~~Mera Pharmaceuticals, Inc.~~

~~Balance Sheets~~

January 31,
2010 October 31,
2009
(Unaudited) (Audited)

ASSETS
Current assets:
Cash and cash equivalents $ 2,241 $ 3,135
Accounts receivable 14,281 6,656
Tax credit receivable 36,849 31,229
Prepaid expenses 11,974 15,994

Total current assets 65,345 57,014

Plant and equipment, net 197,142 200,482

Total Assets $ 262,487 $ 257,496

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 151,907 $ 181,040
Accrued expenses $ 141,935 $ 133,172
Notes payable - related parties 51,936 51,936
Deferred revenue 73,200 30,450
Other current liabilities - -

Total Current Liabilities 418,978 396,598

Contingencies

Stockholders' deficit:
Convertible preferred stock, $.0001 par value, 10,000
shares authorized, 80 Series A shares issued and
outstanding and 974 Series B shares issued and
outstanding 2 2
Common stock, $.0001 par value: 750,000,000
shares authorized, 547,769,915 shares issued
and outstanding 54,777 54,777
Additional paid-in capital 7,920,003 7,920,003
Treasury stock at cost (2,025 ) (2,025 )
Accumulated deficit (8,129,248 ) (8,111,859 )
Total stockholders' deficit (156,491 ) (139,102 )

Total Liabilities and Stockholders' Equity $ 262,487 $ 257,496

~~The accompanying notes are an integral part of these financial statements~~

Mera Pharmaceuticals, Inc.
Condensed Balance Sheets

~~Mera Pharmaceuticals, Inc.~~

~~Condensed Statement of Operations~~

	July 31, 2011			October 31, 2010
	(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	4,008		$	5,940
Accounts receivable		14,165			8,864
Prepaid expenses		32,420			-

Total current assets		50,593			14,804

Plant and equipment, net		4,144			8,034

Other assets		30,045			50,519

Total Assets	$	84,782		$	73,357

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	427,081		$	373,661
Accounts payable - related parties		150,000			150,000
Notes payable - related parties		51,936			51,936
Deferred revenue		218,200			174,700

Total Current Liabilities		847,217			750,297

Contingencies

Stockholders' deficit:
Preferred stock, $.0001 par value, 5,200 shares authorized, none issued and outstanding, respectively		-			-
Series A- Convertible Preferred Stock $0.0001 par value, 2,400 shares authorized, 80 and 80 issued and outstanding, respectively		1			1
Series B- Convertible Preferred Stock $0.0001 par value, 2,400 shares authorized, 974 and 974 shares issued and outstanding		1			1
Common stock, $.0001 par value: 750,000,000 shares authorized, 547,769,915 shares issued and 547,769,915 outstanding, respectively		54,777			54,777
Additional paid-in capital		7,968,873			7,968,873
Treasury stock at cost		(2,025	)		(2,025	)
Accumulated deficit		(8,784,062	)		(8,698,567	)
Total stockholders' deficit		(762,435	)		(676,940	)

Total Liabilities and Stockholders' Deficit	$	84,782		$	73,357

Three Months Ended Three Months Ended
January 31, January 31,
2010 2009
(Unaudited) (Unaudited)

NET SALES $ 96,215 $ 187,937
Cost of goods sold 1,306 453

GROSS PROFIT 94,909 187,484

Operating Expenses
Selling and administrative expenses 50,747 101,023
Research and development costs 62,932 96,670
Depreciation and amortization 4,325 21,607

Total operating expenses 118,004 219,300

Operating loss (23,095 ) (31,816 )

Other income (expense)
Interest income - 1,371
Other income 1,333 -
Interest expense (1,248 ) (1,282 )

Total other income (expense) 85 89

Net loss before tax provision (23,010 ) (31,727 )

Provision for income taxes - -
Refundable tax credit 5,620 7,581

NET INCOME (LOSS) $ (17,390 ) $ (24,146 )

Net income (loss) per common share $ (0.0000 ) $ (0.0000 )

Weighted Average Shares Outstanding 547,769,915 547,769,915

~~The~~See accompanying notes ~~are an integral part of these~~to unaudited condensed financial statements

~~Mera Pharmaceuticals, Inc.~~

~~Statements of Cash Flows~~

Mera Pharmaceuticals, Inc.
Condensed Statements of Operations
(Unaudited)

Three Months Three Months
Ended Ended
January 31, 2010 January 31, 2009
(Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net loss $ (17,390 ) $ (24,146 )
Adjustments to reconcile net loss to net cash
used in operating activities:
Accumulated depreciation and amortization 4,325 21,608
Changes in assets and liabilities
Accounts receivable (7,624 ) 7,465
Tax credit receivable (5,620 ) (7,581 )
Prepaid expenses 4,020 5,437
Accounts payable and accrued liabilities (20,370 ) (2,500 )
Deferrecd revenue 42,750 -
Net cash provided by operating activities 91 283

Cash Flows from Investing Activities:
Purchases of marketable equitable securities - (14,255 )
Proceeds from sales of marketable equitable securities - 34,400
Purchases of fixed assets (985 ) -
Net cash used by investing activities (985 ) 20,145

Cash Flows from Financing Activities:
Net cash provided by financing activities - -

Net increase in cash and cash equivalents (894 ) 20,428
Cash and cash equivalents, beginning of the period 3,135 19,288
Cash and cash equivalents, end of the period $ 2,241 $ 39,716

Supplemental Cash Flow Information
Interst Paid $ - $ -
Taxes Paid $ - $ -

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	July 31, 2011			July 31, 2010			July 31, 2011			July 31, 2010


Net Sales	$	86,819		$	67,115		$	238,707		$	224,743
Cost of Goods Sold		284			-			14,027			10,401

GROSS PROFIT		86,535			67,115			224,680			214,342

Costs and Expenses
Research and development costs		40,564			70,262			127,788			203,667
Selling, general and administrative		63,913			38,284			188,218			145,521
Depreciation and Amortization		2,122			11,149			6,178			22,298

Total costs and expenses		106,599			119,695			322,184			371,486

Operating loss		(20,064	)		(52,580	)		(97,504	)		(157,144	)

Other income (expense):
Other income		2,040			980			4,998			2,312
Interest expense		(1,248	)		(1,248	)		(3,744	)		(3,744	)

Total other income (expense)		792			(268	)		1,254			(1,432	)

Net loss before income tax provision		(19,272	)		(52,848	)		(96,250	)		(158,576	)

Provision for income taxes		-			-			-			-
Refundable tax credit		3,522			4,730			10,755			15,291

Net loss	$	(15,750	)	$	(48,118	)	$	(85,495	)	$	(143,285	)

Loss per share - basic and diluted		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Weighted average shares outstanding - basic and diluted		547,769,915			547,769,915			547,769,915			547,769,915

~~The~~

See accompanying notes ~~are an integral part of these~~to unaudited condensed financial statements

Mera Pharmaceuticals, Inc.
Condensed Statements of Cash Flows
(Unaudited)

	Nine Months			Nine Months
	Ended			Ended
	July 30, 2011			July 30, 2010

Cash Flows from Operating Activities:
Net loss	$	(85,495	)	$	(143,285	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Accumulated depreciation and amortization		6,178			22,298
Changes in assets and liabilities
Accounts receivable		(5,301	)		(14,447	)
Prepaid expenses		(32,420	)		12,002
Other assets		20,474			(15,291	)
Accounts payable and accrued liabilities		53,420			156,688
Deferrecd revenue		43,500			129,750
Net cash provided by operating activities		356			147,715

Cash Flows from Investing Activities:
Purchases of fixed assets		(2,288	)		(150,000	)
Net cash used in investing activities		(2,288	)		(150,000	)

Cash Flows from Financing Activities:
Net cash provided by (used in) financing activities		-			-

Net decrease in cash and cash equivalents		(1,932	)		(2,285	)
Cash and cash equivalents, beginning of the period		5,940			3,135
Cash and cash equivalents, end of the period	$	4,008		$	850

Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

See accompanying notes to unaudited condensed financial statements

MERA PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2011 AND 2010

NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Organization - Mera Pharmaceuticals, Inc. (the “Company” or “Mera”), originally was seeking to develop and commercializes natural products from microalgae using its proprietary, large-scale photobioreactor technology.

During 2009, the Company switched its focus to engaging in the development of Sea Salt for sale in commercial and consumer uses. The salt is concentrated, low sodium and organic. The water used to produce the salt is drawn from an ocean depth of one-half mile. It is different in chemical composition from other sea salts because it comes from deep-sea water. It contains less sodium and more potassium, as well as higher concentrations of trace minerals. The Company's operations are located in Kailua-Kona, Hawaii.

Basis of Presentation ~~of Financial Statements~~

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form ~~10-Q and Article 10 of Regulation S-X.~~10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the ~~three month periods~~nine-month period ended ~~January~~July 31, ~~2010~~2011 are not necessarily indicative of the results that may be expected for the year ending October 31, ~~2010.~~2011. For further information, refer to the financial statements and footnotes thereto for the year ended October 31, ~~2009,~~2010, included in Form 10-K filed with the Securities and Exchange ~~Commission~~Commission.

The preparation of the Company’s ~~financial statements~~Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management’s estimates and assumptions relate to depreciation and amortization calculations; inventory valuations; asset impairments (including impairments of ~~goodwill,~~ long-lived ~~assets, and investments)~~assets); valuation allowances for deferred tax assets; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments. The Company ~~ba ses~~bases its estimates on the Company's historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

Cash and Cash Equivalents - The Company considers all highly liquid debt securities purchased with original or remaining maturities of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value.

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include valuation of inventory, valuation of deferred tax assets and impairment of property and equipment.

Fair Value of Financial Instruments - The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair market value because of the short maturity of those instruments. Notes payable approximate fair value.

MERA PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2011 AND 2010

Accounts Receivable - The Company performs ongoing credit evaluations of customers, and generally does not require collateral. Allowances are maintained for potential credit losses and returns and such losses have been within management’s expectations.

Credit Risk - It is the Company’s practice to place its cash equivalents in either high quality money market securities or to invest in short term corporate bonds. Certain amounts of such funds might not be insured by the Federal Deposit Insurance Corporation. However, the Company considers its credit risk associated with cash and cash equivalents to be minimal.

Inventories - Inventories are stated at the lower of cost (which approximates first-in, first-out) or market. At July 31, 2011, inventories consisted of $742,736 of work in process, $61,771 of finished goods, $68,768 of other inventory assets, and $19,338 of raw materials. Management has recorded a full valuation allowance for obsolete and excess inventory totaling $892,613.

	July 31, July 31,
	2011		2010

Raw Materials	$	19,338	$	19,338
Work In Process		742,736		742,736
Inventory Asset		68,768		72,824
Finished Goods		61,771		61,771
		892,613		896,669

Inventories Allowance		(892,613)		(896,669)
	$	-	$	-

2.	~~Going Concern.~~

Revenue Recognition - Product revenue is recognized upon shipment to customers. Contract services revenue is recognized as services are performed on a cost reimbursement basis. Royalties are recognized upon receipt. The Company recognizes revenue when the price is fixed and determinability persuasive evidence of an arrangement exists, the products are shipped and collectability is reasonable assured.

Plant and Equipment, net - Plant and equipment are stated at cost less accumulated depreciation. Depreciation is recorded principally using the straight-line method, based on the estimated useful lives of the assets (property and plant, 10-40 years; machinery and equipment, 3-10 years). When applicable, leasehold improvements and capital leases are amortized over the lives of respective leases, or the service lives of the improvements, whichever is less.

Expenditures for renewals and improvements that significantly extend the useful life of an asset are capitalized. The costs of software with an expected life of more than one year, and used in the business operations are capitalized and amortized over their expected useful lives. Expenditures for maintenance and repairs are charged to operations when incurred. When assets are sold or retired, the cost of the asset and the related accumulated depreciation are removed from the accounts and any gain or loss is recognized at such time.

Impairment of Long Lived Assets and Long Lived Assets to be Disposed Of – ASC 360 “Accounting for the Impairment or Disposal of Long-Lived Assets” establishes the accounting model for long-lived assets to be disposed of by sale and applies to all long-lived assets, including discontinued operations. This statement requires those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell.

Stock Issued For Services - In December 2004, the FASB issued ASC No. 718, Compensation – Stock Compensation (“ASC 718”). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.

MERA PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2011 AND 2010

Equity instruments (“instruments”) issued to persons other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505.

Research and Development Costs - Generally accepted accounting principles state that costs that provide no discernible future benefits, or allocating costs on the basis of association with revenues or among several accounting periods that serve no useful purpose, should be charged to expense in the period occurred. ASC 350 “Accounting for Research and Development Costs” requires that certain costs be charged to current operations including, but not limited to: salaries and benefits; contract labor; consulting and professional fees; depreciation; repairs and maintenance on operational assets used in the production of prototypes; testing and modifying product and service capabilities and design; and, other similar costs.

Income Taxes - The Company uses the asset and liability method of accounting for income taxes as required by ASC 740 “Accounting for Income Taxes”. ASC requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of certain assets and liabilities. Since its inception, the Company has incurred net operating losses. Accordingly, no provision has been made for income taxes. Statutory taxes not based on income are included in general and administrative expenses.

Loss Per Share - The Company computed basic and diluted loss per share amounts for July 31, 2011 and 2010 pursuant to the ASC 260, “Earnings per Share.” The assumed effects of the exercise of 11,215,000 shares of outstanding stock options, and conversion of 833,333 shares of convertible preferred stock series A and 8,695,429, shares of convertible preferred stock series B were anti-dilutive and, accordingly, dilutive per share amounts have not been presented in the accompanying statements of operations.

Concentrations- During 2010 and 2011, the Company obtains 100% of its salt from one source.

As of July 31, 2011 and 2010, the Company has accounts receivable balances that exceed 10% from 4 and 2 customers, respectively.

	2011	2010
Customer A	21%	N/A
Customer B	15%	10%
Customer C	13%	N/A
Customer D	10%	N/A
Customer E	N//A	38%

As of July 31, 2011 and 2010, the Company has a sales concentration that exceeded 10% to 1 and 1 customer, respectively.

	2011	2010
Customer A	11%	N/A
Customer B	N/A	35%

Recent Accounting Pronouncements: In December 2011, FASB issued Accounting Standards Update 2011-11, Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such; we do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.

MERA PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2011 AND 2010

NOTE B- GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company ~~has~~ incurred a net loss of ~~$23,010~~$15,750 and $85,495 for ~~the First quarter~~three and nine months ending ~~January~~July 31, ~~2010~~2011, and has a total accumulated deficit of $8,784,062. There is also a working capital deficiency of $796,624 and a ~~net accumulated loss~~stockholder deficiency of ~~$8,129,248 from October~~$762,435 as of July 31, ~~2002 through January 31, 2010.~~2011. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development and sales ~~from~~of Kona Sea Salt. ~~Management has plans to seek additional capital through private placement and public offerings of its common stock.~~ These factors raise substantial doubt that the Company will be able to continue as a going concern.

~~Management’s plan for the continuation of the Company as a going concern includes financing the Company’s operations~~Management has plans to seek additional capital through ~~issuance~~private placement and public offerings of its common ~~stock. If the Company is unable to complete its financing requirements or achieve~~stock, and projects that revenue ~~as projected, it~~ will ~~then modify its expenditures and plan of operations to coincide with the actual financing completed and actual operating revenues.~~increase in future years. There are no assurances, however, with respect to the future success of these plans.

~~Unless otherwise indicated, amounts provided in these notes to the financial statements pertain to continuing operations.~~NOTE C- RELATED PARTY TRANSACTIONS

~~MERA PHARMACEUTICALS~~

~~CONDENSED FINANCIAL STATEMENTS~~

In December 2003 the Board agreed to pay one of its members a commission of 4% of sales made to a Hawaiian distributor. The commission amount to be paid is based on sales consummated and approximately $13,000 was payable under this agreement as of July 31, 2011.

3.	~~Related Party Transactions.~~

On November 2, 2009 the Company entered into an agreement with an entity created and controlled by certain members of its Board of Directors. The agreement involves the purchase by such entity of Bulk Kona Deep Sea Salt from unsold inventory at a price onof $7.25 per kilogram. The Company estimates its direct cost for ~~the~~this material is approximately $5.00 per kilogram. The purpose of this transaction is, in the absence of any other funding sources, to provide ~~the~~ cash flow needed to maintain and grow operations so that the Company is able to produce enough Kona Deep Sea Salt to market and sell outside of Hawaii. This program will end once the Company is able to attain positive cash flow sufficient to sustain such operations. Under this agreement, the Company shall have the ~~r ight~~right of first refusal to repurchase some or the entire product purchased by the related entity at a price of $8.50 per ~~kilogram~~Kilogram if certain conditions are met. ~~During the three months ended January~~As of July 31, 2011 and 2010, the Company has received ~~$65,250 from the related entity~~a total of $246,500 and $188,500 under this agreement. Of ~~this amount $42,750 was~~such amounts, $218,200 and $160,200 has been recorded as deferred revenue ~~resulting from~~for product that ~~had~~has not yet been shipped.

~~4. Summary~~

In March 2009 the Company entered into an agreement with a Director. The Director’s Company to provide construction services in exchange for payment of ~~Significant Accounting Policies~~$150,000. As of the date of these financial statements, such amount has not yet been paid.

~~Revenue Recognition~~. The Company has ~~adopted Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, which provides guidance~~an unsecured demand notes payable – shareholder bearing an annual interest rate of 10% due on ~~the recognition, presentation and disclosure of revenue in financial statements. Product revenue is recognized upon shipment to customers. Contract services revenue is recognized as services~~March 31, 2004. The notes are ~~performed on a cost reimbursement basis. Royalties are recognized upon receipt.~~

~~5. Recent Accounting Pronouncements~~currently past maturity; however no demand for payment has been made (See Note D).

~~Recent accounting pronouncements that the~~The Company has ~~adopted or that will be required to adopt in the future~~an unsecured demand notes payable – shareholder bearing an annual interest rate of 8% due on various dates through March 26, 2006. The notes are ~~summarized below.~~

~~Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles~~

In June 2009, the Financial Accounting Standards Board “FASB” issued Statement of Financial Accounting Standard (“SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 168”). SFAS No. 168 will become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”), superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting literature. SFAS No. 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections. SFAS No. 168 will be effectivecurrently past maturity; however no demand for financial statements issued for reporting periods that end after September 15, 2009. This statement will have an impact on the Company’s financial statements since all future references to authoritative accounting literature will be references in accordance with SFAS No. 168.

~~MERA PHARMACEUTICALS~~

~~CONDENSED FINANCIAL STATEMENTS~~

~~Subsequent Events~~

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”.(“SFAS No. 165”) This Statement establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entitypayment has evaluated subsequent events and the basis for that date and is effective for interim and annual periods ending after June 15, 2009. The adoption of SFAS No. 165 did not have a material impact on the Company’s financial statements.

~~Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly~~

In April 2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly"been made (See Note D). This FSP provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS No. 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. The implementation of FSP FAS No. 157-4 did not have a material on the Company’s financial position and results of operations.

~~Recognition and Presentation of Other-Than-Temporary Impairments~~

In April 2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments ". The objective of an other-than-temporary impairment analysis under existing U.S. generally accepted accounting principles (GAAP) is to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. An investment is impaired if the fair value of the investment is less than its amortized cost basis. FSP FAS No. 115-2 and FAS No. 124-2 is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after Mar ch 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted. The implementation of FSP FAS No. 115-2 and FAS No. 124-2 did not have a material impact on the Company’s financial position and results of operations.

~~MERA PHARMACEUTICALS~~

~~CONDENSED FINANCIAL STATEMENTS~~

~~Interim Disclosures about Fair Value of Financial Instruments~~

~~In April 2009, the FASB issued FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments". This FSP amends SFAS No. 107,~~ ~~Disclosures about Fair Value of Financial Instruments,~~ to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, ~~Interim Financial Reporting,~~ to require those disclosures in summarized financial information at interim reporting periods. FSP FAS No. 107-1 is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The implementation of FSP FAS No. 107-1 did not have a material impact on the Company’s financial position and results of operations

~~Amendments to the Impairment Guidance of EITF Issue No. 99-20~~

In January 2009, the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No. 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20". This FSP amends the impairment guidance in EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets,” to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The FSP also retains and emphasizes the objective of an other than- temporary impairment assessment and the related disclosure requirements in FASB Statement No. 115, ~~Accounting for Certain Investments in Debt and Equity Securities,~~ and other related guidance. This I ssue is effective for interim and annual reporting periods ending after December 15, 2008, and shall be applied prospectively. Retrospective application to a prior interim or annual reporting period is not permitted. The adoption of FSP EITF 99-20-1 did not have a material effect on the Company’s financial statements.

NOTE D- NOTES PAYABLE - RELATED PARTIES

~~MERA PHARMACEUTICALS~~

~~CONDENSED FINANCIAL STATEMENTS~~

~~Accounting for Own-Share Lending Arrangements in Contemplation~~Notes payable – related parties consists of ~~Convertible Debt Issuance or Other Financing~~

~~In June 2009,~~ the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No. 09-1, “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing”. This Issue is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstandingfollowing as of the beginning of those fiscal years. Share lending arrangements that have been terminated as a result of counterparty default prior to the effective date of this Issue but for which the entity has not reached a final settlement as of the effective date are within the scope of this Issue. This Issue requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. This Issue is effective for arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009. Early adoption is not permitted. July 31, 2011:

The Company ishas an unsecured demand notes payable – shareholder bearing an annual interest rate of 10% due on March 31, 2004. The notes are currently ~~assessing the impact of FSP EITF 09-1 on its financial position and results of operations.~~past maturity; however no demand for payment has been made (see Note C)

MERA PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2011 AND 2010

The Company has an unsecured demand notes payable – shareholder bearing an annual interest rate of 8% due on various dates through March 26, 2006. The notes are currently past maturity; however no demand for payment has been made (See Note 1 C).

The Company has an unsecured demand notes payable – shareholder bearing an annual interest rate of 10% due on March 31, 2004. The notes are currently past maturity; however no demand for payment has been made.	$	41,936
The Company has an unsecured demand notes payable – shareholder bearing an annual interest rate of 8% due on various dates through March 26, 2006. The notes are currently past maturity; however no demand for payment has been made.		10,000
Total notes payable, related parties	$	51,936

The Company accrued $1,248 and $1,248 for the three months ended July 31, 2011 and 2010, and $3,744 and $3,744 for the nine months ended July 31, 2011 and 2010, respectively, for interest expense due on notes payable-related parties.

NOTE E- STOCK HOLDERS EQUITY

(A)	Preferred Stock- The Company has 5,200 preferred shares authorized to be issued with the rights and preferences to be determined by the Board of Directors as of July 31, 2010 and 2011.

(B)

Stock Options- On November 7, 2004 the Board of Directors adopted the 2004 Stock Option Plan, authorizing issuance of options on up to 60 million shares of the Company’s common stock. In December of 2004, the Board approved issuance of options to purchase approximately 48,000,000 shares of its common stock to existing officers, directors and employees, subject to shareholder approval of the plan. In May 2005, such approval was received. The fair value of the options on the grant date was $480,000 calculated using the Black-Scholes Option Pricing Model. As of July 31, 2011 approximately 11,215,000 were deemed vested based on length of service with the Company since the date the Company’s Plan of Reorganization was approved. Terminated employees who have elected not to exercise options have forfeited their options. Approximately 37,000,000 total options have been forfeited since the adoption of the Stock Option Plan.

The following table summarizes the transactions of the Company’s stock options for the two-year period ended July 31, 2011:

	Number of Shares		Weighted Average Exercise Price
Options outstanding, July 31, 2009		12,430,000	$	0.01
Options granted		-		-
Options exercised		-		-
Options forfeited		(1,215,000)		0.01
Options outstanding, July 31, 2010		11,215,000	$	0.01
Options granted		-		-
Options exercised		-		-
Options forfeited		-		-
Options outstanding, July 31,2011		11,215,000	$	0.01

MERA PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2011 AND 2010

July 31, 2011 Options Outstanding							Options Exercisable
Range of Exercise Price		Number Outstanding at April 30, 2011		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable at April 30, 2011		Weighted Average Exercise Price
$	.01		11,215,000	1.83 years	$	.01		11,215,000	$	.01

July 31, 2010 Options Outstanding							Options Exercisable
Range of Exercise Price		Number Outstanding at April 30, 2010		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable at April 30, 2010		Weighted Average Exercise Price
$	.01		11,215,000	2.83 years	$	.01		11,215,000	$	.01

NOTE F- LEGAL PROCEEDINGS

On June 22, 2011, Michael Broby, a former consultant filed a suit in the 3rd Circuit Court, State of Hawaii courts against Mera Pharmaceuticals, Inc. The complaint alleges breach of contract and breach of covenant of good faith and fair dealing arising out of a commission contract and is seeking damages in excess of $50,000. Mera management is planning to vigorously defend themselves against this claim, as they believe there is no merit.

NOTE G- RECLASSIFICATIONS

Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company’s net loss or cash flows.

NOTE H- SUBSEQUENT EVENT

Merger

On June 15, 2012, Mera Pharmaceuticals, Inc. (the “Company”) entered into a Share Exchange Agreement (the “Agreement”) with Villari Family Centers, Inc., a Florida corporation (“VFC”), and the shareholders of VFC. Pursuant to the terms of the Agreement, the VFC shareholders exchanged 100% of their shares of VFC for shares of the Company’s Series C Convertible Preferred Stock, which, upon conversion, will constitute 95% of the Company’s common voting stock on a fully diluted basis as of the date of closing. The Company will account for this transaction as a reverse merger.

In connection with the issuance of the Series C Convertible Preferred Stock, the Board of Directors and Holders of a Majority of the Voting Interests of the Company has ratified the increase of its authorized common stock to 18,000,000,000 shares.

The rights and preference of the Series C stockholders rank in parity with the Corporation’s Common Stock and Series A and Series B Preferred Stock. The Series C is convertible mandatorily on June 14, 2013 or at the option of 51% of its holders into their proportionate shares of common stock on a fully diluted basis. The Series C will be cancelled once it is redeemed.

Additionally, in connection with the merger, the Series A and B preferred stock automatically converts into an aggregate of 9,529,761 shares of the Company's common stock, resulting in total common stock issued and onstanding of 557,299,676, post merger.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements that include the words "believes," "expects," "estimates," "anticipates" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. Risk factors include, but are not limited to, our ability to raise or generate additional capital; our ability to cost-effectively manufacture our products on a commercial scale; the concentration of our current customer base; competition; our ability to comply with applicable regulatory requirements; potential need for expansion of our production facility; the potential loss of a strategic relationship; inability to attract and retain key personnel; management's ability to effectively manage our growth; difficulties and resource constraints in developing new products; protection and enforcement of our intellectual property; compliance with environmental laws; climate uncertainty; currency fluctuations; exposure to product liability lawsuits; and control of our management and affairs by principal stockholders.

The reader should carefully consider, together with the other matters referred to herein, the information contained under the caption "Risk Factors" in our Annual Report on Form 10-K for a more detailed description of these significant risks and uncertainties. We caution the reader, however, that these factors may not be exhaustive.

Since inception, our primary operating activities have consisted of basic research and development and production process development, recruiting personnel, purchasing operating assets, raising capital and sales of product. From September 16, 2002, the effective date of our plan of reorganization, through ~~January~~July 31, ~~2010~~2011 we had an accumulated deficit of ~~$8,129,249.~~$8,784,062. Our losses to date have resulted primarily from costs incurred in research and development, production costs and from general and administrative expenses associated with operations. We expect to continue to incur smaller operating losses through the current fiscal year. We also expect to have quarter-to-quarter and year-to-year fluctuations in revenues, expenses and losses, some of which could be significant.

We have a limited operating history. An assessment of our prospects should include the technology risks, market risks, expenses and other difficulties frequently encountered by early-stage operating companies, and particularly companies attempting to enter competitive industries with significant technology risks and barriers to entry. We have attempted to address these risks by, among other things, hiring and retaining highly qualified persons, diversifying our customer base and expanding revenue sources, e.g., by performing other contract services and increasing efforts to sell raw materials to other product formulators. However, our best efforts cannot guarantee that we will overcome these risks in a timely manner, if at all.

Results of Operations

Revenues

Revenue increased 29% for the three months ending July 31, 2011 to $86,819 compared to $67,115 for the three months ending July 31, 2010, and increased 6% for the nine months ended July 31, 2011 to $238,707 compared to $224,743 for the nine months ended July 31, 2010. The increase in revenues was due primarily to increased sales of our AstaFactor nutraceutical supplement. We had several large international AstaFactor sales in first quarter 2011 that did not occur in first quarter 2010. Additionally we ran several promotions and discounts on AstaFactor which generated increased customer response and sales. We plan to continue such promotions for the foreseeable future and believe that we will maintain corresponding increases in year over year revenues.

Additionally, the Company had a one time, large bulk sea-salt sale that occurred in the first quarter of 2010, which did not occur in the same period for 2011. Had the large bulk sea-salt sale not occurred in 2010, our nine month revenue 2011 would have increased 18% in comparison to the previous year. Our expectation is that revenue will increase slightly for the rest of the 2010-2011 fiscal year.

1012

Cost of Sales

For the three months ending July 31, 2011, cost of goods sold increased by $284 -- $284 versus $0 for the three months ending July 31, 2010. For the nine month period ending July 31, 2011, cost of goods increased 35% -- $14,027 versus $10,401 for the nine months ended July 31, 2010. The primary factor that increased cost of goods sold was increased product sales. This trend is expected to continue as the Company foresees continued increases in sales of its products.

Research and Development Costs

Research and development costs decreased to $40,564 for the three months ending July 31, 2011 compared $70,262 to the three months ending July 31, 2010, a decline of 42%. For the nine month period ending July 31, 2011, research and development costs decreased 37% -- $127,788 versus $203,667 for the nine months ended July 31, 2010. The decrease was due primarily to cost cutting measures, and due to a re-focus of the Company on production of its Sea Salt product line.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $63,913 for the three months ending July 31, 2011 as compared to $38,284 the three months ending July 31, 2010, an increase of 67%, and increased to $188,218 for the nine months ended July 31, 2011 versus $145,421 for the nine months ended July 31, 2010. The increase was due primarily to compensation expense that was accrued for the Company’s CEO during fiscal 2011 that was not incurred in fiscal 2010.

Interest Expense

For the three months ended July 31, 2011 and 2010, interest expense was $1,248 and $1,248 respectively. For the nine months ended July 31, 2011 and 2010, interest expense was $3,744 and $3,744 respectively. Debt was neither incurred nor paid during either period.

Off-Balance Sheet Arrangements

We don't have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities"(SPEs).

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting policies generally accepted in the United States of America. Our discussion and analysis of our financial condition and results of operations are based on these financial statements. The preparation of these financial statements requires the application of accounting policies in addition to certain estimates and judgments by our management. Our estimates and judgments are based on currently available information, historical results and other assumptions we believe are reasonable. Actual results could differ from these estimates.

There have been no material changes to the critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended October 31, 2010.

Recent Accounting Pronouncements - In December 2011, FASB issued Accounting Standards Update 2011-11, Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such; we do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.

Going Concern

For a discussion of going concern issues, see Note B to our financial statements in Part 1, Item 1 to this quarterly report.

~~Results of Operations~~Liquidity and Capital Resources

~~Revenues.~~ ~~Revenue declined 48.8%~~The Company currently does not have enough cash to satisfy its minimum cash requirements for the ~~quarter ending January 31, 2010 to $96,215 vs. $187,937 in the year ago quarter ending January 31, 2009.~~next twelve months. The ~~revenue decline was attributable to the ending~~future of the ~~HRBioPetroleum agreement which ended on June 8, 2009. Product~~Company is dependent upon its ability to obtain financing and upon future profitable operations from the development and sales of ~~AstaFactor and~~ Kona Sea ~~Salt increased to $96,215 versus $47,368 in the comparable periods, an increase of 103.1%~~

~~Cost of Sales.~~ Cost of goods sold was $1,306 for the quarter ending January 31, 2010 versus $453 in the quarter ending January 31, 2009 which was a 288% increase as we added materials and inventory to meet expected future sales of our AstaFactor and Kona Sea Salt products.Salt.

~~Research~~Management has plans to seek additional capital through private placement and ~~Development Costs~~. ~~Research~~public offerings of its common stock, and ~~development costs decreased to $62,932 for the quarter ending January 31, 2010 versus $96,670 for the quarter ending January 31, 2009, an decrease of approximately 34.9%. The decrease was due~~projects that revenue will increase in future years. There are no assurances, however, with respect to the ~~winding down~~future success of ~~costs associated with the conclusion~~these plans.

The present state of the ~~Company’s technical service agreement~~Company's liquidity and ~~shift~~capital resources raises substantial doubt about its ability to continue as a going concern. The ability of ~~personnel to work on research for the introduction of future new products that~~ the Company ~~hopes~~ to ~~introduce in~~continue as a going concern is dependent on the ~~second quarter of 2010.~~

~~Selling, General~~Company's ability to raise additional capital and ~~Administrative Expenses~~. These expenses decreased to $50,747 for the quarter ending January 31, 2010 as compared with $101,023 in the quarter ending January 31, 2009, a decrease of 49.8% as the Company, concluded the technical service agreement and the employees associated with that project. The Company will also continue to contain expenses though the use of part time workers who are available on a call basis when needed.

~~Interest Expense.~~ ~~For the quarter ended January 31, 2010 versus 2009, interest expense was $1,248 and $1,282, respectively.~~implement its business plan.

ITEM ~~4(T).~~4. CONTROLS AND PROCEDURES

~~(a) Evaluation of Disclosure Controls and Procedures. Under~~An evaluation was carried out under the supervision and with the participation of ~~our~~the Company’s management, including ~~our chief~~its principal executive officer ~~we conducted an evaluation~~and principal financial officer, of ~~our~~the effectiveness of the design and operation of the Company’s disclosure controls and procedures ~~as such terms are~~(as defined in Rule ~~13a-14(c) promulgated~~13a-15(e) and 15d-15(e) under the Exchange ~~Act, within~~Act) as of the ~~90 day~~end of the period ~~prior to~~covered by this Report. Based upon that evaluation, the ~~filing date of this quarterly report. Based on this evaluation, our Chief Executive Officer~~principal executive officer and ~~Principal Financial and Accounting Officer~~principal financial officer concluded that ~~our~~those disclosure controls and procedures were not effective as of ~~that date.~~July 31, 2011, because we do not have sufficient staff to segregate responsibilities and no written documentation of internal control policies. Additionally, our annual report on Form 10-K for the year ended October 31, 2010 and our quarterly report on Form 10-Q for the quarter ended July 31, 2011 were not filed within the time periods specified in the SEC's rules. We plan to seek to correct these deficiencies during the current fiscal year or the next.

~~(b) There~~During the quarterly period covered by this Report, there were no changes in the Company’s internal control over financial reporting that have ~~been no significant changes (including corrective actions with regard~~materially affected, or are reasonably likely to ~~significant deficiencies or material weaknesses) in our~~materially affect, the Company’s internal ~~controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in paragraph (a) above.~~control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. ~~UNREGISTERED SALES~~UNREGESTERED SALE OF ~~EQUITY SECURITIES~~SECURITES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

31.1	Certification of Chief Executive Officer pursuant to Rule 13a – 14 (a) of the Securities Exchange Act of 1934 (filed herewith electronically).

31.2	Certification of Principal Financial and Accounting Officer pursuant to Rule 13a – 14 (a) of the Securities Exchange Act of 1934 (filed herewith electronically).

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith electronically).

32.2	Certification of Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002 (filed herewith electronically)

1215

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	MERA PHARMACEUTICALS, INC.

Dated: ~~March 16, 2010~~ July 26, 2012	By:	/s/ ~~Gregory F. Kowal~~Charles Gary Spaniak, Sr.
		~~Gregory F. Kowal~~Charles Gary Spaniak, Sr.
		Chief Executive Officer

	By:	/s/ Lawrence H. Wolfe
		Lawrence H. Wolfe
		Principal Financial and Accounting Officer

~~(Mark one)~~
þ	~~Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For the quarterly period ended January 31, 2010~~

OR

o	~~Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934~~

Delaware		04-3683628
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)		Smaller reporting company þ

			Page
Part I - Financial Information

	Item 1:		Financial Statements	2

		Condensed Balance ~~Sheet~~Sheets as of July 31, 2011 (unaudited) and as of October 31, 2010	23

		Unaudited Condensed Statements of Operations for the three and nine months ended July 31, 2011 and July 31, 2010	34

		Unaudited Condensed Statements of Cash Flows for the nine months Ended July 31, 2011 and July 31, 2010	45

		Notes to Unaudited Condensed Financial Statements	56

	Item 2:		Management's Plan of Operation	10
	~~Management’s~~
		Management's Discussion and Analysis of Financial Condition and Results of Operations	1012

	Item ~~4(T).~~ 3. Quantitative and Qualitative Disclosures about Market Risk		14

	Item 4. Controls and Procedures		11 14

Part II - Other Information


	Item 1:		Legal Proceedings	1214

	Item 2:		Unregistered Sales of Equity Securities and Use of Proceeds	1214

	Item 3.		Defaults Upon Senior Securities	1214
~~Item 5:~~	~~Other Information~~	12
~~Item 6:~~	~~Exhibits~~	12
~~Signature~~		13
~~Certifications~~
	Item 4: Removed and Reserved		14

	Item 5: Other Information		14

	Item 6: Exhibits		15

	Signature		16

	January 31, 2010			October 31, 2009
	(Unaudited)			(Audited)

ASSETS
Current assets:
Cash and cash equivalents	$	2,241		$	3,135
Accounts receivable		14,281			6,656
Tax credit receivable		36,849			31,229
Prepaid expenses		11,974			15,994

Total current assets		65,345			57,014

Plant and equipment, net		197,142			200,482

Total Assets	$	262,487		$	257,496

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	151,907		$	181,040
Accrued expenses	$	141,935		$	133,172
Notes payable - related parties		51,936			51,936
Deferred revenue		73,200			30,450
Other current liabilities		-			-

Total Current Liabilities		418,978			396,598

Contingencies

Stockholders' deficit:
Convertible preferred stock, $.0001 par value, 10,000
shares authorized, 80 Series A shares issued and
outstanding and 974 Series B shares issued and
outstanding		2			2
Common stock, $.0001 par value: 750,000,000
shares authorized, 547,769,915 shares issued
and outstanding		54,777			54,777
Additional paid-in capital		7,920,003			7,920,003
Treasury stock at cost		(2,025	)		(2,025	)
Accumulated deficit		(8,129,248	)		(8,111,859	)
Total stockholders' deficit		(156,491	)		(139,102	)

Total Liabilities and Stockholders' Equity	$	262,487		$	257,496

	Three Months Ended			Three Months Ended
	January 31,			January 31,
	2010			2009
	(Unaudited)			(Unaudited)

NET SALES	$	96,215		$	187,937
Cost of goods sold		1,306			453

GROSS PROFIT		94,909			187,484

Operating Expenses
Selling and administrative expenses		50,747			101,023
Research and development costs		62,932			96,670
Depreciation and amortization		4,325			21,607

Total operating expenses		118,004			219,300

Operating loss		(23,095	)		(31,816	)

Other income (expense)
Interest income		-			1,371
Other income		1,333			-
Interest expense		(1,248	)		(1,282	)

Total other income (expense)		85			89

Net loss before tax provision		(23,010	)		(31,727	)

Provision for income taxes		-			-
Refundable tax credit		5,620			7,581

NET INCOME (LOSS)	$	(17,390	)	$	(24,146	)

Net income (loss) per common share	$	(0.0000	)	$	(0.0000	)

Weighted Average Shares Outstanding		547,769,915			547,769,915