EARLY DETECT Inactive S-1 IPO registration

Revenues and Cost of Sales. Revenues and cost of sales relate to domestic and international sales of our products.

For the Years Ended August 31,

	2004		2005		2006

Sales	$	-	$	32	$	118

Cost of Sales		324		216		1,414

OPERATING EXPENSES

Compensation, professional and consulting fees. The overall increases from 2004, through 2006, were due primarily to the development and expansion of our product line, the acquisition of subsidiary companies and redevelopment of the marketing plan. A majority of these expenses were paid in stock-based compensation.

For the Years Ended August 31,

	2004		2005		2006

Compensation, professional and consulting fees	$	3,128	$	5,200		9,350
Rent expense		41		28		95
Other general and administrative expenses		178		143		393
Depreciation, amortization and impairment		7		66		8,691
Interest expense		-		31		237

Rent expense. To decrease expense, we reduced the rent expense from 2004 to 2005. The subsequent 2006 increase in rent is primarily due to the acquisition of Pan Probe and the consolidation of its rent expense into EDI’s financials.

Other general and administrative expenses. As with the rent expense, we reduced general and administrative expenses from 2004 to 2005. As we implemented our business plan, expenses increased, and as Pan Probe-related expenses were included in the consolidated financial statements for 2006, accounting for the dramatic increase in that year.

Depreciation, amortization and impairment. In the 2004 operating period, we had very little obtained equipment to depreciate and only one patent to amortize. Since the Pan Probe acquisition was completed late in the 2005 fiscal year, only a small portion of the depreciation and amortization was applicable. Full year amortization and depreciation was available for 2006, showing a dramatic increase over 2005.

Interest expense. Beginning in 2005 and continuing in 2006, interest expenses for loans began accumulating for a loan on the acquisition of Pan Probe, as well as for loans by shareholders and others.

Liquidity and Capital Resources

At August 31, 2006, cash and cash equivalents totaled $53,869, compared to $70,276 at August 31, 2005.

For the Years Ended August 31,
	2004			2005			2006
Net cash provided by (used in) continuing operations:
Operating activities	$	(342	)		(642	)		(1,089	)
Investing activities		( 1	)		( -	)		( 76	)
Financing activities		338			712			1,149
Increase (decrease) in cash and cash equivalents		( 4	)		70			( 16	)

Operating Activities. The increase in net cash outflows from operations in 2006 compared to 2005 was due primarily to an increase in the issuance of common stock for consulting services totaling $8.8 million in 2006 compared to $4.9 million in 2005 and the increase in depreciation, amortization and impairment totaling $8.7 million in 2006 compared to less than $100,000 in 2005. There was also a decrease in 2006 of $1.3 million in inventory from 2005, and an increase of $0.2 million in 2006 in accounts payable and accrued expenses from 2005.

The increase in net cash outflows from operations in 2005 compared to 2004 was due primarily to an increase in the issuance of common stock for consulting services totaling $4.9 million in 2005, as compared to $2.9 million in 2004.

Investing Activities. The change in net cash flows from investing activities for all periods presented was due primarily to the acquisition of fixed assets from the July 2005 Pan Probe acquisition.

Financing Activities. The change in net cash inflows from financing activities was primarily the result of the proceeds from issuance of common stock, which varied from $214,488 in 2004 to $91,250 in 2005 to $1,064,101 in 2006. Also, the proceeds from notes payable - related parties varied from $123,563 in 2004 to $686, 056 in 2005 to $159,422 in 2006.

Results of Operations - Nine Month Interim period ended May 31, 2005, 2006 and 2007

REVENUES AND COST OF REVENUES

Revenues and Cost of Sales. Revenues and cost of sales relate to domestic and international sales of our products.

For the Nine Month Interim Period Ended May 31,
	2005		2006		2007

Sales	$	--	$	132	$	287

Cost of Sales		--		96		257

OPERATING EXPENSES

Compensation, professional and consulting fees. The overall increases from 2005, through 2007, were due primarily to the development and expansion of our product line, redevelopment of the marketing plan and for marketing efforts. A majority of these expenses, including some employee bonuses, were paid in stock-based compensation.

For the Nine Month Interim Period Ended May 31,
	2005		2006		2007

Compensation, professional and consulting fees	$	3,109	$	7,620	$	13,343
Research and development		-		-		5,000
Rent expense		1		58		105
Other general and administrative expenses		5		231		438
Depreciation, amortization and impairment		5		470		474
Interest expense		-		126		10,995

Research and development. In the nine months ending May 31, 2007 we acquired rights from Pan Probe Biotech Beijing to sell and distribute products in China and to distribute bird flu vaccines manufactured in China, exclusively, in all countries not bordering on China. These rights have been expensed at $5,000,000 as research and development expense by the Company.

Rent expense. To decrease expense, we reduced the rent expense prior to 2005. The subsequent 2006 and 2007 increases in rent are primarily due to the acquisition of Pan Probe and Sherman and the consolidation of its rent expense into EDI’s financials.

Other general and administrative expenses. As with the rent expense, we reduced general and administrative expenses prior to 2005. As we implemented our business plan, expenses increased, and as Pan Probe-related expenses were included in the consolidated financial statements for 2006 and 2007 (including adding a small amount of Sherman expense), accounting for the dramatic increase in those years.

Depreciation, amortization and impairment. In the 2005 operating period, we had very little obtained equipment to depreciate and only one patent to amortize. Since the Pan Probe acquisition was completed late in the 2005 fiscal year, depreciation and amortization was applicable for the full nine month period ending May 31, 2006. Full year amortization and depreciation was also available for 2007.

Interest expense. Beginning in 2006 and continuing in 2007, interest expenses for loans began accumulating for a loan on the acquisition of Pan Probe, as well as for loans by shareholders and others. This accounted for over $100,000 of the interest expenses in those years. In 2007, 1,200,000 shares of common stock were issued to repay certain related party debt. The value of these shares is $12,000,000 of which $1,200,000 is reflected as debt reduction and $10,800,000 as debt discount recorded as interest expense.

Liquidity and Capital Resources

At May 31, 2007, cash and cash equivalents totaled $12,059, compared to $141,855 at May 31, 2006.

For the Nine Month Interim Period Ended May 31,
	2005			2006			2007
Net cash provided by (used in) continuing operations:
Operating activities	$	( 66	)		(193	)		(1,216	)
Investing activities		( -	)		( 29	)		(102	)
Financing activities		66			294			1,276
Increase (decrease) in cash and cash equivalents		( -	)		72			(42	)

Operating Activities. The increase in net cash outflows from operations in 2007 and 2006 was due, in part, to an increase in the issuance of common stock for consulting services totaling $12.6 million in 2007 and $7.8 million in 2006 and the increase in depreciation, amortization and impairment totaling about $0.5 million in 2007 and 2006 compared to $5,494 in 2005. In addition, $5.0 million was issued in stock for research and development in 2007 and $10.8 million issued for discount on note payable. There was also a decrease in 2007 of $48,860 in inventory from 2006, and an increase of $271,794 in 2007 in accounts payable and accrued expenses from 2006.

Investing Activities. The change in net cash flows from investing activities for 2007 was due to the acquisition of fixed assets.

Financing Activities. The change in net cash inflows from financing activities was primarily the result of the proceeds from issuance of common stock, which varied from $463,000 in 2006 to $124,000 in 2007. Also, the proceeds from notes payable - related parties varied from $(94,357) in 2006 to $1,248,865 in 2007. The obligations for payments under capital lease changed in 2006 from $74,559 to $96,927 in 2007.

We believe that our cash and cash equivalent balances, anticipated cash flows from operations and external sources of funding from the capital markets will be sufficient to meet EDI’s cash requirements through August 31, 2008. In order for us to continue as a “going concern” beyond August 31, 2008, we may be required to obtain capital from external sources if projected revenue and profits are insufficient to sustain growth. However, there can be no assurances that we will be able to secure additional sources of financing at the times and at terms acceptable to us. The issuance of additional equity securities will also cause dilution to the EDI shareholders. If external financing sources are not available, or are inadequate to fund operations, we could be required to reduce operating costs, including research projects and personnel,, which could jeopardize, future strategic initiatives and business plans. For example, a reduction in operating costs at the Pan Probe subsidiary, based in San Diego, California or the administrative office in Irvine, California, should they occur, could jeopardize our ability to launch market and sell products and services necessary to order, grow and sustain our operations, and eventually, achieve profitability. As discussed in Note 14 to the consolidated financial statements included in this prospectus, the anticipation that we will be required to obtain additional financing in the foreseeable future raised substantial doubt about our ability to continue as a “going concern.” In addition to seeking capital from outside sources, our plans in regard to these matters include reductions in personnel and in fixed overhead costs, should they be necessary.

We may also encounter unforeseen difficulties that may deplete capital resources more rapidly than anticipated, including those set forth in EDI’s Risk Factors included herein. Any efforts to seek additional funding could be made through equity, debt or other external financing structure, and there can be no assurance that additional funding will be available on favorable terms, if at all.

EDI’s long-term requirements will be substantial, and the adequacy of available funds will depend upon many factors, including:

·	The costs of commercialization activities, including marketing, manufacturing and capital equipment;

·	Continued progress in research and development programs;

·	Costs involved in filing, prosecuting, enforcing and defending, any patents claims, should they arise;

·	The Company’s ability to license technology;

·	Competing technological developments;

·	The creation, and formation, of strategic alliances;

·	Other factors not within the Company’s control.

Off-Balance Sheet Arrangements

We have not entered into off-balance sheet financing arrangements, nor do we have significant commitments for capital expenditures in 2007. The only long-term liabilities we possess are obligations under capital lease, which, net of current portion for 2006, is $342,973.

Recent Accounting Pronouncements

Refer to Note 2 of the Company’s consolidated financial statements included elsewhere herein.

A summary of our contractual obligations and commitments as of August 31, 2006 is as follows:

Contractual Obligations and Commitments	Total		2007		2008		2009		2010		Beyond
Operating leases	$	624,000	$	156,000	$	156,000	$	156,000	$	156,000	$	156,000
Capital lease obligations		622,052		107,272		123,792		164,252		181,236		45,500
Long-term debt		---		---		---		---		---		---
Total Contractual Obligations and Commitments	$	1,246,052	$	263,272	$	279,792	$	320,252	$	337,236	$	201,500

Net Operating Loss Carryforwards

We have a net operating loss carryforward in the approximate amount of $84,189,940 as of May 31, 2007, available to offset future taxable income through 2027. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

Deferred income taxes will be determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.


At May 31, 2007, deferred tax assets consist of the following:

Net operating losses	$	28,624,580
Amortization of goodwill		(352,534	)
	$	28,272,046

Valuation allowance		(28,272,046	)
	$	-

A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate as a percentage of income before taxes and federal statutory rate for the nine months ended May 31, 2007 and 2006 is summarized below.

	2007			2006
Federal statutory rate		(34.0	)%		(34.0	)%
State income taxes, net of federal benefits		6.0			6.0
Valuation allowance		28.0			28.0
		0.0	%		0.0	%

Quantitative and Qualitative Disclosure of Market Risks

Our exposure to market risk is confined to our cash, cash equivalents and short-term investments which have maturities of less than one year. The goals of our investment policy are preservation of capital, fulfillment of liquidity needs and fiduciary control of cash and investments. We also seek to maximize income from our investments without assuming significant risk. To achieve our goals, we will maintain a portfolio of cash equivalents and investments in a variety of securities of high credit quality. The securities in our investment portfolio will not be leveraged, will not be classified as available for sale and will be, due to their very short-term nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not believe that an increase in market rates would have any material negative impact on the value of our investment portfolio.

LEGAL PROCEEDINGS

We are not currently a party to any material legal proceedings. From time to time, we may receive claims of and become subject to commercial litigation related to the conduct of our business acquisitions. Such litigation could be costly and time consuming and could divert our management and key personnel from our business operations. The uncertainty of litigation increases these risks. In connection with such litigation, we may be subject to significant damages or equitable remedies relating to the operation of our business. Any such litigation may materially harm our business, results of operations and financial condition.

MANAGEMENT

Executive Officers and Directors

The following table sets forth information concerning our current executive officers and directors.

Name	Age		Position
Charles A. Strongo		43	President, Chief Executive Officer, and Director
David Thomas, Ph. D.		72	Chairman of the Board
Richard Johnson		75	Chief Financial Officer
Clive R. Taylor, M.D., Ph.D.		63	Director
Baron E. Bernard, Sr.		73	Director
Charles E. Parker, M.D., MSEd.		80	Director
Paul Lisak, M.S., R.E.H.S.		63	Director
Ernest M. Vandewghe, Jr., M.D.		79	Director

Mr. Charles A. Strongo, Chief Executive Officer, President, and Director

Charles A. Strongo has served as our President and Chief Executive Officer since March 2004. He has been a member of our Board of Directors since June 2002. From 2002 to 2004, Mr. Strongo served as our Chief Financial Officer. Mr. Strongo currently serves as the President and Chief Executive Officer for our wholly owned subsidiary, Sherman Biotech, positions he has held since July 2006. Mr. Strongo received a B.A. in business administration from National University.

David Thomas, Ph.D., Chairman of the Board of Directors

David Thomas has served as Chairman of our board of directors since our inception. Dr. Thomas also chairs our Compensation Committee. Dr. Thomas is the founder of All American Capital, a corporation that engages in business consulting, and currently serves on its board of directors, a position he has held since 1996. He has also held directorships in other companies, including Century National Bank of Texas from 1982 to 1983, Marshall Islands Development Bank from 1979 to 1981. Dr. Thomas received a B.A. in political science from the University of Southern California and a MFT in foreign trade from the American Institute of Foreign Trade and a Ph.D. in economics from the University of Arizona.

Mr. Richard Johnson, Chief Financial Officer

Richard A. Johnson has served as our Chief Financial Officer since July 2005 and as Chief Financial Officer of Sherman Biotech, our wholly owned subsidiary, since September 2006. In 1990, Mr. Johnson founded Stanhill Associates, a Management Consulting company, and served as President until 1997. From 1998 to 2003, Mr. Johnson served as the Managing Consultant and Chief Financial Officer for McKnight Consulting, a Management Consulting company. From 1981 to 1985, Mr. Johnson held the position of Program Control Manager for C.F. Braun and Company, an engineering and construction company. Mr. Johnson received a B.A. in civil engineering from the University of Illinois in 1957.

Dr. Clive R. Taylor, M.D., Ph.D., Director

Clive R. Taylor has served on our Company’s board of directors since 1999. Dr. Taylor is the Chairman of the Department of Pathology and Laboratory Medicine at the University of Southern California, a position he has held since 1983. Since 2001, he has been the Chairman of one of the FDA Advisory Panels for Diagnostic Devices and Radiologics. In 1998, Dr. Taylor joined Stereovision, Inc., a 3D-imaging company, and currently serves as its scientific advisor and as a member of its board of directors. From 1997 to 2000, Dr. Taylor served as President of the Association of Pathology Chairs. From 1995 to 1998, Dr. Taylor served as President of Biological Stain Commission, and he currently retains a position as trustee. Dr. Taylor received a Ph.D. in immunology from the University of Oxford and a M.D. from the University of Cambridge.

Mr. Baron E. Bernard, Sr., Director, Secretary

Baron E. Bernard joined our board of directors in April 2004 and continues to serve as a director. Mr. Bernard also serves on our Audit and Compensation Committees. Mr. Bernard is also our Secretary, a position he has held since April 2004. In 1973, Mr. Bernard founded Bernard Associates, hotel development consultants, and Bernard Hotels-Hotel Management, a leader in the hotel industry, and held the position of owner until 2004. Mr. Bernard received a B.S. in accounting from Cornell University in 1955.

Dr. Charles E. Parker, M.D., MSEd., Director

Charles E. Parker has served as a member of our board of directors since April 2007 and is Chairman of the Audit Committee. From 1977 to 1996 Dr. Parker served on the board of directors of Olivevien Medical Center, a Division of UCLA. Prior to his corporate positions, Dr. Parker practiced medicine and taught as a professor of medicine at the University of California’s School of Medicine at Los Angeles from 1976 to 1996 and at the University of Southern California from 1996 to present Dr. Parker received an A.A. in modern languages from Sierra College in 1952, and a B.A. in biology from the University of Utah in 1954. Dr. Parker also holds several advanced degrees including a M.D. from the University of Maryland, School of Medicine and a M.S. in medical education from the University of Southern California.

Mr. Paul Lisak, M.S., R.E.H.S., Director

Paul Lisak has served as a member of our board of directors since February 2007 and holds seats in the Audit and Compensation Committees. Mr. Lisak has also served as a member of the board of directors of Paradise Music & Entertainment, Inc., a public company engaged in the business of producing movies, DVD’s, CD’s and environmental laboratories, and has held that position since 2006. Mr. Lisak served in numerous positions with Los Angeles County. Mr. Lisak first joined Los Angeles County in 1973 as an Industrial Waste Inspector, and he went on to the positions of Staff Developer, Program Manager for Public Health Pharmacy and Administrator of Public Health Labs. As Staff Developer, Mr. Lisak trained over 200 health workers, and his position as Program Manager required him to oversee the production and nation-wide distribution of pharmaceuticals. (recent hires require information on business experience; not sure if necessary). In 1990, Mr. Lisak obtained the position of Supervisor and Industrial Hygienist for Hazardous Materials Control Manager and was subsequently promoted to Hazardous Materials Control Manager in 1994, a position he held until 2002. Mr. Lisak received a B.A. in biology and environmental science from Indiana State University in 1970 and a M.A. in environmental science and occupational health from California State University at Northridge in 1978.

Dr. Ernest M. Vandeweghe, Jr., M.D., Director,

Ernest M. Vandeweghe, Jr., M.D. has served on our board of directors since April 2007 and also sits on the Audit Committee. From 1949 to 1956, Dr. Vandeweghe was a professional basketball player with the New York Knickerbockers of the National Basketball Association, a professional basketball league team. >From 1967 to 1976, Dr. Vandeweghe served as a member of the board of directors of the National Athletic Foundation. From 1960 to 1975, Dr. Vandeweghe practiced medicine for the LA Lakers of the NBA, another professional basketball league team. Dr. Vandeweghe received a B.A. in art from Colgate University and a M.D. from Columbia University College of Physicians and Surgeons.

Family Relationships

There are no family relationships between any of our directors or executive officers.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual meeting of our shareholders or until removed from office in accordance with our bylaws.

Our executive officers are appointed by our Board of Directors and hold office until removed by the Board.

Involvement in Certain Legal Proceedings

None of our directors or executive officers have been involved in any of the following events during the past five years:

1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Committees of the Board of Directors

The Audit Committee currently consists of Dr. Parker, Mr. Lisak, and Mr. Bernard. Dr. Parker and Mr. Lisak are independent under the listing standards of the NASDAQ Stock Market. The Audit Committee is responsible for retaining, evaluating and, if appropriate, recommending the termination of the Company's independent registered public accounting firm and is primarily responsible for approving the services performed by the Company's independent registered public accounting firm and for reviewing and evaluating the Company's accounting principles, financial reporting practices, and system of internal accounting controls. The Audit Committee is also responsible for maintaining communication between the Board of Directors and the Company's independent registered public accounting firm. Dr. Parker is the chair of the Audit Committee.

The Board has determined that Dr. Parker is an audit committee financial expert as defined by Item 401(h) of Regulation S−K of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The Compensation Committee currently consists of Dr. Thomas, Mr. Bernard, and Mr. Lisak. Dr. Thomas and Mr. Lisak are independent under the listing standards of the NASDAQ Stock Market.

The Company's executive compensation program is administered by the Compensation Committee. The Compensation Committee is responsible for approving the compensation package of each executive officer and recommending it to the Board of Directors. In making decisions regarding executive compensation, the Compensation Committee considers the input of the Company's management and other directors.

For more information on the responsibilities and activities of the Compensation Committee, including the committee’s processes for determining executive compensation, see “Compensation Discussion and Analysis.”

All directors participate in the consideration of director nominees. We do not have a policy with regard to consideration of nominations for director. We accept nominations for directors from our security holders. There is no minimum qualification for a director nominee to be considered by our board of directors. All of our directors will consider any nomination in accordance with his or her fiduciary responsibility to the company and its stockholders.

Security holders may send communications to our Board of Directors by writing to EarlyDETECT Inc., 2082 Michelson Dr., Suite 212, Irvine, California 92612, attention Board of Directors or any specified director. Any correspondence received at the foregoing address to the attention of one or more directors is promptly forwarded to such director or directors.

Executive Compensation

Our directors receive $2,500 for each meeting attended, provided that no director shall receive an aggregate of more than $10,000 per year. Each of our directors also receives and 50,000 shares of our common stock upon accepting the appointment as a director of the company.

The following table sets forth certain information with respect to the compensation of our Chief Executive Officer and each of our other most highly compensated executive officers who earned more than $100,000 for the fiscal years ended August 31, 2006 and August 31, 2005.

Summary Executive Compensation Table

Name & Principal Position	Year	Salary ($)	Stock Awards ($)	Option Awards ($)	All Other Compensation ($)	Total ($)

Charles A. Strongo, President, CEO, and Director (1)	2006	--	2,000,000	--	--	2,000,000
	2005	--	2,000,000	--	31,000	2,031,000
Richard Johnson, CFO	2006	--	168,000	--	40,250	108,250
	2005	--	120,000	--	3,000	123,000

________________
(1)	Mr. Strongo is a named executive officer who also serves on our board of directors. As such, Mr. Strongo does not receive separate compensation for serving as a director.

Director Compensation

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
David Thomas, Ph.D.	-	-	-	-	-	-	-
Clive R. Taylor	-	-	-	-	-	-	-
Baron E. Bernard	-	-	-	-	-	-	-
Charles E. Parker (1)	-	500,000	-	-	-	-	500,000
Paul Lisak (1)	-	500,000	-	-	-	-	500,000
Ernest M. Vandewghe, Jr. (1)	-	500,000	-	-	-	-	500,000

_____________________

(1)	Directors Dr. Charles E. Parker, Paul Lisak and Dr. Ernest M. Vandewghe, Jr. became directors in April 2007 and were issued 50,000 shares each valued at $10.00 per share on becoming directors.

Outstanding Equity Awards at August 31, 2006

We do not have any outstanding equity awards at August 31, 2006.

Compensation Discussion and Analysis

This section discusses the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. It provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our executive officers and places in perspective the data presented in the narrative and tables that follow.

Overview

Objectives of Compensation Program. The objective of our compensation program for our executive officers is to motivate and reward fairly those individuals who perform over time at or above the levels that we expect and to attract, as needed, individuals with the skills necessary to achieve our objectives. Our compensation program is also designed to reinforce a sense of ownership and urgency and to link rewards to measurable corporate performance goals.

Our executive officers’ compensation currently has three primary components:

· base salary;

· cash bonuses; and

· employee benefits and perquisites.

Determination of Our Compensation Program. For our business, we rely on highly qualified and talented employees who have worked in biotech and pharmaceutical companies to execute our business model and, thus, our compensation program is patterned on those of technology companies in order to attract and retain talented employees who may have opportunities in biotech and pharmaceutical companies.

Determining the Elements of Our Compensation Program. Our compensation program consists of two general elements: a fixed portion of compensation to retain and provide a base level of compensation to our employees and a performance element to incentivize our employees to achieve superior corporate performance. The fixed portion of our compensation program consists of the base salary. The performance element of our compensation program consists of cash bonus and the grant of restricted stock. In addition, we believe the grant of stock awards helps us to align the interests of our executive officers with the interests of our stockholders.

Determining the Amounts of Each Element of Our Compensation Program. In determining the total amount and mixture of the compensation for each of our executive officers, our compensation committee and our board of directors subjectively consider the overall value to us of each executive in light of numerous factors such as competitive position, individual performance, including past and expected contribution to our goals of each executive officer, and our long-term needs and goals, including attracting and retaining key management personnel. Our compensation committee reviews the performance of each executive officer annually and determines whether the executive officer should receive any increase in base salary or receive a stock award based on such evaluation.

Role of Compensation Committee and CEO. The compensation committee of our board of directors has responsibility for reviewing, approving and determining the compensation of our executive officers. Annually, our compensation committee evaluates the performance of the CEO and determines the CEO’s compensation in light of the goals and objectives of the compensation program. Our CEO assists our compensation committee in reaching compensation decisions with respect to the named executives other than the CEO. The other named executives do not play a role in their own compensation determination, other than discussing individual performance objectives with the CEO. If our compensation committee considers it appropriate, it may increase our executive officers’ base salary or provide for additional stock awards.

Tax Deductibility of Compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s CEO or any of the company’s four other most highly compensated executive officers who are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by the stockholders). For 2006, our executive officers did not receive compensation in excess of $1 million. Generally, while we seek to maximize the deduction of our executive officers, because we compensate our executive officers in a manner designed to promote our varying corporate goals, our compensation committee has not adopted a policy requiring all compensation to be deductible.

Discussion of Specific Components of Our Compensation Program.

Base Salary. Our compensation committee will periodically review (usually annually) the individual base salaries of the executive officers, and adjust salaries based on individual job performance and changes in the officer's duties and responsibilities. In making salary decisions, our compensation committee exercises its discretion and judgment based on these factors. No specific formula is applied to determine the weight of each performance factor in determining base salary.

Cash Bonuses. From time to time, our compensation committee grant cash bonuses to our employees at the end of the year. In making cash bonus decisions, our compensation committee exercises its discretion and judgment based on individual job performance.

Equity Compensation. We grant restricted stock to our employees, including our executive officers, from time to time. We believe the restricted stock align our executive officers’ interests with those of our stockholders, help to retain our executive officers and encourage our executive officers to increase the value of our corporate enterprise.

Benefits and Perquisites. Our executive officers participate in the employee benefits that are available to all employees.

Severance and Change of Control Payments. We do not have any arrangements or agreements with our executive officers providing for severance and change of control arrangements.

Employment Agreement

We entered into an employment agreement with Charles A. Strongo beginning April 1, 2004 and continuing through August 31, 2009. Under the terms of the agreement, upon the company becoming a publicly traded company, Mr. Strongo will be entitled to a base salary at the rate of $240,000 per year, and upon approval by the Board, be eligible to receive options to purchase 200,000 shares of the company’s common stock per year at the price of $2.50 per share. The agreement also provides for four weeks of paid vacation and $1,000 per month for all health, dental, and life insurance coverage. Upon the company becoming a publicly traded company, Mr. Strongo will also be entitled to receive an annual bonus not to exceed 100% of his base salary, as determined by the discretion of the Board of Directors. The agreement also provides for non-competition covenant by Mr. Strongo for a period of three years after the end of the employment in favor of the Company.

We entered into an employment agreement with Richard Johnson beginning July 1, 2005 and continuing through August 31, 2009. Under the terms of the agreement, upon the company becoming a publicly traded company, Mr. Johnson will be entitled to a base salary at the rate of $120,000 per year, and upon approval by the Board, be eligible to receive options to purchase 25,000 shares of the company’s common stock per year at the price of $5.00 per share. The agreement also provides for three weeks of paid vacation. The agreement also provides for non-competition covenant by Mr. Johnson for a period of three years after the end of the employment in favor of the Company.

Potential Payments Upon Termination or Change in Control

We do not have any arrangements or agreements with our executive officers providing for payments upon termination or change in control.

RELATED PARTY TRANSACTIONS

The Company entered into a settlement with Peter George, a former director, in the amount of $833,182. This amount included interest through June 20, 2005. In a stipulation dated August 31, 2005, it was stipulated that the Company made three payments of $20,000 each against the total amount. The Company was required to make a $25,000 payment by September 27, 2005 and another $25,000 payment by October 27, 2005, with the remaining balance due and payable with accrued interest at 8% on November 28, 2005. On November 28, 2005, the Company was able to extend this note with the former owner indefinitely with payments to be made as the Company is in a position to do so.

The Company has an agreement with Charles Strongo, our Chief Executive Officer, for funds that he has advanced the Company over the past year. The agreement provides for repayment of funds up to $500,000. As of August 31, 2006 and 2005, there was $375,986 and $177,627 outstanding, respectively to the current owner.

The Company has an agreement with All American Capital, a company that is owned by Dr. David Thomas, our Chairman of the Board of Directors. This company has advanced and been advanced amounts to the Company over the past three years. The Company as of August 31, 2006 owes this company with a common director $50,000, as these funds were advanced to the Company in August 2006. The Company as of August 31, 2005 was owed $217,750 from the company that is owned by Dr. Thomas, and as of August 31, 2004, the Company owed $123,563 to this company. During the past two years, the balance comprised of various expenses that the company under common control paid on behalf of the Company. In 2005, to repay the amounts advanced, the Company signed over the deed to a building that was acquired by the Company for shares of their common stock valued at $645,000 and in addition repaid $134,000. This culminated in the Company being owed $217,750. The Company sold the building at its acquisition cost. The Company and Dr. Thomas agreed to recognize the $217,750 as a commission for the funds raised for the Company as well as the acquisition of Pan Probe.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Owners / Management

The following table sets forth certain information regarding the shares of common stock beneficially owned or deemed to be beneficially owned as of August 1, 2007, by: (i) each person whom we know beneficially owns more than 5% of our common stock, (ii) each of our directors, (iii) the executive officers named in the summary compensation table, and (iv) all such directors and executive officers as a group.

Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our common stock that they beneficially own, subject to applicable community property laws.

In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we included shares of common stock underlying options, warrants and convertible preferred stock held by that person that are currently exercisable or convertible, or exercisable or convertible within 60 days of August 1, 2007. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address for each person is c/o EarlyDETECT, Inc., 2082 Michelson Dr., Suite 212, Irvine, CA 92612.

Name and Address	Amount and Nature of Beneficial Ownership of Common Stock (1)		Percent of Class (1)
Executive Officers and Directors:
Charles A. Strongo		6,076,707(2)		27.1
Richard Johnson 612 Wood Lake Dr. Brea, CA 92821		120,800		0.5
David Thomas		3,529,450(3)		15.7
Clive R. Taylor, M.D., Ph.D.		325,500		1.5
Baron E. Bernard, Sr.		446,000		2.0
Charles E. Parker, M.D., MSEd.		75,600		0.3
Ernest M. Vandewghe, M.D.		50,000		0.2
Paul Lisak, M.S., R.E.H.S.		55,500		0.2

All Directors and Executive Officers (nine persons)

More than 5% Beneficial Owners:

Alice Yu & Dr. Shuije Cui		3,000,000(4)		13.4

* Constitutes less than 1%

_____________________

(1)

As used in this table, “beneficial ownership” means the sole or shared voting power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days after such date. Applicable percentage ownership is based on 22,437,099 shares of common stock outstanding at August 1, 2007.

(2)	Includes 600,000 shares held in Mr. Strongo's family trusts of which he has investment and voting control.

(3)	Includes 946,000 shares held by members of Dr. Thomas' family of which he has investment and voting control. The remaining 2,583,450 shares are held by All American Capital, a company in which Dr. Thomas is the sole owner and director.

(4)	Includes 500,000 shares held by Dr. Cui's brother of which he has investment and voting control.

Equity Compensation Plan Information

We have not adopted an equity compensation or stock option plan. As the number of employees increases or as the need arises, we will evaluate whether to adopt a plan as appropriate.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 50,000,000 shares of common stock, $0.001 par value per share, and 5,000,000 shares of preferred stock, $0.001 par value per share. Each share of common stock is entitled to one vote and the preferred stock is non-voting. As of August 1, 2007, there were 22,437,099 shares of our common stock issued and outstanding and no shares of our preferred stock issued and outstanding. After this offering, we will have 22,437,099 shares of common stock outstanding assuming we sell the maximum amount.

For more detailed information, please see our Articles of Incorporation and Bylaws, which have been filed as exhibits to the registration statement of which this prospectus is a part.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Integrity Stock Transfer.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock. Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

Based on the number of shares of common stock outstanding as of [_____________], 2007, upon completion of this offering, [_____________] shares of common stock will be outstanding, assuming no exercise of options or warrants. All of the shares sold in this offering will be freely tradable unless purchased by our affiliates. The remaining [_____________] shares of common stock outstanding after this offering will be restricted as a result of securities laws or lock-up agreements as described below. Following the expiration of the lock-up period, all shares will be eligible for resale in compliance with Rule 144, Rule 144(k) or Rule 701 to the extent such shares have been released from any repurchase option that we may hold. “Restricted securities” as defined under Rule 144 were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act. These shares may be sold in the public market only if registered pursuant to an exemption from registration, such as Rule 144, Rule 144(k) or Rule 701 under the Securities Act.

Rule 144

In general, under Rule 144 under the Securities Act of 1933, as in effect on the date of this prospectus, a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

·	one percent of the number of shares of common stock then outstanding, which will equal approximately [_____________] shares immediately after the completion of this offering; or

·	the average weekly trading volume of our common stock on the Nasdaq Capital Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 144(k)

Under Rule 144(k) of the Securities Act as in effect on the date of this prospectus, a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. [_____________] shares of our common stock will qualify for resale under Rule 144(k) within 180 days of the date of this prospectus, subject to the lock-up agreements, and to the extent such shares have been released from any repurchase option that we may hold.

Lock-Up Agreements

At the time closing of the offering, [_____________] will have entered into an agreement that for a period of 12 months from the date this registration statement becomes effective, he will not sell, contract to sell, grant any option for the sale or otherwise dispose of any of our equity securities, or any securities convertible into or exercisable or exchangeable for our equity securities, other than through existing Rule 10b5-1 trading plans, intra-family transfers or transfers to trusts for estate planning purposes, without the consent of MidSouth Capital, which consent will not be unreasonably withheld. MidSouth Capital may consent to an early release from the one-year lock-up period if, in its opinion, the market for the common stock would not be adversely affected by sales and in cases of an officer, director or other stockholder’s financial emergency.

CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX

CONSEQUENCES TO NON-U.S. HOLDERS

The following is a summary of certain material United States federal income tax consequences to non-U.S. holders (as defined below) of the acquisition, ownership and disposition of our common stock issued pursuant to this offering. This discussion is not a complete analysis of all of the potential United States federal income tax consequences relating thereto, nor does it address any estate and gift tax consequences or any tax consequences arising under any state, local or foreign tax laws, or any other United States federal tax laws. This discussion is based on the Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service, or IRS, all as in effect as of the date of this offering. These authorities may change, possibly retroactively, resulting in United States federal income tax consequences different from those discussed below. No ruling has been or will be sought from the IRS with respect to the matters discussed below, and there can be no assurance that the IRS will not take a contrary position regarding the tax consequences of the acquisition, ownership or disposition of our common stock, or that any such contrary position would not be sustained by a court.

This discussion is limited to non-U.S. holders who purchase our common stock issued pursuant to this offering and who hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all of the United States federal income tax consequences that may be relevant to a particular holder in light of such holder’s particular circumstances. This discussion also does not consider any specific facts or circumstances that may be relevant to holders subject to special rules under the United States federal income tax laws, including, without limitation, U.S. expatriates, partnerships or other pass-through entities, real estate investment trusts, regulated investment companies, “controlled foreign corporations,” “passive foreign investment companies,” corporations that accumulate earnings to avoid United States federal income tax, financial institutions, insurance companies, brokers, dealers or traders in securities, commodities or currencies, tax-exempt organizations, tax-qualified retirement plans, persons subject to the alternative minimum tax, and persons holding our common stock as part of a hedging or conversion transaction or straddle, or a constructive sale, or other risk reduction strategy.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS AND ANY OTHER UNITED STATES FEDERAL TAX LAWS.

Definition of Non-U.S. Holder

For purposes of this discussion, a non-U.S. holder is any beneficial owner of our common stock that is not a “U.S. person” or a partnership (or other entity treated as a partnership) for United States federal income tax purposes. A U.S. person is any of the following:

·	an individual citizen or resident of the United States;

·	a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia;

·	an estate the income of which is subject to United States federal income tax regardless of its source; or

a trust (1) whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust, or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

Distributions on Our Common Stock

If we make cash or other property distributions on our common stock, such distributions will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. Amounts not treated as dividends for United States federal income tax purposes will constitute a return of capital and will first be applied against and reduce a holder’s adjusted tax basis in the common stock, but not below zero. Any excess will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described under “—Gain on Disposition of Our Common Stock” below.

Dividends paid to a non-U.S. holder of our common stock generally will be subject to United States federal withholding tax at a rate of 30% of the gross amount of the dividends, or such lower rate specified by an applicable income tax treaty. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish to us or our paying agent a valid IRS Form W-8BEN (or applicable successor form) certifying such holder’s qualification for the reduced rate. This certification must be provided to us or our paying agent prior to the payment of dividends and must be updated periodically. Non-U.S. holders that do not timely provide us or our paying agent with the required certification, but which qualify for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

If a non-U.S. holder holds our common stock in connection with the conduct of a trade or business in the United States, and dividends paid on the common stock are effectively connected with such holder’s United States trade or business, the non-U.S. holder will be exempt from United States federal withholding tax. To claim the exemption, the non-U.S. holder must furnish to us or our paying agent a properly executed IRS Form W-8ECI (or applicable successor form).

Any dividends paid on our common stock that are effectively connected with a non-U.S. holder’s United States trade or business (or if required by an applicable income tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States) generally will be subject to United States federal income tax on a net income basis at the regular graduated United States federal income tax rates in much the same manner as if such holder were a resident of the United States, unless an applicable income tax treaty provides otherwise. A non-U.S. holder that is a foreign corporation also may be subject to a branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of a portion of its effectively connected earnings and profits for the taxable year. Non-U.S. holders are urged to consult any applicable income tax treaties that may provide for different rules.

A non-U.S. holder who claims the benefit of an applicable income tax treaty generally will be required to satisfy applicable certification and other requirements prior to the distribution date. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

Gain on Disposition of Our Common Stock

A non-U.S. holder generally will not be subject to United States federal income tax on any gain realized upon the sale or other disposition of our common stock, unless:

·	the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, or if required by an applicable income tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States;

·	the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition, and certain other requirements are met; or

our common stock constitutes a “United States real property interest” by reason of our status as a United States real property holding corporation, or USRPHC, for United States federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder’s holding period for our common stock. The determination of whether we are a USRPHC depends on the fair market value of our United States real property interests relative to the fair market value of our other trade or business assets and our foreign real property interests.

We believe we are not currently and do not anticipate becoming a USRPHC for United States federal income tax purposes.

Unless an applicable income tax treaty provides otherwise, gain described in the first bullet point above will be subject to United States federal income tax on an net income basis at the regular graduated United States federal income tax rates in much the same manner as if such holder were a resident of the United States. Non-U.S. holders that are foreign corporations also may be subject to a branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of a portion of its effectively connected earnings and profits for the taxable year. Non-U.S. holders are urged to consult any applicable income tax treaties that may provide for different rules.

Gain described in the second bullet point above will be subject to United States federal income tax at a flat 30% rate (or such lower rate specified by an applicable income tax treaty), but may be offset by United States source capital losses (even though the individual is not considered a resident of the United States).

Information Reporting and Backup Withholding

We must report annually to the IRS and to each non-U.S. holder the amount of distributions on our common stock paid to such holder and the amount of any tax withheld with respect to those distributions. These information reporting requirements apply even if no withholding was required because the distributions were effectively connected with the holder’s conduct of a United States trade or business, or withholding was reduced or eliminated by an applicable income tax treaty. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. Backup withholding, currently at a 28% rate, however, generally will not apply to distribution payments to a non-U.S. holder of our common stock provided the non-U.S. holder furnishes to us or our paying agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN or IRS Form W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient.

Payments of the proceeds from a disposition by a non-U.S. holder of our common stock made by or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, information reporting (but not backup withholding) will apply to those payments if the broker does not have documentary evidence that the beneficial owner is a non-U.S. holder, an exemption is not otherwise established, and the broker is:

·	a U.S. person;

·	a controlled foreign corporation for United States federal income tax purposes;

·	a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period; or

·	a foreign partnership if at any time during its tax year (1) one or more of its partners are U.S. persons who hold in the aggregate more than 50% of the income or capital interest in such partnership, or (2) it is engaged in the conduct of a United States trade or business.

Payment of the proceeds from a non-U.S. holder’s disposition of our common stock made by or through the United States office of a broker generally will be subject to information reporting and backup withholding unless the non-U.S. holder certifies as to its non-U.S. holder status under penalties of perjury, such as by providing a valid IRS Form W-8BEN or IRS Form W-8ECI, or otherwise establishes an exemption from information reporting and backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s United States federal income tax liability, provided the required information is timely furnished to the IRS.

UNDERWRITING

MidSouth Capital, Inc. will act as the representative of the underwriters with respect to the shares of common stock being offered. In connection with this offering, MidSouth Capital and we have agreed to sell a minimum of 1,000,000 shares and a maximum of 3,000,000 shares of common stock on a best efforts basis.

Stabilization

The rules of the SEC generally prohibit the underwriters from trading in our securities on the open market during this offering. However, the underwriters are allowed to engage in some open market transactions and other activities during this offering that may cause the market price of our securities to be above or below that which would otherwise prevail in the open market. These activities may include stabilization, short sales and over-allotments, syndicate covering transactions and penalty bids.

· Stabilizing transactions consist of bids or purchases made by the managing underwriter for the purpose of preventing or slowing a decline in the market price of our securities while this offering is in progress.

· A penalty bid is an arrangement permitting the managing underwriter to reclaim the selling concession that would otherwise accrue to an underwriter if the common stock originally sold by the underwriter was later repurchased by the managing underwriter and therefore was not effectively sold to the public by such underwriter.

If the underwriters commence these activities, they may discontinue them at any time without notice.

Indemnification

Indemnification will be provided between us and the underwriters against specified liabilities, including liabilities under the Securities Act. We have been advised that, in the opinion of the SEC, indemnification for liabilities under the Securities Act is against public policy as expressed in the Securities Act and is therefore unenforceable.

Underwriters’ Compensation

For the underwriting services, the underwriters are entitled to receive a commission equal to eight percent (8%) of the gross proceeds in the offering; and a non-accountable marketing expense allowance equal to three percent (3%) of the gross proceeds in the offering. In addition, the underwriters are entitled to receive 50,000 shares of our common stock and warrants to purchase the number of shares of common stock equal to 10% of the shares sold in the offering for a term beginning on the closing date of the offering and ending six (6) months from the closing date, with an exercise price per share equal to the offering price per share in the offering. We also agreed to reimburse MidSouth Capital for its out-of-pocket expenses up to an aggregate of $100,000, including legal fees.

Determination of Offering Price

The public offering price of the shares offered by this prospectus has been determined by negotiation between us and the underwriters. Among the factors considered in determining the public offering price of the shares were:

· our history and our prospects;

· the industry in which we operate;

· the status and development prospects for our proposed business plan;

· the previous experience of our executive officers; and

· the general condition of the securities markets at the time of this offering.

The offering price stated on the cover page of this prospectus should not be considered an indication of the actual value of the common stock. That price is subject to change as a result of market conditions and other factors, and we cannot assure you that the shares can be resold at or above the initial public offering price.

Purchasers of shares either in this offering or in any subsequent trading market that may develop must be residents of states in which the securities are registered or exempt from registration. Some of the exemptions are self-executing, that is to say that there are no notice or filing requirements, and compliance with the conditions of the exemption render exemption applicable.

LEGAL MATTERS

Greenberg Traurig, LLP, Costa Mesa, California will pass upon the validity of the securities offered by this prospectus on our behalf. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Atlanta, Georgia is counsel to the underwriter in connection with this offering.

EXPERTS

Michael Pollack, CPA ("Pollack"), an independent registered public accounting firm, has audited our financial statements for the fiscal years ended August 31, 2006, August 31, 2005, and August 31, 2004 as stated in their report appearing herein, and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a Registration Statement on Form S-1 we filed with the SEC. This prospectus does not contain all of the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. You can get a copy of the registration statement from the sources listed below.

*WHAT IS AVAILABLE*	*WHERE TO GET IT*
Paper copies of information On-Line information, free of charge	SEC’s Public Reference Room 100 F Street, N.E. Washington, D.C. 20549
Information about the SEC’s	SEC’s Internet website at http://www.sec.gov

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page(s)
FOR THE YEARS ENDED AUGUST 31, 2005 AND 2004

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets as of August 31, 2005 and 2004	F-3

Consolidated Statements of Operations for the Years Ended August 31, 2005 and 2004	F-4

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years ended August 31, 2005 and 2004	F-5

Consolidated Statements of Cash Flows for the Years Ended August 31, 2005 and 2004	F-6

Notes to Consolidated Financial Statements	F-7 - F-25

	Page(s)
FOR THE YEARS ENDED AUGUST 31, 2006 AND 2005

Report of Independent Registered Public Accounting Firm	F-27

Consolidated Balance Sheets as of August 31, 2006 and 2005	F-28

Consolidated Statements of Operations for the Years Ended August 31, 2006 and 2005	F-29

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years ended August 31, 2006 and 2005	F-30

Consolidated Statements of Cash Flows for the Years Ended August 31, 2006 and 2005	F-31

Notes to Consolidated Financial Statements	F-32 - F-51

INDEX TO REVIEWED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

REVIEWED CONSOLIDATED FINANCIAL STATEMENTS	Page(s)
FOR THE NINE MONTHS ENDED MAY 31, 2007, 2006 AND 2005

Report of Independent Registered Public Accounting Firm	F-53

Reviewed Consolidated Balance Sheets as of May 31, 2007, 2006 and 2005	F-54

Reviewed Consolidated Statements of Operations for the Nine Months Ended May 31, 2007, 2006 and 2005	F-55

Reviewed Consolidated Statement of Changes in Stockholders’ Equity Deficit) for the Nine Months ended May 31, 2007, and the Years ended August 31, 2006, 2005 and 2004	F-56

Reviewed Consolidated Statements of Cash Flows for the Nine Months Ended May 31, 2007, 2006 and 2005	F-57

Notes to Reviewed Consolidated Financial Statements	F-58 - F-79

CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F-1

To the Stockolders of

EarlyDetect Inc.

Irvine, California

I have audited the accompanying consolidated balance sheets of EarlyDetect Inc. (the “Company”) as of August 31, 2005 and 2004, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of management. My responsibility is to express an opinion on these consolidated financial statements based on my audits.

I conducted my audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audits 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. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EarlyDetect Inc. as of August 31, 2005 and 2004, and the results of its operations, and cash flows for the years then ended in conformity with U.S, generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 14 to the consolidated financial statements, the Company has incurred substantial operating losses and has recently received proper approvals from the regulatory bodies to enable them to sell their product in the United States and will be looking to raise capital over the next year to assist in funding their operations. These factors along with initial marketing of their products to generate revenue raise substantial doubt about its ability to continue as a going concern. Management’s operating and financing plans in regards to these matters are also discussed in Note 14. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company has restated the consolidated financial statements for the years ended August 31, 2005 and 2004 to account for $429,520 of accrued compensation that was previously omitted from the originally stated consolidated financial statements. The accrued compensation was to a former officer of the Company and was for compensation earned prior to August 31, 2003.

/s/ MICHAEL POLLACK, CPA

MICHAEL POLLACK, CPA

Cherry Hill, New Jersey

April 20, 2006, except for Note 16 and 17, which is dated November 27, 2006

F-2

CONSOLIDATED BALANCE SHEETS

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

ASSETS
				Restated
	2005			2004

Current Assets:	Restated			Restated
Cash and cash equivalents	$	70,276		$	-
Accounts receivable, net		-			-
Inventory		4,598,540			-

Total Current Assets		4,668,816			-

Fixed assets, net of depreciation		5,172,955			20,502

Other Assets:
Patents, net of amortization		644,583			-
Trademarks, net of amortization		786			370
Goodwill		5,914,212			-

Total Other Assets		6,559,581			370

TOTAL ASSETS	$	16,401,352		$	20,872

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES
Current Liabilities:
Note payable - acquisition	$	3,500,000		$	-
Note payable - bank		250			50,000
Notes payable - related parties		997,799			956,745
Current portion of obligations under capital lease		89,471			-
Bank overdraft		-			239
Accounts payable and accrued expenses		906,934			1,106,080

Total Current Liabilities		5,494,454			2,113,064

Long-term Liabilities:
Obligations under capital lease, net of current portion		432,444			-

Total Long-term Liabilities		432,444			-

Total Liabilities		5,926,898			2,113,064

COMMITMENTS AND CONTINGENCIES (NOTE 8)		-

STOCKHOLDERS' EQUITY (DEFICIT)

Common stock, $.001 par value; 50,000,000shares authorized
and 14,697,131 and 11,027,252 shares issued and outstanding		14,697			11,027
Additional paid-in capital		44,262,048			26,046,937
Accumulated deficit		(33,802,291	)		(28,150,156	)

Total Stockholders' Equity (Deficit)		10,474,454			(2,092,192	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	16,401,352		$	20,872

F-3

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	2005			2004

OPERATING REVENUES
Sales	$	32,813		$	-

COST OF SALES
Direct costs		216,233			324,864
Compensation expense		-			-
Amortization of intangible assets		-			-
Other costs		-			-
Total Cost of Sales		216,233			324,864

GROSS (LOSS)		(183,420	)		(324,864	)

OPERATING EXPENSES
Compensation, professional and consulting fees		5,200,036			3,127,723
Rent expense		28,104			40,848
Other general and administrative expenses		143,175			178,441
Depreciation and amortization		66,069			7,325
Total Operating Expenses		5,437,384			3,354,337

LOSS BEFORE OTHER INCOME (EXPENSE)		(5,620,804	)		(3,679,201	)

OTHER (EXPENSE)
Interest expense, net		(31,331	)		-
Total Other (Expense)		(31,331	)		-

NET LOSS BEFORE PROVISION FOR INCOME TAXES		(5,652,135	)		(3,679,201	)
Provision for Income Taxes		-			-

NET LOSS	$	(5,652,135	)	$	(3,679,201	)

NET LOSS PER BASIC AND DILUTED SHARES	$	(0.44	)	$	(0.58	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		12,862,192			6,371,551

F-4

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

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

					Additional
	Common Stock				Paid-in		Accumulated
	Shares		Amount		Capital		Deficits			Total

Balance, August 31, 2003, as originally reported		1,715,849	$	1,716	$	22,598,160	$	(24,041,435	)	$	(1,441,559	)

Prior period adjustment		-		-		-		(429,520	)		(429,520	)

Balance, August 31, 2003, as restated		1,715,849		1,716		22,598,160		(24,470,955	)		(1,871,079	)

Common stock issued to founders for services rendered		9,000,000		9,000		-		-			9,000

Common stock issued for consulting services		294,992		295		2,923,505		-			2,923,800

Common stock issued for conversion of vendor payables		4,144		4		310,796		-			310,800

Common stock issued for cash		12,267		12		214,476		-			214,488

Net loss for the year		-		-		-		(3,679,201	)		(3,679,201	)

Balance, August 31, 2004		11,027,252		11,027		26,046,937		(28,150,156	)		(2,092,192	)

Common stock issued for acquisition of Pan Probe Biotech		2,500,000		2,500		12,497,500		-			12,500,000

Common stock issued for consulting services		1,020,566		1,021		4,914,309		-			4,915,330

Common stock issued for building		129,000		129		644,871		-			645,000

Common stock issued for cash		18,500		18		91,232		-			91,250

Common stock issued for bonus shares to stockholders		1,813		2		67,199		-			67,201

Net loss for the year		-		-		-		(5,652,135	)		(5,652,135	)

Balance, August 31, 2005, as restated		14,697,131	$	14,697	$	44,262,048	$	(33,802,291	)	$	10,474,454

F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,652,135	)	$	(3,679,201	)

Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		66,069			7,325
Common stock issued for bonus shares to stockholders		67,201			-
Common stock issued for founders for consulting services		-			9,000
Common stock issued for consulting services		4,915,330			2,923,800

Changes in assets and liabilities
Decrease in inventory		-			203,728
Increase (decrease) in accounts payable and accrued expenses		(38,594	)		193,601
Total adjustments		5,010,006			3,337,454
Net cash (used in) operating activities		(642,129	)		(341,747	)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of fixed assets		-			(586	)
Net cash (used in) investing activities		-			(586	)

CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from issuance of common stock		91,250			214,488
Increase (decrease) in bank overdraft		(239	)		239
Payment on note payable - bank		(49,750	)		-
Proceeds (payments) from notes payable - related parties, net		686,056			123,563
Payments of obligations under capital lease		(14,912	)		-
Net cash provided by financing activities		712,405			338,290

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS		70,276			(4,043	)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		-			4,043

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	70,276		$	-

SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION:

Acquisition of Pan Probe Biotech

Common stock issued for company	$	12,500,000		$	-
Issuance of note payable		3,500,000			-
Fixed assets acquired
Equipment		(4,476,245	)		-
Building		(200,000	)		-
Inventory acquired		(4,598,540	)		-
Accounts receivable acquired		(281,003	)		-
Patent acquired		(650,000	)		-
Goodwill acquired		(5,914,212	)		-
Accounts payable assumed		120,000			-
Related party notes assumed		-			-
	$	-		$	-
Sale of building to related party in lieu of payment of note payable	$	645,000		$	-
Common stock issued for payment of vendor payables	$	-		$	310,800

F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION

Advanced Medical Systems, Inc. was incorporated on September 19, 1996 in the State of Nevada. On June 22 2001, Advanced Medical Systems, Inc. changed its name to EarlyDetect, Inc. (the “Company”).

The Company offers a wide range of health screening products that have been carefully evaluated and offer reliable results. Founded in 1996, the Company offers 11 FDA registered health screening kits including tests for pregnancy, ovulation, menopause, cholesterol, blood glucose, stomach ulcers, prostate, colon health, drug detection, alcohol blood levels, breast self-examination, and blood pressure monitors. All of the Company’s products are FDA registered and are manufactured in FDA registered facilities.

The Company was selling their products through 2003 in Canada, and has since ceased, concentrating on the FDA approval process and marketing efforts in the United States.

On July 27, 2005, the Company acquired Pan Probe Biotech, Inc., (“Pan Probe”) a manufacturer of the health screening products and developer of these products for 2,500,000 shares of the Company’s common stock valued at $12,500,000 and a promissory note in the amount of $3,500,000.

The transaction was accounted for as a purchase, and as a result, Pan Probe became a wholly owned subsidiary of the Company, and their results have been consolidated herein.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation for the period July 26, 2005 through August 31, 2005.

Development Stage Company

The Company has considered Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises” in its consolidated financial statements. The Company believes that the criteria established in SFAS No. 7 does not apply due to the fact that the Company has completed development of their product. Additionally, in years past has recognized revenues for their products. The Company has spent the past few years raising money and gaining FDA approval in the United States for the products. This has occurred in the fiscal year ended 2005.

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash or cash equivalents.

The Company maintains cash and cash equivalents with a financial institution that have periodically exceeded the limit of insurability under Federal Deposit Insurance Corporation.

Start-up Costs

In accordance with the American Institute of Certified Public Accountants Statement of Position 98-5, “Reporting on the Costs of Start-up Activities”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.

Revenue Recognition

The Company has recognized revenue in accordance with Staff Accounting Bulletin 100 and 101. Specifically, the following criteria must be established prior to recognition:

1)	Persuasive evidence of an arrangement exists;
2)	Delivery has occurred or services have been rendered;
3)	The seller’s price to the buyer is fixed or determinable, and
4)	Collectibility is reasonably assured.

The Company recognizes revenue upon the sales orders being placed and achieving the criteria noted above. The Company in the past has sold its good in foreign countries (Canada).

F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Goodwill and Other Intangible Assets

Under SFAS No. 142, “Goodwill and Other Intangible Assets”. (“SFAS 142”), goodwill and other indefinite-lived intangible assets are no longer amortized but instead are reviewed for impairment annually and on an interim basis if events or changes in circumstances between annual tests indicate that an asset might be impaired. Under SFAS 142, indefinite-lived intangible assets are tested for impairment by comparing their fair values to their carrying values. Testing for impairment of goodwill is a two-step process. The first step requires the Company to compare the fair value of its reporting units to the carrying value of the net assets of the respective reporting units, including goodwill. If the fair value of the reporting unit is less than the carrying value, goodwill of the reporting unit is potentially impaired and the Company then completes Step 2 to measure the impairment loss, if any. The second step requires the calculation of the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit. If the implied fair value of goodwill is less then the carrying amount of goodwill, an impairment loss is recognized equal to the difference. Intangible assets that do not have indefinite lives are amortized over their useful lives.

Other intangible assets consist of trademarks, with an estimated useful life of 15 years and patents, with an estimated useful life of 10 years, and are reflected below:

F-9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Goodwill and Other Intangible Assets (Continued)

	As of August 31, 2005
	Gross Carrying Amount		Accumulated Amortization		Net
Amortized Intangible Assets:

Trademarks	$	912	$	126	$	786
Patents	$	650,000	$	5,417	$	644,583

Amortization Expense:

For the year ended August 31, 2005			$	5,450
For the year ended August 31, 2004				31

Estimated Amortization Expense:

For the year ended August 31, 2006			$	65,061
For the year ended August 31, 2007				65,061
For the year ended August 31, 2008				65,061
For the year ended August 31, 2009				65,061
For the year ended August 31, 2010				65,061
For the year ended August 31, 2011 through 2020				320,064
Total			$	645,369

The changes in goodwill is as follows:

Goodwill:

Balance - September 1, 2003			$	-

Increases in goodwill on acquisitions made				-
Impairment of goodwill				-

Balance - August 31, 2004				-

Increases in goodwill on acquisitions made				5,914,212
Impairment of goodwill				-

Balance - August 31, 2005			$	5,914,212

F-10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized. No provision (benefit) is reflected for the years ended August 31, 2005 and 2004, respectively.

Income Taxes

Fair Value of Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the notes payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings.

Advertising Costs

The Company expenses the costs associated with advertising as incurred. Advertising expenses are included in the consolidated statements of operations for the years ended August 31, 2005 and 2004.

Fixed Assets

Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Equipment held under capital lease is included in fixed assets and is being depreciated over the estimated term of the lease or estimated life of the asset, whichever is shorter.

F-11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fixed Assets (Continued)

Accounts Receivable

When the Company conducts business it extends credit based on an evaluation of the customers’ financial condition, generally without requiring collateral. Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company has monitored exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. As of August 31, 2005 and 2004, there have been no allowances reserved by the Company.

Impairment of Long-Lived Assets

Long-lived assets, primarily fixed assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company does not perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and estimated fair value.

Inventory

Inventory is stated at the lower of cost or market, utilizing the first-in, first-out method and includes finished goods as well as raw and bio- materials. The inventory cost includes the cost of packaging supplies, direct and indirect labor and other indirect manufacturing costs.

F-12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be antidilutive for periods presented.

Loss Per Share of Common Stock

The following is a reconciliation of the computation for basic and diluted EPS:

	August 31, 2005			August 31, 2004

Net loss	$	(5,652,135	)	$	(3,679,201	)

Weighted-average common shares
Outstanding (Basic)		12,862,192			6,371,551

Weighted-average common stock
Equivalents
Stock options		-			-
Warrants		-			-

Weighted-average common shares
Outstanding (Diluted)		12,862,192			6,371,551

There were no options and warrants outstanding to purchase stock for the years ended August 31, 2005 and 2004, respectively.

F-13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company has no established stock option plan, and has not issued any options or warrants to employees, officers, directors, or others.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation

On December 16, 2004, the Financial Accounting Standards Board (“FASB”) published Statement of Financial Accounting Standards No. 123R, “Share Based Payment” (“SFAS 123R”). SFAS 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. The provisions of SFAS 123R, as amended, are effective for small business issuers beginning as of the first interim period after December 15, 2005. The Company adopted these provisions for their fiscal year ended August 31, 2005, and the adoption did not have a material impact on the consolidated financial statements.

The Company measures compensation expense for its non-employee stock-based compensation under the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) Issue No. 96-18, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The fair value of the option or share issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to expense and additional paid-in capital.

Recent Accounting Pronouncements

In November 2004, the FASB issued Financial Accounting Standards No. 151 (FAS 151), “Inventory Costs - an amendment of ARB No. 43, Chapter 4”. FAS 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs and spoilage. In addition, FAS 151 requires companies to base the allocation of fixed production overhead to the costs of conversion on the normal capacity of production facilities. FAS 151 is effective for the Company in 2006. The Company does not expect FAS 151 to have a material impact on its results or financial statements.

F-14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

On December 16, 2004, FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions” (" SFAS 153"). This statement amends APB Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. Under SFAS 153, if a non-monetary exchange of similar productive assets meets a commercial-substance criterion and fair value is determinable, the transaction must be accounted for at fair value resulting in recognition of any gain or loss. SFAS 153 is effective for non-monetary transactions in fiscal periods that begin after June 15, 2005. The Company does not anticipate that the implementation of this standard will have a material impact on its financial position, results of operations or cash flows.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (Continued)

In May 2005, the FASB issued Statement of Financial Accounting Standard No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”). SFAS 154 is a replacement of APB No. 20, “Accounting Changes”, and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”. SFAS 154 applies to all voluntary changes in accounting principle and changes the requirements for accounting and reporting of a change in accounting principle. This statement establishes that, unless impracticable, retrospective application is the required method for reporting of a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. It also requires the reporting of an error correction which involves adjustments to previously issued financial statements similar to those generally applicable to reporting an accounting change retrospectively. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company believes the adoption of SFAS 154 will not have a material impact on its consolidated financial statements.

In February 2006, the FASB issued Statement of Financial Accounting Standard No. 155, “Accounting for Certain Hybrid Instruments” (“SFAS 155”). FASB 155 allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. This statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company will evaluate the impact of SFAS 155 on its consolidated financial statements.

F-15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Fixed assets as of August 31, 2005 and 2004 are as follows:

NOTE 3- FIXED ASSETS

	Estimated Useful Life		August 31, 2005			August 31, 2004

Production machinery and equipment		10	$	4,476,245		$	-
Building		15		200,000			-
Office machinery and equipment		5		34,936			34,936
Furniture and fixtures		5		1,536			1,536
Equipment held under capital lease		6		536,827			-

Subtotal				5,249,544			36,472
Less: Accumulated depreciation				(76,589	)		(15,970	)

Total			$	5,172,955		$	20,502

There was $60,619 and $7,294 charged to operations for depreciation expense for the years ended August 31, 2005 and 2004, respectively. There was $14,912 and $0 included in depreciation expense for the years ended August 31, 2005 and 2004 for equipment held under capital lease, respectively.

NOTE 4- NOTES PAYABLE - RELATED PARTIES

Former Owner

The Company entered into a settlement with a former director in the amount of $833,182. This amount included interest through June 20, 2005. In a stipulation dated August 31, 2005, it was noted that the Company made three payments of $20,000 each against the total amount. The Company is required to make a $25,000 payment by September 27, 2005 and another $25,000 payment by October 27, 2005, with the remaining balance due and payable with accrued interest at 8% on November 28, 2005. On November 28, 2005, the Company was able to extend this note with the former owner indefinitely with payments to be made as the Company sells its common stock. Additionally, interest ceased being accrued for as of November 28, 2005. The Company has accrued interest for the period June 20, 2005 through August 31, 2005 in the amount of $10,376. Interest expense for the years ended August 31, 2005 and 2004 under this note was $10,376 and $0, respectively. From September 1, 2005 through April 18, 2006, the Company has paid $105,000 to the former officer.

The balance outstanding under this obligation is $773,182 and $833,182 at August 31, 2005 and 2004, respectively. The 2004 balance is equal to the original note amount which was for amounts due the former owner prior to August 31, 2004.

F-16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Additionally, there is $46,990 and $0 in advances due to current officers that are also shareholders. These amounts bear no interest and are due on demand. The advances were short-term in nature, and have been converted to a promissory note on September 1, 2006. The note will now bear interest on the unpaid principal balance at 6% interest. The note remains a demand note and will remain as a current liability.

NOTE 4- NOTES PAYABLE - RELATED PARTIES (CONTINUED)

Current Shareholders

Advances to/from Company With Common Director

The Company has a note agreement with a company that is owned by a director of the Company. This company has advanced and been advanced amounts to the Company over the past two years. The Company as of August 31, 2005 was owed $217,750 from the company that is owned by a director of the Company, and as of August 31, 2004, the Company owed $123,563 to this company. During the past two years, the balance comprised of various expenses that the company under common control paid on behalf of the Company. In 2005, to repay the amounts advanced, the Company signed over the deed to a building that was acquired by the Company for shares of their common stock (see Note 12) valued at $645,000 and in addition repaid $134,000. This culminated in the Company being owed $217,750. The Company sold the building at the cost they acquired at, there was no depreciation on the building, and no gain or loss attributed to the sale. The Company and the company that is owned by a director of the Company agreed to recognize the $217,750 as a commission for the funds raised for the Company as well as the acquisition of Pan Probe. As of August 31, 2005, the balance due the Company is $0.

NOTE 5- NOTES PAYABLE - BANK

The Company had a line of credit with a bank in the amount of $50,000 during 2005 and 2004. The Company would borrow funds from time to time for working capital needs. Interest on the lines of credit were variable at prime rate plus 2.5%. The balance at August 31, 2005 and 2004 was $250 and $50,000 respectively. Interest for the years ended August 31, 2005 and 2004 were approximately $1,450 and $2,720, respectively.

F-17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

As discussed in Note 7, the Company entered into a note agreement with the former owners of Pan Probe Biotech, Inc., a company that was acquired by the Company on July 26, 2005.

NOTE 6- NOTE PAYABLE - ACQUISITION

The note, in the amount of $3,500,000, originally provided for payments to be made to the former owners of Pan Probe, Inc. 50% within 90 days of the Company filing a registration statement with the Securities and Exchange Commission with the remaining 50% due within six months of the filing of the registration statement, however on September 28, 2006, was amended to have 50% of the outstanding principal ($1,750,000) to be payable upon the raising of $3,000,000 in equity financing and the remaining $1,750,000 due three months after the initial made. The Company anticipates the raising of equity to occur in fiscal 2007, therefore has classified the liability as a current liability.

Interest on the note is stated at 5%, and will be accrued through and is payable at maturity. Interest expense for the period July 26, 2005 through August 31, 2005 and accrued interest at August 31, 2005 for this note is $15,000.

NOTE 7- ACQUISITION

On July 26, 2005, the Company entered into a purchase agreement with Pan Probe Biotech, Inc. Pan Probe Biotech, Inc., is a leading manufacturer and supplier of high quality rapid diagnostic tests. The line of diagnostic products range from Pregnancy & Fertility, Drugs-of-Abuse, Infectious Diseases to Cancer Detection panels. These products are used worldwide in the Point-of-Care and Clinical environment as well as the Over-the-Counter consumer.

The Company acquired 100% of Pan Probe Biotech, Inc. for $16,000,000, in the form of 2,500,000 shares of its common stock valued at $12,500,000 and a note agreement for $3,500,000 (see Note 6), in exchange for the shares of Pan Probe Biotech, Inc. As a result of this transaction, Pan Probe Biotech, Inc. became a wholly owned subsidiary of the Company.

The acquisition included machinery and equipment used in the production of the diagnostic tests, the building in which Pan Probe Biotech, Inc. resides, all intellectual property as well as the inclusion of a five-year employment agreement with Dr. Shujie Cui to remain on as lead scientist for the Company, which is the primary reason the acquisition of Pan Probe Biotech, Inc. was made. The acquisition will not only reduce the cost of manufacturing the Company’s products, by owning Pan Probe Biotech, Inc., but it also inherits the other customers of Pan Probe Biotech, Inc.

There are no contingent payments, options or commitments in the transaction, and the Company has not acquired any research and development in this acquisition.

F-18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

These assets have been recorded at their fair market values and the excess of the purchase price over the fair value of the assets received has been recorded as goodwill. The Company, as of August 31, 2005, has concluded that there has been no impairment of this intangible asset in accordance with SFAS 142.

NOTE 7- ACQUISITION (CONTINUED)

The allocation of the purchase price is as follows:

Equipment	$	4,476,245
Building		200,000
Inventory		4,598,540
Accounts receivable		281,003
Patents		650,000
Goodwill		5,914,212
Accounts payable assumed		(120,000	)
	$	16,000,000

The summarized unaudited pro forma financial information for the years ended August 31, 2005 and 2004 that follows assumes the acquisition of Pna Probe Biotech, Inc. was consummated on September 1, 2003:

	Years Ended
	August 31, 2005			August 31, 2004

Sales	$	290,716		$	-
Cost of sales		261,364			361,213

Gross profit (loss)		29,352			(361,213	)

Operating expenses		5,633,706			3,480,234

Loss before other (expense)		(5,604,354	)		(3,841,447	)

Other expense		37,532			2,997

Net loss before provision for income taxes		(5,641,886	)		(3,844,444	)

Provision for income taxes		-			-

Net loss	$	(5,641,886	)	$	(3,844,444	)

Net loss per basic and diluted shares	$	(0.44	)	$	(0.60	)

Weighted average number of common shares outstanding		12,862,192			6,371,551

The unaudited pro forma results of operations for the years ended August 31, 2005 and 2004, are not necessarily indicative of what the actual results of operations of the Company would have been had the acquisition been consummated on September 1, 2003.

F-19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)