held in "street name" by securities dealers and others
for the benefit of individual owners.

DIVIDEND POLICY

         We have not declared or paid any cash dividends on our common stock and
do not intend to declare or pay any cash dividend in the foreseeable future. We
currently intend to retain our future earnings, if any, to finance the further
development of our business and execution of our


                                       28


long-term goals. The payment of dividends, if any, is within the discretion of
the Board of Directors and will depend on our earnings, if any, our capital
requirements, and financial condition and such other factors as the Board of
Directors may consider.

         Further, our Credit Agreement with Bank of India prohibits the payment
of dividends without the consent of the Bank

RECENT SALES OF UNREGISTERED SECURITIES

         During the year ended October 31, 2007, we issued unregistered
securities to the persons, as described below. We believe that each transaction
was exempt from the registration requirements of the Securities Act of 1933, as
amended, by virtue of Section 4(2) thereof and/or Rule 506 of Regulation D
promulgated thereunder. All recipients had adequate access, through their
relationships with us, to information about us.

         o     Between October and December 2006, Kirk issued short-term bridge
notes in the principal amount of $700,000, bearing interest ranging from 10% to
20% per annum. In connection therewith, we issued warrants to acquire an
aggregate of 466,664 shares of our common stock at initial exercise prices of
between $2.00 and $3.00 per share (subject to adjustment in certain
circumstances) with exercise periods ranging from three to five years. Of the
warrants issued, warrants to acquire 75,000 shares of our common stock are
exercisable on a cashless or net issuance basis. Of the notes issued, accrued
and unpaid interest at maturity date of a note in the principal amount of
$250,000 is convertible into 50,000 shares of our common stock. Notes in the
principal amount of $450,000 were subsequently exchanged for units of the 2007
Private Placement (as discussed below).

         o     On January 26, 2007, we completed an initial closing of a private
placement, whereby we sold an aggregate of 1,000,000 units ("UNITS") to
accredited investors (the transaction is referred to herein as the "2007 PRIVATE
PLACEMENT"). During the fiscal year ended October 31, 2007, we completed
subsequent closings of an additional 575,000 Units. Of the 1,575,000 Units sold,
450,000 Units were exchanged in lieu of repayment of certain bridge notes in the
principal amount of $450,000. The price per Unit was $1.00 and each Unit
consisted of (i) one share of our common stock; and (ii) a warrant to purchase,
at any time prior to the third anniversary following the final closing of the
Private Placement, one share of common stock at an exercise price of $3.00 per
share, subject to adjustment in certain instances; except that with respect to
75,000 of the Units, the warrants were exercisable for half a share of our
common stock at an exercise price of $1.50, subject to adjustment in certain
instances. The warrants are also redeemable by us where the exercise price
exceeds a certain amount. Further, the subscription agreement requires us to
file a registration statement, covering the securities sold in the Private
Placement within 30 days of final closing of the Private Placement and will use
its best efforts to cause the registration statement to become effective within
90 days of final closing. If the registration statement has not been declared
effective within 150 days following final closing, we agreed to pay to the
investors liquidated damages, payable in cash or common stock, of 1.5% of the
purchase price paid by the investor in the Private Placement and 1% of the
purchase price paid by the investor in the Private Placement for each subsequent
30 day period, with the total of the foregoing capped at 9%.


                                       29


         o     On February 1, 2007, we entered into two consulting agreements,
each providing for, among other things, the grant of five-year warrants to
acquire 200,00 shares of our common stock at an exercise price of $2.00 per
share, subject to adjustment in certain circumstances, or on a cashless or net
issuance basis.

         o     On March 23, 2007, we issued a five year warrant to acquire
500,000 shares of our common stock at an exercise price of $2.00 per share,
subject to adjustment in certain circumstances.

         o     On April 18, 2007, we entered into an employment agreement with
our then Chief Operating Officer and President which provided for, among other
things, the grant of seven year options to purchase 1,500,000 shares of our
common stock at an exercise price of $2.00 per share, vesting annually in three
equal installments. On February 11, 2008, this employment agreement was
terminated with none of the options vesting.. By separate agreement, our then
Chief Executive Officer and President was retained as a consultant and granted
(i) a five year option to acquire 125,000 shares of our common stock at an
exercise price of $1.00 per share, and (ii) 125,000 shares of common stock.

         o     On April 20, 2007, we entered into a Consulting Agreement with
Harcharan Singh ("SINGH") and Kirk issued a promissory note to 2133820 Ontario,
Inc., an affiliate of Singh, in the principal amount of $1,250,000 in exchange
for cash equal to such principal amount. In connection with the Consulting
Agreement, we issued 2,000,000 shares of our common stock to Singh and warrants
to purchase a further 1,000,000 shares of common stock. In addition, if we
achieve annual earnings before interest, taxes, depreciation and amortization
(EBITA) of at least $20,000,000, then Singh will be entitled to a further grant
of 1,000,000 shares of our common stock, and warrants to purchase 500,000 shares
of our common stock. The warrants are exercisable for a period of seven years
from the date of grant at an initial exercise price of $2.00, subject to
adjustment in certain circumstances, and contain a cashless or net issuance
component. The shares of common stock and the shares of common stock underlying
the warrants also carry piggyback registration rights, subject to customary
carve outs and exclusions.

         o     On May 1, 2007, we granted five-year warrants to acquire an
aggregate of 1,600,000 shares of our common stock at an exercise price of $1.36
per share in connection with a consulting agreement we entered into on February
1, 2007.

         o     On July 5, 2007, we completed an initial closing of a bridge
round of debt financing, whereby Kirk issued convertible bridge notes in the
principal amount of $2,100,000 to accredited investors (the transaction is
referred to herein as the "2007 CONVERTIBLE BRIDGE NOTE OFFERING"). During the
fiscal year ended October 31, 2007, we completed subsequent closings of
convertible bridge notes in the principal amount of $1,350,000. The bridge notes
bear interest at 6% per annum increasing to 18% in the case of an event of
default and have a maturity date of six months from the issuance date, unless
earlier converted. Upon the closing of a Qualified Equity Financing (as defined
in the convertible bridge notes), such convertible bridge notes automatically
convert into our future Series C Preferred Stock to be issued in a Qualified
Equity


                                       30


         Financing at a premium of 110% of the unpaid principal and interest of
the bridge notes. In addition, upon closing of the Qualified Equity Financing,
holders of the bridge notes are entitled to receive common stock purchase
warrants at an exercise price and other terms identical to the warrants to be
issued in the Qualified Equity Financing. The amount of common stock into which
the common stock purchase warrants are exercisable ranges from 40% to 50% of the
number of shares of common stock issuable to bridge note holders upon conversion
of the Series C Preferred Stock receivable upon conversion of the bridge notes,
with the range depending on the timing of the initial closing of the Qualified
Equity Financing. The bridge notes have been secured by a pledge by Ronald H.
Lane, our Chief Executive Officer and Chairman of the Board, of 2,000,000 shares
of our common stock owned by Mr. Lane. In addition, we agreed to issue 1,000,000
shares of Series B Convertible Preferred Stock to the bridge note holders. The
Series B Convertible Preferred Stock will be convertible into our Company's
common stock on a 1:15 basis in the event of default under the bridge notes,
will have full ratchet anti-dilution protection, will be surrendered upon the
completion of the Qualified Equity Financing, will have voting rights on an as
converted basis and will be non-transferable other than in an event of default
under the bridge notes.

         Axiom Capital Management, Inc. ("Axiom") acted as placement agent in
the 2007 Convertible Bridge Note Offering. Pursuant to a letter agreement dated
June 5, 2007, Axiom are entitled to a cash commission of 10% of the purchase
price of the convertible bridge notes plus warrants to purchase 10% of the
number of shares into which the bridge notes are convertible.

         o     On July 9, 2007, we entered into an employment agreement with
Steven Getraer as our Executive Vice President and Chief Financial Officer. The
employment agreement provided for a grant of 600,000 shares of our common stock
exercisable for seven years at an initial exercise price of $2.00 per share and
vesting annually in three equal installments, with the first installment vesting
on July 10, 2008.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

         We did not purchase any of our shares of common stock or other
securities during the year ended October 31, 2007.


                                       31


COMPARATIVE STOCKHOLDER RETURN

         The table below shows a five-year comparison of cumulative total return
for the Company with the cumulative total returns for the Russell 2000 Index and
the NASDAQ Biotechnology Index. Data points are, for the Company, the last day
of each fiscal year and, for the indices, October 31 of each year. The last day
of our fiscal year for fiscal years 2002 through 2007 is noted in each of the
columns below. The table assumes an investment of $100 at the beginning of the
period. The table was prepared by CTA Integrated Communications.



                                                  [PERFORMANCE GRAPH]

                                     10/31/2002   10/31/2003     10/31/2004    10/31/2005    10/31/20006    10/31/2007
- ----------------------------------------------------------------------------------------------------------------------
                                                                                            
SYNOVICS PHARMACEUTICALS, INC.        $100.00      $ 62.50        $ 50.00       $575.00        $500.00        $200.00
- ----------------------------------------------------------------------------------------------------------------------
RUSSELL 2000 INDEX                    $100.00      $141.42        $156.30       $173.12        $205.31        $221.69
- ----------------------------------------------------------------------------------------------------------------------
NASDAQ BIOTECHNOLOGY INDEX            $100.00      $139.85        $135.92       $147.58        $159.33        $174.38
- ----------------------------------------------------------------------------------------------------------------------



ITEM 6.   SELECTED FINANCIAL DATA.

         The following selected financial data should be read in conjunction
with our consolidated financial statements and the related notes and with our
management's discussion and analysis of financial condition and results of
operations, provided elsewhere herein and attached to this Report commencing on
page F-1.



                                                                    YEAR ENDED
                                                                   OCTOBER 31,
                                                                   -----------
                                           2007            2006            2005           2004           2003
                                                                                     
Gross Revenues                      $23,466,311     $10,516,000          $8,192        $98,767        $32,005
Net Revenues                        $23,466,311     $10,516,000          $8,192        $98,767        $31,978
Cost of Sales                       $16,837,126      $8,158,000         $45,289        $18,269         $5,829
Gross Profit (Loss)                  $6,629,185      $2,358,000        ($37,097)       $80,498        $26,149
Operating Expenses                  $16,893,656      $5,977,000      $1,874,468       $866,913       $468,418
Other Income (Expense)             ($10,593,413)    ($3,910,000)      ($999,695)     ($337,921)     ($317,253)
Net Loss                           ($20,857,884)    ($7,529,000)    ($2,911,260)   ($1,124,336)     ($759,522)
Basic and Diluted Loss Per Share         ($1.09)         ($0.33)         ($0.14)        ($0.14)        ($0.17)

Weighted Average Shares
   Outstanding (1)                   19,070,573      26,044,630      20,094,784      7,840,496      4,352,600
Balance Sheet Data:


                                                          32




                                                                    YEAR ENDED
                                                                   OCTOBER 31,
                                                                   -----------
                                           2007            2006            2005           2004           2003
                                                                                   
Working Capital (Deficit)          ($19,580,429)    ($5,289,000)    ($3,713,386)   ($3,079,327)   ($3,661,647)
Total Assets                        $23,333,897      $38,88,650     $16,911,555     $2,875,306     $2,210,696
Total Liabilities                   $31,438,023     $25,779,163      $5,607,804     $3,779,939     $3,707,993
Stockholders equity (deficit)       ($8,104,126)    $13,103,487     $11,303,751      ($904,633)   ($1,497,2970)


- ----------
(1)  These shares do not include 8,701,915, 1,947,751, 620,472, 910,370, and
     713,836 shares of common stock for the years ended October 31, 2007, 2006,
     2005, 2004 and 2003, respectively, that may be issued upon exercise of
     outstanding stock options, warrants and convertible preferred stock as they
     are antidilutive.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION.

         THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AS WELL AS CERTAIN STATEMENTS AND INFORMATION UNDER ITEM 1 "BUSINESS"
INCLUDE CERTAIN FORWARD LOOKING STATEMENTS. WHEN USED IN THIS REPORT, THE WORDS
"EXPECTS," "INTENDS," "PLANS" AND "ANTICIPATES" AND SIMILAR TERMS ARE INTENDED
TO IDENTIFY FORWARD LOOKING STATEMENTS THAT RELATE TO OUR FUTURE PERFORMANCE.
SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED HERE.

OVERVIEW

         We were incorporated on December 22, 1990 under the laws of the State
of Nevada. On April 11, 2006, we name changed our corporate name from Bionutrics
Inc. to our current name. Since our incorporation, we engaged in various lines
of business in pharmaceutical and dietary supplement products. In May 2006, we
acquired Kirk and its affiliate, ANDAPharm LLC, both Florida limited liability
companies. We have one additional operating subsidiary, Synovics Labs. Inc. Our
principal offices are located at 5360 NW 35 Avenue, Fort Lauderdale, FL 33309
During fiscal year ended October 31, 2007, we relocated our principal offices to
Fort Lauderdale, Florida from Phoenix, Arizona.

         We are a specialty pharmaceutical company implementing what is referred
to as an off shore "Front-End" growth strategy - the core of our business model.
This strategy incorporates targeting a series of partnering relationships with
Indian pharmaceutical companies to supply us with low-cost competitive
pharmaceutical products, both active pharmaceutical ingredients ("APIS") and
finished dosage forms. As a result of the acquisition of Kirk and ANDAPharm in
May 2006, we have a facility in Ft. Lauderdale operating under cGMP (current
good manufacturing practices) guidelines for the manufacturing and distribution
of over-the-counter ("OTC") private label drugs and prescription drugs (Rx).

          We have initiated our Front-End strategy, which sources products
developed and manufactured in India, and packages and distributes to our
customers through our Florida operation. Our access to low-cost raw materials
and manufacturing is the cornerstone of the Front-End strategy and key to our
dual objectives of growing our OTC business and introducing a pipeline of Rx
generic drugs. A critical key to this strategy and its implementation is our
alliance with Harcharan (Harry) Singh, of Glopec International, a pharmaceutical
industry

                                       33


veteran with a 20 year proven track record of sourcing competitive
pharmaceuticals products for North America from Asia and Europe.

         Our key assets can be summarized as:

         o    Private label OTC drug manufacturer - Kirk Pharmaceuticals, Fort
              Lauderdale, Florida;

         o    DEA licensed for controlled substances, Schedule 2, 3, 3N, 4, 5
              and List 1 chemicals ;

         o    Containment suites for manufacture of highly regulated/toxic
              substances (e.g. hormones and anti-cancer);

         o    Robust pipeline of prescription Rx and OTC generic drug products;

         o    Access to difficult to source competitive APIs;

         o    Manufacture in both U.S. and India - Package and Distribute in
              U.S;

         From 2005 to July 2007, our focus for revenue growth was the
development of oral controlled-release generic drug formulations utilizing
proprietary drug formulations and delivery technologies under license from
Nostrum Pharmaceuticals, Inc. ("NOSTRUM"). During 2007, the focus and business
model changed resulting from the impact of two factors: first, our
disassociation from Nostrum following the July 2007 settlement of the Nostrum
legal actions; second, our strategic alliance with Harry Singh established in
April, 2007. This alliance is principally designed to assist us in sourcing
low-cost APIs and generic drug applications (abbreviated new drug applications -
ANDAs), submitted by Indian pharmaceutical companies to the United States Food
and Drug Agency (FDA) and approved for sale in the United States drug market and
is the foundation of our current business model.

         We are firstly a manufacturer, packager and distributor of private
label, or store brand, OTC products to chain drug stores, wholesalers and
distributors throughout the United States. The US market for manufacturing and
distribution of OTC drugs, approximately $3.5 billion in size, is dominated by
Perrigo Company, with sales approximating 50% of the total store brand or
private label market. Recently, two large OTC manufacturers, Leiner Health
Products and Pharmaceutical Formulations, Inc. (PFI), representing approximately
$800 million in US sales ceased to supply the store brand OTC market. We believe
that, with our focus on competitive pricing and customer service and with
adequate capitalization, we can continue to grow our OTC business in the US
substantially.

         Our OTC product categories include analgesics, cough cold,
antihistamines, asthma relief and laxatives. Executing our Front-End strategy,
Kirk has initiated the shifting of manufacturing of its high-volume commodity
OTC drugs to India to effect cost savings and maintain competitiveness. These
products are shipped in bulk from India to Ft Lauderdale for packaging and
distribution to our customers. Our OTC products are subject to control by the
United Stated Drug Enforcement Aminstration ("DEA") and will continue to be
manufactured (as well as packaged and distributed) through our Ft Lauderdale
facilities.

         In addition to the OTC business, we are a manufacturer, packager and
distributor of private label solid dosage Rx products. These products are sold
through several distribution channels


                                       34


channels under exclusive or semi exclusive agreements. These agreements include
minimum sales requirements.

         Our Front-End strategy is the source of our pipeline of 17 targeted
in-licensed generic Rx drug (FDA approved) candidates. The Front-End strategy is
founded on the fact that a variety of first-quality small to medium Indian
pharmaceutical companies, well financed with state of the art manufacturing
facilities, have developed and in many cases filed ANDAs with the FDA for the US
market, but have no marketing - distribution presence in the US market, i.e. no
front-end. Harry Singh has long standing business relationships with many of
these companies (and their ownership) and is directing our initial steps of
arranging agreements for ANDA in-licensing, low-cost APIs and contract
manufacturing. We will source finished product from India, then package and
distribute through Florida - the customer belongs to Synovics.

         As a result of historical events as well as the costs incurred in the
acquisition of Kirk in 2006 and the disputes with Dr. Mulye and Nostrum, we have
not been able to adequately generate enough cash to support its ongoing
operations and service its debt. As a result there has been a continuing need
for financing activities.

         Our subsidiary Kirk is a cash flow positive pharmaceutical business
engaged in the development, manufacture and distribution of prescription and
private label over-the-counter drugs for major drug store chains and
distributors in the United States. Since its inception in 1999, it has sustained
year to year growth through unique over-the-counter products combined with high
quality and low cost manufacturing. The acquisition of Kirk was part of our
overall strategy of creating an operational structure through which our product
pipeline can be manufactured and distributed at the same as generating cash flow
to support our research and development program.

         Since our inception through the current fiscal year, we have received
an opinion noting the substantial doubt about our ability to continue as a going
concern from our independent auditors due to the significant recurring operating
losses. However, we intend to attempt to take the steps necessary to resolve the
conditions giving rise to this opinion through the efforts outlined above.

CRITICAL ACCOUNTING POLICIES

         The section herein entitled "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION" addresses our consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of financial statements and the
reported amounts of revenue and expenses during the reporting period. On an
ongoing basis, management evaluates its estimates and judgment, including those
related to revenue recognition, goodwill, bad debts, income taxes, and
contingent liabilities. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments as to the carrying value


                                       35


of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions and
conditions.

         The Securities and Exchange Commission ("SEC") defines "critical
accounting policies" as those that require application of management's most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods.

         The following discussion of critical accounting policies represents our
attempt to report on those accounting policies which we believe are critical to
our consolidated financial statements and other financial disclosure. It is not
intended to be a comprehensive list of all of our significant accounting
policies, which are more fully described in Note 1 of the Notes to the
Consolidated Financial Statements included in this report.

         We have identified the following as critical accounting policies
affecting us: Revenue Recognition and Income Taxes.

         REVENUE RECOGNITION

         We generally recognize product revenue at the time of shipment to the
customer. Revenues from the sale of consignment inventory are recognized upon
the sale of the inventory by third parties. Revenues from services are recorded
at the time the service is rendered and/or reimbursable expenses are incurred.

         INCOME TAXES

         We have a history of losses. These losses generated sizeable federal
net operating loss ("NOL") carryforwards as of October 31, 2007 of approximately
$26,140,000 million.

         Generally accepted accounting principles require that we record a
valuation allowance against the deferred income tax asset associated with these
NOL carryforwards and other deferred tax assets if it is "more likely than not"
that we will not be able to utilize them to offset future income taxes. Due to
our history of unprofitable operations, we only recognize net deferred tax
assets in those subsidiaries in which we believe that it is "more likely than
not" that we will be able to utilize them to offset future income taxes in the
future. We currently provide for income taxes only to the extent that we expect
to pay cash taxes on current income. At October 31, 2007, net deferred tax
assets were approximately $26,472,000 million.

         It is possible, however, that we could be profitable in the future at
levels which cause management to conclude that it may realize a portion of the
NOL carryforwards and other deferred tax assets. However, the realization of
such NOL carryforwards may be significantly limited if it is deemed that a
change in ownership has occurred. For tax purposes, a change in ownership has
occurred if an entity or group of entities that previously did not own 50% or
more of us acquires enough new equity to raise its interest to more than 50%
over a three year period. Subsequent revisions to the estimated net realizable
value of the deferred tax assets could cause our provision for income taxes to
vary significantly from period-to-period.


                                       36


RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR YEAR ENDED OCTOBER 31, 2007 COMPARED TO YEAR ENDED
OCTOBER 31, 2006

         Total revenues for the year ended October 31, 2007 were $23,466,000,
compared to $10,516,000 for the year ended October 31, 2006 an increase in
excess of 123% over the prior year. Gross profit was approximately $6,629,000
for the year ended October 31, 2007, as compared with $2,358,000 for the year
ended October 31, 2006, an increase of $4,271,000 or 180%. These increases
result from several factors. First, is the inclusion in our financial statements
of a full year of the results of Kirk Pharmaceuticals and ANDAPharm. These
entities were acquired in May, 2006 and partial year results were included in
the prior year's financial statements. Both of these operating entities had
growth in their year on year sales resulting from price increases, new customers
and additional products. Sales of one product group were negatively impacted by
the interruption of supply during the fourth quarter of fiscal year 2007. It is
anticipated that this product will be available again during the second quarter
of 2008. Gross margin was impacted by changes in prices and costs. In addition,
increased production and product mix positively impacted margins. We had
increases in materials attributed to increases in the cost of petroleum. While
we will attempt to pass on these increases to our customers, there can be not
assurance that market conditions will allow for comparable increases. As a
result, we may experience a decline in its gross profit percentage in the
future.

         Our three largest customers represented approximately 54% of the sales
for the year ended October 31, 2007 (68% in the prior year) Although we believe
we have good working relationships with each of these customers, we are
continuing to work to further relationships with these and other entities in
order to broaden our sales base.

         Sales of products containing pseudoephedrine, ephedrine and/or
guaifenesen accounted for approximately 63% of sales. These products have come
under increasing government regulation due to the concern of these products in
the production of methamphetamine.

         Total expenses for the year ended October 31, 2007 were $16,893,656 as
compared with $5,977,000 for the year ended October 31, 2006. The increases in
year to year expenses were primarily caused by the inclusion of Kirk and
AndaPharm in our financial statements for the full year ended October 31,2007,
as well as the cost of consulting agreements entered into in the normal course
of business by the Company. In addition, expenses were higher due to the
granting of options, and to the higher legal expenses in connection with the
financing and legal activity of the Company. Our consulting expense was
$6,818,602, the cost to the Company of granting options was $759,762, and legal
fees incurred by us were, $1,900,003, for the twelve months ended October 31,
2007. The operating expenses of Kirk and ANDAPharm are in line with historical
norms of Kirk and ANDAPharm. Increases were in line with normal operating
conditions and the increase in revenues. There were no significant unusual
expenses.

         The increase in interest expense to $6,400,000 from $3,910,000 relates
to the increased debt that we incurred during the year as discussed elsewhere in
this Annual Report on Form 10-


                                       37


K. In addition, increased interest rates and other penalties relating to
non-payment of debt negatively impacted the total for the year.

         The Loss on Litigation of $4,006,000 relates to the settlement
agreement with Dr. Mulye and Nostrum whereby the Technology License Agreement
and ANDA Agreement were terminated.

         As a result of the aforesaid, the net loss for the year ended October
31, 2007 was $20,857,854 as compared with $7,529,000 for the year ended October
31, 2006. The net loss per share was $.70 as compared with a loss of $.33 for
the year ended October 31, 2006.

RESULTS OF OPERATIONS FOR YEAR ENDED OCTOBER 31, 2006 COMPARED TO YEAR ENDED
OCTOBER 31, 2005.

         We acquired Kirk and Andapharm, in May 2006. Results for the period
since acquisition through October 31, 2006 are included in our results for the
year. Total revenues generated during the year ended October 31, 2006 amounted
to $10,516,000, compared to $8,000 for the year ended October 31, 2005. Cost of
revenues and gross profit was approximately $8,159,000 and $2,358,000 for the
year ended October 31, 2006, respectively, versus $45,000 and a gross loss of
$37,000 for the year ended October 31, 2005. The increase in revenues cost of
revenues and gross profit was solely the result of our acquisition of Kirk.

         Total expenses for the year ended October 31, 2006 aggregated
approximately $9.9 million, which resulted in a net loss of $8,571,000. This
compares to net loss of $2,911,000 for the year ended October 31, 2005. The
increase in net loss is due primarily to interest expense and the loss from the
sale of InCon Processing during the year ended October 31, 2006. The net loss
per share was $0.33, $0.14 and $0.14 for each of the years ended October
31,2006, 2005, and October 31, 2004, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         YEAR ENDED OCTOBER 31, 2007, 2006, AND 2005

         To date, our operations have not generated sufficient cash flow to
satisfy our capital needs. We have financed our operations primarily through the
private sale of common stock, warrants and debt securities. We had a working
capital deficit of approximately $19,580,429 at October 31, 2007, as compared
with $5,289,000 and $3,713,386 at October 31, 2006, and 2005, respectively. Cash
and cash equivalents were $0, $2,393,437 and $129,000 at October 31, 2007, 2006
and 2005, respectively.

         Net cash used in operating activities during the years ended October
31, 2007, 2006 and 2005 was $368,386, $5,200,000, $2,258,000, respectively.
The approximately $15,600,000 in net cash used in operating activities during
the year ended October 31, 2007 was the result of our net loss of $20,200,00
offset by non cash expenses as well as changes in working capital levels. The
approximately $5,200,000 in net cash used in operating activities during the
year ended October 31, 2006 was the result of the net loss of approximately
$8,600,000 in fiscal 2007, offset by non cash expense including the loss in the
joint ventures of approximately $1,000,000 and the loan discount was
approximately $1,200,000. The increase in net cash used in operating activities
during the year ended October 31, 2005 resulted primarily from the net loss of
approximately $2,900,000 in 2005, offset by non-cash expenses including equity
in net loss of joint venture of $220,000, stock based compensation of
approximately $44,000, a write down of inventory of approximately $44,000, as
well as an interest accrual for accelerated interest on the Multiple Advance
Non-Revolving Note of approximately $732,000, which was not paid in cash.

         Net cash used in investing activities during the years ended October
31, 2007, 2006 and 2005, was approximately $709,593 $10,400,000 and $350,000,
primarily the result of the purchase of equipment and fees associated with
acquisition activities.

         Net cash provided by financing activities during the years ended
October 31, 2007, 2006, and 2005, was approximately $2,000,000, $17,800,000
and $2,108,000, respectively. The cash provided in 2007, 2006, and 2005 reflects
approximately $1,800,000, $5,600,000 and $508,000 from the proceeds from the
placement of common stock and warrants, and approximately $7,000,000,
$13,000,000 and $1,600,000 from the proceeds from the issuance of notes payable,
respectively.


                                       38


         We are currently delinquent in the payment of obligations to bring
current certain notes payable and currently have undertaken a capital raising
effort to address such delinquency. There is no assurance that we will succeed
in this effort.

         We will require additional equity and/or debt financing for fiscal year
2008 to fund our operations and to satisfy our debt service obligations. There
can be no assurance given that we will be successful in the sale of our equity
or obtaining additional capital from other sources or means.

         Our auditors have expressed in their audit report a qualification as to
our ability to continue as a going concern. See Note 2 of the Notes to the
Consolidated Financial Statements regarding our plans to address this concern.

         We have not entered into any material capital expenditure agreements,
or engaged in any off balance sheet financing.

         The following table depicts our obligations and commitments as of
October 31, 2007 to make future payments under existing contracts or contingent
commitments.



                                                                 PAYMENTS DUE BY PERIOD
                                                     LESS THAN 1                                 AFTER 5
CONTRACTUAL OBLIGATIONS                   TOTAL          YEAR       1-3 YEARS     4-5 YEARS       YEARS

                                                                                
Note payable - bank                    $ 7,200,000   $ 1,750,000   $ 5,450,000   $         -   $         -
Note payable - shareholders & others     3,250,000     3,250,000             -             -             -
Other notes payable                      8,175,000     8,175,000             -             -             -

  Capital lease obligations                174,820        52,297       122,523             -             -
                                       -----------   -----------   -----------   -----------   -----------

                                       $18,799,820   $13,227,297   $ 5,572,523   $-            $-
                                       ===========   ===========   ===========   ===========   ===========



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         We do not invest in or own any market risk sensitive instruments
entered into for trading purposes or for purposes other than trading purposes.
All loans made to us have been for fixed interest rates and accordingly, the
market risk to us prior to maturity is minimal.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         Reference is made to the Consolidated Financial Statements for the
fiscal year ended


                                       39


October 31, 2007, the Notes thereto and Independent Auditors' Report thereon
commencing at Page F-1 of this Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.

ITEM 9A. CONTROLS AND PROCEDURES.

         Our management is responsible for establishing and maintaining a system
of disclosure controls and procedures (as defined in Rule 13a-15(e) and
15d-15(e) under the Exchange Act) that is designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer's management, including our principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.

         In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation
was completed under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer of the effectiveness of the design
and operation of our disclosure controls and procedures as of the end of the
period covered by this Annual Report. Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer, concluded that our disclosure
controls and procedures as of October 31,2007 had deficiencies that caused our
controls and procedures to be ineffective. These deficiencies consisted of
inadequate staffing and supervision that could lead to the untimely
identification and resolution of accounting and disclosure matters and failure
to perform timely and effective reviews. Management is presently evaluating its
options with its auditor to address these deficiencies. There have been no
significant changes to our internal controls or other factors that could
significantly affect internal controls subsequent to the period covered by this
Annual Report.

ITEM 9B. OTHER INFORMATION.

2007 CONVERTIBLE BRIDGE NOTES OFFERING

         The following disclosure would have otherwise been filed as an
amendment to Form 8-K under the heading "Item 1.01 - Entry into a Material
Definitive Agreement.", "Item 2.03 - Creation of Direct Financial Obligation"
and "Item 3.02 - Unregistered Sales of Equity Securities."

         As previously reported, on July 5, 2007, we and Kirk completed an
initial closing of a bridge round of debt financing, whereby Kirk issued
convertible bridge notes in the principal amount of $2,100,000 to accredited
investors as defined by Rule 501 under the Securities Act of 1933, as amended.
During the fiscal year ended 2007, Kirk issued additional convertible


                                       40


promissory notes in the principal amount of $1,350,000. The total gross proceeds
of such offering were $3,450,000.

         The convertible bridge notes bear interest at 6% per annum increasing
to 18% in the case of an event of default and have a maturity date of six months
from the issuance date, unless earlier converted. Upon the closing of a
qualified equity financing, the bridge notes automatically convert into our
future Series C Preferred Stock to be issued in a qualified equity financing at
a premium of 110% of the unpaid principal and interest of the bridge notes. In
addition, upon closing of the qualified equity financing, holders of the bridge
notes are entitled to receive common stock purchase warrants of the Company at
an exercise price and other terms identical to the warrants to be issued in the
qualified equity financing. The amount of common stock into which the common
stock purchase warrants are exercisable ranges from 40% to 50% of the number of
shares of common stock issuable to bridge note holders upon conversion of the
Series C Preferred Stock receivable upon conversion of the bridge notes, with
the range depending on the timing of the initial closing of the qualified equity
financing.

         The convertible bridge notes have been secured by a pledge by Ronald H.
Lane, our Chief Executive Officer and Chairman of the Board, of 2,000,000 shares
of our common stock owned by Dr. Lane. In addition, we agreed to issue 1,000,000
shares of our Series B Convertible Preferred Stock to be held by Axiom Capital
Management, Inc. as nominee of the bridge note holders. The Series B Convertible
Preferred Stock will be convertible into our common stock on a 1:15 basis in the
event of default under the bridge notes, will have full ratchet anti-dilution
protection, will be surrendered upon the completion of the Qualified Equity
Financing, will have voting rights on an as converted basis and will be
non-transferable other than in an event of default under the bridge notes.

         Axiom Capital Management, Inc. ("Axiom") acted as placement agent in
the 2007 Convertible Bridge Note Offering. Pursuant to a letter agreement dated
June 5, 2007, Axiom are entitled to a cash commission of 10% of the purchase
price of the convertible bridge notes plus warrants to purchase 10% of the
number of shares into which the bridge notes are convertible.

         The foregoing description is qualified in its entirety by the form of
Convertible Bridge Note and letter agreement which are attached as an exhibit
hereto.

     The securities were offered and sold to investors in reliance upon
exemptions from registration pursuant to Section 4(2) under the Securities Act
of 1933, as amended.


                                       41



RESIGNATION OF DAVID COFFIN-BEACH

         The following disclosure would have otherwise been filed on Form 8-K
under the heading "Item 3.02 - Unregistered Sales of Equity Securities." and
"Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers."

         On February 11, 2008, David Coffin-Beach resigned as our President and
Chief Operating Officer. No options granted under Mr. Coffin-Beach's employment
agreement vested and by separate agreement Mr. Coffin-Beach was retained as a
consultant and granted (i) a five year option to acquire 125,000 shares of our
common stock at an exercise price of $1.00 per share, and (ii) 125,000 shares of
our common stock.

         The securities were offered and sold in reliance upon exemptions from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended.

ISSUANCE OF VCG&A WARRANTS

         The following disclosure would have otherwise been filed on Form 8-K/A
under the heading "Item 3.02 - Unregistered Sales of Equity Securities."

         As previously reported, we entered into a consulting agreement with
VCG&A, Inc. pursuant effective as of February 1, 2007. On May 1, 2007, we
granted to VCG&A and its designees five-year warrants to acquire an aggregate of
1,600,000 shares of our common stock at an exercise price of $1.36 per share in
connection with the said consulting agreement. Such warrants were issued in lieu
of any options issuable under the said consulting agreement.

         The securities were offered and sold to investors in reliance upon
exemptions from registration pursuant to Section 4(2) under the Securities Act
of 1933, as amended.

ISSUANCE OF MEYER WARRANT

         The following disclosure would have otherwise been filed on Form 8-K
under the heading "Item 3.02 - Unregistered Sales of Equity Securities."


                                       42


         On March 23, 2007, we issued a five year warrant to acquire 500,000
shares of our common stock at an exercise price of $2.00 per share, subject to
adjustment in certain circumstances.

         The securities were offered and sold in reliance upon exemptions from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

         The following table sets forth certain information regarding our
current directors, executive officers and key employees:

NAME                            AGE      POSITION

Ronald H. Lane, Ph.D.           63       Chairman of the Board, Chief Executive
                                         Officer,  Treasurer, Chief Financial
                                         Officer and Secretary
Steven Getraer                  60       Executive Vice President and Chief
                                         Financial Officer
William M. McCormick(1)(2)      67       Director
Richard M. Feldheim(1)(2)       65       Director
John S. Copanos                 37       President, Chief Operating Officer,
                                         Treasurer and Secretary of Kirk
                                         Pharmaceuticals, LLC and AndaPharm, LLC

- ----------
(1)  Member of the Audit Committee
(2)  Member of the Compensation Committee

BUSINESS EXPERIENCE

         The following is a brief account of the education and business
experience during at least the past five years of our current directors,
executive officers and significant employees, indicating the principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

         RONALD HOWARD LANE, PH.D. has served as our Chairman of the Board and
Chief Executive Officer since December 1994 and our predecessor, NutraGenics
(Delaware), since April 1994. He also served as our President from inception to
April 18, 2007. Chief Executive Officer and President of LipoGenics from July
1992 to October 1997. Dr. Lane is responsible for directing Synovics' corporate
development and growth. He received a Ph.D. and post-doctorate NIH fellowship
from the University of Wisconsin (Madison) in Neurophysiology. Dr. Lane
spearheaded development of the technology at LipoGenics. He had been previously
employed by Norcap Financial Corporation, The National Western Group, Inc. (an
investment company), and Taylor Pearson Corporation.


                                       43


         STEVEN GETRAER has served as our Executive Vice President and Chief
Financial Officer since July 10, 2007. From August 2006 to July 9, 2007 he
served as Chief Executive Officer of Kirk and President of Andapharm. Prior to
joining Kirk, Mr. Getraer was an independent business consultant starting in
2003. Prior thereto, he held senior operating and financial positions with
divisions of Henry Schein Inc., a multinational distributor of healthcare
products, from 1999 to 2003 including serving as President of Schein
Pharmaceuticals' Retail Division and Danbury Pharmacal Division. He also
occupied several key operational management positions at Bristol-Myers Company
(now Bristol-Myers Squibb), in addition to a tenure as General Auditor for that
company's global operations. Mr. Getraer has a BS in accounting from Long Island
University and he completed his course work for his MBA from New York
University. He began his career in the pharmaceutical industry in 1976.

         RICHARD M. FELDHEIM has been a member of the Board of Directors since
October 1995. He served as a director, Secretary and Chief Financial Officer of
LipoGenics from July 1992 until October 1996. Mr. Feldheim has served as
Chairman and Co-Chief Executive Officer of Abby's, a restaurant chain in Oregon,
since 1991. He was in private practice as a lawyer prior thereto, and had been
previously employed with Goldman Sachs & Co.; Donaldson, Lufkin & Jenrette; J.
Aron Company; and Price Waterhouse, and was President of Norcap Financial
Corporation. Mr. Feldheim received a B.S., B.A., a Master's Degree in
Accounting, and a J.D. from the University of Arizona, as well as an LL.M. in
Taxation from New York University. He is a Certified Public Accountant.

         WILLIAM M. MCCORMICK has been a member of the Board of Directors since
May 1996. He currently serves as Chairman of the Executive Advisory Board of
Inverness Management, LLC. Mr. McCormick was from 1990 to 1995 President and
Chief Executive Officer and a Director from 1990 until 1997 of PennCorp
Financial Group, Inc., a NYSE company. Prior thereto, Mr. McCormick was employed
by the American Express Company. His titles there ranged from Senior Vice
President Finance, Systems & Operations of the American Express International
Banking Corporation and President of American Express' Travel Related Services
Company. For approximately five years thereafter, Mr. McCormick was Chairman and
CEO of Fireman's Fund Insurance. After graduating from Yale, Mr. McCormick spent
his early years in investment banking and management consulting with Donaldson,
Lufkin & Jenrette and McKinsey & Company, Inc., respectively.

         JOHN S. COPANOS is the founder of Kirk and its affiliate ANDAPharm and
is the President and Chief Operating Officer of Kirk and Chief Executive Officer
of ANDAPharm which he founded in 1999. Mr. Copanos currently heads business
development for Kirk and ANDAPharm.

         There have been no events under any bankruptcy act, no criminal
proceedings and no judgments, injunctions, orders or decrees material to the
evaluation of the ability and integrity of any of our directors, executive
officers, promoters or control persons during the past five years.

THE BOARD OF DIRECTORS

         The Board of Directors is divided into three classes with each class of
director elected for


                                       44


a staggered term of three years and until their respective successors is duly
elected and qualified.

         During the fiscal year ended October 31, 2007, our Board of Directors
held 7 meetings. No director who served during the fiscal year ended October
31, 2007 attended fewer than 75% of the meetings of the Board of Directors
during that year.

         We do not have a formal policy regarding attendance by members of the
Board of Directors at our annual meeting of stockholders, although it does
encourage attendance by the directors. Historically, more than a majority of the
directors have attended the annual meeting.

COMMITTEES OF THE BOARD

         We have established a standing audit committee and compensation
committee of our Board of Directors with Messrs. Feldheim and McCormick as its
members. Messrs. Feldheim and McCormick are independent directors, as defined
under Rule 4200(a)(15) of the Nasdaq Marketplace Rules, even though such
definition does not currently apply to us because we are not listed on Nasdaq.
Mr. Feldheim is a CPA and has been designated as an audit committee financial
expert.

NOMINATION OF DIRECTORS

         Our Board has not established a nominating committee because the Board
believes that it is unnecessary in light of our size and the fact that a
majority of our three board members are independent. Our Board does not utilize
a nominating committee charter. In the event that vacancies on our Board of
Directors arise, the board considers potential candidates for director, which
may come to the attention of the board through current directors, professional
executive search firms, stockholders or other persons. The board will consider
candidates recommended by stockholders if the names and qualifications of such
candidates are submitted in writing in accordance with the notice provisions for
stockholder proposals to our corporate secretary. The board will consider
properly submitted stockholder nominations for candidates for the board in the
same manner as it evaluates other nominees. Following verification of the
stockholder status of persons proposing candidates, recommendations are
aggregated and considered by the board and the materials provided by a
stockholder to the corporate secretary for consideration of a nominee for
director are forwarded to the board. All candidates are evaluated at meetings of
the board. In evaluating such nominations, the board seeks to achieve the
appropriate balance of industry and business knowledge and experience in light
of the function and needs of the board. The board considers candidates with
excellent decision-making ability, business experience, personal integrity and
reputation.

CODE OF ETHICS

         We have not yet adopted a code of ethics applicable to our principal
executive officer, principal financial officer, principal accounting officer or
controller. Our examination of our corporate governance and other policies and
procedures that relate to a larger enterprise have been interrupted by the time
and effort required by the Nostrum dispute and our capital raising efforts.
Shortly following conclusion of these matters, we expect to adopt a code of
ethics applicable to all directors, officers and employees.


                                       45


STOCKHOLDER COMMUNICATIONS

      Stockholders and other interested parties may contact the Board of
Directors or the non-management directors as a group at the following address:
Board of Directors or Outside Directors 5360 NW 35 Avenue, Fort Lauderdale, FL
33309. All communications received at the above address will be relayed to the
Board of Directors or the non-management directors, respectively. Communications
regarding accounting, internal accounting controls or auditing matters may also
be reported to the Board of Directors using the above address.

         Typically, we do not forward to our directors communications from our
stockholders or other communications which are of a personal nature or not
related to the duties and responsibilities of the Board, including:

     o   Junk mail and mass mailings

     o   New product suggestions

     o   Resumes and other forms of job inquiries

     o   Opinion surveys and polls

     o   Business solicitations or advertisements

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Exchange Act requires our directors and officers,
and persons who own more than 10% of a registered class of our equity
securities, to file reports of ownership and changes in ownership with the SEC.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.

         Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to us during fiscal year 2007, we believe that during fiscal year
2007, our executive officers, directors and all persons who own more than ten
percent of a registered class of our equity securities complied with all Section
16(a) filing requirements except with respect to a late filing of Form 3 of
David Coffin-Beach.

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION DISCUSSION AND ANALYSIS

PHILOSOPHY AND OBJECTIVES OF OUR COMPENSATION PROGRAM

         Our approach to executive compensation, one of the most important and
also most complex aspects of corporate governance, is influenced by our belief
in rewarding people for


                                       46


consistently strong execution and performance. We believe that the ability to
attract and retain qualified executive officers and other key employees is
essential to our long term success.

         Our plan to obtain and retain highly skilled employees is to provide
significant incentive compensation opportunities and market competitive
salaries. The plan was intended to link individual employee objectives with
overall company strategies and results, and to reward executive officers and
significant employees for their individual contributions to those strategies and
results. Furthermore, we believe that equity awards serve to align the interests
of our executives with those of our stockholders. As such, equity is a key
component of our compensation program.

         The named executive officers for fiscal year ended October 31, 2007 are
Ronald Lane, Chairman of the Board and Chief Executive Officer; David
Coffin-Beach, Former President and Chief Operating Officer; Steven Getraer,
Chief Financial Officer; John Copanos, Joe Esposito and Aldo Rodriguez. These
individuals are referred to collectively in this Annual Report on Form 10-K as
the "NAMED EXECUTIVE OFFICERS."

ADMINISTRATION OF OUR COMPENSATION PROGRAM

         The compensation committee endeavors to review the compensation of our
Named Executive Officers at least on an annual basis to ensure that remuneration
levels and benefits adequately incentivize such officers to perform at high
levels, are reasonable in light of our corporate performance and continue to
achieve the philosophy and objectives of our compensation program described
above.

         The compensation committee had previously retained the services of
Charas Consulting for the purposes of assisting the compensation committee in
ensuring that they are competitive and appropriately linked to our long term
success and creation of stockholders value. The compensation committee also
periodically sought input from Charas Consulting on a range of external market
factors, including evolving compensation trends, appropriate peer group
companies and market survey data. Although the compensation committee reviews
the compensation practices of its peer companies, due to shortage of cash does
not adhere to strict formulas or survey data to determine the mix of
compensation elements.

ELEMENTS OF OUR COMPENSATION PROGRAM AND HOW WE DETERMINE THE AMOUNT FOR EACH
ELEMENT

         OVERVIEW

         The primary elements of our executive compensation program are base
salary, bonus and stock and long term compensation typically in the form of
stock option grants. Although we may in the future provide other types of
compensation, these three elements are the principal means by which we endeavor
to provide the Named Executive Officers with compensation opportunities.

         We have not had any formal or informal policy or target for allocating
compensation between long-term and short-term compensation, between cash and
non-cash compensation or


                                       47


among the different forms of non-cash compensation. Instead, our compensation
committee, after reviewing information provided by compensation surveys and
publicly available filings of peer companies, determines subjectively what it
believes to be the appropriate level and mix of the various compensation
components. Ultimately, the compensation committee's objective in allocating
between long-term and currently paid compensation is to ensure adequate base
compensation to attract and retain personnel, while providing incentives to
maximize long-term value for our company and our stockholders.

         We have entered into employment agreements during fiscal year ended
October 31, 2007 with all of our Named Executive Officers except John Copanos,
Joe Esposito and Aldo Rodriguez. Such employment agreements set forth base
salaries, bonuses and, except in the case of Ronald Lane, stock option grants.

         BASE SALARY

         We pay a base salary to our Named Executive Officers. In general, base
salaries for the Named Executive Officers are determined by evaluating the
responsibilities of the executive's position, the executive's experience and the
competitive marketplace. As appropriate, base salary adjustments will be
considered and would take into account changes in the executive's
responsibilities, the executive's performance and changes in the competitive
marketplace.

      The base salary for our Chief Executive Officer was established pursuant
to recommendations given to the compensation committee by the third party
consultant, Charas Consulting, and the other named executive officer were
established by the compensation committee based upon the recommendation of the
Chief Executive Officer. We believe that the base salaries of the Named
Executive Officers are appropriate within the context of the compensation
elements provided to the executives and because they are at a level which
remains competitive in the marketplace.

         BONUSES

         The Board of Directors may authorize us to give discretionary bonuses,
payable in cash or shares of common stock, to the Named Executive Officers and
other key employees. Such bonuses are designed to motivate the Named Executive
Officers and other employees to achieve specified corporate, business unit
and/or individual, strategic, operational and other performance objectives. Due
to lack of adequate financial resources, no bonuses were awarded to Named
Executive Officers during the fiscal year ended October 31, 2007 except for John
Copanos.


                                       48


         STOCK OPTIONS

         Compensation for executive officers also includes the long-term
incentives afforded by stock options. Our stock option award program is designed
to motivate our Named Executive Officers and assist in their retention. The size
of the stock option grant is generally intended to reflect the executive's
position with us and we generally grant stock options upon commencement of
employment with us with an annual vesting schedule of three years to encourage
key employees to continue their employment with us.

         OTHER COMPENSATION

         Our Named Executive Officers are eligible for the same level and
offering of benefits that we may make available to other employees from time to
time.

         We do not have any defined benefit pension or retirement plans.

POST-TERMINATION/ CHANGE OF CONTROL COMPENSATION

         We have arrangements with certain of the Named Executive Officers that
may provide them with compensation following termination of employment. These
arrangements are discussed below under "Agreements with Named Executive
Officers".

TAX IMPLICATIONS OF EXECUTIVE COMPENSATION

         Our aggregate deductions for each Named Executive Officer compensation
are potentially limited by Section 162(m) of the Internal Revenue Code to the
extent the aggregate amount paid to an executive officer exceeds $1 million,
unless it is paid under a predetermined objective performance plan meeting
certain requirements, or satisfies one of various other exceptions specified in
the Internal Revenue Code. At our 2007 Named Executive Officer compensation
levels, we did not believe that Section 162(m) of the Internal Revenue Code
would be applicable, and accordingly, we did not consider its impact in
determining compensation levels for our Named Executive Officers in 2007.

AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

         RONALD LANE - CHIEF EXECUTIVE OFFICER
         On May 17, 2007, we entered into an employment agreement, dated as of
January 30, 2007, with Ronald Lane for serving as the Company's Chief Executive
Officer through January 30, 2010, renewable for an additional one year unless
either we or Dr. Lane provides written notice of termination at least 60 days
prior to the end of the term.

         The employment agreement provides for an annual base salary of $400,000
and, solely at the discretion of the Board of Directors, based on his
performance and the Company's financial condition and operating results, a bonus
payable in cash or shares of common stock. The agreement further provides that
the Board may grant him options under any equity


                                       49


compensation plan in which he is eligible to participate. The agreement further
provides that we owe Dr. Lane an amount to be mutually agreed by them (the
"DEFERRED OBLIGATION").

         The agreement provides that if Dr. Lane's employment by us is
terminated without cause, by his death, or by Lane for good reason (which
includes a "change of control"), Mr. Lane will be entitled in addition to unpaid
salary through the date of termination, payment of the Deferred Obligation and a
severance amount of all or a portion (not less than one-half) of his base salary
for one year based on the number of completed years of service under the
Agreement. Change of Control is defined as a (i) change of holders of more than
50% of the voting stock by means of a consolidation or merger, (ii) the sale of
all or substantially all of the assets or capital stock of the Company or (iii)
the acquisition by a person or group of persons in one or a series of related
transactions of more than 50% of the voting stock.

         In the event that we terminate Dr. Lane's employment for cause or
Dr. Lane terminates his employment with us without good reason, Dr. Lane shall
be entitled to any earned but unpaid base salary, the Deferred Obligation plus
any unpaid reimbursable expenses through the date of termination of his
employment.

         STEVEN GETRAER - EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
         On July 10, 2007, we entered into an employment agreement with Mr.
Steven Getraer employing him as our Executive Vice President and Chief Financial
Officer. Mr. Getraer's employment with us is for a three year term ending July
9, 2010, renewable for subsequent terms unless earlier terminated by either
party. Mr. Getraer is entitled to a base salary of $265,000 per annum,
increasing to $280,000 per annum commencing on August 10, 2008 and to $295,000
commencing on August 10, 2009. In addition, Mr. Getraer is entitled to a
discretionary fiscal year-end bonus payable in cash and/or shares of our common
stock and was granted options to acquire an aggregate of 600,000 shares of our
common stock exercisable for seven years at an initial exercise price of $2.00
per share and vesting annually in three equal installments, with the first
installment vesting on July 10, 2008. We may also in our discretion grant Mr.
Getraer options pursuant to any eligible equity compensation plan.

            If we terminate Mr. Getraer's employment without cause, upon Mr.
Getraer's death, or if Mr. Getraer terminates his employment for good reasons
including a change of control event, he shall be entitled to the following
severance: (i) Mr. Getraer's current base salary for one year; and (ii) any
earned but unpaid base salary plus any unpaid reimbursable expenses through the
date of termination of his employment. In the event that we terminate Mr.
Getraer's employment for cause or Mr. Getraer terminates his employment with us
without good reason, Mr. Getraer shall be entitled to any earned but unpaid base
salary, unpaid bonus approved by the board plus any unpaid reimbursable expenses
through the date of termination of his employment.

         DAVID COFFIN-BEACH - FORMER CHIEF OPERATING OFFICER On April 18, 2007,
         we entered into an employment agreement with Mr.
David Coffin-Beach employing him as our Chief Operating Officer. On February 11,
2008, Mr. Coffin-Beach resigned from this position. Mr. Coffin Beach's
employment agreement provided for a three year term ending April 18, 2010 and
may be automatically renewed for additional one year periods. He was entitled to
a base salary of $300,000 per annum and a discretionary year end bonus


                                       50


payable in cash and/or shares of our common stock. In addition, Mr. Coffin-Beach
was granted options to acquire an aggregate of 1,500,000 shares of the
registrant's common stock exercisable for seven years at an initial exercise
price of $2.00 per share and vesting annually in three equal installments, with
the first installment vesting on April 18, 2008. At the date of Mr.
Coffin-Beach's resignation, none of his options vested. We also had the
discretion to grant Mr. Coffin-Beach options pursuant to any eligible equity
compensation plan.

         If we terminated Mr. Coffin-Beach's employment without cause, upon Mr.
Coffin-Beach's death or if Mr. Coffin Beach terminated his employment for good
reasons including a change of control event, Mr. Coffin-Beach would have been
entitled to the following severance: (i) Mr. Coffin-Beach's current base salary
for one year plus any accrued bonus prior to termination; and (ii) any earned
but unpaid base salary plus any unpaid reimbursable expenses through the date of
termination of his employment. If we terminated Mr. Coffin-Beach's employment
for cause or Mr. Coffin-Beach terminates his employment with us without good
reason, Mr. Coffin-Beach would be entitled to any earned but unpaid base salary
plus any unpaid reimbursable expenses through the date of termination of his
employment. Mr. Coffin-Beach's resignation constituted termination by Mr.
Coffin-Beach without good reason and he was paid accordingly.

HEDGING POLICY

         We do not permit the Named Executive Officers, to "hedge" ownership by
engaging in short sales or trading in any options contracts involving our
securities.

COMPENSATION COMMITTEE REPORT

         The Compensation Committee has reviewed and discussed with management
the disclosures contained in the Compensation Discussion and Analysis section of
this Item 11 of the Annual Report on Form 10-K for the fiscal year ended October
31, 2007. Based upon this review and its discussions with management, the
Compensation Committee recommended to its Board of Directors that the
Compensation Discussion and Analysis section be included in this Annual Report
on Form 10-K for the fiscal year ended October 31, 2007.

                                            William McCormick (Chairman)
                                            Richard Feldheim

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         As noted above, Messrs Feldheim and McCormick serve on our compensation
committee. Except as set forth below, no member of our compensation committee
has ever been an officer or employee of ours. During the last fiscal year, none
of our executive officers served on the board of directors or on the
compensation committee of any other entity, any officers of which served either
on our board or on our compensation committee.

         From July 1992 until October 1996 Mr. Feldheim served as a Director,
Secretary and Chief Financial Officer of LipoGenics, Inc., a now non-operating
subsidiary of ours.


                                       51



SUMMARY COMPENSATION TABLE

         The table below summarizes the compensation information in respect of
the Named Executive Officers for the fiscal year ended October 31, 2007 and
2006.



                                                                                            CHANGE IN
                                                                                          PENSION VALUE
                                                                                               AND
                                                                                           NONQUALIFIED
                                                                             NON-EQUITY      DEFERRED
                                                    STOCK        OPTION    INCENTIVE PLAN  COMPENSATION    ALL OTHER
                      YEAR    SALARY        BONUS   AWARDS       AWARDS     COMPENSATION     EARNINGS    COMPENSATION      TOTAL
                      (1)                    (2)      (3)         (4)                                         (5)
     NAME AND
PRINCIPAL POSITION              ($)          ($)      ($)         ($)           ($)             ($)           ($)           ($)
- ------------------   -----    ------        -----   ------       ------    --------------  ------------  ------------      -----
                                                                                               
Ronald Lane
 Chief Executive      2007   $400,000(6)      --       --          --           --              --          $11,000       $411,000
 Officer and
 Chairman of the
 Board

Steven Getraer
 Executive Vice       2007   $250,000(7)      --       --       $552,215        --              --             --         $802,215
 President
 and Chief
 Financial
 Officer(6)

David Coffin-Beach
  Former              2007   $161,600         --              $1,788,230         --             --           $4,400     $1,952,230
  President(8)

John Copanos
  President,          2007   $225,000    $25,000       --            --          --             --           $3,900       $253,900
  Chief Operating
  Officer,
  Treasurer and
  Secretary of
  Kirk
  Pharmaceuticals,
  LLC and
  ANDAPharm, LLC

Joe Esposito
  Director of         2007   $117,000         --        --           --          --             --           $2,700       $119,700
  Technical
  Operations

Aldo Rodriguez
  Controller          2007   $114,000         --        --           --          --             --             --         $114,000


                                       52




- ----------------

(1)  The information is provided for each fiscal year which begins on November 1
     and ends on October 31.

(2)  No bonuses were granted to the Named Executive Officers in the fiscal year
     ended October 31, 2007.

(3)  No stock awards were granted to the Named Executive Officers in the fiscal
     year ended October 31, 2007.

(4)  The amounts reflect the compensation expense in accordance with FAS 123(R)
     of these option awards. The assumptions used to determine the fair value of
     the option awards for the fiscal year ended October 31, 2007 is set forth
     in note 9 of our financial statements for the year ended October 31, 2007.
     Our Named Executive Officers will not realize the value of these awards in
     cash unless and until these awards are exercised and the underlying shares
     subsequently sold.

(5)  Represents amounts paid for health insurance premium.

(6) Does not include accumulated deferred compensation of $267,948.

(7)  Mr. Getraer was appointed Chief Financial Officer on July 10, 2007. Prior
     to that from September 2006 until July 2007 he served as Chief Executive
     Officer of Kirk and President of ANDAPharm.

(8)  $90,000 represents amount paid as an employee and $160,000 represents
     amount paid as a consultant.

(9)  Mr. Coffin-Beach was appointed Chief Operating Officer on April 18,2007 and
     resigned from this position on February 11, 2008.

                           GRANTS OF PLAN-BASED AWARDS

         The following table sets forth information regarding grants of plan
based awards to the Named Executive Officers during the fiscal year ended
October 31, 2007.



                                                                                         ALL
                                                                                        OTHER
                                                                                        STOCK      ALL                  GRANT
                                                                                        AWARDS:   OTHER                 DATE
                                  ESTIMATED                      ESTIMATED              NUMBER    OPTION     EXERCISE    FAIR
                               POSSIBLE PAYOUTS                FUTURE PAYOUTS             OF      AWARDS:       OR      VALUE
                               UNDER NON-EQUITY                 UNDER EQUITY            SHARES    NUMBER       BASE      OF
                                   INCENTIVE                   INCENTIVE PLAN             OF        OF        PRICE     STOCK
                                  PLAN AWARDS                     AWARDS                 STOCK   SECURITIES     OF       AND
                         ----------------------------   -----------------------------     OR     UNDERLYING   OPTION    OPTION
                 GRANT   THRESHOLD   TARGET   MAXIMUM   THRESHOLD   TARGET    MAXIMUM    UNITS    OPTIONS     AWARDS    AWARDS
NAME             DATE       ($)       ($)       ($)        (#)       (#)        (#)       (#)       (#)       ($/SH)      (1)
- ----             ----    ---------   ------   -------   ---------   ------    -------   ------   ----------  --------   ------
                                                                                       
David
Coffin-Beach    4/18/07                                           1,500,000(2)                                 $2.00  $1,788,230


Steven Getraer  7/10/07                                             600,000(2)                                 $2.00    $552,215


- ----------------

(1)  The amounts reflect the compensation expense in accordance with FAS 123(R)
     of these option awards. The assumptions used to determine the fair value of
     the option awards for the fiscal year ended October 31, 2007 are set forth
     in note 9 of our financial statements for the year ended October 31, 2007.
     Our Named Executive Officers will not realize the value of these awards in
     cash unless and until these awards are exercised and the underlying shares
     subsequently sold.

                                       53



(2)  Represents options that vest equally on the first, second and third
     anniversary of the grant date.

                                       54



                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

         The following table sets forth information concerning stock options and
stock awards held by the Named Executive Officers as of October 31, 2007.



                                    OPTION AWARDS                                           STOCK AWARDS
          ----------------------------------------------------------------   ----------------------------------------
                                                                                                 EQUITY      EQUITY
                                                                                                INCENTIVE   INCENTIVE
                                                                                                  PLAN        PLAN
                                                                                       MARKET     AWARDS:    AWARDS:
                                                                              NUMBER   VALUE      NUMBER     MARKET
                                                                               OF       OF         OF          OR
                                           EQUITY                             SHARES   SHARES    UNEARNED    PAYOUT
                                          INCENTIVE                            OR       OR        SHARES,   VALUE OF
                                            PLAN                              UNITS    UNITS      UNITS     UNEARNED
                                           AWARDS                              OF       OF         OR        SHARES,
            NUMBER OF       NUMBER OF     NUMBER OF                           STOCK    STOCK      OTHER     UNITS OR
           SECURITIES      SECURITIES     SECURITIES                           HELD    HELD      RIGHTS      OTHER
           UNDERLYING      UNDERLYING     UNDERLYING                           THAT    THAT       THAT       RIGHTS
           UNEXERCISED     UNEXERCISED    UNEXERCISED   OPTION                 HAVE    HAVE       HAVE        THAT
             OPTIONS         OPTIONS       UNEARNED    EXERCISE    OPTION      NOT      NOT       NOT       HAVE NOT
               (#)             (#)         OPTIONS       PRICE   EXPIRATION   VESTED   VESTED    VESTED      VESTED
NAME       EXERCISABLE    UNEXERCISABLE      (#)          ($)       DATE       (#)      ($)      (#)          ($)
- ----       -----------    -------------   -----------  --------  ----------   ------   ------    ------     --------
                                                                                 
Steven
Getraer         --         600,000(1)         --          2.00    7-10-2014

David
Coffin-
Beach           --       1,500,000(1)         --          2.00    4-18-2014


- --------

(1)  Represents options that vest equally on the first, second and third
     anniversary of the grant date.


                        OPTION EXERCISES AND STOCK VESTED

         No options have been exercised by our Named Executive Officers during
fiscal year ended October 31, 2007.

                                PENSION BENEFITS

         We do not provide pension benefits to the Named Executive Officers.

                                       55



                       NONQUALIFIED DEFERRED COMPENSATION

         We do not have any defined contribution or other plan that provides for
the deferral of compensation on a basis that is not tax-qualified.

            POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

         Please see the discussion under "COMPENSATION DISCUSSION AND ANALYSIS -
AGREEMENTS WITH NAMED EXECUTIVE OFFICERS."

                              DIRECTOR COMPENSATION

          During the fiscal year ended October 31, 2007, no director
compensation was paid. We pay all Board members reimbursement for expenses for
each Board meeting attended.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

         The following table sets forth certain information regarding beneficial
ownership of our common stock as of January 31, 2008 by (i) each person who is
known by us to own beneficially more than 5% of our common stock, (ii) each of
the Named Executive Officers, and (iii) all our directors and executive officers
as a group. On such date, we had 19,177,186 shares of our common stock
outstanding (not including 10,661,000 shares in treasury).

         As used in the table below and elsewhere in this Annual Report on Form
10-K, the term "beneficial ownership" with respect to a security consists of
sole or shared voting power, including the power to vote or direct the vote
and/or sole or shared investment power, including the power to dispose or direct
the disposition, with respect to the security through any contract, arrangement,
understanding, relationship, or otherwise, including a right to acquire such
power(s) during the next 60 days following January 31, 2008.

                                                            PERCENTAGE OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER(1)   AMOUNT OWNED(2)    BENEFICIALLY OWNED
- ---------------------------------------   --------------     ------------------
Ronald Lane**(3)                             3,939,668              20.5%

Richard M. Feldheim**(4)                      405,529                2.1%

William M. McCormick**(5)                     811,167                4.2%

Steven Getraer**                                 0                    *

David Coffin-Beach**                             0                    *

Joe Esposito**                                   0                    *

                                       56



Aldo Rodriguez**                                 0                    *

John Copanos**                                   0                    *

Nostrum Pharmaceuticals(6)                       0                    *
203 Somerset Court
Princeton, NJ 08540

Maneesh Pharmaceuticals                      1,500,000               7.8%
23-24 Kalpatru Court
C.G. Road, Chembour
Mumbaik 7 400 074
91 22 2520 2122

Harcharan Singh (7)                          3,000,000              14.9%
BMO Nesbitt Burns
1 First Canadian Place, 49th Floor
Toronto, ON M5X 1H3

NalinKant Amratlal Rathod (8)                2,198,018              11.3%
JL. Teregong Kecil A/1
Pondok Indah
Jakarta, Indonesia

Named Executive                              5,036,364              26.7%
Officers and Directors
as a Group
(eight persons) (9)

- -------------
*Denotes less than a 1% interest in the Company

**   His address is c/o Synovics Pharmaceuticals Inc., 2575 Camelback Road,
     Suite 450, Phoenix, AZ 85016

(1)  Except as indicated, and subject to community property laws when
     applicable, the persons named in the table above have sole voting and
     investment power and with respect to all shares of common stock shown as
     beneficially owned by them.

(2)  Includes shares of common stock issuable to the identified person pursuant
     to stock options or warrants that may be exercised within 60 days after
     January 31, 2008. In calculating the percentage of ownership, such shares
     are deemed to be outstanding for the purpose of computing the percentage of
     shares of common stock owned by such person, but are not deemed to be
     outstanding for the purpose of computing the percentage of shares of common
     stock owned by any other stockholders.

(3)  Includes 3,403,638 shares of common stock held of record by R.H. Lane
     Limited Partnership of which Dr. Lane is a general partner. He shares
     voting power over these shares with Richard M. Feldheim, a general partner.
     2,000,000 shares of common stock have been pledged pursuant to a pledge
     agreement between Dr. Lane and Axiom Capital Management, Inc. Dr. Lane
     disclaims beneficial ownership of 60,000 shares of common stock held by
     such partnership for the benefit of other partners and 180,000 shares of
     common stock held by the partnership for the benefit of his wife.

                                       57



(4)  Includes 3,966 shares of common stock held of record by Abby's, Inc., a
     corporation controlled by Mr. Feldheim, and 401,563 shares of Common Stock
     held of record by the R. M. Feldheim Limited Partnership of which Mr.
     Feldheim is the general partner. Does not include 3,403,638 shares of
     common stock held by R.H. Lane Limited Partnership for the benefit of other
     partners. He shares voting power over the shares held by Abby's, Inc. and
     R.H. Lane Limited Partnership.

(5)  Includes 120,000 shares of common stock issuable upon exercise of warrants,
     10,000 shares of common stock held by Mr. McCormick's wife and 5,500 shares
     of common stock held by Mr. McCormick's minor children as to which shares
     he disclaims beneficial ownership.

(6)  As previously reported by us, and elsewhere in this Annual Report on Form
     10-K, 10,661,000 shares of common stock are being held in escrow pursuant
     to the terms of that certain Settlement Agreement entered into as of July
     31, 2007 between Synovics, Synovics Labs, Nostrum and Dr. Mulye. Prior to
     entering into the said settlement agreement, based on Schedule 13D/A filed
     with the SEC on June 20, 2007, these shares were owned legally by Nostrum
     and none were owned directly by Dr. Mulye. Further, based on the
     aforementioned Schedule 13D/A, Dr. Mulye is the beneficial owner of all of
     the outstanding capital stock of Nostrum. These shares are being treated as
     treasury stock for accounting purposes.

(7)  Includes 2,000,000 shares of common sock beneficially owned by Mr. Singh,
     and 1,000,000 shares of common stock issuable upon exercise of warrants.

(8)  Includes 212,806 shares of common Stock beneficially owned by Mr. Rathod,
     which includes 116,156 shares of common stock that were purportedly
     transferred to Mr. Rathod in 2006 by Bali Holdings Limited (but for which
     Mr. Rathod has yet to receive share certificates from the Company's
     transfer agent) and 96,650 shares of Common Stock that are held for the
     benefit of Mr. Rathod by Merrill Lynch. The above referenced shares of
     common Stock also include 1,720,926 shares of Common Stock beneficially
     owned by Asia Pacific Investment Holdings Limited ("ASIA PACIFIC"), of
     which Mr. Rathod is the owner and sole director, and 250,000 shares of
     common sock acquirable by Asia Pacific under the terms of a Common Stock
     Purchase Warrant, dated as of April 17, 2006. These shares of common stock
     beneficially owned by Asia Pacific include (i) 216,018 shares of common
     stock that are held for the benefit of Asia Pacific by Royal Bank of
     Canada, (ii) 60,875 shares of common stock that are held for the benefit of
     Asia Pacific by Great Asian Holdings Limited, and (iii) 94,533 shares of
     common stock that are held by James M. Belcher, since Asia Pacific may be
     deemed to have shared voting power over those shares as a consequence of
     Mr. Belcher's inclusion on Asia Pacific's slate of nominees. The above
     referenced shares of common stock also include 14,286 shares of common
     stock beneficially owned by Technology Resources & Investments Limited
     ("TECHNOLOGY RESOURCES"), of which Mr. Rathod is the owner and sole
     director. Mr. Rathod shares the power to vote or to direct the vote or to
     dispose or direct the disposition of the 1,735,212 shares of common stock
     held in the aggregate (including 250,000 shares of common stock acquirable
     by Asia Pacific under the terms of a Common Stock Purchase Warrant, dated
     as of April 17, 2006) by Asia Pacific and Technology Resources because Mr.
     Rathod, as the 100% owner, controls each of those entities and, in his
     capacity as sole director, may act on behalf of each of those entities to
     vote or to direct the vote or to dispose or direct the disposition of the
     1,735,212 shares of common stock they collectively hold (including 250,000
     shares of common stock acquirable by Asia Pacific under the terms of a
     Common Stock Purchase Warrant, dated as of April 17, 2006). In the course
     of his business, Mr. Rathod also provides investment advice and consulting
     services to certain business associates who to his knowledge hold,
     collectively, approximately 310,000 shares of common stock (including
     certain shares of common stock held by Macro Power Ltd that are reflected
     as beneficially owned by Mr. Rathod in recent filings by the Company). Mr.
     Rathod disclaims beneficial ownership of those shares of common stock. The
     foregoing information is based upon a Schedule 13D/A filed with SEC on July
     3, 2007.

(9)  Includes 120,000 shares of common stock issuable upon exercise of warrants.


                                       58



SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         On October 31, 1996, our Board of Directors adopted the 1996 Stock Plan
authorizing 570,000 shares of Common Stock (the "Plan"), subject to approval by
stockholders at their next Annual Meeting. The purpose of the Plan is to further
the interests of the Company and its stockholders by encouraging key persons
associated with us to acquire shares of our common stock, thereby acquiring a
proprietary interest in its business and an increased personal interest in its
continued success.

         The following table sets forth information with respect to options
issued by us during the fiscal year ended October 31, 2007.



                                                                                     NUMBER OF SECURITIES
                                                                                   REMAINING AVAILABLE FOR
                          NUMBER OF SECURITIES TO    WEIGHTED-AVERAGE EXERCISE      FUTURE ISSUANCE UNDER
                          BE ISSUED UPON EXERCISE       PRICE OF OUTSTANDING      EQUITY COMPENSATION PLANS
                          OF OUTSTANDING OPTIONS,      OPTIONS, WARRANTS AND        (EXCLUDING SECURITIES
                            WARRANTS AND RIGHTS                RIGHTS              REFLECTED IN COLUMN (A))
PLAN CATEGORY                       (A)                          (B)                         (C)
- -------------             -----------------------    -------------------------    -------------------------
                                                                         
EQUITY COMPENSATION
PLANS APPROVED BY                     --                         --                          --
SECURITY HOLDERS

EQUITY COMPENSATION
PLANS NOT APPROVED BY              2,220,000(1)                                            450,000(2)
SECURITY HOLDERS
TOTAL


- -------------

(1)  Represents 2,100,000 options issued outside of our Plan and 120,000 options
     issued under our Plan.

(2)  Represents number of options issuable under our Plan.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         All related person transactions are reviewed and, as appropriate, may
be approved or ratified by the Board of Directors. If a director is involved in
the transaction, he or she may not participate in any review, approval or
ratification of such transaction. Related person transactions

                                       59


are approved by the Board of Directors only if, based on all of the facts and
circumstances, they are in, or not inconsistent with, our best interests and our
stockholders, as the Board of Directors determines in good faith. The Board of
Directors takes into account, among other factors it deems appropriate, whether
the transaction is on terms generally available to an unaffiliated third-party
under the same or similar circumstances and the extent of the related person's
interest in the transaction. The Board of Directors may also impose such
conditions as it deems necessary and appropriate on us or the related person in
connection with the transaction.

         In the case of a transaction presented to the Board of Directors for
ratification, the Board of Directors may ratify the transaction or determine
whether rescission of the transaction is appropriate.

VCG&A

         On February 1, 2007, we entered into a consulting agreement with VCG &
A, Inc ("VCG&A"). for the provision of consulting services by VCG&A. The initial
term of the consulting agreements was 6 months and shall be automatically
renewed for an additional 6 months.

         The services to be provided by the Consultant under the Consulting
Agreement shall be separated into two distinct phases. The first phase, which is
not to exceed 180 days in duration, was structured to assist us in\ its capital
raising efforts, the development of an overall business strategy and the
negotiation and purchase of the rights to a certain key drug product (the
"TARGET PRODUCT"). The second phase was structured to assist us in ongoing
management, sales and marketing support. The services to be provided by VCG&A
will advance from the first to the second phase upon the occurrence of certain
conditions, including the purchase by us of the rights to the Target Product.
The consulting agreement provides that in the event that the services to be
provided by VCG&A do not advance from Phase I to Phase II, VCG&A shall provide
first phase services for the remainder of the term.

         Under the consulting agreement, we agreed to pay VCG&A cash fees and
royalties based upon the net sales of the Target Product. In addition, on May 1,
2007, we granted to VCG&A and its designees five-year warrants to acquire an
aggregate of 1,600,000 shares of our common stock at an exercise price of $1.36
per share in connection with the said consulting agreement. Such warrants were
issued in lieu of any options issuable under the said consulting agreement.

         David Coffin-Beach, our former President and Chief Operating Officer,
acted as an independent consultant to VCG&A prior to joining us.

         The foregoing description is a summary and is qualified in its entirety
by the consulting agreement, which is attached as an exhibit hereto and
incorporated by reference herein.

SINGH TRANSACTION

         On April 20, 2007, we entered into a strategic alliance with Harcharan
Singh ("SINGH"). In connection with

                                       60



this strategic alliance, we entered into a consulting agreement with Singh and
Kirk LLC issued a promissory note to 2133820 Ontario, Inc., an affiliate of
Singh, in the principal amount of $1,250,000 in exchange for cash equal to such
principal amount.

         During the term of the consulting agreement, Singh is being retained to
provide strategic consulting services to us and will participate as an observer
of our board meetings. In consideration for these services, the consulting
agreement provided that Singh is to receive a $10,000 monthly retainer
commencing May 31, 2007, 2,000,000 shares of our common stock and warrants to
purchase a further 1,000,000 shares of our common stock. In addition, if we
achieve annual earnings before interest, taxes, depreciation and amortization
(EBITA) of at least $20,000,000, then Singh will be entitled to a further grant
of 1,000,000 shares of our common stock, and warrants to purchase 500,000 shares
of our common stock. The warrants are exercisable for a period of seven years
from the date of grant at an initial exercise price of $2.00, subject to
adjustment in certain circumstances, and contain a cashless or net issuance
component. The shares of common stock and the shares of common stock underlying
the warrants also carry piggyback registration rights, subject to customary
carve outs and exclusions.

         The term of the consulting agreement is for three years unless
terminated earlier or extended for subsequent periods. If prior to the end of
the term, we terminate the consulting agreement for any reason absent fraud,
intentional misconduct or gross negligence, Singh will be entitled to an early
termination fee of $120,000. In addition, in the event of a change of control
event, Singh will be entitled to a fee of $250,000.

         The aforementioned note bears interest of 15% per annum with interest
payments payable monthly commencing May 1, 2007 and matures on September 12,
2007. The Note was automatically exchangeable for 1,250,000 units of our then
ongoing private placement upon the sale by us of a further 2,500,000 units. The
Note was also exchangeable at the option of the holder for 1,250,000 units or if
we are in default of the Note, 2,000,000 units.

         The foregoing description is a summary and is qualified in its entirety
by the consulting agreement and promissory note, which are attached as exhibits
hereto and incorporated by reference herein.

OMEPRAZOLE AGREEMENT

         On May 1, 2007, we executed a License and Supply Agreement with Fluid
Air Inc. doing business as PharmPro ("FAI") for the development and
commercialization of the over the counter generic version of Omeprazole.

         According to the license agreement, FAI granted us, under FAI's patent
rights, an exclusive worldwide license to develop, commercialize and sublicense
capsules containing the generic version of over the counter Omeprazole (the
"DRUG Product"). The license agreement provides that FAI will be responsible for
developing the Drug Product in accordance with the Drug Product development plan
while we will be responsible for research and development activities and will
file in our name, the appropriate regulatory filings with FAI being responsible
for the chemistry, manufacturing and controls review portion of such filings.
Once developed

                                       61



and necessary regulatory approvals have been obtained, we will be responsible
for promoting, marketing and distributing the Drug Product supplied exclusively
by FAI.

         As partial consideration for the rights granted, we paid
FAI a license fee of $500,000 with further payments
due upon the completion of certain milestones. Commencing upon the first
commercial sale of the Drug Product, we are also required to pay to FAI
royalties on the net product sales of the Drug Product until the later of (i)
the expiration of the last to expire FAI patent rights covering the Drug
Product; and (ii) ten years from the first commercial sale of the Drug Product.
Unless terminated sooner for cause, the license agreement will expire on a
country by country basis on the expiration of our obligation to make royalty
payments with respect to such country.

         No assurance can be given that any viable drug product
will be developed or approved by regulatory
authorities pursuant to the license agreement or if developed and approved that
any material revenues to us will be generated.

         The license agreement was entered into as a result of an introduction
to FAI made by VCG&A. As previously mentioned, Mr. Coffin-Beach, our former
President and Chief Operating Officer, acted as an independent consultant to
VCG&A prior to joining us.

         The foregoing description is a summary and is qualified in its entirety
by the license agreement, which is attached as an exhibit hereto and
incorporated by reference herein.

2007 CONVERTIBLE BRIDGE NOTES

         On July 5, 2007, we completed an initial closing of a bridge round of
debt financing, whereby Kirk issued convertible bridge notes in the principal
amount of $2,100,000 to accredited investors (the transaction is referred to
herein as the "2007 CONVERTIBLE BRIDGE NOTE OFFERING"). During the fiscal year
ended October 31, 2007, we completed subsequent closings of convertible bridge
notes in the principal amount of $1,350,000. The bridge notes bear interest at
6% per annum increasing to 18% in the case of an event of default and have a
maturity date of six months from the issuance date, unless earlier converted.
Upon the closing of a Qualified Equity Financing (as defined in the convertible
bridge notes), such convertible bridge notes automatically convert into our
future Series C Preferred Stock to be issued in a Qualified Equity Financing at
a premium of 110% of the unpaid principal and interest of the bridge notes. In
addition, upon closing of the Qualified Equity Financing, holders of the bridge
notes are entitled to receive common stock purchase warrants at an exercise
price and other terms identical to the warrants to be issued in the Qualified
Equity Financing. The amount of common stock into which the common stock
purchase warrants are exercisable ranges from 40% to 50% of the number of shares
of common stock issuable to bridge note holders upon conversion of the Series C
Preferred Stock receivable upon conversion of the bridge notes, with the range
depending on the timing of the initial closing of the Qualified Equity
Financing.

         The bridge notes have been secured by a pledge by Ronald H. Lane, our
Chief Executive Officer and Chairman of the Board, of 2,000,000 shares of our
common stock owned by Mr. Lane. In addition, we issued 1,000,000 shares of
Series B Convertible Preferred Stock to the

                                       62



bridge note holders. The Series B Convertible Preferred Stock is convertible
into our Company's common stock on a 1:15 basis in the event of default under
the bridge notes, has full ratchet anti-dilution protection, will be surrendered
upon the completion of the Qualified Equity Financing, has voting rights on an
as converted basis and will be non-transferable other than in an event of
default under the bridge notes.

         Axiom Capital Management, Inc. ("Axiom") acted as placement agent in
the 2007 Convertible Bridge Note Offering. Pursuant to a letter agreement dated
June 5, 2007, Axiom are entitled to a cash commission of 10% of the purchase
price of the convertible bridge notes plus warrants to purchase 10% of the
number of shares into which the bridge notes are convertible.

         The foregoing description is a summary and is qualified in its entirety
by the convertible bridge note and letter agreement which are attached as
exhibits hereto and incorporated by reference herein.

SETTLEMENT OF NOSTRUM DISPUTE

         On July 31, 2007, we together with Synovics Labs entered into a
settlement agreement with the various parties to the Nostrum actions. Under the
terms of the settlement agreement, all pending actions and proceedings between
the parties were dismissed with prejudice, the parties mutually released one
another and all pre-settlement agreements were terminated, including the
Technology License and ANDA Agreement. In connection with the termination of the
ANDA Agreement, the Company and Synovics Labs assigned to Nostrum the
Abbreviated New Drug Application for the Metformin Extended Release 500mg.

         As part of the settlement, 10,661,000 shares of our common stock that
are owned by Nostrum have been placed in escrow pursuant to a separate escrow
agreement (the "ESCROW SHARES"). If the guarantees of Dr. Mulye and Nostrum to
the Bank of India ("BOI") in connection with our credit facility with BOI are
extinguished in full or in part by May 1, 2008, the Escrow Shares will be
released to us in an amount proportionate to the amount by which the guarantees
have been extinguished. If by May 1, 2008, any Escrow Shares have not been
released to us or if we fault on our credit facility with BOI and such default
remains uncured for more than sixty days, any remaining Escrow Shares will be
released to Nostrum. If the Escrow Shares are released to Nostrum and during the
escrow period we issue additional shares of common stock or common stock
equivalents to cause the Escrow Shares to represent less than 32% of our
outstanding shares on a fully diluted basis, then we are required to issue to
Nostrum additional shares of common stock so that the Escrow Shares together
with the additional shares constitute 32% of our outstanding shares on a fully
diluted basis. Such additional shares will be reduced proportionately if any of
the Escrow Shares are released to us during the escrow period. As of the date
hereof, the current amount of the outstanding principal loan balance with BOI is
$7,200,000.

         The sole owner of Nostrum is Dr. Mulye Mulye who was formerly our
largest shareholder and was formerly our Chief Scientific Officer and a member
of our Board of Directors.

         The foregoing description is a summary and is qualified in its entirety
by the settlement agreement, which is attached as an exhibit hereto and
incorporated by reference herein.

COPANOS NOTE AMENDMENT

                                       63



         As previously reported we entered into a promissory note in the
principal amount of $3,000,000 with John Copanos (the "COPANOS NOTE") as partial
consideration for the acquisition by us Kirk and ANDAPharm. Subsequently, on
December 13, 2006 and on May 21, 2007, the Copanos Note was amended.

         On November 30, 2007, we entered into a further agreement amending the
Copanos Note, as amended, according to which the interest rate on the
outstanding principal of $2,000,000 and accrued and unpaid interest of
$258,041.51 has been increased to 12% per annum retroactively to October 3, 2007
and the payment schedule for the payment of such principal and accrued and
unpaid interest has been adjusted. In connection with the agreement, the parties
executed mutual releases and we consented, in the case of default, to John
Copanos obtaining a final judgment without necessity of a further hearing.

         John Copanos serves as the President, Chief Operating Officer,
Treasurer and Secretary of Kirk Pharmaceuticals, LLC and AndaPharm, LLC.

         The foregoing description is a summary and is qualified in its entirety
by the agreement, which is attached as an exhibit hereto and incorporated by
reference herein.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         The following table presents fees, including reimbursements for
expenses, for professional audit services rendered by Miller Ellin & Company,
LP. ("MILLER ELLIN") for the audits of our annual financial statements and
interim reviews of our quarterly financial statements for the years ended
October 31, 2007 and October 31, 2006 and fees billed for other services
rendered by Miller Ellin during those periods.

                                     2007                       2006
                                     ----                       ----
Audit Fees(1)                       $70,000                   $84,000
Audit-Related Fees                    ---                       ---
Tax Fees                              ---                       ---
All Other Fees                        ---                       ---


- --------

(1)  Audit fees consist of fees billed for professional services rendered for
     the audit of our consolidated annual financial statements and review of the
     interim consolidated financial statements included in quarterly reports and
     services that are normally provided by Miller Ellin in connection with
     statutory and regulatory filings or engagements.

                                     PART IV


ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES.

(a) Documents filed as part of this Report

    (1) The financial statements listed in the Index to Consolidated Financial
Statements are filed as part of this report

                                       64



    (2) The financial statements listed in the Index are filed a part of this
report.

    (3) List of Exhibits

        See Index to Exhibits in paragraph (b) below.

        The Exhibits are filed with or incorporated by reference in this report.

(b) Financial Statement Schedules

    None.

(c) Exhibits required by Item 601 of Regulation S-K.

EXHIBIT           DESCRIPTION
- -------           -----------
3.1      Restated Articles of Incorporation (1)

3.2      Articles of Amendment to the Articles of Incorporation (1)

3.2a     Amendment to the Restated Articles of Incorporation(2)

3.3      Bylaws (1)

3.3a     Bylaws, as amended through September 20, 2006 (3)

4.1      Form of Certificate evidencing shares of common stock (1)

10.1     Form of Rights Agreement, effective as of September 8, 2006, between
         the Registrant and Continental Stock Transfer & Trust Company, as
         rights agent (4)

10.2     Amendment No. 1 to Technology License Agreement, by and between the
         Company and Nostrum Pharmaceuticals, Inc., dated June 30, 2005 (5)

10.2a    Amendment No. 2 to Technology License Agreement, by and between the
         Company and Nostrum Pharmaceuticals, Inc., dated August 31, 2005 (5)

10.2b    Amendment No. 3 to Technology License Agreement, by and between the
         Company and Nostrum Pharmaceuticals, Inc., dated October 3, 2005 (6)

10.3     ANDA Ownership Transfer and Product License Agreement, dated as of May
         17, 2006, by and between Nostrum Pharmaceuticals, Inc. and Synovics
         Laboratories, Inc. (7)

                                       65



10.4     Letter Agreement, by and between the Company, Nostrum Pharmaceuticals,
         Inc. and Enem Nostrum Remedies Pvt. Ltd, dated September 27, 2005 (8)

10.5     Placement Agency Agreement, by and between the Company and Indigo
         Securities LLC, dated October 3, 2005 with respect to the Bridge
         Financing (6)

10.5a    Form of Subscription Agreement associated with the Bridge Financing (6)

10.5b    Form of 9% Convertible Bridge Notes (6)

10.5c    Form of Note offered in exchange for Convertible Bridge Note (4)

10.5d    Form of Bridge Warrants associated with the Bridge Financing (6)

10.5e    Form of Registration Rights Agreement associated with the Bridge
         Financing (6)

10.6     Credit Agreement, dated as of May 22, 2006, between the Registrant and
         Bank of India, New York Branch (9)

10.6a    Promissory Note, dated May 22, 2006, by the Registrant in favor of Bank
         of India, in the principal amount of $10,500,000 (9)

10.6b    Security Agreement, dated May 22, 2006, by the Registrant in favor of
         Bank of India (9)

10.6c    Corporate Guaranty, dated May 22, 2006, by Andapharm, Inc., Andapharm,
         LLC, Bionutrics Health Products, Inc., Incon Technologies, Inc., Kirk
         Pharmaceuticals, LLC, Kirk Pharmaceuticals, Inc., Lipogenics, Inc.,
         Synovics Laboratories, Inc., and Nutrition Technology Corp. in favor of
         Bank of India (98)

10.6d    Corporate Guaranty, dated May 22, 2006 by Nostrum Pharmaceuticals, Inc.
         in favor of Bank of India (9)

10.6e    Individual Guaranty, dated May 22, 2006, by Dr. Nirmal Mulye in favor
         of Bank of India (9)

10.7     Promissory Note, dated May 23, 2006, by the Registrant in favor of John
         S. Copanos (10)

10.8     Form of Purchase and Sale Agreement by and among the Company, Asia
         Pacific Investment Holdings Limited, InCon Technologies, Inc., Bali
         Holdings, LLC, InCon Processing, LLC, InCon International, Inc., N.P.
         Shaikh and John R. Palmer, dated as of October 31, 2005 (11)

10.8a    Form of Consent of Noteholders to purchase (11)

10.9     Andapharm Purchase Agreement, dated as of July 28, 2005, between the
         Registrant and John S. Copanos (9)

                                       66



10.10    Form of Warrant for investors in private placement that initially
         closed on January 26, 2007 (12)

10.11    Form of Warrant for investors in private placement that initially
         closed on January 26, 2007 (12)

10.12    Consulting Agreement between the Registrant and Saggi Capital Corp.
         dated February 1, 2007 (13)

10.13    Consulting Agreement between the Registrant and Bridge Ventures, Inc.
         dated February 1, 2007 (13)

10.14    Consulting Agreement between the Registrant and VCG&A, Inc. effective
         as of February 1, 2007 (14)

10.15    Employment Agreement dated as of April 18, 2007 between the Registrant
         and David Coffin-Beach (15)

10.16    Consulting Agreement dated April 20, 2007 between the Registrant and
         Harcharan Singh (16)

10.17    Promissory Note dated April 20, 2007 of Kirk Pharmaceuticals, LLC
         issued to 2138820 Ontario, Inc.(16)

10.18    License and Supply Agreement between the Registrant and Fluid Air,
         Inc. (17)

10.19    Employment Agreement dated as of January 30, 2007 between the
         Registrant and Ronald H. Lane, Ph.D. (18)

10.20    Employment Agreement dated July 10, 2007 between the Registrant and
         Steven Getraer (19)

10.21    Form of Convertible Bridge Note for 2007 convertible bridge note
         financing (20)

10.22    Settlement Agreement dated July 31, 2007 (21)

10.23    Promissory Note Dated August 31, 2007 in the principal amount of
         $1,500,000 issued by Kirk Pharmaceuticals, LLC in favor of CB
         Distributors, Inc. (22)

10.24    Purchase Agreement, dated as of August 31, 2007 between Kirk
         Pharmaceuticals, Inc. and CB Distributors, Inc. (22)

10.25    Agreement between Registrant and John Copanos dated as of November 30,
         2007 (23)

10.26    Letter agreement between the Registrant and Axiom Capital Management,
         Inc. dated June 5, 2007.*

21       Subsidiaries of the Company*

                                       67



31.1     Certification of Principal Executive Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission
         Release 34-46427*

31.2     Certification of Principal Financial Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission
         Release 34-46427*

32.1     Certification of Principal Executive Officer pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002*

32.2     Certification of Principal Financial Officer pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002*

- ----------

*    Filed herewith

- --   See Item 13 of the Company's Report on Form 10-K for the year ended October
     31, 2005 for a list of other material agreements executed prior to October
     1, 2005.

(1)  Incorporated by reference to Registrant's Form 10 filed with the Commission
     on or about January 21, 1997.

(2)  Incorporated by reference to Registrant's Form 10-K filed with the
     Commission on February 13, 2007.

(3)  Incorporated by reference to Registrant's Form 8-K filed with the
     Commission on September 21, 2006.

(4)  Incorporated by reference to Registrant's Form 8-K filed with the
     Commission on September 14, 2006.

(5)  Incorporated by reference to Registrant's Form 10-K filed with the
     Commission on January 30, 2006.

(6)  Incorporated by reference to Registrant's Form 8-K filed with the
     Commission on October 7, 2005, as amended on October 11, 2005.

(7)  Incorporated by reference to Registrant's Form 8-K filed with the
     Commission on May 19, 2006.

(8)  Incorporated by reference to Registrant's Form 8-K filed with the
     Commission on October 3, 2005.

(9)  Incorporated by reference to Registrant's Form 8-K filed with the
     Commission on May 26, 2006.

                                       68



(10) Incorporated by reference to Registrant's Form 8-K/A (amendment to 8-K
     filed on May 26, 2006) filed May 31, 2006

(11) Incorporated by reference to Registrant's Form 10-Q filed with the
     Commission on March 16, 2006

(12) Incorporated by reference to Registrant's Form 8-K/A filed February 2, 2007

(13) Incorporated by reference to Registrant's Form 8-K filed February 6, 2007

(14) Incorporated by reference to Registrant's Form 8-K filed February 8, 2007

(15) Incorporated by reference to Registrant's Form 8-K filed April 24, 2007

(16) Incorporated by reference to Registrant's Form 8-K filed April 26, 2007

(17) Incorporated by reference to Registrant's Form 8-K filed May 7, 2007

(18) Incorporated by reference to Registrant's Form 8-K filed May 17, 2007

(19) Incorporated by reference to Registrant's Form 8-K filed July 11, 2007

(20) Incorporated by reference to Registrant's Form 8-K filed July 11, 2007

(21) Incorporated by reference to Registrant's Form 8-K filed August 6, 2007

(22) Incorporated by reference to Registrant's Form 8-K filed September 7, 2007

(23) Incorporated by reference to Registrant's Form 8-K filed December 6, 2007

                                       69



                                   SIGNATURES

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

                                                  SYNOVICS PHARMACEUTICALS INC.



Dated: February 13, 2008                          By: /S/ RONALD HOWARD LANE
                                                      --------------------------
                                                  Name:  Ronald Howard Lane
                                                  Title: Chief Executive Officer


Pursuant to the requirements of the Securities Act of 1934, this Report has been
signed below by the following persons on behalf of the Company and in the
capacities and on the dates indicated.

Title                                                                Date

/S/ RONALD HOWARD LANE             Chief Executive Officer,    February 13, 2008
- -------------------------------    Chairman of the Board
Ronald Howard Lane                 (Principal Executive
                                    Officer)


/S/ STEVEN GETRAER                 Chief Financial Officer     February 13, 2008
- -------------------------------    (Principal Accounting
Steven Getraer                     Officer)



/S/ RICHARD M. FELDHEIM            Director                    February 13, 2008
- -------------------------------
Richard M. Feldheim


/S/ WILLIAM M. MCCORMICK           Director                    February 13, 2008
- -------------------------------
William M. McCormick

                                       70





             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Synovics Pharmaceuticals, Inc.

We have audited the accompanying consolidated balance sheets of Synovics
Pharmaceuticals, Inc. and Subsidiaries as of October 31, 2007 and 2006 and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for the years ended October 31, 2007, 2006, and 2005. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform an audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Synovics
Pharmaceuticals, Inc. and Subsidiaries as of October 31, 2007 and 2006 and the
results of their operations and their cash flows for each of the three years in
the period ended October 31, 2007, 2006, and 2005 in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As shown in the consolidated
financial statements, the Company has negative working capital of $19,580,426,
and has experienced significant losses and negative cash flows. These facts
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in this regard are described in Note 2.



                                                /s/ Miller, Ellin & Company, LLP
                                                   CERTIFIED PUBLIC ACCOUNTANTS

New York, New York
February 13, 2008







                 SYNOVICS PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS




                                                                  YEARS ENDED OCTOBER 31,
                                                        --------------------------------------------
                                                            2007            2006            2005
                                                        ------------    ------------    ------------
                                                                               
REVENUES, net                                           $ 23,466,311    $ 10,516,398    $      8,192


COST OF REVENUES                                          16,837,126       8,158,727          45,289
                                                        ------------    ------------    ------------

         GROSS PROFIT                                      6,629,185       2,357,671       2,357,671
                                                        ------------    ------------    ------------


OPERATING EXPENSES
  Research and development                                 1,289,833       1,200,000       1,521,508
  Selling, general, and administrative                    15,603,823       4,776,857         352,960
                                                        ------------    ------------    ------------
         Total expenses                                   16,893,656       5,976,857       1,874,468
                                                        ------------    ------------    ------------

         OPERATING LOSS                                  (10,264,471)     (3,619,186)     (1,911,565)
                                                        ------------    ------------    ------------


OTHER INCOME (EXPENSES):
Other income                                                  12,503              --          13,695
Interest expense, net                                     (6,400,962)     (3,909,716)       (792,976)
Impairment loss                                           (4,006,386)             --              --
Loss on disposal of assets                                  (198,568)             --              --

         Total other (expenses) income                   (10,593,413)     (3,909,716)       (779,281)
                                                        ------------    ------------    ------------

NET LOSS BEFORE PROVISION FOR
  INCOME TAX                                             (20,857,884)     (7,528,902)     (2,690,846)

PROVISION FOR INCOME TAXES                                        --              --              --
                                                        ------------    ------------    ------------

   NET LOSS FROM CONTINUING OPERATIONS                   (20,857,884)     (7,528,902)     (2,690,846)
   NET LOSS FROM DISCONTINUED OPERATIONS                          --              --              --
   Equity in the loss of InCon Processing, LLC                    --      (1,042,119)       (220,414)
                                                        ------------    ------------    ------------

NET LOSS                                                $(20,857,884)   $ (8,571,021)   $ (2,911,260)
                                                        ============    ============    ============

BASIC AND DILUTED NET LOSS PER COMMON SHARE
 FROM CONTINUING OPERATIONS                             $      (1.09)   $      (0.29)   $      (0.13)
 FROM DISCONTINUED OPERATIONS                                     --           (0.04)          (0.01)
                                                        ------------    ------------    ------------

NET LOSS PER SHARE                                      $      (1.09)   $      (0.33)   $      (0.14)
                                                        ============    ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING                                               19,070,573      26,044,630      20,094,784
                                                        ============    ============    ============


See notes to the consolidated financial statements.




                 SYNOVICS PHARMACEUTICALS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS




                                                                                              OCTOBER 31,
                                                                                      ----------------------------
                                                                                          2007            2006
                                                                                      ------------    ------------
                                                                                                
ASSETS

CURRENT ASSETS:
 Cash and cash equivalents                                                            $         --    $  2,393,437
 Trade receivables                                                                       3,206,793       2,037,860
 Inventory                                                                               1,928,009       2,376,480
 Prepaid expenses and other current assets                                                 302,937         922,670
                                                                                      ------------    ------------
                                                       Total Current Assets              5,437,739       7,730,447
                                                                                      ------------    ------------

PROPERTY
Net of accumulated depreciation of $490,771 & 163,303, respectively                      2,024,407       1,642,282
                                                                                      ------------    ------------

OTHER ASSETS:
 Security Deposits                                                                          87,548         379,622
 Note receivable                                                                           122,158              --
 Deferred financing fees                                                                 2,899,296       1,967,937
 Patents - net of  accumulated amortization of  $350,687 and $343,113, respectively      1,315,051      15,714,664
 Goodwill                                                                               11,447,698      11,447,698
                                                                                      ------------    ------------
                                                       Total Other Assets               15,871,751      29,509,921
                                                                                      ------------    ------------

TOTAL                                                                                 $ 23,333,897    $ 38,882,650
                                                                                      ============    ============


LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
 Accounts payable                                                                     $  4,716,702    $  3,226,664
 Notes payable - shareholders and others                                                 3,250,000       1,000,000
 Notes payable                                                                           8,175,000       4,087,047
 Accrued interest to shareholders and others                                             4,529,342       1,735,174
 Accrued liabilities                                                                     2,597,122       1,970,277
 Notes payable - bank                                                                    1,750,000       1,000,000
                                                                                      ------------    ------------
                                                       Total current liabilities        25,018,165      13,019,162
                                                                                      ------------    ------------

LONG-TERM LIABILITIES:
 Deferred revenues                                                                         847,334         980,363
 Long term debt, net of current portion                                                  5,450,000      11,500,000
 Capital lease obligation, net of current portion                                          122,523         279,638
                                                                                      ------------    ------------
                                                       Total Liabilities                31,438,023      25,779,163
                                                                                      ------------    ------------

STOCKHOLDERS' EQUITY (DEFICIT)
 Preferred stock - $.001 par value - authorized, 5,000,000 shares;
    591,850 and 591,850 issued and outstanding, respectively
    (liquidation preference of $798,998)                                                   798,998         798,998
 Common stock - $.001 par value - authorized, 45,000,000 shares;
    29,838,186 and 22,681,725 issued and outstanding, respectively                          29,838          26,044
 Additional paid-in capital                                                             71,537,568      61,876,506
 Warrants                                                                                4,892,997       4,139,972
 Accumulated deficit                                                                   (74,261,117)    (53,403,233)
 Common stock in treasury                                                              (10,952,410)       (184,800)
Subscription receivable                                                                   (150,000)       (150,000)
                                                                                      ------------    ------------
                                               Total stockholders' equity (deficit)     (8,104,126)     13,103,487
                                                                                      ------------    ------------

TOTAL                                                                                 $ 23,333,897    $ 38,882,650
                                                                                      ============    ============


See notes to the consolidated financial statements.

                         SYNOVICS PHARMACEUTICALS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                     YEAR ENDED OCTOBER 31,
                                                                                -----------------------------------
                                                                                      2007                2006
                                                                                ---------------      --------------
                                                                                                 
OPERATING ACTIVITIES:
Net loss                                                                          $(20,857,884)        $(8,571,021)
Adjustments to reconcile net loss to cash used in operating activities:
  Impairment of long lived assets                                                    3,362,837
  Depreciation and amortization                                                        596,634             122,911
  Equity in the loss of joint venture                                                        -           1,042,119
  Stock issued for interest                                                             89,473
  Stock and warants issued from note conversion                                      2,450,774
  Warants issued from convertible debt                                                 251,088
  Stock and warrants based compensation                                              6,507,842                   -
  Amortization of bridge loan discount                                                (931,359)          1,230,412
  Changes in operating assets and liabilities:
      Receivables                                                                   (1,168,933)           (113,335)
      Inventory                                                                        448,471             974,229
      Prepaids and other current assets                                                789,649            (386,222)
      Other assets                                                                           -                   -
      Accounts payable                                                               1,490,038          (1,985,106)
      Accrued liabilities                                                              626,845             866,346
      Accrued Interest                                                               2,794,168           1,735,174
Deferred Revenues                                                                     (133,029)            (80,932)
                                                                                ---------------      --------------
Net cash used in operating activities                                               (3,683,386)         (5,165,425)
                                                                                ---------------      --------------


INVESTING ACTIVITIES:
  Capital expenditures                                                                (709,593)           (447,939)
  Acquisition activities                                                                     -          (8,800,000)
  Patent acquisitions                                                                        -          (1,144,812)
                                                                                ---------------      --------------
Net cash provided in investing activities                                             (709,593)        (10,392,751)
                                                                                ---------------      --------------

FINANCING ACTIVITIES:
  Sale of common stock and warrants                                                  1,826,657           5,640,000
  Payment of deferred financing                                                              -            (840,639)
  Proceeds from debt                                                                 6,250,000          13,600,000
  Repayment of debt                                                                 (3,620,000)           (341,783)
  Renegotiation of bank note                                                        (2,300,000)                  -
  Repayment of leases                                                                 (157,115)           (234,784)
                                                                                ---------------      --------------
Net cash provided by financing activities                                            1,999,542          17,822,794
                                                                                ---------------      --------------


NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS                                                                    (2,393,437)          2,264,618

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                       2,393,437             128,819
                                                                                ---------------      --------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $          0         $ 2,393,437
                                                                                ===============      ==============


SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING
ACTIVITIES:
  Settlement of debt through issuance of common stock                             $          -         $ 2,088,244
                                                                                ===============      ==============


See notes to the consolidated financial statements.




                 SYNOVICS PHARMACEUTICALS, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)



                                              Preferred Stock                  Common Stock                      Warrants
                                       ----------------------------   ------------------------------   -----------------------------
                                          Shares          Amount          Shares          Amount          Number         Amount
                                       --------------   -----------   ---------------  -------------   -------------  --------------

                                                                                                          
Balances, October 31, 2004                   591,850       798,998        16,002,600         16,002         685,000         401,191

Issuance of common stock                           -             -         6,679,125          6,679               -               -

Warrants issued                                    -             -                 -              -         307,496         461,245

Warrants expired                                   -             -                 -              -        (555,000)       (350,786)

Options issued                                     -             -                 -              -               -               -

Options canceled                                   -             -                 -              -          (5,600)              -

Net Loss                                           -             -                 -              -               -               -

                                       --------------   -----------   ---------------  -------------   -------------  --------------
Balances, October 31, 2005                   591,850       798,998        22,681,725         22,681         431,896         511,650

Issuance of common stock                           -             -         3,362,902          3,363               -               -

Warrants issued                                    -             -                 -              -         444,996         300,326

Warrants expired                                   -             -                 -              -         (10,000)           (405)

Warrants issued in connection
with convertible bride notes                       -             -                 -              -        1,075,259      3,328,401

Beneficial conversion feature
of convertible bridge notes                        -             -                 -              -               -               -

Options issued                                     -             -                 -              -               -               -

Options canceled                                   -             -                 -              -          (6,000)              -

Net Loss                                           -             -                 -              -               -               -

Subscription receivable on
sale of warrants                                   -             -                 -              -               -               -

Acquisition of treasury stock                      -             -                 -              -               -               -

                                       --------------   -----------   ---------------  -------------   -------------  --------------
Balances, October 31, 2006                   591,850       798,998        26,044,627         26,044       1,936,151       4,139,972

Issuance of common stock                                                   1,095,000          1,095

Stocks and warrants issued                                                                                1,712,500         324,473

Warrants issued in connection
with convertible debt                                                        648,506            649         366,664         251,088

Warrants issued in connection
with note conversion                                                                                        525,000         177,464

Stock and warrants issued for sevices                                      2,000,000          2,000       4,900,000               -

Stocks and warrants issued for interest                                       50,000             50

Net Loss

Acquisition of treasury stock

                                       --------------   -----------   ---------------  -------------   -------------  --------------
Balances, October 31, 2007                   591,850      $798,998        29,838,133        $29,838       9,440,315      $4,892,997
                                       ==============   ===========   ===============  =============   =============  ==============


                                                                               Treasury stock
                                          Paid in       Accumulated     ---------------------------   Subscription   Stockholders'
                                          Capital         Deficit          Shares         Amount       Receivable   Equity (Deficit)
                                        -------------  --------------   ------------  -------------   ------------

                                                                                                    
Balances, October 31, 2004                39,800,127     (41,920,952)             -              -             -        (904,634)

Issuance of common stock                  14,651,720               -              -              -             -      14,658,399

Warrants issued                                    -               -              -              -             -         461,245

Warrants expired                             350,786               -              -              -             -               -

Options issued                                     -               -              -              -             -               -

Options canceled                                   -               -              -              -             -               -

Net Loss                                                  (2,911,260)             -              -             -      (2,911,260)

                                        -------------  --------------   ------------  -------------  ------------  --------------
Balances, October 31, 2005                54,802,633     (44,832,212)             -              -             -      11,303,750

Issuance of common stock                   7,499,542               -              -              -             -       7,502,905

Warrants issued                             (300,326)              -              -              -             -               -

Warrants expired                                 405               -              -              -             -               -

Warrants issued in connection
with convertible bride notes              (3,328,401)              -              -              -             -               -

Beneficial conversion feature
of convertible bridge notes                3,202,653               -              -              -             -       3,202,653

Options issued                                     -               -              -              -             -               -

Options canceled                                   -               -              -              -             -               -

Net Loss                                           -      (8,571,021)             -              -             -      (8,571,021)

Subscription receivable on
sale of warrants                                   -               -              -              -      (150,000)       (150,000)

Acquisition of treasury stock                      -               -         59,000       (184,800)            -        (184,800)

                                        -------------  --------------   ------------  -------------  ------------  --------------
Balances, October 31, 2006                61,876,506     (53,403,233)        59,000       (184,800)     (150,000)     13,103,487

Issuance of common stock                     550,690                                                                     551,785

Stocks and warrants issued                 1,501,114                                                                   1,825,587

Warrants issued in connection
with convertible debt                              -                                                                     251,737

Warrants issued in connection
with note conversion                       2,270,735                                                                   2,448,199

Stock and warrants issued for sevices      5,249,195                                                                   5,251,195

Stocks and warrants issued for interest       89,324                                                                      89,374

Net Loss                                                 (20,857,884)                                                (20,857,884)

Acquisition of treasury stock                                             0,661,000    (10,767,610)                  (10,767,610)

                                        -------------  --------------   ------------  -------------  ------------  --------------
Balances, October 31, 2007               $71,537,564    ($74,261,117)     0,720,000   ($10,952,410)     (150,000)     (8,104,130)
                                        =============  ==============   ============  =============  ============  ==============


See notes to the consolidated financial statements.



SYNOVICS PHARMACEUTICALS, INC.
INCOME STATEMENT
OCTOBER 31, 2007




REVENUES                                     Synovics        BHP      Lipogenics                Kirk      AJE   AJE   Consolidation
                                                                                              
  Revenues                                                                                   23,466,311                  23,466,311
  Discounts/Allowance                                                                                                             0
                                            ---------------------------------------------------------------------------------------
      Net Revenues                                    0          0             0    0    0   23,466,311                  23,466,311

COST OF GOODS SOLD                                                                           16,837,126                  16,837,126
                                            ---------------------------------------------------------------------------------------

GROSS MARGIN                                          0          0             0    0    0    6,629,185                   6,629,185
                                            ---------------------------------------------------------------------------------------



OPERATING EXPENSES:
      Research                                        0                                       1,289,833                   1,289,833
      Salaries                                  774,019                                                                     774,019
      Fringe Salary Cost                         37,511                                                                      37,511
      Travel Expense                            153,820                                                                     153,820
      Legal                                   1,899,754        249                                                        1,900,003
      Accounting                                149,321                                                                     149,321
      Employment Agency                          60,334                                                                      60,334
      Lease expense                                   0                                                                           0
      Rent and Utilities                         60,387                                                                      60,387
      Express Mail                                2,674                                                                       2,674
      Telephone                                  11,355                                                                      11,355
      Insurance                                  67,477                                                                      67,477
      Supplies                                    5,093                                                                       5,093
      Maintenance & Repairs                       1,300                                                                       1,300
      Dues and Subscriptions                        325                                                                         325
      Pacific Stock Transfer fees                   295                                                                         295
      Fees & License                             75,632                                                                      75,632
      Consulting                              6,818,602                                                                   6,818,602
      Investor Relations                        187,715                                                                     187,715
      Stock option expense                      759,762                                                                     759,762
      Misc Taxes                                  1,842                                                                       1,842
      Computer Expense                            2,316                                                                       2,316
      Bank Fees                                  14,178        250                                                           14,428
      Depreciation and Amortization              32,914      4,253                              336,570                     373,737
      Misc                                           31                                       4,145,843                   4,145,874
                                            ---------------------------------------------------------------------------------------

      Total                                  11,116,657      4,752             0    0    0    5,772,247     0     0      16,893,656
Net operating income(loss)                  (11,116,657)    (4,752)            0    0    0      856,938     0     0     (10,264,471)

    Other income and expenses
        Interest  on Trust account                8,092                                                                       8,092
        Other income                              3,144                                           1,267                       4,411
        Interest on Notes payable            (6,128,807)                                       (272,155)                 (6,400,962)
        Gain/Loss Litigation                 (4,006,386)                                                                 (4,006,386)
        Gain/Loss Slae of Asset                 (45,321)   (31,253)                            (121,993)                   (198,568)

                                            ---------------------------------------------------------------------------------------
        Total other income                  (10,169,279)   (31,253)            0    0    0     (392,881)    0     0     (10,593,413)
                                                                                                                                  0
Net Income (Loss)                           (21,285,936)   (36,006)            0    0    0      464,057     0     0     (20,857,884)



                                                                       Depreciation - COGS      151,748
                                                                       Depreciation - SGA        80,190
                                                                       Amortization             256,380

                                                                                                488,318




                            SYNOVICS PHARMACEUTICALS, INC
                                    BALANCE SHEET
                                  OCTOBER 31, 2007



                                         ------------------------------------------------------------------------------
                                             BIO            BHP           LIPO          NTC        Bio Intl      Incon
                                         ------------------------------------------------------------------------------
                                                                                             
 ASSETS
   Current Assets

    Cash                                       4,983          3,052            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------
      Total Cash                               4,983          3,052            --            --          --           --

    Investment in InCon Processing LLC            --             --            --            --          --           --
    Investment in BIO                             --                      120,289            --          --           --
    Investment in BHP                          5,000                           --            --          --           --
    Investment in NTC                      7,000,500                           --            --          --           --
    Investment in INCON                           --                           --     7,000,000          --           --
    Investment in Kirk                    12,551,983
    Investment in LIPO                     1,097,600                           --            --          --           --
    Investment in Bio Intl                     2,275             --            --            --          --           --
    Investment in INCON                     (184,800)
    Investment in BIO                                                                                            184,800
    Investment in NuRx                            --             --            --       403,739          --        3,739
                                         -----------     ----------    ----------    ----------    --------    ---------
      Total Securities                    20,472,558             --       120,289     7,403,739          --      188,539

    Trade Receivable                              --             --            --            --          --           --
    Note Receivable                          122,158
    Other Receivable                      (4,535,350)            --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------


      Total Accounts Receivable           (4,413,193)            --            --            --          --           --

    Inventory                                     --             --            --            --          --           --
    Work in Process-Batches                       --             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------
      Total Inventory                             --             --            --            --          --           --

    Intercompany BIO                              --     (8,702,354)   (1,560,568)   (9,890,994)    (66,907)   2,664,062
    Intercompany BHP                       8,702,354             --         7,743     1,657,361          --        7,868
    Intercompany NTC                       9,890,994     (1,657,361)      (14,895)           --          --      420,228
    Intercompany LIPO                      1,560,568         (7,743)           --        14,895          --       30,720
    Intercompany Bio Intl                     66,907             --            --            --          --      (66,382)
    Intercompany INCON                    (2,664,062)        (7,868)      (30,720)     (420,228)     66,382           --
    Intercompany Kirk
    Intercompany NuRx                             --             --            --            --          --     (407,477)
    Other Current  Assets                         --             --            --            --          --           --
    Prepaid Expenses                          90,680             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------
      Total Other Current Assets          17,647,441    (10,375,326)   (1,598,440)   (8,638,966)       (525)   2,649,019
                                         -----------     ----------    ----------    ----------    --------    ---------

      Total Current Assets                33,711,790    (10,372,274)   (1,478,151)   (1,235,227)       (525)   2,837,558

    Fixed Assets
    Machinery & Equipment                     10,617         18,589            --            --          --           --
    Capitalized Leases                        24,354             --            --            --          --           --
    Computers                                  7,949         22,409            --            --          --           --
    Leasehold Improvements                        --             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------
      PPE - Cost                              42,920         40,998            --            --          --           --
    Less accumulated depreciation            (42,920)       (40,998)           --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------
      PPE - Net                                    0             --            --            --          --           --

    Note Receivable                                              --            --            --          --           --
    Deferred Warrant Fees                  1,661,313
    Deferred Financing fees                1,237,983
    Goodwill                                      --
    Patents & Licensing Agreement            920,185         35,321        50,206            --          --           --
    Less accumulated amortization           (259,266)       (35,321)      (50,206)           --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------
     Net Intangibles                       3,560,214             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------

     Total Fixed & Intangibles Assets      3,560,214             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------

    Other Assets
    Deposit on Patent License                                    --            --            --          --           --

    Deposit on Kirk Bldg                      74,200

    Security deposit                          13,348             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------

     Total Other Assets                       87,548             --            --            --          --           --
                                         -----------     ----------    ----------    ----------    --------    ---------

       TOTAL ASSETS                       37,359,553    (10,372,274)   (1,478,151)   (1,235,227)       (525)   2,837,558
                                         ===========    ===========    ==========    ==========    ========    =========


                                         -------------------------------------------------------------------------------------
                                                                             Consolidating /     CONSOLIDATED
                                          NuRx         Kirk        Debit   Elimanting Entries    (Totals Only)    Agree to F/S
                                         -------------------------------------------------------------------------------------
                                                                                                     
 ASSETS                                                                      Debit (Credit)
   Current Assets

    Cash                                       1        (270,604)                          --     (262,568.140)
                                         -------   -------------           ------------------    -------------
      Total Cash                               1        (270,604)                                     (262,568)        Y


    Investment in InCon Processing LLC        --                                                            --
    Investment in BIO                         --                                     (120,289)              --
    Investment in BHP                         --                                       (5,000)              --
    Investment in NTC                         --                                   (7,000,500)              --
    Investment in INCON                       --                                   (7,000,000)              --
    Investment in Kirk                                                            (12,551,983)              --
    Investment in LIPO                        --                                   (1,097,600)              --
    Investment in Bio Intl                    --                                       (2,275)              --
    Investment in INCON                                                               184,800               --
    Investment in BIO                                                                (184,800)              --
    Investment in NuRx                        --              --                     (407,478)              --
                                         -------   -------------           ------------------    -------------
      Total Securities                        --              --      --          (28,185,125)              --

    Trade Receivable                          --       3,206,793                                     3,206,793         Y
    Note Receivable                                                                                    122,158         Y
    Other Receivable                          --       4,535,350                           --               --
                                         -------   -------------           ------------------    -------------
                                                                                                            --

      Total Accounts Receivable               --       7,742,143      --                   --        3,328,951

    Inventory                                 --       1,928,009                                     1,928,009
    Work in Process-Batches                   --              --                           --               --
                                         -------   -------------           ------------------    -------------
      Total Inventory                         --       1,928,009      --                   --        1,928,009         Y

    Intercompany BIO                          --                                                   (17,556,761)
    Intercompany BHP                          --                                                    10,375,326
    Intercompany NTC                          --                                                     8,638,966
    Intercompany LIPO                         --                                                     1,598,440
    Intercompany Bio Intl                     --                                                           525
    Intercompany INCON                   407,477                                                    (2,649,019)
    Intercompany Kirk                                                                                       --
    Intercompany NuRx                         --                                                      (407,477)
    Other Current  Assets                     --                                                            --
    Prepaid Expenses                          --         212,256                           --          302,937
                                         -------   -------------           ------------------    -------------
      Total Other Current Assets         407,477         212,256      --                   --          302,937         Y
                                         -------   -------------           ------------------    -------------

      Total Current Assets               407,478       9,611,804      --          (28,185,125)       5,297,328         Y

    Fixed Assets
    Machinery & Equipment                     --       2,431,260                                     2,460,466
    Capitalized Leases                        --                                                        24,354
    Computers                                 --                                                        30,358
    Leasehold Improvements                    --              --                           --               --
                                         -------   -------------           ------------------    -------------
      PPE - Cost                              --       2,431,260      --                   --        2,515,178
    Less accumulated depreciation             --        (406,853)                          --         (490,771)
                                         -------   -------------           ------------------    -------------
      PPE - Net                               --       2,024,407      --                   --        2,024,407         Y

    Note Receivable                           --                                                            --
    Deferred Warrant Fees                                                                            1,661,313         A
    Deferred Financing fees                                                                          1,237,983         A
    Goodwill                                          11,447,698                                    11,447,698         Y
    Patents & Licensing Agreement             --         921,619                                     1,927,330         B
    Less accumulated amortization             --        (267,486)                          --         (612,279)        B
                                         -------   -------------           ------------------    -------------
     Net Intangibles                          --      12,101,830      --                   --       15,662,045
                                         -------   -------------           ------------------    -------------

     Total Fixed & Intangibles Assets         --      14,126,237      --                   --       17,686,452
                                         -------   -------------           ------------------    -------------


    Other Assets
    Deposit on Patent License                 --
    Deposit on Kirk Bldg                                                                                74,200
    Security deposit                          --              --                           --           13,348
                                         -------   -------------           ------------------    -------------

     Total Other Assets                       --              --      --                   --           87,548         Y
                                         -------   -------------   -----   ------------------    -------------

       TOTAL ASSETS                      407,478   23,738,041.91      --          (28,185,125)      23,071,329
                                         =======   =============   =====   ==================    =============


                                        
 ASSETS
   Current Assets

    Cash

      Total Cash                            TRUE

    Investment in InCon Processing LLC
    Investment in BIO
    Investment in BHP
    Investment in NTC
    Investment in INCON
    Investment in Kirk
    Investment in LIPO
    Investment in Bio Intl
    Investment in INCON
    Investment in BIO
    Investment in NuRx

      Total Securities                      TRUE

    Trade Receivable
    Note Receivable
    Other Receivable



      Total Accounts Receivable             TRUE

    Inventory
    Work in Process-Batches

      Total Inventory                       TRUE

    Intercompany BIO
    Intercompany BHP
    Intercompany NTC
    Intercompany LIPO
    Intercompany Bio Intl
    Intercompany INCON
    Intercompany Kirk
    Intercompany NuRx
    Other Current  Assets
    Prepaid Expenses

      Total Other Current Assets            FALSE


      Total Current Assets                  TRUE

    Fixed Assets
    Machinery & Equipment
    Capitalized Leases
    Computers
    Leasehold Improvements

      PPE - Cost
    Less accumulated depreciation

      PPE - Net                             TRUE

    Note Receivable
    Deferred Warrant Fees
    Deferred Financing fees
    Goodwill
    Patents & Licensing Agreement
    Less accumulated amortization

      Net Intangibles                       TRUE


      Total Fixed & Intangibles Assets      TRUE



    Other Assets
    Deposit on Patent License


    Deposit on Kirk Bldg


    Security deposit


      Total Other Assets                    TRUE


        TOTAL ASSETS                        TRUE






                                           --------------------------------------------------------------------------------------
                                              BIO           BHP           LIPO        NTC       Bio Intl     Incon        NuRx
                                           --------------------------------------------------------------------------------------
                                                                                                    
LIABILITIES & STOCKHOLDERS EQUITY

  Current Liabilities

     Accounts Payable                      2,488,415           (800)          --            1         --           --         --
     Other current Liability                 900,471             --           --           --         --           --         --
     Accrued Interest                      4,529,342
     Accrued Current Liabilities                              1,326           --           --         --           --         --
     Notes Payable, Short term                80,000             --           --           --         --           --         --
     Current Portion, Bank Loan            1,750,000
     Current Portion, Seller Note          2,000,000
     Current Portion, Singh
     Current Portion of Other Notes        3,195,000             --           --           --         --           --         --
     Less Contra Valuation
     Current Portion Leases                       --             --           --           --         --           --         --
                                          ----------    -----------   ----------   ----------   --------   ----------   --------
        Total Current Liabilities         14,943,228            526           --            1         --           --         --

     Inter Company Synovics
     Deferred Revenue-Kirk
     Bridge Notes
     Contra Valuation                             --
     Bank of India Note                    5,450,000
     John S. Copanos Note                         --
     Leases                                       --             --           --           --         --           --         --
                                          ----------    -----------   ----------   ----------   --------   ----------   --------
        Total Long Liabilities             5,450,000             --           --           --         --           --         --
                                          ----------    -----------   ----------   ----------   --------   ----------   --------

        Total Liabilities                 20,393,228            526           --            1         --           --         --

  Equity
     Preferred Stock                         798,998             --           --           --         --           --         --
     Capital Stock                            30,079             --          211           10         --           --    407,478
     Stock Subscription Rec                 (150,000)
     Warrants                              4,892,997             --           --           --         --           --         --
     Paid in Capital                      72,249,977          5,000    1,097,389    7,000,490      2,275    7,000,000         --
     Retained Earnings                   (28,617,379)   (10,341,795)  (2,574,887)  (8,235,728)    (2,800)  (3,120,322)        --
     Net Income (Loss)                   (21,285,936)       (36,006)        (864)          --         --   (1,042,120)        --
     Common stock in Treasury            (10,952,410)            --           --           --         --           --         --
                                          ----------    -----------   ----------   ----------   --------   ----------   --------

        Total Equity                      16,966,325    (10,372,800)  (1,478,151)  (1,235,228)      (525)   2,837,558    407,478
                                          ----------    -----------   ----------   ----------   --------   ----------   --------

TOTAL LIABILITIES & STOCKHOLDERS EQUITY   37,359,553    (10,372,274)  (1,478,151)  (1,235,228)      (525)   2,837,558    407,478
                                          ==========    ===========   ==========   ==========   ========   ==========   ========
                                            TRUE           TRUE          TRUE         TRUE        TRUE        TRUE        TRUE


                                         ----------------------------------------------------------
                                                                   Consolidating /
                                                                 Elimanting Entries    CONSOLIDATED
                                              Kirk       Debit     (Debit) Credit     (Totals Only)
                                         ----------------------------------------------------------
                                                                                                          
LIABILITIES & STOCKHOLDERS EQUITY                                  (Debit) Credit

  Current Liabilities

     Accounts Payable                        1,966,520                                    4,454,136          Y
     Other current Liability                                                                900,471          C
     Accrued Interest                                                                     4,529,342          Y
     Accrued Current Liabilities             1,643,028                                    1,644,354          C
     Notes Payable, Short term                                                               80,000          Y
     Current Portion, Bank Loan                                                           1,750,000          Y
     Current Portion, Seller Note                                                         2,000,000          Y           shareholder
     Current Portion, Singh                  1,250,000                                    1,250,000          Y           shareholder
     Current Portion of Other Notes          4,900,000                                    8,095,000          D
     Less Contra Valuation                                                                       --          D
     Current Portion Leases                     52,297                           --          52,297          Y
                                         -------------           ------------------   -------------
        Total Current Liabilities            9,811,844      --                   --      24,755,599                         TRUE

     Inter Company Synovics                                                                      --
     Deferred Revenue-Kirk                     847,334                                      847,334          Y
     Bridge Notes                                                                                --
     Contra Valuation                                                                            --
     Bank of India Note                                                                   5,450,000          Y
     John S. Copanos Note                                                                        --          Y
     Leases                                    122,523                           --         122,523          Y
                                         -------------           ------------------   -------------
        Total Long Liabilities                 969,858      --                   --       6,419,858                         TRUE
                                         -------------           ------------------   -------------

        Total Liabilities                   10,781,702      --                   --      31,175,457          Y              TRUE

  Equity
     Preferred Stock                                                                        798,998          Y
     Capital Stock                                                         (407,940)         29,838          Y
     Stock Subscription Rec                                                                (150,000)         Y
     Warrants                                                                             4,892,997          Y
     Paid in Capital                        12,551,983                  (28,369,545)     71,537,568          Y
     Retained Earnings                         (59,698)                    (450,626)    (53,403,235)         Y
     Net Income (Loss)                         464,056                    1,042,986     (20,857,884)         Y
     Common stock in Treasury                       --                           --     (10,952,410)         Y
                                         -------------           ------------------   -------------

        Total Equity                        12,956,340      --          (28,185,125)  (8,104,128.33)                        FALSE
                                         -------------   -----   ------------------   -------------

          TOTAL LIABILITIES &
             STOCKHOLDERS EQUITY         23,738,041.91      --          (28,185,125)     23,071,329                         TRUE
                                         =============   =====   ==================   =============
                                             TRUE        TRUE           TRUE              TRUE




NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ORGANIZATION, AND NATURE OF
BUSINESS

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Synovics
Pharmaceuticals, Inc. and its wholly owned subsidiaries, (collectively the
"Company"). All significant inter-company accounts and transactions have been
eliminated in consolidation.

ORGANIZATION AND NATURE OF BUSINESS

Synovics Pharmaceuticals, Inc. is a specialty pharmaceutical company engaged in
the development, manufacturing and commercialization of generic over the counter
pharmaceutical products and generic prescription drug products. Synovics
Pharmaceuticals, Inc. previously called Bionutrics, Inc. was incorporated in
Nevada in 1990. The Company has two primary subsidiaries, Kirk Pharmaceuticals,
Inc. ("Kirk"), and Andapharm, Inc. ("Andapharm"). Kirk, Inc. manufactures and
distributes OTC products developed by or licensed to the company. Andapharm
serves as the product research and RX manufacturing arm of the Company with a
focus on the development of active compounds for drugs.

CASH AND CASH EQUIVALENTS
The Company considers all liquid investments with an original maturity of three
months or less to be cash equivalents. At October 31, 2007, and 2006 cash
consisted of cash on deposit with banks and the Company had no cash equivalents.

INVENTORY

The Company's inventory is stated at the lower of cost or market. Cost is
determined using the first in first out method.

PROPERTY AND DEPRECIATION

Property and equipment are stated at cost. Major renewals and improvements are
capitalized and replacements, maintenance and repairs, which do not improve or
extend the lives of the respective assets, are charged to expense when incurred.
When items of property and equipment are retired or otherwise disposed of, the
original cost and related accumulated depreciation to date are removed from the
accounts and any gain or losses upon retirement or sale is recognized in income.
The Company's property consists of, manufacturing equipment, computer equipment
leasehold improvements, and furniture and fixtures which are depreciated for
financial reporting purposes using the straight-line method over the estimated
useful life of the assets.

PATENTS

Costs incurred for the application of patents are capitalized and amortized on
the straight-line method for 17 years, which is their estimated useful life.
These costs are charged to expense if the patent is unsuccessful. The Company
continually reviews patents for impairment. If conditions indicate that the
carrying value is not recoverable an impairment charge is recognized to reduce
the carrying amount to the estimated fair value of the asset. Patents currently
capitalized relate to both the processes and products associated with the
Company's business.



IMPAIRMENT OF LONG-LIVED ASSETS

The Company continually evaluates the fair value of long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. No material impairments were
determined to have occurred during the years ended October 31, 2007, and 2006.

REVENUE RECOGNITION

The Company generally recognizes product revenue at the time of shipment to the
customer. Revenues from services are recorded at the time the service is
rendered and/or reimbursable expenses are incurred.

Revenues for the years ended October 31, 2007 and 2006 were derived primarily
from services and product sales, the latter of which were from the sales at Kirk
and Andapharm from May 22, 2006, the date of acquisition.

RESEARCH AND DEVELOPMENT

The cost of research and development is charged to expense as incurred.

LOAN CLOSING COSTS

In the year ended October 31, 2006, the Company incurred various expenses in
connection with obtaining a line of credit bank facility to finance the Kirk and
Andapharm acquisitions. These costs are being amortized over 36 months.
Amortization expense charged to operations for the years ended October 31, 2007
and October 31, 2006, were $1,049,953 and $885,016, respectively.

INTANGIBLE ASSETS

Goodwill and intangible assets with indefinite lives are reviewed at least
annually for impairment. Management performed its review of the carrying value
of the Company's goodwill and other intangible assets and determined that there
was no impairment as of October 31, 2007, 2006 and 2005. Accordingly, the
carrying value of the Company's goodwill and other intangible assets represents
goodwill and licensed technology.

STOCK-BASED COMPENSATION

Beginning with stock options and warrants granted in 2003, the Company has
accounted for stock-based compensation in accordance with the provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation," which provided guidance for
the recognition of compensation expense as it related to the issuance of stock
options and warrants. In addition, the Company adopted the provisions of SFAS
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure -
an amendment of SFAS No. 123." SFAS No. 148 amended SFAS No. 123 to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation provided by SFAS No.
123. As permitted by SFAS No. 148, the Company has adopted the fair value method
recommended by SFAS No. 123 to effect a change in accounting for stock-based
employee compensation. In addition, the Company adopted the provisions of SFAS
No. 123R, "Share-Based Payment," which revised SFAS No. 123 to require all
share-based payments to employees, including grants of employee stock options,
to be recognized based on their fair values.



INCOME TAXES

The Company accounts for income taxes using the liability method. The liability
method measures deferred income taxes by applying enacted statutory rates in
effect at the balance sheet date to the differences between the tax bases of
assets and liabilities and their reported amounts in the financial statements.
Any resulting deferred tax assets or liabilities are adjusted to reflect changes
in tax laws as they occur.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates include the allowance for doubtful
accounts.

REGISTRATION RIGHTS AGREEMENT

The Company entered into a registration rights agreement in connection with the
sale of the 2005 convertible bridge notes. The agreement provided that the
Company file a Registration Statement with the SEC that covers the resale of
125% of the Registerable Securities, as defined, (the shares issuable upon
conversion at the initial current conversion price and upon exercise of related
warrants at the initial exercise price) (the "MANDATORY REGISTRATION
STATEMENT").

If the Mandatory Registration Statement was not declared or ordered effective
within one hundred twenty (120) days after the Closing, the Company was to pay
each investor a fee equal to 1% of the purchase price paid by such Investor for
the Securities plus the aggregate exercise price of the Warrants and the
Placement Agent Warrants for the first two thirty (30) day periods aftersuch
failure and 2.5% of such amount for each subsequent thirty 30 day period (pro
rata, in each case, for partial months). Any such payments were to be made at
the end of each calendar month until the date that the Mandatory Registration
Statement was declared effective. Those payments may be made, at the election of
the Company, in cash or in additional shares of Series A Preferred Stock valued
at the Original Purchase Price. There is no cap on the maximum amount of the
penalties that could be payable under the agreement. The Company recognized the
penalties, if any, incurred under the registration rights agreement as interest
expense in the period in which they are incurred. The Company has failed to have
an effective registration statement as defined under the agreement and
recognized $2,195,064 and $914,549 of penalties during the year ended October
31, 2007 and October 31, 2006 respectively, which are reflected as interest
expense.

CONCENTRATIONS AND CREDIT RISK

CASH

The Company maintains cash balances in banks, which, at times, may exceed the
limits of amounts insured by the Federal Deposit Insurance Corporation (FDIC);
however, because deposits are maintained at high quality financial institutions,



management does not believe that there is a significant risk of loss of
uninsured amounts.

The Company has customers that accounted for over 10 percent of revenues in the
years ended October 31, 2007, and 2006. The percentages by customer are as
follows:

                                               2007               2006
                                               ----               ----
                        Customer A             21.9%              33.4%
                        Customer B             21.3%              27.5%
                        Customer C             11.0%               6.8%
                                               -----              -----
                                               54.2%              67.7%
The concentration of accounts receivables with customer owing more than 10% is:

                                                2007              2006
                                                ----              ----
                        Customer A              24.1%             30.8%
                        Customer B              21.0%             26.2%
                        Customer C              10.4%              0.0%
                                                -----             -----
                                                55.5%             57.0%


NEW ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE


In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," an
interpretation of FASB Statement No. 109 ("FIN 48"), which provides criteria for
the recognition, measurement, presentation and disclosure of uncertain tax
positions. A tax benefit from an uncertain position may be recognized only if it
is "more likely than not" that the position is sustainable on its technical
merits. The provisions of FIN 48 are effective for fiscal years beginning after
December 15, 2006. The Company does not expect FIN 48 will have a material
effect on its consolidated financial condition, results of perations or cash
flows.

In September 2006, the FASB issued FASB Statement No. 157 "Fair Value
Measurements" ("FASB No. 157") which relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. The provisions of FASB No. 157 are effective for financial
statements issued for fiscal years beginning after November 15, 2007. The
Company does not expect this statement to have a material effect on its
consolidated financial condition, results of operations or cash flows upon
adoption.

In September 2006, the SEC issued Staff Accounting Bulletin 108, "Considering
The Effects Of Prior Year Misstatements When Quantifying Misstatements In
Current Year Financial Statements", which provides guidance regarding the
process of quantifying financial statements misstatements for the purpose of
materiality assessment. The provisions are effective for fiscal years ending on
or after November 15, 2006. This bulletin did not have a material effect on its
consolidated financial condition, results of operations or cash flows upon
adoption.

In February 2007, the FASB issued FASB Statement No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities, including an amendment of FASB
Statement No. 115," ("FASB No.159") which permits entities to choose to



measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. FASB No. 159 is expected to expand the use of fair value
measurement, which is consistent with the Board's long-term measurement
objectives for accounting for financial instruments. FASB No. 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. FASB No. 159 does not affect any
existing accounting literature that requires certain assets and liabilities to
be carried at fair value. FASB No. 159 does not establish requirements for
recognizing and measuring dividend income, interest income, or interest expense.
FASB No. 159 does not eliminate disclosure requirements included in other
accounting standards, including requirements for disclosures about fair value
measurements, included in FASB Statements No. 157, "Fair Value Measurements, and
No. 107, Disclosures about Fair Value of Financial Instruments." FASB No. 159 is
effective as of the beginning of an entity's first fiscal year that begins after
November 15, 2007. The Company has not yet completed its assessment of the
impact upon adoption of FASB No. 159 on its consolidated financial condition,
results of operations or cash flows.

RECLASSIFICATIONS

Certain accounts and amounts in the 2005 and 2006 financial statements have been
reclassified in order to conform with the 2007 presentation. These
reclassifications have no effect on net income.

NOTE 2 - BASIS OF PRESENTATION

GOING CONCERN AND OPERATING PLANS

The accompanying consolidated financial statements have been prepared assuming
the Company will continue to operate as a going concern. Under that assumption,
it is expected that assets will be realized and liabilities will be satisfied in
the normal course of business. However, the Company has experienced significant
operating losses and negative cash flows from operations in each of the last two
years ended October 31, 2007, and 2006. The Company has sustained cumulative
losses of approximately $74 million through October 31, 2007 and has a working
capital deficit of approximately $18.9 million at that date. Management has
adopted a plan of action that it believes will address its current financial
requirements and enable it to achieve a more sound financial condition. The
accompanying consolidated financial statements do not include any adjustments
relating to the recoverability and classification of assets and liabilities as
might be necessary if the Company be unable to continue as a going concern.

Substantial doubts have been raised about the Company's ability to continue as a
going concern. As shown in the accompanying financial statements, the Company
has recurring losses and negative cash flows from operations. Management is
currently attempting to secure additional financing through private placements
and negotiate long-term contracts. The Company's continuation as a going concern
is dependent upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis, to maintain adequate financing, and ultimately to
attain successful operations.



NOTE 3 - ACQUISITION

In July 2005, the Company entered into a Purchase Agreement (the "Kirk Purchase
Agreement") to acquire Kirk Pharmaceuticals, LLC, and its affiliate, ANDAPharm,
LLC (collectively, "Kirk") for $12,000,000. Kirk is a Florida based
pharmaceutical company that manufactures over-the-counter ("OTC") and generic
prescription drugs in its FDA and DEA approved facility.

On May 22, 2006, the Company consummated the acquisition of Kirk, and is
currently working with Kirk's existing management to integrate the two
companies. The Company anticipates that Kirk will provide potential cash flow
from its operations to fund some of the Company's planned clinical trials and
will be the designated manufacturing facility for the Company.

The Company has accounted for this acquisition using the purchase method. The
purchase price of the acquisition is set forth below:

               Cash on closing                                   $   9,000,000
               Note payable to sellers                               3,000,000
               Estimated transaction costs incurred                    552,000
                                                                 -------------
               Total purchase price                              $  12,552,000
                                                                 =============


Assets Acquired:
   Current assets                                                $   5,437,675
   Non-current assets                                                1,378,655
Liabilities assumed                                                 (5,712,028)
                                                                 -------------
Net assets acquired                                              $   1,104,302
                                                                 -------------

Cost in excess of net assets acquired (recorded goodwill)           11,447,698
                                                                 -------------
Total estimated fair value of net assets acquired and
recorded goodwill                                                $ 12,552,000
                                                                 =============

Note 4-   PLACEMENT AGENCY AGREEMENT 2005

On September 27, 2005, the Company entered into a Placement Agency Agreement
with Indigo Securities LLC, ("Indigo") whereby, Indigo agreed to act as the
Company's agent in connection with sales by the Company of: (i) from $5,000,000
to $10,000,000, face amount of the Company's 10% Senior Notes, to be offered
together with warrants, (ii) Financing by the Company of up to $2,500,000, face
amount of the Company's 9% Convertible Bridge Notes (the "Bridge Notes"), to be
offered together with warrants (the "Bridge Warrants", the "Bridge Financing")
and (iii) up to $5 million of Series A Convertible Preferred Stock ("Series A
Preferred Stock") together with warrants, all of which offered on terms and
conditions agreed upon by the parties. As of the date hereof, the Company issued
$4,845,000 under the 9% Convertible Bridge Notes as part of the Bridge
Financing. No Series A Convertible Preferred Stock has been issued.

On May 23, 2006, the Company provided written notice that it was terminating its
Placement Agency Agreement. All fees paid thereto by the Company under the



Placement Agency Agreement in connection with the Bridge Note Placement were
retained by the Placement Agent.

Note 5- SALES AGREEMENT OF INCON PROCESSING, LLC

On April 2006, the Company together with Asia Pacific Investment Holdings
Limited ("Asia Pacific") completed the sale of their respective interests in
InCon Processing, LLC ("InCon"), to John Palmer and N.P. Shaikh. The InCon
operation was deemed by the Company to no longer be an important element in its
current business strategy. The sale provides for the distribution to the sellers
of future Earnings Before Interest, Depreciation and Amortization (EBITDA) in
the total amount of $600,000, the assignment of certain tocotrienol processing
technology and the conveyance of the respective interest of Messrs. Palmer and
Shaikh in Bali Holding, LLC, a holding company that has Synovics restricted
common stock, of which 118,000 shares would accrue to the sellers. The sale
proceeds noted above would be split between Synovics and Asia Pacific when
distribution was made. The sale proceeds were shared by the Company.

NOTE 6 - INVENTORY

As of October 31, 2007, and 2006 inventory consists of:

- ------------------------------------------------------------------
                                        2007              2006
                                        ----              ----
- ------------------------------------------------------------------
Finished goods                       $  203,409        $  445,377
- ------------------------------------------------------------------
Work in Process                         515,120           101,127
- ------------------------------------------------------------------
                                      1,209,480         1,829,976
Raw materials                        ----------        ----------
- ------------------------------------------------------------------
                                     $1,928,009        $2,376,480
                                     ==========        ==========
- ------------------------------------------------------------------

NOTE 7 - INTANGIBLE ASSETS

Intangible Assets consists of long term rights to profits on revenues from sales
of one of the company's products. These rights were purchased in May, 2006 from
a company that was in partnership for the specific product. This asset is being
amortized over the estimated life of the product (five years). As of October 31,
2007 the unamortized balance is $654,132.

In addition, the Company has patents in the amount of $1,005,712. These patents
are being amortized over their useful life.

NOTE 8 - PROPERTY AND EQUIPMENT

Property and equipment at October 31, 2007 and 2006 consists of the following:

                                               2007              2006
                                           -----------        -----------
Leasehold Improvements                     $  415,443         $  260,419
Machinery & Equipment                       1,879,699          1,406,170
Computers and Software                        220,036            138,996
                                           -----------        -----------
                                           $2,515,178         $1,805,585
Less Accumulated Depreciation                (490,771)          (163,303)
                                           -----------        -----------
                                           $2,024,407         $1,642,282

Depreciation expense was $327,468, $92,614 and $14,138 for the years ended
October 31, 2007, 2006 and 2005, respectively.

NOTE 9 - NOTE PAYABLE - BANK

In May 2006, the Company entered into a bank financing as senior secured debt in
the principal amount $10,500,000. Of the principal, $5,250,000 could only be
utilized for working capital purposes, the amount borrowed to equal 70% of the
value of fully paid inventory and the accounts receivable and 100% of the cash
in the accounts maintained by the borrower at the bank. The interest rate is 1%
above the bank's prime rate (9.25% at October 31, 2007). Interest is payable
monthly. In September, 2007 the amount of the loan was reduced by the amount
held back for working capital purposes.

Future maturities of notes payable - bank are as follows:

                            2008                  $1,750,000
                            2009                   2,750,000
                            2010                   2,700,000
                                                  ----------
                                                  $7,200,000
                                                  ==========

Interest expense under the note payable was $931,829, $143,347 and 0, for the
years ended October 31, 2007, 2006 and 2005, respectively.

NOTE 7 - NOTES PAYABLE - SHAREHOLDERS AND OTHER RELATED PARTIES.

The Company entered into a promissory note in the principal amount of $3,000,000
with the seller as partial consideration for the acquisition of Kirk and
AndaPharm. During the year ended October 31, 2007, $1,000,000 was repaid to the
seller. The note was subsequently amended in 2007. The remaining $2,000,000 of
the note is due on January 15, 2008 ($1,500,000) and August 15, 2008 ($500,000).
The payment due on January 15, 2008 was not made and is overdue. The current
interest rate on the unpaid principal is 12% per annum As of October 31, 2007
there was unpaid interest of $300,840 which has been included in these financial
statements. Interest expense under the note payable was $201,042, $99,798 and $0
for the years ended October 31, 2007, 2006 and 2005, respectively.

On April 20, 2007, the Company entered into a Consulting Agreement with
Harcharan Singh and Kirk issued a promissory note to an affiliate of Mr. Singh,
in the principal amount of $1,250,000 in exchange for cash equal to such
principal amount. The Note was due on September 12, 2007 and is currently
outstanding. The note accrues interest at the rate of 15% per annum. As of
October 31, 2007, there was unpaid interest of $95,833 included in these
financial statements.

The Note is exchangeable for 1,250,000 units of the registrant's 2007 Bridge
Financing, or two million shares of common stock at the holder's option.
Interest expense under the note payable was $201,042, $99,798 and 0, for the
years ended October 31, 2007, 2006 and 2005, respectively.



NOTE 8 - OTHER NOTES PAYABLE

Other notes payable consists of the following:

                                                 2007               2006
                                              ----------         ----------
2005 Convertible Bridge Notes                 $2,945,000         $4,545,000
2007 Bridge Notes                             $3,450,000         $        0
2007 Customer Note                            $1,500,000         $        0
Other                                         $  280,000         $        0
                                              ----------         ----------
Total                                         $8,175,000         $4,545,000
                                              ==========         ==========

2005 CONVERTIBLE BRIDGE NOTES

In October 2005, the Company began issuing convertible bridge notes ("2005
Notes") of which $ 4,545,000 had been issued through October 31, 2006. In 2007,
$1,600,000 was repaid. The 2005 Notes bear interest at 9% per annum and are
convertible at $3.00 per share at the option of the holder. The Bridge Notes
matured 18 months from the date of issuance. In the event the Company
consummates a "Qualified Equity Financing" prior to the eighteen (18) month
anniversary of the Issuance Date,the Maturity Date of the Note shall be extended
to the third anniversary of the Issuance Date. The Company has not timely met
its obligations for the payment of principal and interest under such notes.
Further, the Company has not timely complied with its registration requirement
relating to shares of common stock issuable in connection with the offering of
the notes and the related warrants. The Company is currently in discussions with
a number of holders of such notes with respect to the resolution of these
issues.

In connection with the issuance of the Bridge Notes, the Company also issued
detachable stock purchase warrants to purchase 807,493 shares of common stock
at$4.00 per share. The warrants expire three years from the date of issuance.
Based on the relative fair values, the Company has attributed $ $ 1,429,540 of
the total proceeds to the warrants and has recorded the warrants as additional
paid-in capital and discount to the Bridge Notes. The resulting discount on the
Bridge Notes is being amortized over the term of the Bridge Notes as interest
expense.

The Company did not pay the accrued interest due to the holders of the Bridge
Notes on September 1, 2006. The default on the interest resulted in an increase
of the interest rate to increase to per annum retroactive to the date of the
convertible note on the unpaid principal outstanding.

In November 2005, the Company issued $450,000 of 9% convertible bridge notes
along with detachable warrants to certain investors under the Indigo Placement
Agency Agreement. The convertible notes are convertible into common stock at a
price per share which was below the estimated fair value of the Company's common
stock at the date of issuance of the notes. Accordingly, the Company recorded a
"non-cash beneficial conversion charge" of $57,351 as additional interest
expense, to be amortized over the term of the notes.

In December 2005, the Company issued $200,000 of 9% convertible bridge notes
along with detachable warrants to certain investors under the Indigo Placement
Agency Agreement. The notes are convertible into common stock at $2 per share
which was below the estimated fair value of the Company's common stock at the
date of issuance of the notes. Accordingly, the Company recorded a "non-cash
beneficial conversion charge" of $78,852 as additional interest expense, to be



amortized over the term of the notes.

In January 2006, the Company issued $100,000 of 9% convertible bridge notes
along with detachable warrants to certain investors under the Indigo Placement
Agency Agreement. The notes are convertible into common stock at $3 per share
which was below the estimated fair value of the Company's common stock at the
date of issuance of the notes. Accordingly, the Company recorded a "non-cash
beneficial conversion charge" of $16,898 as additional interest expense, to be
amortized over the term of the notes.

CUSTOMER NOTE

On August 31, 2007, Kirk Pharmaceuticals a wholly-owned subsidiary of the
Company, issued an unsecured Promissory Note in favor of CB Distributors, Inc.
in the amount of $1,500,000 together with interest per annum rate equal to 8%.
With extensions, this note is due January, 31, 2008. This note is still
outstanding. The Company is in discussion with the holder as to settlement of
the note.

2007 BRIDGE NOTES

Beginning on July 5, 2007, the Company and Kirk Pharmaceuticals, LLC ("KIRK")
debt financing, whereby Kirk issued convertible bridge notes in the principal
amount of $3,450,000 to accredited investors as defined by Rule 501 under the
Securities Act of 1933, as amended.

The bridge notes bear interest at 6% per annum increasing to 18% in thecase of
an event of default and have a maturity date of six months from the issuance
date, unless earlier converted. Upon the closing of a qualified equity
financing, the bridge notes automatically convert into the Company's future
Series C Preferred Stock to be issued in a qualified equity financing at a
premium of 110% of the unpaid principal and interest of the bridge notes. In
addition, upon closing of the qualified equity financing, holders of the bridge
notes are entitled to receive common stock purchase warrants of the Company at
an exercise price and other terms identical to the warrants to be issued in the
qualified equity financing. The amount of common stock into which the common
stock purchase warrants are exercisable ranges from 40% to 50% of the number of
shares of common stock issuable to bridge note holders upon conversion of the
Series C Preferred Stock receivable upon conversion of the bridge notes, with
the range depending on the timing of the initial closing of the qualified equity
financing.

The bridge notes have been secured by a pledge by Ronald H. Lane, the Company's
Chief Executive Officer and Chairman of the Board, of 2,000,000 shares of common
stock of the Company owned by Mr. Lane. In addition, the Company agreed to issue
1,000,000 shares of its future Series B Convertible Preferred Stock to be held
by Axiom Capital Management, Inc. as nominee of the bridge note holders. The
Series B Convertible Preferred Stock will be convertible into the Company's
common stock on a 1:15 basis in the event of default under the bridge notes,
will have full ratchet anti-dilution protection, will be surrendered upon the
completion of the qualified equity financing, will have voting rights on an as
converted basis and will be non-transferable other than in an event of default
under the bridge notes. The interest on the late registration of the S-3 for the
periods was $2,195,064, in the year ended October 31, 2007. The interest expense
for the deferred fees associated with the convertible notes



for the periods ended October 31 2007 and 2006 were $1,049,953 and $885,016,
respectively.

NOTE 8 - 2007 PRIVATE PLACEMENT

During January and February 2007, the Company completed closings of a private
placement ("2007 Private Placement"), whereby the Company sold an aggregate of
1,575,000 units ("Units") to accredited investors. Of the 1,575,000 Units sold,
450,000 Units were exchanged in lieu of repayment of notes issued in the 2006
Bridge Note Financing in the principal amount of $450,000.

The price per Unit was $1.00 and each Unit consisted of (i) one share of common
stock of the Company, par value $0.001 per share (the "Common Stock"); and (ii)
a warrant to purchase, at any time prior to the third anniversary following the
final closing of the Private Placement, one share of Common Stock at an exercise
price of $3.00 per share, subject to adjustment in certain instances; except
that with respect to 75,000 Units, the warrant is exercisable for half a share
of Common Stock at an exercise price of $1.50. The warrants are also redeemable
by the Company where the exercise price exceeds a certain amount.

The per share weighted value of the warrants to purchase 1,575,000 shares of
common stock at $3.00 per share was between $0.98 and $1.32. The warrants were
valued using the Black-Scholes option pricing model with the following weighted
average assumptions: no dividend yield; expected volatility between 153% and
155%; risk free interest rate of between 4.63% and 4.9%; and expected life of
three years.

The subscription agreement requires the Company to file a registration
statement, covering the securities sold in the 2007 Private Placement within 30
days of final closing of the 2007 Private Placement and use its best efforts to
cause the registration statement to become effective within 90 days of final
closing. If the registration statement has not been declared effective within
150 days following final closing, the Company has agreed to pay to the investors
liquidated damages, payable in cash or common stock, of 1.5% of the purchase
price paid by the investor in the 2007 Private Placement and 1% of the purchase
price paid by the investor in the 2007 Private Placement for each subsequent 30
day period, with the total of the foregoing capped at 9%. These penalties are
currently accruing.

NOTE 9 - CONSULTING AND STRATEGIC ALLIANCE AGREEMENTS

On February 1, 2007, the Company entered into consulting agreements with each of
Saggi Capital Corp. and Bridge Ventures, Inc. (each, a "Consultant") for the
provision of consulting services (including investor relations and strategic
consulting) by the Consultants. Under the consulting agreements, each Consultant
is entitled to receive $5,000 per month during the term of the agreement and
five-year warrants to acquire 200,000 shares of the Company's common stock, par
value $0.001 per share, at an exercise price of $2.00 per share, subject to
adjustment in certain circumstances, or on a cashless or net issuance basis. The
per share weighted value of the warrants to purchase 400,000 shares of common
stock at $2.00 per share is $1.37. The warrants were valued using the
Black-Scholes option pricing model with the following weighted average
assumptions: no dividend yield; expected volatility of 153%; risk free interest
rate of 4.84%; and expected life of five years. The Company recorded a charge of
$273,212 for each consultant, to recognize the agreement.



On February 1, 2007, the Company entered into a consulting agreement (the "VCG
Agreement") with VCG & A, Inc. ("VCG") for the provision of consulting services
by VCG that include assisting the Company in its capital raising efforts, the
development of an overall business strategy and the purchase of an over the
counter generic version of Omeprazole (the "Target Product") as well as to
assist the Company in ongoing management, sales and marketing support. Under the
VCG Agreement, the Company agreed to pay VCG cash fees and royalties based upon
the net sales of the Target Product. In addition, VCG is entitled to receive
stock options to purchase 300,000 shares of the Company's common stock, par
value $0.001 per share, at an exercise price of $1.40. The stock options vested
immediately upon execution of the VCG Agreement. The per share weighted value of
the options to purchase 300,000 shares of common stock at $1.40 per share is
$1.39. The options were valued using the Black-Scholes option pricing model with
the following weighted average assumptions: no dividend yield; expected
volatility of 153%; risk free interest rate of 4.84%; and expected life of five
years. The Company recorded a charge of $416,475 to recognize the agreement. On
May 1, 2007, the Company issued 1,300,000 share options exercisable for Five (5)
years at a price equal to the closing share price as at the day prior to the
execution of a licensing agreement by the Company to acquire the rights to an
Omeprazole type product with the assistance of VCG. These share options shall
survive termination or non-renewal of this agreement. The stock options vested
immediately upon execution of the VCG Agreement. The per share weighted value of
the options to purchase 1,300,000 shares of common stock at per share is $1.17.
The options were valued using the Black-Scholes option pricing model with the
following weighted average assumptions: no dividend yield; expected volatility
of 130%; risk free interest rate of 4.67%; and expected life of five years. The
Company recorded a charge of $1,527,000 to recognize the agreement.

On April 20, 2007, the Company entered into a strategic alliance with Harcharan
Singh ("Singh"). In connection with this strategic alliance, the Company and its
subsidiary, Kirk, entered into a Consulting Agreement with Singh (the
"Consulting Agreement") and Kirk issued to 2133820 Ontario, Inc., an affiliate
of Singh, a note in the principal amount of $1,250,000 (the "Singh Note").
During the term of the Consulting Agreement, Singh is being retained to provide
strategic consulting services to the Company and will participate as an observer
of the Company's board meetings. In consideration for these services, Singh is
to receive a $10,000 monthly retainer commencing May 31, 2007, was issued
2,000,000 shares of the Company's common stock and warrants to purchase a
further 1,000,000 shares of the Company's common stock. In addition, if the
Company achieves annual earnings before interest, taxes, depreciation and
amortization (EBITA) of at least $20,000,000, then Singh will be entitled to a
further grant of 1,000,000 shares of Company's common stock and warrants to
purchase 500,000 shares of the Company's common stock. The warrants are
exercisable for a period of seven years from the date of grant at an initial
exercise price of $2.00, subject to adjustment in certain circumstances, and
contain a cashless or net issuance component. The per share weighted value of
the warrants to purchase 1,000,000 shares of common stock at $2.00 is $1.19 The
warrants were valued using the Black-Scholes option pricing model with the
following weighted average assumptions: no dividend yield; expected volatility
of 133%; risk free interest rate of 4.62% and expected life of seven years. The
Company recorded a charge of $1,192,153 to recognize the agreement.

In addition, the Company issued a note to Singh note (the "Singh Note") in
conjunction with the Consulting Agreement, which bears interest of 15% per annum
with interest payments payable monthly commencing May 1, 2007 and matures on



September 12, 2007. The Singh Note is exchangeable into equity of the Company
under certain circumstances.

NOTE 10 - EMPLOYMENT AGREEMENTS

On April 18, 2007, the Company entered into an employment agreement with David
Coffin-Beach, Ph.D. as the Company's President and Chief Operating Officer.
According to Coffin-Beach's employment agreement, Mr. Coffin-Beach's employment
with the Company is for a three year term ending April 18, 2010 and may be
automatically renewed for additional one year periods. Mr. Coffin-Beach is
entitled to a base salary of $300,000 per annum and a discretionary year end
bonus payable in cash and/or shares of the Company's common stock. In addition,
Mr. Coffin-Beach was granted options to acquire an aggregate of 1,500,000 shares
of the Company's common stock exercisable for seven years at an initial exercise
price of $2.00 per share and vesting annually in three equal installments, with
the first installment vesting on April 18, 2008. The per share weighted value of
the options to purchase 1,500,000 shares of common stock at $2.00 is $1.19 The
options were valued using the Black-Scholes option pricing model with the
following weighted average assumptions: no dividend yield; expected volatility
of 133%; risk free interest rate of 4.62%; and expected life of seven years. The
Company may also in its discretion grant Mr. Coffin-Beach options pursuant to
any eligible equity compensation plan.

On May 17, 2007, the Company executed an Employment Agreement dated as of
January 30, 2007 with Ronald H. Lane ("Lane"), its Chief Executive Officer,
providing for Lane to serve as the Company's Chief Executive Officer through
January 30, 2010, renewable for an additional one year unless either the Company
or Lane provides written notice of termination at least 60 days prior to the end
of the term. According to the Lane Employment Agreement, Lane is to receive an
annual base salary of $400,000 and, solely at the discretion of the Board, based
on his performance and the Company's financial condition and operating results,
a bonus payable in cash or shares of the Company's common stock. The Lane
Employment Agreement further provides that the Board may grant him options under
any equity compensation plan in which he is eligible to participate. The Lane
Employment Agreement provides that the Company owes Lane an amount to be
mutually agreed by them (, representing, among other things, accrued, but unpaid
salary.

On July 9, the Company entered into an employment agreement with Steven Getraer
as the Company's Executive Vice President and Chief Financial Officer. Mr.
Getraer agreed to employment with the Company is for a three year term ending
July 9, 2010, renewable for subsequent terms unless earlier terminated by either
party. Mr. Getraer is entitled to a base salary of $265,000 per annum,
increasing to $280,000 per annum commencing on July 10, 2008 and to $295,000
commencing on July 10, 2009. In addition, Mr. Getraer is entitled to a
discretionary fiscal year-end bonus payable in cash and/or shares of the
Company's common stock and was granted options to acquire an aggregate of
600,000 shares of the Company's common stock exercisable for seven years at an
initial exercise price of $2.00 per share and vesting annually in three equal
installments, with the first installment vesting on July 10, 2008. The per share
weighted value of the options to purchase 600,000 shares of common stock at
$2.00 is $0.92. The options were valued using the Black-Scholes option pricing
model with the following weighted average assumptions: no dividend yield;
expected volatility of 122%; risk free interest rate of 4.97%; and expected life
of seven years. The Company may also in its discretion grant Mr. Getraer options
pursuant to any eligible equity compensation plan.



NOTE 11 - STOCKHOLDERS' DEFICIT

COMMON STOCK

The Company has authorized 45,000,000 shares of common stock, with a par value
of $0.001 per share. During the year ending October 31, 2007, the Company issued
3,793,556 shares as follows:

     SHARES ISSUED             CONSIDERATION
     -------------             -------------
      2,000,000        Consulting arrangement with Harcharan Singh.
      1,793,556        Settlement of interest, debt and other considerations.

PREFERRED STOCK

The Company has authorized 5,000,000 shares of Series A Convertible Preferred
Stock, with a par value of $0.001 per share. The 591,850 outstanding shares were
issued prior to November 1, 2001 as consideration for the cancellation of
$798,998 of debt and accrued interest thereon that was owed to a director. The
shares have a cumulative annual dividend of $0.108 per share and a liquidation
value of $6.75 per share, and each share is convertible into one-fifth of a
share of common stock. The preferred shares have a dividend and a liquidation
preference over common shares. No dividend on the preferred shares outstanding
has ever been declared or paid and dividends in arrears amounted to $451,992 at
October 31, 2007.

STOCK-BASED COMPENSATION

As of October 31, 2007, the Company had authorized 570,000 common shares for
issuance under (the "1996 Plan"), pursuant to options granted or which may be
granted to key personnel, consultants, and independent contractors. Under the
1996 Plan, incentive stock options may be granted to purchase its Nonqualified
1996 Stock Option Plan common stock at 100% (110% for an optionee who is a 10%
stockholder) of the fair market value of the stock on the date of grant. Stock
options are exercisable for a period of up to ten years from the date of grant
(five years for an option granted to a 10% stockholder). All participants are
eligible to receive stock awards and stock appreciation rights, as to be
determined by the Company's Board of Directors. No stock awards or stock
appreciation rights have been granted under the Plan.

A summary of transactions for non-employee stock options and warrants for the
years ended October 31, 2007, 2006 and 2005 is as follows:





- --------------------------------------------------------------------------------------------------------------------------------
                                                                                            WEIGHTED           AVERAGE
- --------------------------------------------------------------------------------------------------------------------------------
                                     NUMBER OF SHARES            OPTION PRICE RANGE         REMAINING LIFE     EXERCISE PRICE
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
OPTIONS AND WARRANTS
OUTSTANDING, AS OF
October 31, 2004                          576,600                   $1.00 - $20.13                2.8               $1.43
- --------------------------------------------------------------------------------------------------------------------------------
Warrants issued                           307,496                        $4.00                     3                $4.00
- --------------------------------------------------------------------------------------------------------------------------------
Warrants canceled                        (555,000)                       $1.00                     -                $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Options issued                               -                                                     0                  0
- --------------------------------------------------------------------------------------------------------------------------------
                                           (5,600)
Options canceled                         ---------                      $18.13                     -               $18.13
- --------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS
OUTSTANDING, AS OF
October 31, 2005                          323,496                     $3.00-$5.00                 2.9               $3.99
- --------------------------------------------------------------------------------------------------------------------------------
Warrants issued                         1,520,255                    $4.00 - $6.00                2.5               $5.00
- --------------------------------------------------------------------------------------------------------------------------------
Warrants canceled                         (10,000)                   $3.00 - $3.13                 -                $3.07
- --------------------------------------------------------------------------------------------------------------------------------
Options issued                                -                            -                       -                  -
- --------------------------------------------------------------------------------------------------------------------------------
                                           (6,000)
Options canceled                        ----------                       $5.00                     0                $5.00
- --------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS
OUTSTANDING, AS OF
October 31, 2006                        1,827,751                    $3.00 - $6.00                2.4               $4.60
- --------------------------------------------------------------------------------------------------------------------------------
Warrants issued                         4,654,164                    $1.35 - $3.00                4.40              $1.71
- --------------------------------------------------------------------------------------------------------------------------------
Warrants canceled
- --------------------------------------------------------------------------------------------------------------------------------
Options issued
- --------------------------------------------------------------------------------------------------------------------------------
Options canceled
- --------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS
OUTSTANDING, AS OF
October 31, 2007                        6,481,915                    $1.35 - $6.00                3.48              $2.59
- ---------------------------------------------------------------------------------------------------------------------------------





- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                    2007                2006              2005
                                                                                    ----                ----              ----
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                
Options exercisable, end of fiscal year                                                   0                   0            6,000
- ---------------------------------------------------------------------------------------------------------------------------------
Warrants exercisable, end of fiscal year                                          6,481,915           1,827,751          317,496
- ---------------------------------------------------------------------------------------------------------------------------------
Weighted average fair value of options granted during the year                        $0.00               $0.00            $0.00
- ---------------------------------------------------------------------------------------------------------------------------------
Weighted average fair value of warrants granted during the year                       $5.00               $5.00            $3.99
- ---------------------------------------------------------------------------------------------------------------------------------



Additional information regarding options and warrants outstanding as of October
31, 2007 is as follows:



WEIGHTED
- ----------------------------------------------------------------------------------------------------------------------------
RANGE OF                    NUMBER                  WEIGHTED AVERAGE         WEIGHTED AVERAGE                EXERCISABLE
EXERCISE PRICES             OUTSTANDING             EXERCISE PRICE           REMIANING CONTRACTUAL LIFE
                                                                             (YEARS)
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                 
$1.35 - $6.00               8,701,915                  $2.59                 3.48                            6,481,915
- ----------------------------------------------------------------------------------------------------------------------------



In accordance with the methodology prescribed under SFAS No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION, the Company did not recognize any compensation expense
related to non-employee stock options in 2006, 2005, or 2004. Compensation
expense of $0, $0, and $0 related to employee stock options was recognized in
2007, 2006, or 2005, respectively.

The fair value of each employee-nonemployee option and warrant was calculated on
the date of grant using the Black-Scholes model with the following weighted
average assumptions:





- ------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31              RISK FREE INTEREST             VOLATILITY RATE             DIVIDEND YIELD
                                   ------------------             ---------------             --------------
- ------------------------------------------------------------------------------------------------------------
                                                                                                 
2007                                             4.97%                        135%                        0
- ------------------------------------------------------------------------------------------------------------
2006                                             4.48%                        225%                        0
- ------------------------------------------------------------------------------------------------------------
2005                                             3.13%                        550%                        0
- ------------------------------------------------------------------------------------------------------------


EMPLOYEE STOCK BASED COMPENSATION

A summary of transactions for employee stock options and warrants for the years
ended October 31, 2007, 2006, and 2005 is as follows:



- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                             WEIGHTED              AVERAGE
- ------------------------------------------------------------------------------------------------------------------------------------
EMPLOYEE OPTIONS AND WARRANTS                NUMBER OF SHARES        OPTION PRICE RANGE      REMAINING LIFE        EXERCISE PRICE
- -----------------------------                ----------------        ------------------      --------------        --------------
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS OUTSTANDING,
AS OF
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            
October 31, 2004                                   255,400             $5.00 - $18.13              2.44                 $10.70
                                                 ---------
- ------------------------------------------------------------------------------------------------------------------------------------
Options granted                                          -
- ------------------------------------------------------------------------------------------------------------------------------------
Options canceled                                  (22,400)
                                                ----------             $5.00 - $18.13                                    $8.75
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS OUTSTANDING,
AS OF
- ------------------------------------------------------------------------------------------------------------------------------------
October 31, 2005                                   233,000             $5.00 - $18.13              2.44                 $10.70
- ------------------------------------------------------------------------------------------------------------------------------------
Options granted                                          -
- ------------------------------------------------------------------------------------------------------------------------------------
Options canceled                                 (113,000)
                                                 ---------
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS OUTSTANDING,
AS OF
- ------------------------------------------------------------------------------------------------------------------------------------
October 31, 2006                                   120,000                  16.25                  1.75                  16.25
- ------------------------------------------------------------------------------------------------------------------------------------
Options granted                                  2,100,000                  $2.00                  6.75                  $2.00
- ------------------------------------------------------------------------------------------------------------------------------------
Options canceled
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS AND WARRANTS OUTSTANDING,
AS OF
- ------------------------------------------------------------------------------------------------------------------------------------
October 31, 2007                                 2,200,000             $2.00 - $16.25              6.5                   $2.79
- ------------------------------------------------------------------------------------------------------------------------------------





- -----------------------------------------------------------------------------------------------------------------
                                                                              2007          2006            2005
                                                                              ----          ----            ----
- -----------------------------------------------------------------------------------------------------------------
                                                                                                
Options exercisable, end of year                                             113,000       113,000       113,000
- -----------------------------------------------------------------------------------------------------------------
Warrants exercisable, end of year                                            120,000       120,000       120,000
- -----------------------------------------------------------------------------------------------------------------
Weighted average fair value of options granted during the year                  -             -              -
- -----------------------------------------------------------------------------------------------------------------
                                                                             441,153
Options available for future grant under the 1996 Plan                      ========
- -----------------------------------------------------------------------------------------------------------------




Additional information regarding options and warrants outstanding as of October
31, 2007 is as follows:



- ------------------------------------------------------------------------------------------------------------------------------------
                            OUTSTANDING                                                        EXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                       WEIGHTED AVERAGE
                                                   WEIGHTED AVERAGE    REAMINING CONTRACTUAL                     WEIGHTED AVERAGE
RANGE OF EXERCISE PRICES    NUMBER OUTSTANDING     EXERCISE PRICE      LIFE (YEARS)            EXERCISABLE       EXERCISABLE PRICE
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
$2.00 - $16.25              2,120,000              $2.79               6.5                     120,000           $16.25
- ------------------------------------------------------------------------------------------------------------------------------------



LOSS PER COMMON SHARE

Net loss per common share is calculated by dividing net loss by the weighted
average number of shares outstanding during each period presented. Common stock
equivalents, consisting of options and warrants have not been included in the
calculation for any of the three years ended October 31, 2006, 2005, and 2004,
because their effect would be anti-dilutive. The following potentially dilutive
securities were not included in the computation of diluted loss per share:

- ----------------------------------------------------------------------------
                               2007            2006                  2005
                               ----            ----                  ----
- ----------------------------------------------------------------------------
Options                       119,000            119,000            119,000
- ----------------------------------------------------------------------------
Warrants                    6,481,915          1,827,751            437,496
- ----------------------------------------------------------------------------

The following table sets forth the numerator and denominator in the computation
of basic and diluted per share information:



- ----------------------------------------------------------------------------------------------------------
                                             2007                   2006                  2005
- ----------------------------------------------------------------------------------------------------------
                                                                                 
Numerator for basic and diluted loss per
share
- ----------------------------------------------------------------------------------------------------------
Net Loss                                     $(20,857,884)          $(8,025,402)          $(2,911,260)
- ----------------------------------------------------------------------------------------------------------
Denominator for basic and diluted loss
per share
- ----------------------------------------------------------------------------------------------------------
Weighted-average shares outstanding            29,782,703            26,044,630            20,097,784
- ----------------------------------------------------------------------------------------------------------


NOTE 12 - INCOME TAXES

Federal and state income tax expense (benefit) for the years ended October 31,
2006, 2005 and 2004 and a reconciliation of income taxes computed at the United
States federal statutory income tax rate to the provision for income taxes
reflected in the Statements of Operations is presented below:





- ------------------------------------------------------------------------------------------------
                                                2007                2006               2005
                                                ----                ----               ----
- ------------------------------------------------------------------------------------------------
                                                                           
Current:
- ------------------------------------------------------------------------------------------------
Federal                                      $(6,867,395)        $(2,367,015)       $  (989,828)
- ------------------------------------------------------------------------------------------------
State                                         (1,511,894)           (417,708)          (174,676)
- ------------------------------------------------------------------------------------------------
Deferred:
- ------------------------------------------------------------------------------------------------
Federal                                          107,826             300,905         (1,146,225)
- ------------------------------------------------------------------------------------------------
                                                  19,028              53,101          (202,275)
State                                        -----------         -----------        -----------
- ------------------------------------------------------------------------------------------------
                                              $7,952,438           2,430,717          2,513,004
Valuation allowance                          ===========          ==========        ===========
- ------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------
Provision for Income Taxes                        -                   -                    -
- ------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------


Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Deferred tax assets
result primarily from net operating loss carry-forwards. The components of the
Company's deferred tax assets and liabilities at October 31, 2007, 2006, and
2005 are as follows:



- --------------------------------------------------------------------------------------------------------------
DEFERRED TAX ASSETS                                      2007                   2006                 2005
                                                         ----                   ----                 ----
- --------------------------------------------------------------------------------------------------------------
                                                                                         
Operating loss carryforwards                          $26,140,547            $18,479,296          $15,821,702
- --------------------------------------------------------------------------------------------------------------
Stock option compensation                                 176,013                262,706              262,706
- --------------------------------------------------------------------------------------------------------------
Deferred loss on inventory                                 79,965                 17,600               17,600
- --------------------------------------------------------------------------------------------------------------
Reserve accounts                                           75,515                    -                   -
- --------------------------------------------------------------------------------------------------------------
Other
                                                     ------------           ------------         ------------
- --------------------------------------------------------------------------------------------------------------
Total Deferred Tax Asset                              26,472,040             18,759,602           16,602,008
                                                    -------------          -------------        -------------
- --------------------------------------------------------------------------------------------------------------
                                                    $(26,472,040)          $(18,759,602)        $(16,602,008)
Valuation Allowance                                 =============          =============        =============
- --------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------


A full valuation allowance is provided against all deferred tax assets due to
the uncertainty as to their future realization. In addition, the realization of
such NOL carryforwards may be significantly limited if it is deemed that a
change in ownership has occurred. For tax purposes, a change in ownership has
occurred if an entity or group of entities that previously did not own 50% or
more of a Company acquires enough new equity to raise its interest to more than
50% over a three year period.

As of October 31, 2007, the Company has federal net operating loss carry
forwards totaling approximately $65,000,000 available to offset future federal
taxable income. The federal net operating loss carry-forwards expire in varying
amounts through 2007. In addition, the Company has state net operating loss
carry forwards of approximately $35,700,000 available to offset future state
taxable income.

NOTE 13 - TERMINATION OF TECHNOLOGY LICENSE AGREEMENTS

The Company and its subsidiary Synovics Laboratories, Inc. ("Synovics Labs"),
have been involved in a legal dispute with Nostrum Pharmaceuticals, Inc.
("Nostrum") and Nirmal Mulye, Ph.D. ("Mulye"). As disclosed in the Company's
previous periodic reports, these parties were among the parties to pending
actions and proceedings before the federal District Court of the Southern
District of New York and the District of New Jersey as well as arbitration
before the American Arbitration Association.



On July 31, 2007, the Company together with its subsidiary Synovics Labs entered
into a settlement agreement with all parties to the various actions. Under the
terms of the settlement agreement, all pending actions and proceedings between
the parties were dismissed with prejudice, the parties mutually released one
another and all pre-settlement agreements were terminated, including the
Technology License Agreement between the Company and Nostrum and the ANDA
Ownership Transfer and Product License Agreement ("ANDA Agreement") between
Synovics Labs and Nostrum. In connection with the termination of the ANDA
Agreement, the Company and Synovics Labs assigned to Nostrum the Abbreviated New
Drug Application for the Metformin Extended Release 500mg.

As part of the settlement, 10,661,000 shares of common stock of the Company that
are owned by Nostrum have been placed in escrow pursuant to a separate escrow
agreement (the "Escrow Shares"). If the guarantees of Mulye and Nostrum to the
Bank of India ("BOI") in connection with the Company's credit facility with BOI
are extinguished in full or in part by May 1, 2008, the Escrow Shares will be
released to Synovics in an amount proportionate to the amount by which the
guarantees have been extinguished. If by May 1, 2008 any Escrow Shares have not
been released to the Company or if the Company defaults on its credit facility
with BOI and such default remains uncured for more than sixty days, any
remaining Escrow Shares will be released to Nostrum. If the Escrow Shares are
released to Nostrum and during the escrow period the Company issues additional
shares of common stock or common stock equivalents to cause the Escrow Shares to
represent less than 32% of the outstanding shares of the Company on a fully
diluted basis, then the Company is required to issue to Nostrum additional
shares of common stock so that the Escrow Shares together with the additional
shares constitute 32% of the outstanding shares of the Company on a fully
diluted basis. Such additional shares will be reduced proportionately if any of
the Escrow Shares are released to Synovics during the escrow period. The current
amount of the outstanding principal loan balance with BOI is $9,750,000.
Subsequently, this loan has been paid down to a balance of $7,450,000.

As a result of the settlement, the Company has written off $14,460,000 which had
been included in intangible assets on the balance sheet. In this connection, a
charge of $3,692,390 has been recognized in the current income statement. The
shares that have been placed in escrow are being treated as treasury stock. The
fair value of the shares included in treasury stock at July 31, 2007 was
$10,767,610. The Company believes that it is probable that the guarantee to the
BOI by Nostrum and Mulye will be extinguished in full. In the event that any
shares are returned to Nostrum and Mulye from escrow, the Company may recognize
an additional charge at that time.

NOTE 14 - OTHER MATTERS

LICENSE AGREEMENT

On May 1, 2007, the Company's subsidiary, Synovics Labs, entered into a License
and Supply Agreement dated as of April 11, 2007 with Fluid Air Inc. doing
business as PharmPro ("FAI") for the development and commercialization of the
over the counter generic version of Omeprazole (the "License Agreement").
According to the License Agreement, FAI granted Synovics Labs, under FAI's
patent rights, an exclusive worldwide license to develop, commercialize and
sublicense capsules containing the generic version of over the counter
Omeprazole (the "Drug Product"). FAI will be responsible for developing the Drug
Product in accordance with the Drug Product development plan while Synovics Labs
will be responsible for research and development activities and will file in
Company's name, the appropriate regulatory filings with FAI being responsible



for the chemistry, manufacturing and controls review portion of such filings.
Once developed and necessary regulatory approvals have been obtained, Synovics
Labs will be responsible for promoting, marketing and distributing the Drug
Product supplied exclusively by FAI.

As partial consideration for the rights granted, Synovics Labs paid FAI a
license fee of $500,000 with further payments due upon the completion of certain
milestones. Commencing upon the first commercial sale of the Drug Product, the
Company is also required to pay to FAI royalties on the net product sales of the
Drug Product until the later of (i) the expiration of the last to expire FAI
patent rights covering the Drug Product; and (ii) ten years from the first
commercial sale of the Drug Product. Unless terminated sooner for cause, the
License Agreement will expire on a country by country basis on the expiration of
Synovics Labs' obligation to make royalty payments with respect to such country.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

REGULATION

The Company is required to obtain certain licenses in connection with the
manufacture of its products. These licenses require compliance with certain
licensing stipulations, as well as the FDA, DEA and other regulation bodies'
rules and regulations. If the Company were to be out of compliance with any of
these rules or regulations, there could be a material adverse effect on the
Company's operations, which could have an adverse effect on the Company's
financial statements.

OPERATING LEASES

Rent expense for the years ended October 31, 2007, 2006, and 2005 was $753,760
$91,246 and $25,967, respectively. Kirk and Andapharm have commitments for
office and manufacturing space. The leases for rent expense annually are
$898,282. Minimum future rent payments under the operating leases at October 31,
2007 are as follows:

Twelve Months
Ended October 31,
- -----------------
2008     $588,419
2009      650,282
2010      662,905
2011      256,091
2012      175,816

The Company estimates additional rent expense aggregating $223,000 a year for a
period of five years.

Capital Leases

Minimum future lease payments under capitalized leases at the October 31, 2007
are as follows:



Twelve Months
Ended October 31,
- ------------------------------------------------
2008                                     $57,584
2009                                      48,838
2010                                      46,336
2011                                      38,830
2012                                       9,708
                                         -------
Net minimum lease payments               201,296
Less: Amount representing interest        28,958
                                        --------

Current portion                         $ 42,431
Long term portion                       $122,523
                                        ========

The capitalized leases have effective interest rates ranging from 7.95% through
15.42% per annum.

NOTE 15 - LITIGATION

As previously reported, on May 11, 2007, we received from our agent for service
of process in Nevada a copy of a Summons (the "Summons"), together with a Notice
of Motion, for Summary Judgment in Lieu of Complaint filed by Asia Pacific
Investment Holdings Limited ("Asia Pacific"). In the Summons, Asia Pacific
sought an order from the Supreme Court of the State of New York, County of New
York (the "Court"), granting summary judgment with respect to claims arising
from an alleged default by us of the terms of a certain Convertible Promissory
Note issued to Asia Pacific on April 17, 2006, in the principal amount of
$1,500,000 (the "Asia Pacific Note"). On July 16, 2007, the Court issued a
decision granting Asia Pacific's Motion for Summary Judgment in Lieu of
Complaint. On September 7, 2007, we paid Asia Pacific $1,844,625 and on or
around September 17, 2007, we paid a further amount of $10,500, the amount due
to Asia Pacific under the Asia Pacific Note. Asia Pacific is still claiming from
us its payment of attorneys fees and the parties have reached an agreement in
principle with respect to the payment of such fees.

On January 18, 2008, the Registrant received a complaint filed by Bushido
Capital Master Fund, L.P. and BCMF Trustees, LLC against the Registrant in the
United States District Court, Southern District of New York. The complaint seeks
recovery of an amount of no less than $579,395 arising from a default by the
Registrant of a Convertible Promissory Note dated October 3, 2005 in the
principal amount of $500,000. The Registrant is presently evaluating its options
with respect to responding to this complaint.

NOTE 16 - RELATED PARTY TRANSACTIONS

On March 16, 2005, the Company entered into a Technology License Agreement and
replaced in its entirety the Product Development and License Agreement with
Nostrum dated June 16, 2004. The license grant relates to ten 505 (b)(2)
Products and ten Generic products, and in consideration therefore the Company
issued 6 Million shares of its common stock to Nostrum. In July 2004, Nirmal
Mulye, the majority shareholder of Nostrum, was appointed to the Company's Board
of Directors.

Synovics Laboratories, Inc., a wholly owned Company subsidiary, entered into the
ANDA Ownership Transfer and Product License Agreement, dated May 17, 2006 with
Nostrum. The ANDA Agreement transferred ownership of an abbreviated new drug



application to an AB rated, generic 500mg equivalent (Metformin ER) of the
branded product Glucophage-XR (the "Metformin Drug") and additionally grants the
Company an exclusive license in the United States to develop, make and sell the
Metformin Drug and an additional strength version of the Metformin Drug.

EX-10.26

                                                                   Exhibit 10.26

                          AXIOM CAPITAL MANAGEMENT INC.
                           780 THIRD AVENUE, 43 FLOOR
                               NEW YORK, NY 10017

                               ------------------

                                                                    JUNE 5, 2007

SENT VIA FAX AND EMAIL
- ----------------------

Ronald H. Lane PH.D.
Chief Executive Officer
Synovics Pharmaceuticals, Inc.
2415 East Camelback Road - Suite 700

Phoenix, AZ 85016

Dear Ronald:

         Axiom Capital Management Inc. (the "PLACEMENT AGENT") is pleased to act
as  placement  agent  to  Synovics  Pharmaceuticals,  Inc.  and  certain  of its
subsidiaries (the "COMPANY") in connection with the following transactions:  (i)
a  $15,000,000  debt  financing  with  Greenbridge   Capital  (the  "GREENBRIDGE
FINANCING"  and the  securities  placed  in  such  financing,  the  "GREENBRIDGE
SECURITIES")  (ii) a placement of up to $4,500,000 in secured  bridge notes (the
"BRIDGE NOTES") which will  automatically  convert into  securities  received by
investors in the  Convertible  Preferred  Financing  (defined  below) along with
warrants to purchase shares of the Company's common stock (the  "Warrants",  and
such  financing,  the "BRIDGE  ROUND") (iii) an offering of up to $16,000,000 in
convertible  preferred shares (the "CONVERTIBLE  PREFERRED STOCK") including the
principal amount of Bridge Notes converted into Convertible  Preferred Stock and
Warrants (the "WARRANTS"  together with the  Convertible  Preferred  Stock,  the
"SECURITIES") to accredited  investors  pursuant to mutual agreeable terms to be
negotiated with investors (such offering, the "CONVERTIBLE PREFERRED FINANCING")
and (iv) the  conversion of up to $4,545,000 of  outstanding  secured notes (the
"INDIGO BRIDGE  NOTES") into  Convertible  Preferred  Stock of the Company (such
transaction,  the  "CONVERSION OF INDIGO BRIDGE  NOTES").  Each of the Placement
Agent  and  the  Company  may be  referred  to  individually  as a  "Party"  and
collectively as the "PARTIES".  This engagement letter may be referred to as the
"AGREEMENT".  Each  of the  Greenbridge  Financing,  the  Bridge  Round  and the
Convertible  Preferred  Financing  may be  referred  to as a  "TRANSACTION"  and
collectively as the "Transactions".

         In our  capacity as your  placement  agent we will have no authority to
commit the Company in any fashion.  All decisions  will remain with you and your
Board in your sole and absolute discretion.

         The Company  agrees to retain the  Placement  Agent for a period of six
(6)  months  from  the date  hereof  for the  purposes  described  above,  on an
exclusive  basis.  The period may be extended by mutual  agreement,  and earlier
termination  is permitted by either party upon fifteen (15) days written  notice
to the other. In addition, the Placement Agent may retain sub-placement





agents  subject to the Company's  prior consent which shall not be  unreasonably
withheld.  Prior to the closing of the Greenbridge Financing,  the Parties shall
execute a  Placement  Agency  Agreement  covering  all  Transactions  containing
customary  representations  and warranties in a form reasonably  satisfactory to
the Placement Agent.

         Upon closing of the Transactions, the Placement Agent shall receive the
following fees:

         A.    CASH FEES.

               i.   At each closing of the Greenbridge Financing,  the Placement
                    Agent will  receive a cash fee equal to two percent  (2%) of
                    the aggregate  purchase price of the Greenbridge  Securities
                    sold at such closing.


               ii.  At each closing of the Bridge  Round,  the  Placement  Agent
                    will  receive a cash fee equal to ten  percent  (10%) of the
                    aggregate  purchase  price of the Bridge  Notes sold at such
                    closing.

               iii. At each closing of the Convertible Preferred Financing,  the
                    Placement Agent will receive a cash fee equal to ten percent
                    (10%) of the  aggregate  purchase  price of the  Convertible
                    Preferred Stock sold at such closing.

               iv.  The  Placement  Agent shall receive a cash fee equal to four
                    percent  (4%) of the  aggregate  face  value  of the  Indigo
                    Bridge Notes converted into  Convertible  Preferred Stock of
                    the Company.

         B.    WARRANTS.

               i.   The  Placement  Agent shall  receive  warrants  granting the
                    Placement  Agent the right to purchase  four percent (4%) of
                    the number of shares into which the  Greenbridge  Securities
                    purchased by investors  introduced by the Placement Agent in
                    the Greenbridge Financing are convertible.

               ii.  The  Placement  Agent shall  receive  warrants  granting the
                    Placement  Agent the right to purchase ten percent  (10%) of
                    the number of shares into which the Bridge  Notes  purchased
                    by investors introduced by the Placement Agent in the Bridge
                    Round are convertible.

               iii. The  Placement  Agent shall  receive  warrants  granting the
                    Placement  Agent the right to purchase ten percent  (10%) of
                    the number of shares  into which the  Convertible  Preferred
                    Stock  purchased by investors  introduced  by the  Placement
                    Agent   in   the   Convertible   Preferred   Financing   are
                    convertible.

               iv.  The  Placement  Agent shall  receive  warrants  granting the
                    Placement  Agent the right to purchase  four percent (4%) of
                    the number of common  shares  into  which the Indigo  Bridge
                    Notes are converted.

         C.    EXPENSES.  The Company  hereby  agrees to reimburse the Placement
               Agent for all out-of-pocket  costs,  including but not limited to
               travel  expenses and legal fees incurred in  connection  with the
               Transactions including any post-closing expenses.

         Upon  expiration  of  this  Agreement,  or if  the  Company  elects  to
terminate this  Agreement,  the above provision with respect to fees shall apply
nevertheless with respect to any transaction concluded by the Company within one
year following such expiration or termination

                                       2





with any party  introduced to the Company by the  Placement  Agent or with which
the  Placement  Agent has  participated  in material  discussions  concerning  a
proposed  transaction.  Upon any expiration or  termination by the Company,  the
Placement Agent shall, if requested in writing by the Company,  promptly provide
the Company with a list of any such parties.  Regardless of the  completion of a
transaction,  the Company  agrees to reimburse the  Placement  Agent for all its
out-of-pocket  expenses  incurred in connection with this engagement,  including
reasonable fees and disbursements of counsel.

         The Company agrees to furnish or cause to be furnished to the Placement
Agent any information  concerning the Company that the Placement Agent considers
necessary  for the proper  performance  of its services  hereunder.  The Company
agrees that all such information shall be complete,  accurate and not misleading
and will keep the Placement  Agent promptly and fully  informed of  developments
which might affect the accuracy or  completeness of such  information.  We agree
that we will treat all  material  received  from you in a strictly  confidential
manner and will disclose such  information  only with the prior  approval of the
Company, except as otherwise required by law or legal process.

         The Company agrees to indemnify and hold harmless the Placement  Agent,
its members, employees and agents (collectively, the "INDEMNIFIED PARTIES") from
and  against  any  losses,  claims,  damages  or  liabilities  (or  actions,  or
proceedings, in respect thereof) related to or arising out of this engagement or
the  Placement  Agent's role in  connection  therewith  and will  reimburse  the
Indemnified  Parties for all related  expenses  (including  fees and expenses of
legal counsel) as they are incurred in connection with investigating,  preparing
or defending any such action,  proceeding or claim, except that the Company will
not be responsible to any Indemnified Party for any claims, liabilities,  losses
or  damages  to the  extent  they  are  finally  determined  by a  court  having
jurisdiction  (after all  applicable  periods  for appeal  have  lapsed) to have
resulted  primarily  from the gross  negligence  or willful  misconduct  of such
Indemnified  Party.  The  foregoing  provisions  of this  paragraph  shall be in
addition to any right that the  Indemnified  Parties and/or the Company may have
in common law or  otherwise.  The  provisions  of this  paragraph  shall survive
expiration or termination of this Agreement.

         This   constitutes   the  entire   agreement   between   the   Parties,
incorporating  all discussions  between us, and may be amended only by a writing
executed by both Parties. This Agreement shall be interpreted in accordance with
the laws of the State of New York,  without regard to principles of conflicts of
laws, and shall inure to the benefit of our successors and assigns.

                           [SIGNATURE PAGE TO FOLLOW]


                                       3






         If the foregoing  correctly  sets forth the  understanding  between us,
please so indicate by signing below.

                                       Very truly yours,

                                       AXIOM CAPITAL MANAGEMENT, INC.


                                       By:  /s/ Mark Martino
                                       ------------------------------
                                       Name: Mark Martino

                                       Title: President

Agreed to and accepted this
15 day of June , 2007

SYNOVICS PHARMACEUTICALS, INC.

By: /s/ Ronald H. Lane
    --------------------------------
Name: Ronald H. Lane Ph. D.
Title: Chief Executive Officer


                                        4

EX-21

                                                                      EXHIBIT 21


                         SUBSIDIARIES OF THE REGISTRANT

         As of January 31, 2008, the Registrant has the following wholly owned
subsidiaries:


1. Kirk Pharmaceuticals, LLC
2. Andapharm LLC
3. Kirk Pharmaceuticals, Inc.
4. Andapharm, Inc.
5. LipoGenics, Inc.
6. Bionutrics Health Products, Inc.
7. Synovics Laboratories, Inc.
8. Nutrition Technology Corporation
9. InCon International Ltd.
10. Cosmedics, Inc.

EX-31.1

                                                                    Exhibit 31.1


                                  CERTIFICATION
            PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Ronald Howard Lane, the principal executive officer of Synovics
Pharmaceuticals Inc., a Nevada corporation (the "REGISTRANT"), certify that:

1. I have reviewed this annual report on Form 10-K of Synovics Pharmaceuticals
Inc., for the year ended October 31, 2007;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 (e) and 15d-15 (e)) for the Registrant and Registrant
has:

a) designed such disclosure controls and procedures to ensure that material
information relating to Registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period
in which this annual report is being prepared;

b) evaluated the effectiveness of Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. Registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
Registrant auditors and the audit committee of Registrant's board of directors
(or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control over
financial reporting.


Date: February 13, 2008                     /s/  Ronald Howard Lane
                                                 ---------------------------
                                                 Ronald Howard Lane,
                                                 Principal Executive Officer

EX-31.2

                                                                    Exhibit 31.2


                                  CERTIFICATION
            PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Steven Getraer, the principal financial officer of Synovics Pharmaceuticals
Inc., a Nevada corporation (the "REGISTRANT"), certify that:

1. I have reviewed this annual report on Form 10-K of Synovics Pharmaceuticals
Inc., for the year ended October 31, 2007;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 (e) and 15d-15 (e)) for the Registrant and Registrant
has:

a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The Registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control over
financial reporting.


Date: February 13, 2008                    /s/  Steven Getraer
                                                ---------------------------
                                                Steven Getraer,
                                                Principal Financial Officer

EX-32.1

                                                                    Exhibit 32.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Synovics Pharmaceuticals Inc. (the
"REGISTRANT") on Form 10-K for the period ending October 31, 2007 as filed with
the Securities and Exchange Commission on the date hereof (the "REPORT"), I,
Ronald Howard Lane, the principal executive officer of Registrant, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Registrant.



/s/ Ronald Howard Lane
- --------------------------
Ronald Howard Lane
Chief Executive Officer
February 13, 2008

This certification has been furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

A signed original of this written statement required by Section 906 has been
provided to Synovics, Inc. and will be retained by Synovics, Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.

EX-32.2

                                                                    Exhibit 32.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Synovics Pharmaceuticals Inc. (the
"REGISTRANT") on Form 10-K for the period ending October 31, 2007 as filed with
the Securities and Exchange Commission on the date hereof (the "REPORT"), I,
Ronald Howard Lane, the Principal Financial Officer of Registrant, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Registrant.



/s/ Ronald Howard Lane
- ---------------------------
Ronald Howard Lane
Principal Financial Officer
February 13, 2008

This certification has been furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

A signed original of this written statement required by Section 906 has been
provided to Synovics, Inc. and will be retained by Synovics, Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.