CURAXIS PHARMACEUTICAL S4 Registration of securities issued in business combination transactions

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form S-4

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

AUTO SEARCH CARS, INC.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of

incorporation or organization)

5599

(Primary Standard Industrial

Classification Code Number)

26-1919261

(I.R.S. Employer

Identification No.)

164 Eleven Levels Road

Ridgefield, CT 06877

(203) 216-9991

(Address, Including Zip Code, and Telephone Number,

Including Area Code, of Registrant’s Principal Executive Offices)

Business Filings Incorporated

6100 Neil Road, Suite 500

Reno, NV 89511

(608) 827-5300

(Name, Address, Including Zip Code, and Telephone Number,

Including Area Code, of Agent for Service)

Copies to:

Joseph M. Lucosky, Esq.

Anslow & Jaclin, LLP

195 Route 9 South, Suite 204

Manalapan, NJ 07726

Tel: (732) 409-1212

Fax: (732) 577-1188

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement and the satisfaction or waiver of all other conditions to the Merger Agreement described herein.

If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company þ

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering	Aggregate	Amount of
Securities to be Registered (1)	Registered	Price per Share (2)	Offering Price (3)	Registration Fee
Common Stock, $0.0001 par value per share	62,962,604	$0.10	$6,296,260.40	$448.92

(1)		This registration statement relates to common stock, $0.0001 par value per share, of Auto Search Cars, Inc. (“Auto Search”) issuable to holders of shares of Curaxis Pharmaceutical Corporation (“Curaxis”), in the proposed merger of Curaxis with and into Auto Search Cars, Inc.

(2)		The Company currently is currently quoted. The Proposed Maximum Offering price per share is based on the Company’s original resale registration statement filed on Form S-1 May 15, 2008.

(3)		Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) and (o) of the Securities Act of 1933, as amended.

The registrant hereby amends the registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that the registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this information statement/prospectus is not complete and may be changed. Auto Search may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”), of which this document is a part, is declared effective. This information statement/prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any representation to the contrary is a criminal offense.

CURAXIS PHARMACEUTICAL CORPORATION

12600 Deerfield Parkway, suite 100

Alpharetta, GA 30004

NOTICE OF ACTION BY WRITTEN CONSENT

TO THE STOCKHOLDERS OF CURAXIS PHARMACEUTICAL CORPORATION:

NOTICE IS HEREBY GIVEN that on February 5, 2010, Curaxis Pharmaceutical Corporation, a Delaware corporation (“Curaxis”), obtained written consent from stockholders holding a majority of the outstanding shares of common stock of Curaxis entitled to vote on the following actions:

1. To ratify and approve the merger agreement (the “Merger Agreement”) by and among Curaxis, Auto Search Cars Acquisition Corp. and Auto Search Cars, Inc. (“Auto Search”) and the transactions contemplated thereby.

The details of the foregoing action and other important information are set forth in the accompanying information statement and a copy of the Merger Agreement is attached as Exhibit 2.1. The board of directors of Curaxis (the “Curaxis Board of Directors”) has unanimously approved the above action.

Under Section 228 of the Delaware General Corporation Law (“DGCL”), action by stockholders may be taken without a meeting, without prior notice, without a vote, by written consent of the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize the action at a meeting at which all shares entitled to vote thereon were present and voted. On that basis, the stockholders holding a majority of the outstanding shares of capital stock entitled to vote approved the foregoing actions. No other vote or stockholder action is required. Under Delaware law, appraisal rights are afforded to stockholders who properly dissent with the merger and comply with the requirements set forth herein. If you do not comply with the procedures governing appraisal rights set forth under Delaware law and explained elsewhere in this information statement, you may not be entitled to payment for your shares.

Please read this information statement carefully and in its entirety. Although you will not have an opportunity to vote on the approval of the Merger Agreement and the merger, this information statement contains important information about these actions.

WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND CURAXIS A PROXY

This information statement is being mailed on or about February 20, 2010 to all stockholders of record as of February 5, 2010.

			By Order of the Board of Directors
			/s/ Patrick S. Smith
			Patrick S. Smith Chairman

62,962,604

Auto Search Cars, Inc.

Common Stock

PRELIMINARY INFORMATION STATEMENT

WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND CURAXIS A PROXY

GENERAL INFORMATION

The boards of directors of Auto Search Cars, Inc., (“Auto Search”), and Curaxis Pharmaceutical Corporation, (“Curaxis”) have each approved the merger of Curaxis with a wholly-owned subsidiary of Auto Search. If the proposed merger is completed, the holders of common stock of Curaxis (the “Curaxis Common Stock”) are expected to receive one (1) share of Auto Search common stock (the “Auto Search Common Stock”) for each share of Curaxis Common Stock they own immediately prior to completion of the merger.

This information statement is being furnished to Curaxis stockholders in connection with the actions taken by the Curaxis Board of Directors and the written consent of the holders of a majority of Curaxis’ outstanding voting securities with respect to the actions described below. On January 18, 2010, the Curaxis Board of Directors unanimously approved these actions, subject to stockholder approval. In accordance with Section 228 of the DGCL, on or about February 5, 2010, Curaxis received written consents in lieu of a meeting from stockholders (the “Majority Stockholders”) holding 43,966,182 shares of Curaxis Common Stock, representing approximately 70% of the 62,962,604 total shares of common stock issued and outstanding as of January 18, 2010, the record date. This information statement is being sent to Curaxis’ stockholders to comply with the requirements of Delaware General Corporations Law and shall constitute notice to Curaxis’ stockholders of action taken by written stockholder consent.

Pursuant to the Merger Agreement dated as of February 8, 2010, by and between Curaxis, Auto Search Cars Acquisition Corp. (“Acquisition Corp.”) and Auto Search, Acquisition Corp. will merge with and into Curaxis, with Curaxis being the surviving corporation (the “Surviving Corporation”) and a wholly-owned subsidiary of Auto Search. The merger will become effective as of the date and at such time as the Certificate of Merger is filed with the Secretary of State of the State of Delaware with respect to the merger (the “Effective Time”). In accordance with the terms of the Merger Agreement, at the Effective Time, each share of Curaxis Common Stock outstanding immediately prior to the Effective Time will be converted into the right to receive one share, par value $0.0001 per share, of Auto Search Common Stock. Auto Search Common Stock currently trades on the Over-the-Counter Bulletin Board (the “OTCBB”) under the symbol ASCH. At the Effective Time, the Curaxis Common Stock will no longer be outstanding and shall automatically be cancelled and retired and cease to exist, and each holder of Curaxis Common Stock shall cease to have any rights with respect to the shares of Curaxis Common Stock, except the right to receive the shares of Auto Search common stock as described above. No fractions of a share of Auto Search Common Stock will be issued, and in lieu of such issuance, a holder of Curaxis Common Stock who would otherwise be entitled to a fraction of a share of Auto Search Common Stock as a result of the exchange of shares contemplated by the Merger Agreement will receive a whole share for any fractional share interest equal to or in excess of .50 of a share and will receive no share or payment for any fractional share interest less than .50 per share.

We encourage you to read carefully this information statement/prospectus including the section entitled “Risk Factors” beginning on page 16.

IN CONNECTION WITH THE MERGER, YOU HAVE THE RIGHT TO EXERCISE DISSENTERS’ RIGHTS UNDER THE DELAWARE GENERAL CORPORATION LAW AND OBTAIN THE “FAIR VALUE” OF YOUR SHARES OF AUTO SEARCH’S COMMON STOCK, PROVIDED THAT YOU COMPLY WITH THE CONDITIONS ESTABLISHED UNDER APPLICABLE DELAWARE LAW. IF YOU DO NOT COMPLY WITH THE PROCEDURES GOVERNING APPRAISAL RIGHTS SET FORTH UNDER DELAWARE LAW AND EXPLAINED ELSEWHERE IN THIS INFORMATION STATEMENT, YOU MAY NOT BE ENTITLED TO PAYMENT FOR YOUR SHARES.

FOR A DISCUSSION REGARDING YOUR APPRAISAL RIGHTS, SEE THE SECTION TITLED “APPRAISAL RIGHTS”.

Neither of the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this information statement/prospectus. Any representation to the contrary is a criminal offense.

THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Preliminary Prospectus Subject to completion _________, 2010

TABLE OF CONTENTS

	Page
SUMMARY TERM SHEET	7
QUESTIONS AND ANSWERS ABOUT THE MERGER	9
RISK FACTORS	16
CAUTIONARY INFORMATION REGARDING FORWARD LOOKING STATEMENTS	35
THE MERGER	36
THE MERGER AGREEMENT	41
AUTO SEARCH. – DESCRIPTION OF BUSINESS	44
AUTO SEARCH. – LEGAL PROCEEDINGS	46
AUTO SEARCH. – EXECUTIVE COMPENSATION	47
AUTO SEARCH – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	48
AUTO SEARCH – MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	49
AUTO SEARCH – FINANICAL STATEMENTS	52
CUARXIS – DESCRIPTION OF BUSINESS	53
CUARXIS - LEGAL PROCEEDINGS	74
CUARXIS - DIRECTORS, OFFICERS, PROMOTERS AND CONTROL PERSONS	74
CUARXIS – EXECUTIVE COMPENSATION	76
CUARXIS – BENEFICIAL OWNERSHIP	79
CUARXIS - DESCRIPTION OF SECURITIES	81
CUARXIS - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	82
CUARXIS - FINANCIAL STATEMENTS	97
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA	98
PART II – INFORMATION NOT REQUIRED IN PROSPECTUS	103
SIGNATURES	105
EXHIBITS	Attached

SUMMARY TERM SHEET FOR THE MERGER

The following is a summary of the principal terms of the merger. This summary does not contain all information that may be important to you. Auto Search and Curaxis encourage you to read carefully this information statement, including the appendices, in their entirety.

On February 8, 2010, Curaxis Pharmaceutical Corporation entered into the Merger Agreement with Auto Search Cars, Inc. In connection with the merger:

•	each share of common stock, par value $0.001 per share, of the Acquisition Corp. that shall be outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive one share of common stock, par value $0.001, of the Surviving Corporation, so that at the Effective Time, Auto Search shall be the holder of all of the issued and outstanding shares of the Surviving Corporation.

•	each issued and outstanding share of Curaxis Common Stock shall be converted into the right to receive one (1) share of Auto Search Common Stock.

•	Each issued Company Warrant (as defined in the Merger Agreement) shall be converted into warrants to purchase an equal number of shares of Auto Search Common Stock at the Exercise Price defined in the Company Warrants.

•	each share of Auto Search Common Stock issued to Curaxis shareholders pursuant to the Merger Agreement shall be restricted from trading or resale for a period of one (1) year commencing on the Effective Date, provided that such restriction shall not apply to the Auto Search Common Stock issued in exchange for Curaxis Common Stock issued in the Company’s Bridge Financing (as defined in the Merger Agreement);

•	each share of Curaxis Common Stock held in the treasury of Curaxis immediately prior to the Effective Time shall be cancelled in the Merger and cease to exist; and

•	the Certificate of Incorporation and By-laws of Curaxis shall be the Certificate of Incorporation and By-laws of the Surviving Corporation.

Auto Search Common Stock trades on the OTC Bulletin Board under the symbol “ASCH.” On February 5, 2010, the last reported sales price of Auto Search Common Stock at the end of regular trading hours, as reported on the OTCBB, was $0.00.

The Auto Search stockholders are not required to vote on the Merger. The obligations of Auto Search and Curaxis to complete the Merger are also subject to the satisfaction or waiver of several other conditions to the Merger. More information about Auto Search, Curaxis and the Merger is contained in this information statement/prospectus.

Sincerely,
/s/ Jonathan Martin			/s/ Patrick S. Smith
Jonathan Martin Chief Executive Officer Auto Search Cars, Inc.			Patrick S. Smith Chief Executive Officer Curaxis Pharmaceutical Corporation

This information statement/prospectus is dated February 10, 2010, and is being mailed to stockholders of Curaxis on or about February 20, 2010.

ADDITIONAL INFORMATION

This information statement/prospectus incorporates by reference important business and financial information about Auto Search and Curaxis from documents that are not included in or delivered with this information statement/prospectus. For a more detailed description of the information incorporated by reference into this information statement/prospectus and how you may obtain it, see “Additional Information—Where You Can Find More Information” beginning on page.

You can obtain any of the documents incorporated by reference into this information statement/prospectus from Auto Search or Curaxis, as applicable, or from the Securities and Exchange Commission, which is referred to as the SEC, through the SEC’s website at www.sec.gov. Documents incorporated by reference are available from Auto Search and Curaxis without charge, excluding any exhibits to those documents, unless the exhibit is specifically incorporated by reference as an exhibit in this information statement/prospectus. Auto Search stockholders and Curaxis stockholders may request a copy of such documents by contacting the applicable department at:

Auto Search Cars, Inc.	Curaxis Pharmaceutical Corporation
164 Eleven Levels Rd	12600 Deerfield Parkway, Suite 100
Ridgefield, CT 06877	Alpharetta, GA 30004
Attn: Jonathan Martin	Attn: David Corcoran

In addition, you may obtain copies of the information relating to Auto Search, without charge, by sending an e-mail to jonathanjaymartin@gmail.com or by calling (203) 216-9991

You may obtain copies of the information relating to Curaxis, without charge, by sending an e-mail to dcorcoran@curaxispharma.com or by calling (678) 566-3750.

We are not incorporating the contents of the websites of the SEC, Auto Search, Curaxis or any other person into this document. We are only providing the information about how you can obtain certain documents that are incorporated by reference into this information statement/prospectus at these websites for your convenience.

QUESTIONS AND ANSWERS ABOUT THE MERGER

Following are questions and related answers that address some of the questions you may have regarding the pending merger (the “Merger”) transaction between Curaxis Pharmaceutical Corporation (“Curaxis”), Auto Search Cars Acquisition Corp. (“Acquisition Corp.”) and Auto Search Cars, Inc. (“Auto Search”). These questions and answers may not contain all of the information relevant to you, do not purport to summarize all material information relating to the Merger Agreement, or any of the other matters discussed in this information statement, and are subject to, and are qualified in their entirety by, the more detailed information contained in or attached to this information statement. Therefore, please carefully read this information statement, including the attached appendices, in its entirety.

Q. WHY DID I RECEIVE THIS INFORMATION STATEMENT?

A. Applicable requirements of Delaware law and the federal securities laws require Curaxis to provide you with information regarding the Merger. As explained more fully elsewhere in this information statement, since Curaxis has adopted the Merger Agreement and the Merger has been approved by the written consent of the holders of a majority of Curaxis’ outstanding capital stock, your consent to the Merger or the other actions in connection therewith, is not required and is not requested. Nevertheless, this information statement contains important information about the Merger, and the other actions contemplated thereby.

Q. WHY AM I NOT BEING ASKED TO VOTE ON THE MERGER?

A. Curaxis’ stockholders, who currently own in the aggregate approximately 70% of the voting power of outstanding shares of Curaxis’ capital stock, have executed a written consent dated February 5, 2010, approving the Merger and the transactions contemplated by the Merger Agreement. This consent of stockholders is sufficient to approve entering into the transactions. Accordingly, the actions will not be submitted to our other stockholders for a vote.

Q. WHEN IS IT EXPECTED THAT THE MERGER WILL BE COMPLETE?

A. Curaxis and Auto Search signed the Merger Agreement on February 8, 2010. The holders of a majority of Curaxis’ capital stock approved the merger by written consent dated February 5, 2010. The parties are working toward completing the Merger as quickly as possible, and hope to complete the Merger during the first quarter of 2010; however, the exact timing cannot be predicted. In order to complete the Merger, several conditions set forth in the Merger Agreement must be met or waived. The Merger will become effective when a certificate of merger is filed with the Secretary of State of the State of Delaware.

Q. WHAT WILL I RECEIVE IN THE MERGER?

A. The holders of Curaxis Common Stock will receive shares of Auto Search common stock. This means that each share of Curaxis Common Stock will convert into the right to receive one (1) share of Auto Search Common Stock. After the Merger is completed, it is expected that Curaxis’ pre-merger stockholders and warrant holders will own approximately 63,943,574 shares of Auto Search Common Stock, or approximately 91% of the outstanding shares of Auto Search on an as converted basis, subject to adjustment under the terms of the Merger Agreement.

Q. HAS SOMEONE DETERMINED THAT THE MERGER IS ADVISABLE FOR THE CURAXIS STOCKHOLDERS AND AUTO SEARCH STOCKHOLDERS?

A. Yes. The Curaxis Board of Directors and the Auto Search Board of Directors have independently determined that the Merger is advisable for their stockholders, respectively. The Curaxis Board of Directors and the Auto Search Board of Directors have approved the Merger and the Merger Agreement, and the Auto Search Board of Directors has approved the issuance of their common stock in the Merger, as well as the other actions contemplated in connection with the Merger. The number of shares of Auto Search Common Stock to be issued pursuant to the Merger Agreement was determined by negotiation between Curaxis and Auto Search. This consideration does not necessarily bear any relationship to our asset value, net worth or other established criteria of value and should not be considered indicative of the actual value of Curaxis. Furthermore, neither Curaxis nor Auto Search has obtained an opinion from any third party that the merger is fair from a financial perspective.

Q. DO I HAVE APPRAISAL OR DISSENTER’S RIGHTS?

A. Yes. Under Delaware law, holders of Curaxis Common Stock who do not consent to the Merger are entitled to appraisal rights in connection with the Merger. You are urged to read the discussion of appraisal rights commencing on page 38 for a more complete discussion of appraisal rights. If you do not comply with the procedures governing appraisal rights set forth under Delaware law and explained elsewhere in this information statement, you may not be entitled to payment for your shares.

Q. WHAT WILL HAPPEN IF THE MERGER IS NOT COMPLETED?

A. If the Merger is not completed for any reason, Curaxis may be subject to a number of other risks. Curaxis will have no access to the public markets for its common stock and will have incurred the expenses associated with attempting to effectuate the Merger and the transactions contemplated by the Merger. The failure to consummate the Merger would have an adverse impact on the financial condition of Curaxis and the value of its equity interests.

Q. WHO CAN ANSWER QUESTIONS REGARDING THE MERGER?

A. If you would like additional copies of this information statement, or if you have questions about the Merger, amendments or the other matters discussed in this document, you should contact:

Curaxis Pharmaceutical Corporation

12600 Deerfield Parkway, Suite 100

Alpharetta, GA 30004

Attn: David Corcoran

Q. WHERE CAN I FIND MORE INFORMATION ABOUT AUTO SEARCH?

A. Auto Search files periodic reports and other information with the Securities and Exchange Commission (the “SEC”). You may read and copy this information at the SEC’s public reference facilities. Please call the SEC at 1-800-SEC-0330 for information about these facilities. This information is also available on the Internet site maintained by the SEC at http://www.sec.gov. For further information, please refer to the section of this information statement titled “AVAILABLE INFORMATION.”

SUMMARY

The following is a summary that highlights information contained in this information statement/prospectus. This summary may not contain all of the information that may be important to you. For a more complete description of the Merger Agreement and the Merger contemplated by the Merger Agreement, we encourage you to read carefully this entire information statement/prospectus, including the attached appendices. In addition, we encourage you to read the information incorporated by reference into this information statement/prospectus, which includes important business and financial information about Auto Search that has been filed with the SEC. You may obtain the information incorporated by reference into this information statement/prospectus without charge by following the instructions in the section entitled “Additional Information—Where You Can Find More Information” beginning on page 49.

The Companies

Auto Search Cars, Inc.

164 Eleven Levels Road

Ridgefield, CT 06877

(203) 216-9991

Auto Search Cars, Inc.’s Business

Auto Search has been engaged in the development of a web-based e-commerce site designed to be a price leader in the online vehicle sales and service market. Inclusive in the business plan is to develop the website as a platform to provide information, not just for the sale of vehicles but also for information such as vehicle financing and warranties. Auto Search has created a platform that is local, regional and national in nature. By providing such a platform, Auto Search can bring vehicle sellers and other industry participants, such as vendors of automotive services and advertisers, together with consumers actively engaged in a search for a vehicle or vehicle-related products.

Since inception, Auto Search has been engaged in business activities, including the launch of the preliminary website, website development, market research, developing economic models and financial forecasts, performing due diligence regarding e-commerce marketing, identifying future sources of capital and most notably the launch of the fully operational website.

Auto Search has been offering free listings on its website though the date of this filing as an incentive for consumers to use its product.

Auto Search has implemented a full set of features including geographic search criteria, pictures and make/model search options.

Curaxis Pharmaceutical Corporation

12600 Deerfield Parkway, Suite 100

Alpharetta, GA 30004

(678) 566-3750

Curaxis’ Business

We were incorporated on February 27, 2001, under the laws of the state of Delaware. Our executive offices are located at 12600 Deerfield Parkway, Suite 100, Alpharetta, Georgia 30004. Our fiscal year end is December 31.

We are an emerging specialty pharmaceutical company with a peptide hormone product candidate for the treatment of Alzheimer’s disease and multiple cancers. Our therapeutic platform is based on the hypothesis that many diseases of aging may be caused by age-related dysregulation of the hypothalamic-pituitary-gonadal (HPG) axis. This platform is built on the premise that hormones associated with this axis are beneficial early in life, when they promote growth and development, but are harmful later in life when the mechanism for feedback is compromised, thereby leading to disease processes, including pathologies associated with Alzheimer’s disease and various cancers. We believe our discovery of a duplicate HPG axis at the cellular level in brain tissue from Alzheimer’s patients and in multiple tumors will enable us to develop significant new treatments for Alzheimer’s disease as well as many cancers.

Our Alzheimer’s Disease Program

Leuprolide acetate, a peptide hormone, has been widely used over the past twenty years for the treatment of a number of hormone-related disorders, most notably prostate cancer and endometriosis and precocious puberty, and has a well-established safety profile. Curaxis has conducted extensive preclinical and clinical studies exploring the use of leuprolide acetate for the treatment of Alzheimer’s disease in mild-to-moderate patients. The results to date are encouraging and point especially to a potentially significant new treatment for women with Alzheimer’s disease. Women represent approximately two-thirds of Alzheimer’s patients.

Men present greater challenges in the use of leuprolide to treat Alzheimer’s disease because leuprolide suppresses their production of testosterone, which could necessitate patient self-administration of supplemental testosterone and which can lead to wide swings in testosterone blood serum levels. Therefore, in the near-term, we plan to concentrate our development efforts on the use of leuprolide acetate to treat women, although we will continue our efforts to better understand mechanisms that might lead to optimum outcomes in men.

Auto Search Cars Acquisition Corp.

164 Eleven Levels Road

Ridgefield, CT 06877

(203) 216-9991

Auto Search Cars Acquisition Corp.’s Business

Auto Search Cars Acquisition Corp. was formed in December 2009, in the State of Delaware, as an acquisition subsidiary of Auto Search, for the purpose of merging with Curaxis, pursuant to the terms of the Merger Agreement.

The Merger (see page 36)

Auto Search and Curaxis have agreed to the acquisition of Curaxis by Auto Search under the terms of the Merger Agreement that is described in this information statement/prospectus. In the Merger, Acquisition Corp., a wholly-owned subsidiary of Auto Search, will merge with Curaxis, with Curaxis surviving as a wholly-owned subsidiary of Auto Search (the “Surviving Corporation”). We have attached the Merger Agreement to this information statement/prospectus as Exhibit 2.1. We encourage you to carefully read the Merger Agreement in its entirety because it is the legal document that governs the Merger.

Merger Consideration

If the proposed Merger is completed, the holders of Curaxis Common Stock are expected to receive one (1) share of Auto Search Common Stock for each share of Curaxis Common Stock they own immediately prior to completion of the Merger. For a full description of a comparison of the rights of the Auto Search Common Stock to the rights of the Curaxis Common Stock, see “Comparison of Stockholder Rights and Corporate Governance Matters” beginning on page 46. The merger is expected to qualify as a “reorganization” under the Internal Revenue Code. See “Risk Factors—Risks Relating to the Merger” beginning on page 16.

Ownership of Auto Search after the Merger

Based on the number of shares of Auto Search Common Stock and Curaxis Common Stock outstanding on February 5, 2010 and without giving effect to any further issuances of shares of stock by Auto Search, holders of Curaxis common stock are expected to hold approximately 91% of the outstanding shares of Auto Search Common Stock on an as converted basis immediately after the Merger.

Auto Search stockholders will continue to own their existing shares, which will not be affected by the Merger.

Opinion of Financial Advisor

Curaxis

The Curaxis board of directors did not engage a financial advisor to assist in the sale of Curaxis or to render a financial opinion as to the fairness, from a financial point of view, of the consideration to be paid to the Curaxis stockholders in the merger. The Curaxis Board of Directors determined that the factors which weighed in favor of the Merger, as discussed below, were substantial in relation to the factors which weighed against the Merger. The Curaxis Board of Directors also considered the cost of obtaining a fairness opinion as prohibitively expensive in light of Curaxis’ financial condition.

Share Ownership of Directors and Executive Officers

At the close of business on February 5, 2010, the Curaxis record date, directors and executive officers of Curaxis and their affiliates beneficially owned and were entitled to vote approximately 16,422,064 shares of Curaxis Common Stock, collectively representing approximately 26% of the shares of Curaxis Common Stock outstanding on that date. Curaxis has received written consent from certain Curaxis stockholders representing approximately 70% of Curaxis Common Stock under which the parties, subject to certain limited exceptions, have voted their shares in favor of the Merger.

Dissenters’ or Appraisal Rights (see page 38)

Holders of shares of Curaxis Common Stock who do not vote in favor of approval and adoption of the Merger Agreement and approval of the Merger and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the Merger under Section 262 of the Delaware General Corporate Law (“DGCL”). Under the Nevada Revised Statutes, holders of shares of Auto Search Common Stock are not entitled to appraisal rights in connection with the merger.

Conditions to Completion of the Merger (see page 41)

A number of conditions must be satisfied before the Merger will be completed. These include among others:

•	The Form S-4 shall have become effective under the Securities Act of 1993, as amended;
•	The representations and warranties made by Curaxis in the Merger Agreement are true and correct;

•	Curaxis has performed, in all material respects, all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with, in all material respects, by Curaxis prior to the Effective Time;

•	The representations and warranties made by Auto Search and/or Acquisition Corp. in the Merger Agreement are true and correct;

•	Auto Search has performed, in all material respects, all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with, in all material respects, by it prior to the Effective Time; and

Each of Auto Search, Acquisition Corp. and Curaxis may waive the conditions to the performance of its respective obligations under the merger agreement and complete the merger even though one or more of these conditions has not been met.

Regulatory Matters (see page 72)

The merger is not subject to antitrust laws or any federal or state regulatory requirements.

Reasonable Best Efforts to Complete the Merger (see page 42)

Each of Auto Search and Curaxis has agreed to cooperate fully with the other party and use its reasonable best efforts to take, or cause to be taken, all actions necessary, proper or advisable under applicable law and regulations to complete the Merger as promptly as practicable.

Material United States Federal Income Tax Consequences of the Merger (see page 43)

Curaxis expects the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code. If the Merger qualifies as a “reorganization,” Curaxis stockholders generally will not recognize a gain or loss for federal income tax purposes. No gain or loss will be recognized for federal income tax purposes by Curaxis, Auto Search, or Auto Search stockholders as a result of the Merger.

Tax matters are complicated, and the tax consequences of the Merger to each Curaxis stockholder will depend on the facts of each stockholder’s situation. Curaxis stockholders are urged to read carefully the discussion in the section entitled “The Merger—Material United States Federal Income Tax Consequences of the Merger” and to consult their tax advisors for a full understanding of the tax consequences of their participation in the merger.

Accounting Treatment (see page 84)

The merger transaction will be accounted for as a reverse acquisition and recapitalization. Auto Search is the issuer. For accounting purposes, Curaxis will be considered the acquirer. Accordingly, the historical financial statements prior to the merger will become those of Curaxis retroactively restated for the equivalent number of shares received in the merger. Earnings per share for the periods prior to the merger will be restated to reflect the equivalent number of shares outstanding.

Risk Factors

In evaluating the Merger Agreement and the Merger, in the case of Curaxis stockholders, or the issuance of shares of Auto Search Common Stock in the Merger, you should carefully read this information statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors” beginning on page 16.

Summary Selected Historical Financial Data

Auto Search and Curaxis are providing the following information to aid you in your analysis of the financial aspects of the Merger.

Summary Financial Data of Auto Search

The following unaudited statement of operations and balance sheet summary of Auto Search should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Prospectus and in the information set forth in the section titled “Auto Search Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	For the Period from February 1, 2008 (Inception) to September 30, 2009 (unaudited)		For the Period from February 1, 2008 (Inception) to December 31, 2008 (audited)
STATEMENT OF OPERATIONS

Revenues	$	0	$	0
Total Operating Expenses	$	20,448	$	16,717

Other Income	$	200	$	200
Net Loss	$	(20,248)	$	(16,517	)

	As of September 30, 2009 (unaudited)		As of December 31, 2008 (audited)
BALANCE SHEET DATA

Cash	$	518		4,486
Total Assets	$	718		4,686
Total Liabilities	$	13,296		13,333
Stockholders’ (Deficiency)	$	(12,578)		(8,647)

Summary Financial Data of Curaxis

The following unaudited statement of operations and balance sheet summary of Curaxis Pharmaceutical Corporation should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Prospectus and in the information set forth in the section titled “Curaxis Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	For the Period from February 27, 2001 (Inception) to September 30, 2009 (unaudited)			For the Period from February 27, 2001 (Inception) to December 31, 2008 (audited)
STATEMENT OF OPERATIONS	(dollars in thousands)

Revenues	$	0		$	0
Total Operating Expenses	$	92,490		$	91,986

Other Income (expense)	$	5,712		$	(551	)
Net Loss	$	(86,778	)	$	(92,537	)

	As of September 30, 2009 (unaudited)		As of December 31, 2008 (audited)
BALANCE SHEET DATA	(dollars in thousands)

Cash	$	869		5
Total Assets	$	1,136		147
Total Liabilities	$	10,157		16,691
Stockholders’ (Deficiency)	$	(9,021)		(16,544)

RISK FACTORS

Auto Search’s and Curaxis’ stockholders should consider the following risk factors and uncertainties, together with the other information included and incorporated by reference in this information statement/prospectus.

RISKS RELATED TO THE MERGER

IF THE PROPOSED MERGER WITH CURAXIS IS CONSUMMATED, AUTO SEARCH WILL FACE THE RISKS ASSOCIATED WITH CURAXIS’ BUSINESS.

Auto Search is targeting a closing of the Merger during the first quarter of 2010. If the proposed Merger is consummated, Auto Search may be subject to a number of material risks associated with Curaxis’ business, including the following:

•	Curaxis’ business is capital intensive and, after the Merger, Auto Search may not be able to raise sufficient funds to proceed with clinical development of Curaxis’ therapeutic candidates.
•	Curaxis’ business is subject to numerous uncertainties, including the possibility that none of its therapeutic candidates will obtain FDA approval or achieve commercialization.

OWNERSHIP OF AUTO SEARCH COMMON STOCK MAY BE HIGHLY CONCENTRATED AFTER CONSUMMATION OF THE MERGER.

After consummation of the Merger, certain stockholders will have beneficial ownership of significant blocks of Auto Search’s outstanding common stock. Such stockholders, acting individually or as a group, will have substantial influence over the outcome of a corporate action of Auto Search requiring stockholder approval, including the election of directors, any approval of a merger, consolidation or sale of all or substantially all of Auto Search’s assets or any other significant corporate transaction, even if the outcome sought by such stockholders is not in the interest of Auto Search’s other stockholders. These stockholders, acting as a group, may also delay or prevent a change in control of Auto Search, even if such change in control would benefit the other stockholders of Auto Search.

AUTO SEARCH’S AND CURAXIS’ SHAREHOLDERS MAY NOT REALIZE A BENEFIT FROM THE MERGER COMMENSURATE WITH THE OWNERSHIP DILUTION THEY WILL EXPERIENCE IN CONNECTION WITH THE MERGER.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the Merger, Auto Search’s and Curaxis’ stockholders will have experienced substantial dilution of their ownership interest in connection with the Merger without receiving any commensurate benefit.

IF ANY OF THE EVENTS DESCRIBED IN “RISKS RELATED TO AUTO SEARCH,” “RISKS RELATED TO CURAXIS” OR RISKS RELATED TO AUTO SEARCH AND THE COMBINED COMPANY AND THE INDUSTRY IN WHICH THEY WILL OPERATE OCCUR, THOSE EVENTS COULD CAUSE THE POTENTIAL BENEFITS OF THE MERGER NOT TO BE REALIZED.

Following the effective time of the Merger, the combined company will be susceptible to many of the risks described in the sections herein entitled “Risks Related to Auto Search,” and “Risks Related to Curaxis.” To the extent any of the events in the risks described in those sections occur, those events could cause the potential benefits of the Merger not to be realized and the market price of the combined company’s common stock to suffer.

RISKS RELATED TO AUTO SEARCH

RISKS ASSOCIATED WITH AUTO SEARCH’S BUSINESS

Assuming the Merger is consummated, Auto Search intends to discontinue any efforts relating to development of a website for online vehicle classified advertising and to concentrate its focus exclusively on Curaxis’ drug research and development business. Therefore, the risks described below, relating to Auto Search’s current website business, will continue to be relevant to its business only if the Merger is not consummated. However, if the Merger is consummated, the risks associated with Curaxis’ drug research and development business will be important to Auto Search’s business.

AUTO SEARCH’S INDEPENDENT ACCOUNTANTS HAVE EXPRESSED DOUBT ABOUT ITS ABILITY TO CONTINUE AS A GOING CONCERN.

Auto Search’s business condition, as indicated in its independent accountant’s audit report, raises substantial doubt as to Auto Search’s ability to continue as a going concern. To date, Auto Search has completed only part of its business plan and it can provide no assurance that it will be able to generate enough revenue to achieve profitability. It is not possible at this time to predict with any assurance the potential success of Auto Search’s business.

RISKS RELATED TO AUTO SEARCH COMMON STOCK

ANY ADDITIONAL FUNDING AUTO SEARCH ARRANGES THROUGH THE SALE OF ITS COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SECURITY HOLDERS.

Auto Search may have to raise additional capital in order for its business plan to succeed. Its most likely source of additional capital will be through the sale of additional shares of common stock. Such issuances will cause security holders’ interests in Auto Search to be diluted, which may negatively affect the value of their shares.

CURRENTLY, THERE IS NO PUBLIC MARKET FOR AUTO SEARCH’S COMMON STOCK, AND THERE CAN BE NO ASSURANCE THAT ANY PUBLIC MARKET WILL EVER DEVELOP OR THAT AUTO SEARCH’S COMMON STOCK WILL BE QUOTED FOR TRADING. FURTHER, EVEN IF QUOTED, IT IS LIKELY TO BE SUBJECT TO SIGNIFICANT PRICE FLUCTUATIONS.

Auto Search’s common stock is listed on the Over-the-Counter Bulletin Board under the symbol “ASCH,” however; there is a limited trading market for its common stock. Even if Auto Search is successful in developing a public market, there may not be enough liquidity in such market to enable security holders to sell their stock. If a public market for Auto Search’s common stock does not develop, investors may not be able to re-sell the shares of its common stock, rendering their shares effectively worthless and resulting in a complete loss of their investment. Auto Search cannot predict the extent to which investor interest in Auto Search will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

ANY TRADING MARKET THAT MAY DEVELOP MAY BE RESTRICTED BY VIRTUE OF STATE SECURITIES “BLUE SKY” LAWS WHICH PROHIBIT TRADING ABSENT COMPLIANCE WITH INDIVIDUAL STATE LAWS. THESE RESTRICTIONS MAY MAKE IT DIFFICULT OR IMPOSSIBLE FOR AUTO SEARCH SECURITY HOLDERS TO SELL SHARES OF ITS COMMON STOCK IN THOSE STATES.

There is a limited public market for Auto Search’s common stock, and there can be no assurance that any public market will develop in the foreseeable future. Transfer of Auto Search’s common stock may also be restricted under the securities regulations and laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, Auto Search’s common stock may not be traded in such jurisdictions.

BECAUSE AUTO SEARCH IS SUBJECT TO THE “PENNY STOCK” RULES, THE LEVEL OF TRADING ACTIVITY IN ITS COMMON STOCK MAY BE REDUCED.

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in Auto Search’s common stock may find it difficult to sell their shares.

IN THE EVENT THAT A PUBLIC MARKET DEVELOPS, THE PRICE OF AUTO SEARCH’S COMMON STOCK WILL BE SUBJECT TO SIGNIFICANT PRICE FLUCTUATIONS.

Until an orderly market develops in Auto Search’s common stock, if ever, the price at which its common stock trades is likely to fluctuate significantly. Prices for Auto Search’s common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of its common stock, developments affecting its business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of Auto Search and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of Auto Search common stock.

In addition, Auto Search common stock may not be followed by any market analysts, and there may be few institutions acting as market makers for its common stock. Either of these factors could adversely affect the liquidity and trading price of Auto Search common stock.

AUTO SEARCH DOES NOT EXPECT TO PAY DIVIDENDS TO HOLDERS OF ITS COMMON STOCK IN THE FORESEEABLE FUTURE. AS A RESULT, HOLDERS OF ITS COMMON STOCK MUST RELY ON STOCK APPRECIATION FOR ANY RETURN ON THEIR INVESTMENT.

Auto Search has not declared any dividends since its inception, and it does not plan to declare any dividends in the foreseeable future. Accordingly, holders of Auto Search common stock will have to rely on capital appreciation, if any, to earn a return on their investment in Auto Search common stock.

RISKS RELATED TO CURAXIS

RISKS RELATED TO CURAXIS’ FINANCIAL POSITION AND NEED FOR ADDITIONAL CAPITAL.

CURAXIS HAS INCURRED SIGNIFICANT LOSSES SINCE ITS INCEPTION, AND CURAXIS EXPECTS TO INCUR LOSSES AT LEAST FOR THE FORESEEABLE FUTURE AND MAY NEVER ACHIEVE OR MAINTAIN PROFITABILITY.

Since inception Curaxis has incurred significant operating losses. To date, Curaxis has financed its operations primarily through the sale of its common stock and warrants to private investors. Curaxis expects to incur operating losses at least for the foreseeable future. If Curaxis is unable to raise the funds necessary to pay its expenses, including expenses accumulated in its clinical trial activities to date, Curaxis may be unable to continue operations.

To become and remain profitable, Curaxis must succeed in developing and commercializing drugs with significant market potential. This will require Curaxis to be successful in a range of challenging activities for which it is only in the preliminary stages: developing drugs, obtaining regulatory approval for them, and manufacturing, marketing and selling them. Curaxis may never succeed in these activities and may never generate revenues that are significant or large enough to achieve profitability. Even if Curaxis does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis. Curaxis’ failure to become and remain profitable could impair its ability to raise capital, expand its business, diversify its product offerings or continue its operations.

CURAXIS WILL NEED SUBSTANTIAL ADDITIONAL FUNDING AND MAY BE UNABLE TO RAISE CAPITAL WHEN NEEDED, WHICH WOULD FORCE IT TO DELAY, REDUCE OR ELIMINATE ITS PRODUCT DEVELOPMENT PROGRAMS OR COMMERCIALIZATION EFFORTS.

Curaxis expects its research and development expenses to increase in connection with its ongoing activities, particularly as it conducts clinical trials for its candidate for the treatment of mild to moderate Alzheimer’s disease. In addition, subject to regulatory approval of any of its product candidates, Curaxis expects to incur significant commercialization expenses for product sales, marketing, securing commercial quantities of product from its manufacturers and distribution. Curaxis will need substantial additional funding to complete clinical trials and fund initial commercialization costs of its therapeutic candidates and to advance its earlier stage preclinical programs, and may be unable to raise capital when needed or on attractive terms, which would force Curaxis to delay, reduce or eliminate its research and development programs or commercialization efforts.

Curaxis’ future capital requirements will depend on many factors, including:

the progress and results of clinical trials of its lead candidate, VP4896, for mild to moderate Alzheimer’s disease;
the costs of establishing sales and marketing functions, outsourcing manufacturing needs and obtaining pre-launch inventory of VP4896;
the scope, progress, results and cost of preclinical development and laboratory testing and clinical trials for its other product candidates;
the costs, timing and outcome of regulatory review of VP4896 for mild to moderate Alzheimer’s disease and of its other product candidates;
the number and development requirements of other product candidates;
the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;
Curaxis’ success in entering into collaboration agreements with leading pharmaceutical and biotechnology companies to assist in furthering the development of product candidates; and
The timing, receipt and amount of sales or royalties, if any, from VP4896 and other potential products.

Until such time, if ever, as Curaxis can generate substantial product revenues, Curaxis expect to finance its cash needs through public or private equity offerings, debt financings and possibly corporate collaboration and licensing arrangements. If Curaxis raises additional funds by issuing equity securities, its stockholders may experience dilution. Debt financing, if available, may involve agreements that include covenants limiting or restricting its ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or additional equity that Curaxis raises may contain terms, such as liquidation and other preferences that are not favorable to Curaxis or its stockholders. If Curaxis raises additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to Curaxis.

CURAXIS’ SHORT OPERATING HISTORY MAY MAKE IT DIFFICULT FOR YOU TO EVALUATE THE SUCCESS OF OUR BUSINESS TO DATE AND TO ASSESS ITS FUTURE VIABILITY.

Curaxis is a development-stage company. Its operations to date have been limited to organizing and staffing the company, acquiring, developing and securing its technology and undertaking preclinical studies and limited clinical trials of its most advanced product candidate, VP4896. Curaxis has not yet demonstrated its ability to successfully complete large-scale, pivotal clinical trials, obtain regulatory approval, manufacture a commercial scale product or arrange for a third party to do so on its behalf or conduct sales and marketing activities necessary for successful product commercialization.

In addition, Curaxis may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. Curaxis will need to transition from a company with a research focus to a company capable of supporting commercial activities and it may not be successful in such transition.

CURAXIS DEPENDS HEAVILY ON THE SUCCESS OF ITS MOST ADVANCED PRODUCT CANDIDATE, VP4896 FOR MILD TO MODERATE ALZHEIMER’S DISEASE, WHICH IS STILL IN CLINICAL DEVELOPMENT. IF CURAXIS IS UNABLE TO COMMERCIALIZE VP4896 FOR THIS INDICATION, OR EXPERIENCES SIGNIFICANT DELAYS IN DOING SO, ITS BUSINESS WILL BE MATERIALLY HARMED.

Curaxis has invested a significant portion of its efforts and financial resources in the development of its most advanced product candidate, VP4896, for mild to moderate Alzheimer’s disease. The success of its VP4896 Alzheimer’s disease program will depend on several factors, including the following:

successful patient enrollment in, and completion of, clinical trials;
receipt of marketing approvals from the FDA and similar foreign regulatory authorities;
obtaining commercial quantities of leuprolide acetate, the active ingredient of VP4896;
obtaining commercial quantities of VP4896 from its supplier, Durect Corporation;
stablishing a sales and marketing infrastructure to market and sell VP4896 in the United States and internationally, whether alone or in collaboration with others; and
acceptance of the product by patients, the medical community and third party payors.

Curaxis’ ability to generate product revenues, which Curaxis does not expect will occur for at least the next several years, if ever, will depend heavily on the successful development and commercialization of VP4896. If Curaxis is unable to commercialize VP4896 for mild to moderate Alzheimer’s disease, or experience significant delays in doing so, its business will be materially harmed.

IF CURAXIS IS UNABLE TO ACHIEVE STATISTICAL SIGNIFICANCE ON THE PRIMARY EFFICACY ENDPOINTS IN CLINICAL TRIALS OF VP4896 FOR THE TREATMENT OF MILD TO MODERATE ALZHEIMER’S DISEASE, IT MAY NOT BE SUCCESSFUL IN OBTAINING FDA APPROVAL FOR VP4896, WHICH WOULD MATERIALLY HARM ITS BUSINESS.

In ALADDIN I, Curaxis’ Phase II clinical trial for women with mild to moderate Alzheimer’s disease involving an injectable formulation of leuprolide acetate, Curaxis identified a trend in favor of the high dose leuprolide acetate group versus placebo, but it did not achieve statistical significance on the primary efficacy endpoints or any of the secondary efficacy endpoints in this clinical trial. The primary efficacy endpoints of the trial were a patient’s score on each of the ADAS-cog, a test of memory and cognition, and the ADCS-CGIC, a global measure of a subject’s change in condition, at 48 weeks compared to baseline. There were various secondary efficacy endpoints, including a patient’s score on the ADCS-ADL, a measurement of a patient’s capacity to perform activities of daily living, at 48 weeks compared to baseline. Analysis of the same primary efficacy endpoints at the completion of the 48-week men’s Phase II study, ALADDIN II, also did not demonstrate statistical significance.

Curaxis performed a preplanned subgroup analysis of 78 women out of the 108 women who participated in ALADDIN I, the Phase II clinical trial in women. Of this subgroup of 78 women, which included all of the patients who were taking an AChEI and excluded the 30 patients who were not taking an AChEI, 28 patients were taking an AChEI plus a 11.25 mg of leuprolide acetate, 24 patients were taking an AChEI plus a 22.5 mg of leuprolide acetate and 26 patients were taking an AChEI plus placebo. The results for the group of 28 patients that received an AChEI plus the 11.25 mg dose of leuprolide acetate were not statistically significantly different from the results for the group that received an AChEI plus placebo. The results for the group of 24 patients that received an AChEI plus the 22.5 mg of leuprolide acetate compared to the group of 26 patients that received an AChEI plus placebo were statistically significant with respect to the patients’ scores on both primary endpoints, the ADAS-cog and ADCS-CGIC as well as on the ADCS-ADL, a secondary endpoint, prior to applying any statistical adjustment. However, because Curaxis performed several comparisons, it was required to adjust the p-values of the results to account for multiple comparisons. This was done by using what is referred to as the Bonferroni correction which applies an estimated statistical penalty to account for the number of comparisons made. Specifically, the unadjusted p-values for this subgroup were 0.026 for the ADAS-cog, 0.031 for the ADCS-CGIC and 0.015 for ADCS-ADL. The adjusted p-values for this subgroup were 0.078 for the ADAS-cog, 0.093 for the ADCS-CGIC and 0.044 for ADCS-ADL. Therefore, after applying the Bonferroni correction, Curaxis was only able to demonstrate statistical significance with respect to the ADCS-ADL.

Curaxis likewise performed an analysis of 90 men out of 119 men who participated in ALADDIN II, the Phase II clinical trial in men. Of this subgroup of 90 men, which included all of the patients who were taking an AChEI and excluded the 29 patients who were not taking an AChEI, 27 patients were taking an AChEI plus a 22.5 mg dose of leuprolide acetate, 34 patients were taking an AChEI plus a 33.75 mg dose of leuprolide acetate and 29 patients were taking an AChEI plus placebo. The results for both leuprolide-treated groups were not significantly different from the results for the group that received an AChEI plus placebo. The treated groups of 27 and 34 patients given 22.5 mg and 33.75 mg of leuprolide acetate, respectively, demonstrated a slight positive signal on the ADAS-cog assessment compared to placebo at 48 weeks. Results on the ADCS-CGIC rating demonstrated that 44% of the men who received 22.5 mg of leuprolide acetate plus AChEIs, and 47% of the men who received 33.75 mg of leuprolide acetate plus AChEIs, were either improved or showed no change compared to 31% of the men who received placebo plus AChEIs.

In addition, Curaxis used a commercially available formulation of leuprolide acetate administered by injection in its Phase II trials for the treatment of mild to moderate Alzheimer’s disease, while Curaxis’ planned clinical trials will test VP4896, a biodegradable polymeric implant formulation of leuprolide acetate, for this indication. Leuprolide acetate administered through an implant may not have the same effect as leuprolide acetate injections had in Curaxis’ earlier Phase II clinical trials and may cause side effects not seen in those Phase II clinical trials. ALADDIN 105 was a Phase I trial performed by Curaxis to test the safety and tolerability of the VP4896 implant and the implantation procedure as well as the pharmacokinetics, or rate of release, of leuprolide delivery from the implant. The results of that study suggest that the VP4896 implant is safe and well tolerated. ALADDIN 105 also demonstrated that the VP4896 implant releases leuprolide acetate in a steady and sustained way over the 8-week dosing period. In addition, Curaxis’ planned clinical trials may be at dosing levels that are higher than the doses of leuprolide acetate used in ALADDIN I and ALADDIN II. The differences in dosing levels and methods of administration, as well as other factors, may have unexpected effects on the outcome of Curaxis’ clinical trials. If Curaxis is unable to achieve statistical significance on the primary efficacy endpoints in pivotal Phase III clinical trials, it may be not be successful in obtaining FDA approval for VP4896, which would materially harm its business.

CURAXIS’ PROGRAM FOR VP4896 IS BASED ON THE LH HYPOTHESIS, WHICH IS NOT VIEWED AS THE PREDOMINANT HYPOTHESIS REGARDING THE POSSIBLE CAUSES OF ALZHEIMER’S DISEASE. THIS ADDS TO THE RISK OF CURAXIS’ DEVELOPMENT EFFORT AND MAY AFFECT PHYSICIAN AND PATIENT ACCEPTANCE AND USE OF VP4896 AND THE WILLINGNESS OF THIRD PARTIES TO PROVIDE REIMBURSEMENT.

Curaxis’ program for VP4896 is based on the LH hypothesis which is not the predominant view regarding the possible causes of Alzheimer’s disease. The LH hypothesis proposes that the known neurological and biochemical changes associated with Alzheimer’s disease are caused by elevated levels of the pituitary hormone, leuteinizing hormone or LH. Thus, this hypothesis suggests that when LH levels increase as the body ages, the neurological changes seen in Alzheimer’s disease result. The beta amyloid hypothesis, however, proposes that amyloid beta protein, which makes up the plaques present in the brains of Alzheimer’s disease patients, is toxic and is the causative agent of the disease. Under this hypothesis, inhibiting the production of, and enhancing the clearance of, amyloid beta protein plaques may prevent or treat Alzheimer’s disease. The beta amyloid hypothesis is the predominant view. While preclinical data now support the notion that the LH hypothesis may be interrelated with the amyloid hypothesis and other hypotheses of Alzheimer’s disease pathology, the unproven nature of the LH hypothesis adds to the risk that Curaxis’ development effort may not be successful. In particular, no drugs for the treatment of Alzheimer’s disease have been successfully developed based on the LH hypothesis. Moreover, the predominant status of the beta amyloid hypothesis may impede Curaxis’ development and commercialization efforts. For example, the predominant status of the beta amyloid hypothesis in the medical community may adversely affect Curaxis’ ability to recruit patients for its clinical trials or, if Curaxis successfully completes clinical development of this product candidate and obtains regulatory approval, may adversely affect its ability to recruit sales and marketing personnel, may affect physician and patient acceptance and use of the product and the willingness of third parties to provide reimbursement, any of which could materially harm Curaxis’ business.

IF CURAXIS’ PRECLINICAL STUDIES DO NOT PRODUCE SUCCESSFUL RESULTS OR ITS CLINICAL TRIALS DO NOT DEMONSTRATE SAFETY AND EFFICACY IN HUMANS, CURAXIS WILL NOT BE ABLE TO COMMERCIALIZE ITS PRODUCT CANDIDATES.

Before obtaining regulatory approval for the sale of its product candidates, Curaxis must conduct, at its own expense, extensive preclinical tests and clinical trials to demonstrate the safety and efficacy in humans of its product candidates. Preclinical and clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and interim results of a clinical trial do not necessarily predict final results. Specifically, the results of Curaxis’ Phase II trials were collected from a limited number of subjects and may not be indicative of results that it will obtain in later studies which are expected to be of greater size and scope.

A failure of one or more of Curaxis’ clinical trials can occur at any stage of testing. Curaxis may experience numerous unforeseen events during, or as a result of, the clinical trial process that could delay or prevent its ability to receive regulatory approval or commercialize VP4896 or its other product candidates, including:

regulatory authorities, institutional review boards, or ethics committees may not authorize Curaxis to commence a clinical trial or conduct a clinical trial at a prospective trial site;
Curaxis’ clinical trials may produce negative or inconclusive results, and it may decide, or regulatory authorities may require it, to conduct additional clinical trials or it may abandon projects that it expects to be promising;
enrollment in Curaxis’ clinical trials may be slower than it currently anticipates, resulting in significant delays. Additionally, participants may drop out of our clinical trials at a higher rate than we anticipate;
our third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner;
we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks;
regulatory authorities, institutional review boards, or ethics committees may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
the cost of our clinical trials may be greater than we anticipate;
the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate; and
the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.

If we are required to conduct additional clinical trials or other testing of VP4896 or our other product candidates beyond those that we currently contemplate, if we are unable to successfully complete our clinical trials or other testing or if the results of these trials or tests are not positive or are only modestly positive, we may:

be delayed in obtaining marketing approval for our product candidates;
not be able to obtain marketing approval; or
obtain approval for indications that are not as broad as intended.

Curaxis’ product development costs will also increase if we experience delays in testing or approvals. We do not know whether any clinical trials will begin as planned, need to be restructured or will be completed on schedule, if at all. Significant clinical trial delays also could shorten the patent protection period during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to commercialize our products or product candidates.

USE OF THIRD PARTIES TO MANUFACTURE OUR PRODUCT CANDIDATES, INCLUDING VP4896, MAY INCREASE THE RISK THAT WE WILL NOT HAVE SUFFICIENT QUANTITIES OF OUR PRODUCT CANDIDATES OR SUCH QUANTITIES AT AN ACCEPTABLE COST, AND CLINICAL DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCT CANDIDATES COULD BE DELAYED, PREVENTED OR IMPAIRED.

Curaxis does not own or operate manufacturing facilities for clinical or commercial production of our product candidates. We have limited personnel with experience in drug manufacturing and we lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. Our strategy is to outsource all manufacturing of our product candidates and products, including VP4896, to third parties.

Reliance on third party manufacturers entails risks to which we would not be subject if we manufactured product candidates or products ourselves, including:

reliance on the third party for regulatory compliance and quality assurance;
the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and
the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.

Curaxis’ manufacturers may not be able to comply with current Good Manufacturing Practice, or cGMP, regulations or other regulatory requirements or similar regulatory requirements outside the United States. Our failure, or the failure of our third party manufacturers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.

Curaxis’ product candidates and any products that we may develop may compete with other product candidates and products for Auto Search to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations that are both capable of manufacturing for us and willing to do so. If the third parties that we engage to manufacture product for our clinical trials should cease to continue to do so for any reason, we likely would experience delays in advancing these trials while we identify and qualify replacement suppliers and we may be unable to obtain replacement supplies on terms that are favorable to us. In addition, if we are not able to obtain adequate supplies of our product candidates or the drug substances used to manufacture them, it will be more difficult for us to develop our product candidates and compete effectively.

Curaxis’ current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop product candidates and commercialize any products that receive regulatory approval on a timely and competitive basis.

CURAXIS RELIES ON DURECT CORPORATION, OUR SOLE SOURCE PROVIDER OF VP4896, TO PRODUCE VP4896 FOR OUR CLINICAL TRIALS AND WILL RELY ON DURECT TO PRODUCE COMMERCIAL DRUG SUPPLIES OF VP4896. DURECT HAS LIMITED EXPERIENCE PRODUCING BIODEGRADABLE IMPLANTS AND MAY NOT BE ABLE TO PROVIDE VP4896 TO SATISFY OUR REQUIREMENTS.

We rely on Durect Corporation, or Durect, as our sole source provider of VP4896 for use in our clinical trials and, if we receive marketing approval, will rely on Durect as our sole source provider for commercial supply of VP4896. VP4896 requires precise, high quality manufacturing. Durect’s failure to achieve and maintain satisfactory standards could result in patient injury or death, product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could materially harm our business. Durect may encounter manufacturing difficulties involving production yields, quality control and quality assurance. Durect is subject to ongoing periodic unannounced inspection by the FDA and corresponding state and foreign agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards. We do not control Durect’s compliance with these regulations and standards.

To date, Durect has not produced commercial supply of a biodegradable implant for any drug approved for human use. If we receive marketing approval for and commercially launch VP4896, we anticipate that Durect will need to expand its manufacturing capacity for this drug, possibly materially. Durect may not be able to increase its manufacturing capacity for VP4896 in a timely or economic manner, or at all. Moreover, significant scale up of manufacturing may require additional validation studies, which the FDA must review and approve.

If Durect is unable to successfully increase the manufacturing capacity for VP4896 and we are unable to establish alternative manufacturing capabilities, the commercial launch of VP4896 may be delayed or there may be a shortage in supply. If Durect is unable to successfully increase manufacturing capacity for VP4896 at an acceptable cost, our commercialization of VP4896 could be delayed, prevented or impaired, including through a reduction of our gross margins on product sales.

We could lose supply of VP4896 from Durect if Durect elects to discontinue supply to us pursuant to Durect’s right to do so beginning two years after the first commercial sale or use of VP4896 or if Durect simply fails to or is unable to supply us at the levels required under the agreement. If we lose supply of VP4896 from Durect, we will need to establish an alternative source of supply. The loss of supply and need to establish alternative supply could result in lengthy delays in clinical trials, significant interruption of commercial supplies and substantial additional costs. Switching manufacturers may be difficult because, among other reasons, the number of potential manufacturers is limited, and the FDA must approve any replacement manufacturer. Such approval would require new clinical trials and compliance inspections. If we are able to transfer Durect’s manufacturing technology and process to a new manufacturer, which we have the right to do in circumstances specified in our agreement with Durect, to receive FDA approval would require bioequivalence or similar clinical trials, which are generally simpler and less costly than pivotal clinical trials. If we are not able to obtain such transfer, including as a result of Durect’s refusal to adhere to its contractual obligations, such approval would require new pivotal clinical trials. Accordingly, it may be difficult or impossible for us to find a replacement manufacturer for Durect on acceptable terms, in a manner that avoids supply interruption or possibly at all.

We could also lose our supply of VP4896 from Durect if our agreement with Durect terminates for any reason. In that case, in addition to the risks and consequences associated with having to secure alternative supply arrangements for VP4896 described above, we would be subject to the risks and consequences associated with losing our license to the Durect technology that is included in VP4896, and having to find and test alternative sustained release technology, as described in detail in the risk factor below entitled “If we fail to comply with our obligations in our intellectual property agreements with Durect or other third parties, we could lose license rights that are important to our business.”

CURAXIS RELIES ON THIRD PARTIES TO CONDUCT OUR CLINICAL TRIALS AND THOSE THIRD PARTIES MAY NOT PERFORM SATISFACTORILY, INCLUDING FAILING TO MEET ESTABLISHED DEADLINES FOR THE COMPLETION OF SUCH TRIALS.

We do not have the ability to independently conduct clinical trials for our product candidates and we rely on third parties, such as contract research organizations, clinical data management organizations, medical institutions, and clinical investigators, to perform this function. Our reliance on these third parties for clinical development activities reduces our control over these activities. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.

We also rely on other third parties to store and distribute drug supplies for our clinical trials for VP4896. Any performance failure on the part of our existing or future distributors could delay clinical development or regulatory approval of our product candidates or commercialization of our products, producing additional losses and depriving us of potential product revenue.

CURAXIS MAY NOT BE SUCCESSFUL IN ESTABLISHING COLLABORATIONS, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO DISCOVER, DEVELOP AND, PARTICULARLY IN INTERNATIONAL MARKETS, COMMERCIALIZE PRODUCTS.

We intend to selectively enter into collaboration agreements with leading pharmaceutical and biotechnology companies to assist us in furthering the development of our product candidates. In particular, we intend to enter into these third-party arrangements for target indications in which our potential collaborator has particular expertise or that involve a large, primary care market that must be served by large sales and marketing organizations. In entering into these collaboration agreements, our goal will be to maintain co-promotion or co-commercialization rights in the United States and, in some cases, other markets. If we are unable to reach agreements with suitable collaborators, we may fail to meet our business objectives for the affected product or program. We face, and will continue to face, significant competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex and time consuming to negotiate, document and implement. We may not be successful in our efforts to establish and implement collaborations or other alternative arrangements. The terms of any additional collaborations or other arrangements that we establish may not be favorable to us. Moreover, these collaborations or other arrangements may not be successful.

IF CURAXIS IS NOT ABLE TO OBTAIN AND ENFORCE PATENT PROTECTION FOR ITS DISCOVERIES, ITS ABILITY TO SUCCESSFULLY COMMERCIALIZE OUR PRODUCT CANDIDATES WILL BE HARMED AND IT MAY NOT BE ABLE TO OPERATE OUR BUSINESS PROFITABLY.

Curaxis’ success depends, in part, on our ability to protect proprietary methods and technologies that we develop under the patent and other intellectual property laws of the United States and other countries, so that we can prevent others from using our inventions and proprietary information. However, we may not hold proprietary rights to some patents related to our current or future products and technologies. Because patent applications in the United States and many foreign jurisdictions are typically not published until 18 months after filing, or in some cases not at all, and because publications of discoveries in scientific literature lag behind actual discoveries, we cannot be certain that we were the first to make the inventions claimed in our issued patent or pending patent applications, or that we were the first to file for protection of the inventions set forth in our patent applications. As a result, we may be required to obtain licenses under third-party patents to market our proposed products. If licenses are not available to us on acceptable terms, or at all, we will not be able to market the affected products.

Our strategy depends on our ability to rapidly identify and seek patent protection for our discoveries. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Despite our efforts to protect our proprietary rights, unauthorized parties may be able to obtain and use information that we regard as proprietary. The issuance of a patent does not guarantee that it is valid or enforceable, so even if we obtain patents, they may not be valid or enforceable against third parties. In addition, the issuance of a patent does not guarantee that we have the right to practice the patented invention. Third parties may have blocking patents that could be used to prevent us from marketing our own patented product or method and practicing our own patented technology.

Our pending patent applications and the pending patent applications of Durect that we have licensed may not result in issued patents. If patents do not issue with respect to such patent applications or if the claims allowed are too narrow, our business may be harmed. The patent position of pharmaceutical or biotechnology companies, including ours, is generally uncertain and involves complex legal and factual considerations. The standards which the United States Patent and Trademark Office and its foreign counterparts use to grant patents are not always applied predictably or uniformly and can change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical or biotechnology patents. The laws of some foreign countries do not protect proprietary information to the same extent as the laws of the United States, and many companies have encountered significant problems and costs in protecting their proprietary information in these foreign countries. Accordingly, we do not know the degree of future protection for our proprietary rights or the breadth of claims allowed in any patents issued to us or to others. The allowance of broader claims may increase the incidence and cost of patent interference proceedings and/or opposition proceedings, and the risk of infringement litigation. On the other hand, the allowance of narrower claims may limit the value of our proprietary rights.

Our issued patent and any future patents that we may own or license may not contain claims sufficiently broad to protect us against third parties with similar technologies or products, or provide us with any competitive advantage. Moreover, our patents and any patent for which we have licensed rights may be challenged, narrowed, invalidated or circumvented. For example, we are aware of one issued third party U.S. patent, filed after our issued U.S. patent was filed, which may nonetheless be prior art to our patent and which might form the basis of an interference proceeding or invalidity challenge. We believe that our claimed methods of treatment for Alzheimer’s disease are patentably distinct over the third party patent, that the third party patent does not enable our methods of treatment and, therefore, that our patent claims should be found valid and enforceable. However, the patent office or a court might disagree with us. An interference or invalidity challenge to our issued patent could result in the narrowing or loss of our patent claims.

If the patents that we own or license are invalidated or otherwise limited, other companies will be better able to develop products and technologies that compete with ours, which could adversely affect our competitive business position, business prospects and financial condition.

THERE ARE LIMITATIONS ON OUR PATENT RIGHTS RELATING TO OUR PRODUCT CANDIDATES AND TECHNOLOGIES, INCLUDING WITH RESPECT TO THE USE OF VP4896 TO TREAT ALZHEIMER’S DISEASE, THAT MAY AFFECT OUR ABILITY TO EXCLUDE THIRD PARTIES FROM COMPETING AGAINST US IF WE RECEIVE APPROVAL TO MARKET THESE PRODUCT CANDIDATES OR TECHNOLOGIES.

Curaxis’ proprietary rights relating to our product candidates and technologies, including with respect to the use of VP4896 to treat Alzheimer’s disease, are limited in ways that may affect our ability to exclude third parties from competing against us if we receive regulatory approval to market these product candidates and technologies. In particular:

We do not own or license composition of matter patents covering leuprolide acetate, the active pharmaceutical ingredient of VP4896, or methods of making leuprolide acetate. Moreover, the active ingredient that we are testing in our most advanced preclinical programs is also leuprolide acetate. Leuprolide acetate is currently marketed for a number of other indications. As a result, competitors can offer and sell leuprolide acetate products so long as they do not infringe, or contribute to the infringement of, or actively induce infringement of, any patents or other proprietary rights that we or others may have the rights to enforce.

The principal patent protection that covers, or that we expect will cover, the use of VP4896 to treat Alzheimer’s disease and leuprolide acetate to treat other indications stems from a method of use patent and patent applications. This type of patent only protects specified methods of using specified products according to the patent claims. This type of patent does not limit a competitor from making and marketing a product that is identical to our product for an indication that is outside of the patented method. Moreover, physicians may prescribe such a competitive identical product for off label indications that are covered by the applicable patents. In particular, leuprolide acetate, the active pharmaceutical ingredient in VP4896 and the drug being tested by us in our most advanced preclinical programs, is currently marketed for a number of other indications. Although off label prescriptions may infringe or contribute to or actively induce infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute. Consequently, VP4896, if approved, could face competition from leuprolide acetate products that are already on the market, or may later be approved, through off label usage of these products to treat Alzheimer’s disease that may be difficult or impossible for us to prevent because our primary patent protection is limited to method of use claims.

We have not applied for method of use patent protection outside of the United States and Canada for use of VP4896 to treat Alzheimer’s disease. As a result, there is a significant risk that we will face early generic competition for VP4896 for the treatment of Alzheimer’s disease in international markets. This risk may be increased if competitors are able to develop formulations of leuprolide acetate, such as other polymeric implants, that are as effective as VP4896 may prove to be or if competitors can demonstrate that commercially available leuprolide acetate can be administered by injection in a manner that is as effective as VP4896 may prove to be.

These limitations on our patent rights may result in competitors taking product sales away from us, which would reduce our revenues and harm our business.

IF CURAXIS FAILS TO COMPLY WITH OUR OBLIGATIONS IN OUR INTELLECTUAL PROPERTY AGREEMENTS WITH DURECT OR OTHER THIRD PARTIES, WE COULD LOSE LICENSE RIGHTS THAT ARE IMPORTANT TO OUR BUSINESS.

We are a party to a license agreement with Durect pursuant to which Durect grants to us a worldwide, royalty-bearing exclusive license relating to Durect’s polymeric implant technology to develop and commercialize VP4896 for the treatment of Alzheimer’s disease. This technology includes patent applications covering the VP4896 formulation and the method of making VP4896. If we fail to perform our obligations under our agreement with Durect, Durect may terminate the agreement and our license to its patents and Auto Search to its manufacturing know-how. If this happened, we would be required to develop or license an alternative sustained release technology for VP4896. This would likely involve reformulating or otherwise changing VP4896. As a result, the FDA would likely require us to perform new pivotal clinical trials of the reformulated or otherwise changed version of VP4896. This could result in lengthy delays in clinical trials, significant interruption of commercial supplies and substantial additional costs. This would substantially harm our business. Furthermore, acceptable alternative technology may not exist, may not be something we are able to develop and may not be available to us on reasonable terms or possibly at all.

In addition to clinically developing VP4896 for mild to moderate Alzheimer’s disease, we also are working on the preclinical development of leuprolide acetate for the treatment of various cancers. We may determine to develop an implantable formulation of leuprolide acetate for these additional indications. However, because our license from Durect is limited to the field of Alzheimer’s disease, we will not be able to develop a leuprolide acetate implant based on Durect’s technology for these additional indications without obtaining an appropriate amendment of our license from Durect. If Durect will not agree to such an amendment, we could seek to develop other polymeric implants of leuprolide acetate that are outside of Durect’s patents and know-how. However, it might be time consuming and expensive for us to do so and might deprive us of the clinical and regulatory benefits that we believe will be available to us from developing a leuprolide acetate implant based on Durect’s technology for additional indications.

We may also enter into additional licenses in the future. Our existing license with Durect imposes, and we expect future licenses with third parties will impose, various diligence, milestone payment, royalty, insurance and other obligations on us. If we fail to comply with these obligations, the licensor may have the right to terminate the license, in which event we might not be able to market any product that is covered by the licensed patents.

IF CURAXIS IS UNABLE TO PROTECT THE CONFIDENTIALITY OF OUR PROPRIETARY INFORMATION AND KNOW-HOW, THE VALUE OF OUR TECHNOLOGY AND PRODUCTS COULD BE ADVERSELY AFFECTED.

In addition to patented technology, we rely upon unpatented proprietary technology, processes and know-how, including particularly Durect’s manufacturing know-how relating to the production of VP4896. We seek to protect our unpatented proprietary information in part by confidentiality agreements with our employees, consultants and third parties. These agreements may be breached and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently developed by competitors. If we are unable to protect the confidentiality of our proprietary information and know-how, competitors may be able to use this information to develop products that compete with our products, which could adversely impact our business. We could be similarly harmed if Durect’s confidential know-how relating to the production of VP4896 becomes known to our competitors.

IF CURAXIS INFRINGES OR IS ALLEGED TO INFRINGE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, IT WILL ADVERSELY AFFECT OUR BUSINESS.

Our research, development and commercialization activities, as well as any product candidates or products resulting from these activities, may infringe or be claimed to infringe patents or patent applications under which we do not hold licenses or other rights. Third parties may own or control these patents and patent applications in the United States and abroad. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

As a result of patent infringement claims, or in order to avoid potential claims, we or our current or future collaborators may choose or be required to seek a license from the third party and be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we or our collaborators were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining Auto Search to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we or our collaborators are unable to enter into licenses on acceptable terms. This could harm our business significantly.

For example, we are aware of one issued third party U.S. patent, filed after our issued patent was filed, which includes a claim directed to a method for the treatment of a neurodegenerative disorder which could form the basis of an infringement claim. We believe that if this patent were asserted against us in an infringement action relating to VP4896 for the treatment of mild to moderate Alzheimer’s disease, the claims should be held invalid. An issued U.S. patent, however, is entitled to a presumption of validity as a matter of law. If the claims of this third party patent were found valid and interpreted to cover the use of VP4896 for the treatment for Alzheimer’s disease, we would be liable for past damages for infringement and might be required to obtain a license under the patent to manufacture and market VP4896. If a license were not available to us on acceptable terms, or at all, we might not be able to market VP4896.

Moreover, the field of polymeric implants for sustained drug release is highly competitive, and we are aware of third party patents directed to technologies similar to Durect’s. Although we are not aware of any third party patents that would be literally infringed by the commercial development of the VP4896 implant, we are aware of third party patents which include claims directed to implants containing a copolymer of lactic acid and glycolic acid, that could be asserted against our product in the U.S. under the doctrine of equivalents. Even if a U.S. patent claim is not literally infringed, the doctrine of equivalents permits a court to find infringement if the differences between the accused product or process and the patent claims are insubstantial. If a court were to find a third party patent infringed under the doctrine of equivalents, the consequences could be the same as those of a finding of literal infringement, including liability for past damages and the possibility of being enjoined from commercializing the affected product or process. In the event of an injunction, we would be required to cease marketing VP4896, but could develop an alternative sustained release formulation which would not infringe any third party patents. Development of an alternative sustained release formulation would require substantial additional time and expense, including additional regulatory review, all of which could harm our business significantly.

There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industries. In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings, including interference proceedings declared by the United States Patent and Trademark Office and opposition proceedings in the European Patent Office, regarding intellectual property rights with respect to our products and technology. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

IF WE ARE NOT ABLE TO OBTAIN REQUIRED REGULATORY APPROVALS, WE WILL NOT BE ABLE TO COMMERCIALIZE OUR PRODUCT CANDIDATES, AND OUR ABILITY TO GENERATE REVENUE WILL BE MATERIALLY IMPAIRED.

Our product candidates and the activities associated with their development and commercialization, including their testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries. Failure to obtain regulatory approval for a product candidate will prevent us from commercializing the product candidate.

We have not received regulatory approval to market any of our product candidates in any jurisdiction. We have only limited experience in filing the applications necessary to gain regulatory approvals and expect to rely on third party contract research organizations to assist us in this process. Securing FDA approval requires the submission of extensive preclinical and clinical data, information about product manufacturing processes and inspection of facilities and supporting information to the FDA for each therapeutic indication to establish the product candidate’s safety and efficacy. Our future products may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining regulatory approval or prevent or limit commercial use.

The process of obtaining regulatory approvals is expensive, often takes many years, if approval is obtained at all, and can vary substantially based upon, among other things, the type, complexity and novelty of the product candidates involved. Changes in the regulatory approval policy during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA has substantial discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent regulatory approval of a product candidate. Any regulatory approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the product not commercially viable.

OUR PRODUCTS COULD BE SUBJECT TO RESTRICTIONS OR WITHDRAWAL FROM THE MARKET AND WE MAY BE SUBJECT TO PENALTIES IF WE FAIL TO COMPLY WITH REGULATORY REQUIREMENTS OR IF WE EXPERIENCE UNANTICIPATED PROBLEMS WITH OUR PRODUCTS, WHEN AND IF ANY OF THEM ARE APPROVED.

Any product for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and comparable regulatory bodies. These requirements include submissions of safety and other post-marketing information and reports, registration requirements, cGMP requirements relating to quality control, quality assurance and corresponding maintenance of records and documents and requirements regarding the distribution of samples to physicians and recordkeeping. Even if regulatory approval of a product is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. Later discovery of previously unknown problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in:

restrictions on such products, manufacturers or manufacturing processes;
warning letters;
withdrawal of the products from the market;
refusal to approve pending applications or supplements to approved applications that we submit;
recall;
fines;
suspension or withdrawal of regulatory approvals;
refusal to permit the import or export of our products;
product seizure; and
injunctions or the imposition of civil or criminal penalties.

FAILURE TO OBTAIN REGULATORY APPROVAL IN INTERNATIONAL JURISDICTIONS WOULD PREVENT US FROM MARKETING OUR PRODUCTS ABROAD.

We intend to have our products marketed outside the United States. In order to market our products in the European Union and many other foreign jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ from that required to obtain FDA approval. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or jurisdictions or by the FDA. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in any market.

THE COMMERCIAL SUCCESS OF ANY PRODUCTS THAT WE MAY DEVELOP WILL DEPEND UPON THE DEGREE OF MARKET ACCEPTANCE BY PHYSICIANS, PATIENTS, HEALTHCARE PAYORS AND OTHERS IN THE MEDICAL COMMUNITY.

Any products that we bring to the market may not gain market acceptance by physicians, patients, healthcare payors and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

the prevalence and severity of any side effects;
the efficacy and potential advantages over alternative treatments;
the ability to offer our product candidates for sale at competitive prices;
relative convenience and ease of administration;
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
the strength of marketing and distribution support; and
sufficient third party coverage or reimbursement.

IF WE ARE UNABLE TO ESTABLISH SALES AND MARKETING CAPABILITIES OR ENTER INTO AGREEMENTS WITH THIRD PARTIES TO MARKET AND SELL OUR PRODUCT CANDIDATES, WE MAY BE UNABLE TO GENERATE PRODUCT REVENUES.

We do not currently have a sales or marketing organization and have limited experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any approved product, we must either develop a sales and marketing organization or outsource these functions to third parties. We intend to selectively enter into collaboration agreements with leading pharmaceutical and biotechnology companies to assist us in furthering the development of our product candidates. In particular, we intend to enter into these third-party arrangements for target indications in which our potential collaborator has particular expertise or that involve a large, primary care market that must be served by large sales and marketing organizations. Our goal in these collaborations will be to maintain co-promotion or co-commercialization rights in the United States and, in some cases, other markets. There are risks involved with establishing our own sales and marketing capabilities, as well as in entering into arrangements with third parties to perform these services. For example, developing a sales force is expensive and time consuming and could delay any product launch. We will begin to incur many sales and marketing costs prior to receiving marketing approval for our product candidates. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or prohibited as a result of FDA requirements or other reasons, our investment in these functions would be lost. If we enter into arrangements with third parties to perform sales and marketing services, our product revenues could be lower than if we directly sold and marketed our products. In addition, any revenues received under such arrangements will depend on the skills and efforts of others, and we do not know whether these efforts will be successful.

IF THIRD PARTY PAYORS DO NOT PROVIDE COVERAGE FOR PRODUCTS WE MAY DEVELOP, OR IF THE AMOUNT THAT A THIRD PARTY PAYOR MAY REIMBURSE HEALTH CARE PROVIDERS WHO USE ANY PRODUCTS THAT WE MAY DEVELOP IS NOT ADEQUATE TO COMPENSATE THE HEALTH CARE PROVIDER FOR THE USE OF ANY SUCH PRODUCT, OUR REVENUES AND PROSPECTS FOR PROFITABILITY WILL SUFFER.

Our revenues and profits will depend heavily on purchases of any products we may develop by health care providers who receive reimbursement from third party payors, including governmental and private payors, both in the United States and abroad. Whether health care providers will purchase any products we develop will depend in part upon the coverage policies and availability of adequate reimbursement from such third party payors. Obtaining reimbursement from a third party payor will depend on whether a product is covered under the third party payor’s benefit plan. In general, to be covered, a product must fall within a designated benefit category and be medically reasonable and necessary for treatment. However, even if covered, the amount and method of reimbursement will vary based on factors such as the particular site of service in which the product is used.

Obtaining a determination that a product is covered is a time-consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to each payor. We may not be able to provide data sufficient to gain coverage. Even when a payor determines that a product is covered, the payor may impose limitations that preclude payment for some uses that are approved by the FDA or comparable authorities but are determined by the payor to not be medically reasonable and necessary. Moreover, eligibility for coverage does not imply that any product will be covered in all cases or that reimbursement will be available at a rate that permits the health care provider to cover its costs of using the product.

Most persons suffering from Alzheimer’s disease are elderly, and therefore we expect that coverage and reimbursement for VP4896 for this indication in the United States will be primarily through the Medicare program. Our business would be materially adversely affected if the Medicare program were to determine that it will not: (1) cover VP4896 for the treatment of Alzheimer’s disease, or any other products we may develop; or (2) adequately reimburse health care providers for the use of VP4896 or any other products we may develop.

Beginning in 2005, pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Medicare changed the formula used to calculate the reimbursement for physician-administered drugs. The price established for VP4896 under the Medicare program under the new formula will probably be less than under the previous formula. In addition, alternative methods for calculating reimbursement are used under the Medicare program depending on the benefit category and site of service, which could lower reimbursement still further. In addition, starting in January 2006, physicians now have the option of being reimbursed directly by Medicare or participating in the Competitive Acquisition Program, or CAP, whereby the physician has the option to obtain drugs from a CAP vendor who negotiates prices with drug companies and obtains reimbursement from Medicare for the drug. If substantial numbers of physicians participate in the CAP, it will likely decrease the price we can obtain for VP4896 from the CAP vendor, if it is approved for marketing.

Any products we may develop may also receive reimbursement under Medicaid. If the state-specific Medicaid programs do not provide adequate coverage and reimbursement for any products we may develop, it may have a negative impact on our operations.

The scope of coverage and payment policies varies among third-party private payors, including indemnity insurers, employer group health insurance programs and managed care plans. Such third party carriers may base their coverage and reimbursement on the coverage and reimbursement rate paid by carriers for Medicare beneficiaries. Furthermore, many such payors are investigating or implementing methods for reducing health care costs, such as the establishment of capitated or prospective payment systems. Cost containment pressures have led to an increased emphasis on the use of cost-effective products by health care providers. If private payors do not provide adequate coverage or reimbursement for any products we may develop, it could have a negative effect on revenues and results of operations.

FOREIGN GOVERNMENTS TEND TO IMPOSE STRICT PRICE CONTROLS, WHICH MAY ADVERSELY AFFECT OUR REVENUES, IF ANY.

In some foreign countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.

IF PRODUCT LIABILITY LAWSUITS ARE BROUGHT AGAINST US, WE MAY INCUR SUBSTANTIAL LIABILITIES AND MAY BE REQUIRED TO LIMIT COMMERCIALIZATION OF ANY PRODUCTS THAT WE MAY DEVELOP.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we may develop. Because VP4896 is being developed as an implant that will contain eight weeks’ supply of drug, we may face higher product liability risk than if our product was administered in another form, such as a daily pill. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

decreased demand for any product candidates or products that we may develop;
injury to our reputation;
withdrawal of clinical trial participants;
costs to defend the related litigation;
substantial monetary awards to trial participants or patients;
loss of revenue; and
the inability to commercialize any products that we may develop.

We have product liability insurance that covers our clinical trials up to a $10 million annual aggregate limit and subject to a per claim deductible. The amount of insurance that we currently hold may not be adequate to cover all liabilities that may incur. We intend to expand our insurance coverage to include the sale of commercial products if we obtain marketing approval for any products. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost and we may not be able to obtain insurance coverage that will be adequate to satisfy any liability that may arise.

WE FACE SUBSTANTIAL COMPETITION WHICH MAY RESULT IN OTHERS DISCOVERING, DEVELOPING OR COMMERCIALIZING PRODUCTS BEFORE OR MORE SUCCESSFULLY THAN WE DO.

The development and commercialization of new drugs is highly competitive. We face competition with respect to our current product candidates and any products we may seek to develop or commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. Our competitors may develop products that are more effective, safer, more convenient or less costly than any that we are developing or that would render our product candidates obsolete or non-competitive. Our competitors may also obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours.

We believe that many competitors are attempting to develop therapeutics for Alzheimer’s disease, including academic institutions, government agencies, public and private research organizations, large pharmaceutical companies and smaller more focused companies.

There are currently five drugs approved for the treatment of Alzheimer’s disease in the United States. In many cases, these products have well-known brand names, are distributed by large pharmaceutical companies with substantial resources and experience and have achieved widespread acceptance among physicians and patients. See “Business—Alzheimer’s disease.” In addition, we are aware of product candidates of third parties that are in development, which, if approved, would compete against our product candidates, if approved.

Durect has made a commitment to us not to develop, commercialize or license to someone else formulations of leuprolide acetate that release a similar dose per unit of time as does VP4896, but has otherwise not committed to us that it will not develop other leuprolide acetate products including sustained release leuprolide acetate products using its technologies. As a result, Durect could collaborate with a third party to develop a product having a different dose that competes with VP4896, in some cases using the same Durect sustained release technology as is included in VP4896. Finally, as described under “Risk Factors—There are limitations on our patent rights relating to our product candidates and technologies, including with respect to the use of VP4896 to treat Alzheimer’s disease, that may affect our ability to exclude third parties from competing against us if we receive approval to market these product candidates or technologies,” to the extent that we market products with active ingredients that do not have composition of matter patent protection and are approved for other indications, such as leuprolide acetate, it is possible that we will experience competition from off label sales of products containing these active ingredients.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to or necessary for our programs or advantageous to our business.

Our lead product candidate, VP4896 for the treatment of mild to moderate Alzheimer’s disease, is a small biodegradable implant that is administered once every eight weeks by a physician in the physician’s office through a minor surgical procedure. All drugs currently marketed for the treatment of Alzheimer’s disease, and many of the drugs under development for this indication, are orally self-administered pills. If VP4896’s administration method is not accepted by patients or physicians, we may not generate significant product revenues and our business may be materially harmed.

OUR BUSINESS ACTIVITIES INVOLVE THE USE OF HAZARDOUS MATERIALS, WHICH REQUIRE COMPLIANCE WITH ENVIRONMENTAL AND OCCUPATIONAL SAFETY LAWS REGULATING THE USE OF SUCH MATERIALS. IF WE VIOLATE THESE LAWS, WE COULD BE SUBJECT TO SIGNIFICANT FINES, LIABILITIES OR OTHER ADVERSE CONSEQUENCES.

Our research and development programs involve the controlled use of hazardous materials. Accordingly, we are subject to federal, state and local laws governing the use, handling and disposal of these materials. Although we believe that our safety procedures for handling and disposing of these materials comply in all material respects with the standards prescribed by state and federal regulations, we cannot completely eliminate the risk of accidental contamination or injury from these materials. In addition, our collaborators may not comply with these laws. In the event of an accident or failure to comply with environmental laws, we could be held liable for damages that result, and any such liability could exceed our assets and resources.

WE MUST COMPLY WITH FEDERAL, STATE AND FOREIGN LAWS, REGULATIONS, AND OTHER RULES RELATING TO THE HEALTH CARE BUSINESS, AND, IF WE ARE UNABLE TO FULLY COMPLY WITH SUCH LAWS, REGULATIONS AND OTHER RULES, WE COULD FACE SUBSTANTIAL PENALTIES.

We are or will be directly or indirectly through our customers, subject to extensive regulation by the federal government, the states and foreign countries in which we may conduct our business. The laws that directly or indirectly affect our ability to operate our business include the following:

the federal Medicare and Medicaid Anti-Kickback law, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging for a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid Programs;
other Medicare laws, regulations, rules, manual provisions and policies that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;
the federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;
the federal False Statements Act, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; and
state and foreign law equivalents of the foregoing.

If our operations are found to be in violation of any of the laws, regulations, rules or policies described above or any other law or governmental regulation to which we or our customers are or will be subject, or if the interpretation of the foregoing changes, we may be subject to civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the curtailment or restructuring of our operations. Similarly, if our customers are found non-compliant with applicable laws, they may be subject to sanctions, which could also have a negative impact on us. Any penalties, damages, fines, curtailment or restructuring of our operations would adversely affect our ability to operate our business and our financial results. The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations, and additional legal or regulatory change. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and damage our reputation.

WE HAVE SUBSTANTIAL INDEBTEDNESS TO TRADE CREDITORS AND SEVERAL TRADE CREDITORS HAVE OBTAINED JUDGMENTS AGAINST US.

We have substantial indebtedness to trade creditors relating to goods and services provided to us in connection with our truncated Phase III trials. In general, our relationship with our trade creditors have remained cordial despite this indebtedness and the vast majority of our trade creditors have cooperated with us in our efforts to defer payments to them until we can obtain further financing. However, there can be no assurance that our trade creditors will continue to be cooperative and one or more of them may choose to bring suit to enforce their claims. One trade creditor won a judgment of approximately $1,100,000 against Curaxis and we subsequently entered into a negotiated payment arrangement with this creditor. In addition, several other trade creditors have obtained default judgments against the Curaxis, although to our knowledge none of such creditors have initiated any court proceedings to enforce those judgments.

OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO RETAIN OUR CHIEF EXECUTIVE OFFICER AND OTHER KEY EXECUTIVES AND TO ATTRACT, RETAIN AND MOTIVATE QUALIFIED PERSONNEL.

We are highly dependent on Patrick S. Smith, our Chairman, President and Chief Executive Officer, David J. Corcoran, our Chief Financial Officer, and the other principal members of our executive and scientific teams. Although we do not have any reason to believe that we may lose the services of any of these persons in the foreseeable future, the loss of the services of any of these persons might impede the achievement of our research, development, and commercialization objectives.

Recruiting and retaining qualified scientific personnel and sales and marketing personnel will also be critical to our success. We may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.

FORWARD-LOOKING STATEMENTS

This information statement/prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements may include statements regarding, among other things:

•	the proposed Merger with Curaxis, including the expected time period for closing the Merger;
•	the ability to obtain or meet the closing conditions in the merger agreement, including applicable regulatory and tax requirements, and to otherwise complete the Merger in a timely manner;
•	future financial and operating results, including cash requirements;
•	the effects of local and national economic, credit and capital market conditions on the economy in general, and on the pharmaceutical industry in particular, and the effects of foreign exchange rates and interest rates;
•	the ability to realize the synergies and other perceived advantages resulting from the Merger;
•	future opportunities of the combined company;
•	our growth strategies;
•	anticipated trends in our industry;
•	changes in laws, including increased tax rates, regulations or accounting standards, third party relations and approvals, and decisions of courts, regulators and governmental bodies;
•	access to available and feasible financing on a timely basis;
•	our anticipated needs for working capital; and
•	the ability to retain key personnel both before and after the Merger.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology.

Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this information statement/prospectus generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this information statement/prospectus will in fact occur. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated from these forward-looking statements, even if new information becomes available in the future.

THE MERGER

This section of the information statement describes the merger and related transactions. Although we believe that the description in this section covers the material terms of the merger and the transactions, this summary may not contain all of the information that is important to you. You must carefully read the entire information statement and the other documents we refer to in this information statement, including the Merger Agreement, for a more complete understanding of the Merger Agreement and the transactions contemplated thereby.

General

The Merger Agreement provides that, at the Effective Time of the Merger, Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Auto Search, will merge with and into Curaxis, with Curaxis continuing in existence as the Surviving Corporation. Each share of Curaxis Common Stock issued and outstanding at the Effective Time will be converted into one (1) share of Auto Search Common Stock.

Auto Search will also assume the due performance of all the terms and conditions of each outstanding Company Warrant (as defined in the Merger Agreement). Each such Company Warrant shall become exercisable into an equal number of shares of Auto Search Common Stock at the Exercise Price defined in the Merger Agreement.

Each share of the Auto Search Common Stock issued to the Curaxis shareholders pursuant to the Merger Agreement shall be restricted from trading or resale for a period of one (1) year commencing at the Effective Time. Such restriction shall not apply to Auto Search Common Stock issued in exchange for shares of Curaxis Common Stock issued in Curaxis’ Bridge Financing (as defined in the Merger Agreement).

The Certificate of Incorporation and By-laws of the Surviving Corporation will be the Curaxis Certificate of Incorporation and By-laws from and after the Effective Time.

Auto Search’s officers and directors will resign effective as of the Effective Time of the Merger and be replaced by the Curaxis officers and directors..

Background of the Merger

As part of their ongoing management of the business and affairs of their respective companies, the Auto Search Board of Directors and the Curaxis Board of Directors periodically evaluated potential strategic alternatives and considered ways to enhance their respective company’s performance and prospects in light of current business and economic conditions. For each company, these reviews included consideration of potential strategic transactions with other companies and the potential benefits and risks of such transactions. However, none of these deliberations resulted in substantive discussions relating to the possible terms of any merger or similar transaction.

In particular, during 2008 and early 2009, Curaxis’ management and the Curaxis Board of Directors considered numerous alternatives in their efforts to raise capital to advance the clinical development of Curaxis’ therapeutic candidates. After an extensive search, on May 28, 2009, Curaxis entered into a transaction management agreement with Southridge Business Solutions Group, LLC (“Southridge”) of Ridgefield, Connecticut, and an equity purchase agreement confidential term sheet with Southridge Advisors, LLC (“Southridge Advisors”), acting on behalf of Brittany Capital Management Limited (“Brittany”), to assist Curaxis in becoming a publicly-traded company and to provide Curaxis with an equity facility under which Curaxis can periodically over a period of two years, sell shares of its common stock to Brittany, up to a maximum of twenty million dollars ($20,000,000), at a price equal to 92% of the price of Curaxis Common Stock during the ten (10) days preceding each sale. The exact price of each sale will be based on the average of the three low closing bid prices for Curaxis Common Stock during the ten (10) day trading days preceding the closing of each sale. Curaxis believes that this financing facility will enable it to advance its clinical development program for VP4896 and help to reestablish the validity and potential of Curaxis’ clinical pipeline. Brittany’s obligations to purchase Curaxis’ shares are subject to a number of conditions, including establishment of a public trading market in Curaxis Common Stock.

In connection with its goal of establishing a public trading market for shares of its common stock, on September 14, 2009, Curaxis and Auto Search entered into a Letter of Intent to merge Curaxis into Acquisition Corp. on terms that were subsequently incorporated into the Merger Agreement, which was executed by Curaxis and Auto Search on February 8, 2010. In addition, under the terms of the Merger Agreement and in consideration for the cancellation of 181,285,000 shares of Auto Search Common Stock, Curaxis will pay $100,000 to Jonathan Martin and issue 3,589,460 warrants to purchase Auto Search Common Stock.

The negotiations that led to the terms reflected in the Letter of Intent and the Merger Agreement were conducted at arms length during the period from August 28, 2009, through September 14, 2009, on behalf of Curaxis by Patrick S. Smith, Curaxis’ Chief Executive Officer and David J. Corcoran, Curaxis’ Chief Financial Officer and on behalf of Auto Search by Jonathan Martin, Auto Search’s Chief Executive Officer. Southridge served as an intermediary in these discussions.

Curaxis’ Board approved the Letter of Intent at a Board meeting held on September 8, 2009 and approved the Merger Agreement at a Board meeting held on January 18, 2010. Auto Search’s Board approved the Letter of Intent at a Board meeting held on August 29, 2009 and approved the Merger Agreement at a Board meeting held on January 18, 2010.

Curaxis’ Reasons for the Merger and Recommendation

In reaching the decision to adopt the Merger Agreement and recommend it for approval by the respective equity holders of the companies, the Curaxis Board of Directors and the Auto Search Board of Directors consulted with respective management, as well as outside advisors. As discussed in greater detail below, these consultations included discussions regarding Auto Search’s strategic business plan, the costs and risks of executing Curaxis’ business plan as a public company, Curaxis’ cash position and prospects for raising more cash, its past and current business operations, and its future prospects, the strategic rationale for the potential transaction with Auto Search and the terms and conditions of the Merger Agreement.

The Curaxis Board of Directors determined that the Merger is advisable and in the best interest of the Curaxis stockholders. In reaching its decision to approve the Merger Agreement, the Curaxis Board of Directors reviewed Auto Search’s business strategy and financial position and Curaxis management reviewed Auto Search’s key contracts and performed a due diligence investigation. The Curaxis Board of Directors identified and considered several factors in its assessment, which, when taken as a whole, supported the decision to approve the Merger and Merger Agreement.

These factors and potential benefits of the merger considered by the Curaxis Board included the following:


	•	the ability of the combined company to potentially secure investor capital and financing for development of Curaxis product portfolio;
	•	leveraging Auto Search’s existing general and administrative infrastructure as a public company to further reduce Curaxis overhead associated with becoming a public company; and
	•	The possible liquidity opportunities for Curaxis’ stockholders subsequent to the Merger as a result of the exchange of their Curaxis shares for shares of Auto Search.

	Auto Search’ Board of Directors considered the following additional factors:

	•	access to a rich pipeline of products including those in the late stages of clinical development; and
	•	securing a pipeline of products at an attractive price based upon the stage of corporate development within which Curaxis is situated.

Taking into account all of the material facts, matters and information, including those described above, the Curaxis Board of Directors and the Auto Search Board of Directors believe that the Merger Agreement is advisable and fair to and in the best interests of each of Curaxis and Auto Search and each company’s respective equity holders.

Board of Directors and Officers Post-Merger and Equity Interests

The directors of Auto Search immediately following consummation of the Merger will be Patrick S. Smith, David J. Corcoran, Bert A. Spilker, Sheldon L. Goldberg, William E. McConville,and Ronald V. Pompeo Jr., and the officers will be Patrick S. Smith, Chairman of the Board, President and Chief Executive Officer, David J. Corcoran, Executive Vice President and Chief Financial Officer, and Judith S.T. Geaslen, Vice President of Finance.

No Independent Financial Advisor

Neither Curaxis nor Auto Search has engaged an independent financial advisor to consult with, or render an opinion on, the relative advantages and disadvantages of the transactions.

Vote Required

Section 228 of the DGCL provides that any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. In order to eliminate the costs and management time involved in obtaining proxies and in order to effect the proposals as early as possible in order to accomplish Curaxis purposes as described herein, on or about February 5, 2010 the Curaxis Board of Directors obtained written consents from holders of approximately 70% of Curaxis’ outstanding share of Common Stock approving the Merger Agreement.

Completion and Effectiveness of the Merger

The Merger will be completed when all of the conditions to completion of the Merger are satisfied or waived. The Merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware.

Appraisal Rights

Under Delaware law, Curaxis stockholders who have not consented to the Merger are entitled, after complying with certain requirements of Delaware law, to dissent from the approval of the authority with respect to the Merger, pursuant to Section 262 of the DGCL (“Dissenters’ Law”) and to be paid the “fair value” of their shares of the Curaxis Common Stock in cash by complying with the procedures set forth in the Dissenters’ Law. Set forth below is a summary of the procedures relating to the exercise of appraisal rights by Curaxis stockholders. This summary does not purport to be a complete statement of the provisions of the Dissenters’ Law and is qualified in its entirety by reference to such provisions.

Under Delaware law, holders of Curaxis Common Stock who do not wish to accept the merger consideration have the right to dissent from the merger and to receive payment in cash for the fair value of their shares of Curaxis Common Stock together with a fair rate of interest, if any, as determined by the Delaware Court of Chancery. These rights are known as appraisal rights. Curaxis stockholders may only exercise these appraisal rights by strictly complying with the provisions of Section 262 of the DGCL, which is referred to in this prospectus as Section 262.

The following is intended as a brief summary of the material provisions of the Delaware statutory procedures required to be followed by a stockholder in order to dissent from the merger and perfect its appraisal rights. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Section 262. Failure to precisely follow any of the statutory procedures set forth in Section 262 may result in a termination or waiver of your appraisal rights. This summary does not constitute legal or other advice, nor does it constitute a recommendation that holders of Curaxis Common Stock exercise their appraisal rights.

Under Section 262, where a merger is adopted by stockholders by written consent in lieu of a meeting of stockholders, either the constituent corporation before the effective date of the merger or the surviving or resulting corporation, within 10 days after the effective date of the merger, must notify each stockholder of the constituent corporation entitled to appraisal rights of the approval of the merger and that appraisal rights are available. This prospectus constitutes the notice to Curaxis’ stockholders of the availability of appraisal rights in connection with the merger in compliance with the requirements of Section 262. If you wish to consider exercising your appraisal rights, you should carefully review the text on appraisal rights in this prospectus because failure to timely and properly comply with the requirements of Section 262 will result in the loss of your appraisal rights under Delaware law.

Holders of shares of Curaxis Common Stock who have not consented to the Merger and who desire to exercise their appraisal rights must deliver a written demand for appraisal to Curaxis within 20 days after the mailing of this prospectus. A demand for appraisal must reasonably inform Curaxis of the identity of the stockholder and that such stockholder intends thereby to demand appraisal of the shares of Curaxis Common Stock held by such stockholder. All demands for appraisal should be addressed to David Corcoran, Curaxis Pharmaceutical Corporation, 12600 Deerfield Parkway, Suite 100, Alpharetta, GA 30004 or sent by facsimile to (678) 566-3551, and should be executed by, or on behalf of, the record holder of shares of Curaxis Common Stock. ALL DEMANDS MUST BE RECEIVED BY CURAXIS WITHIN TWENTY DAYS AFTER THE DATE THIS PROSPECTUS WAS MAILED TO CURAXIS STOCKHOLDERS, AS SET FORTH ON THE COVER PAGE OF THIS PROSPECTUS.

If you fail to deliver a written demand for appraisal within the time period specified above and the merger is completed, you will be entitled to receive the merger consideration for your shares of Curaxis Common Stock as provided for in the merger agreement, but you will have no appraisal rights with respect to your shares of Curaxis Common Stock.

To be effective, a demand for appraisal by a holder of shares of Curaxis Common Stock must be made by, or in the name of, the registered stockholder, fully and correctly, as the stockholder’s name appears on the stockholder’s stock certificate(s). Beneficial owners who do not also hold the shares of record may not directly make appraisal demands to Curaxis. The beneficial owner must, in these cases, have the registered owner, such as a broker, bank or other custodian, submit the required demand in respect of those shares. If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made by or for the fiduciary; and if the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, who holds shares as a custodian for others, may exercise the record owner’s right of appraisal with respect to the shares held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares as to which appraisal is sought. Where no number of shares is expressly mentioned, the demand will be presumed to cover all shares held in the name of the record owner. In addition, the stockholder must continuously hold the shares of record from the date of making the demand through the effective date of the merger.

If you hold your shares of Curaxis Common Stock in a brokerage account or in other custodian form and you wish to exercise appraisal rights, you should consult with your bank, broker or other custodian to determine the appropriate procedures for the making of a demand for appraisal by the custodian.

Within ten days after the effective date of the merger, Curaxis will give written notice that the merger has become effective to each stockholder who is entitled to appraisal rights and has properly filed a written demand for appraisal in accordance with Section 262. At any time within sixty days after the effective date of the merger, any stockholder who has demanded an appraisal has the right to withdraw the demand and accept the terms of the merger by delivering a written withdrawal of the stockholder’s demands for appraisal. If, following a demand for appraisal, you have withdrawn your demand for appraisal in accordance with Section 262, you will have the right to receive the merger consideration for your shares of Curaxis Common Stock.

Within 120 days after the effective date of the merger, any stockholder who has delivered a demand for appraisal in accordance with Section 262 will, upon written request to Curaxis, be entitled to receive a written statement setting forth the aggregate number of shares not voted in favor of the merger agreement and with respect to which demands for appraisal rights have been received and the aggregate number of holders of these shares. This written statement will be mailed to the requesting stockholder within ten days after the stockholder’s written request is received by Internet America or within ten days after expiration of the period for delivery of demands for appraisal, whichever is later. Within 120 days after the effective date of the merger, either Curaxis or any stockholder who has delivered a demand for appraisal in accordance with Section 262 may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all such stockholders. Upon the filing of the petition by a stockholder, service of a copy of the petition must be made upon Curaxis. Curaxis has no obligation to file a petition in the Delaware Court of Chancery in the event there are dissenting stockholders, and Curaxis has no present intent to file a petition in the Delaware Court of Chancery. Accordingly, the failure of a stockholder to file a petition within the period specified could nullify the stockholder’s previously written demand for appraisal.

If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to Curaxis, Curaxis will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Delaware Court of Chancery with a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached by Curaxis. After notice to dissenting stockholders who demanded appraisal of their shares, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition, and to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided thereby. The Delaware Court of Chancery may require the stockholders who have demanded appraisal for their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.

After determination of the stockholders entitled to appraisal of their shares, the Delaware Court of Chancery will appraise the “fair value” of the shares owned by those stockholders. This value will be exclusive of any element of value arising from the accomplishment or expectation of the merger, but will include a fair rate of interest, if any, upon the amount determined to be the fair value. When the value is determined, the Delaware Court of Chancery will direct the payment of the value, with interest thereon accrued during the pendency of the proceeding, if the Delaware Court of Chancery so determines, to the stockholders entitled to receive the same, upon surrender by the holders of the certificates representing those shares.

You should be aware that the fair value of your shares as determined under Section 262 could be more than, the same as, or less than the value that you are entitled to receive under the terms of the merger agreement.

Costs of the appraisal proceeding may be imposed upon Curaxis and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery as the Court deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. In the absence of such a determination of assessment, each party bears its own expenses. Any stockholder who had demanded appraisal rights will not, after the effective date of the merger, be entitled to vote shares subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares, other than with respect to payment as of a record date prior to the effective date; however, if no petition for appraisal is filed within 120 days after the effective date of the merger, or if the stockholder delivers a written withdrawal of his or her demand for appraisal and an acceptance of the terms of the merger within 60 days after the effective date of the merger, then the right of that stockholder to appraisal will cease and that stockholder will be entitled to receive the merger consideration for shares of his or her Curaxis Common Stock pursuant to the merger agreement. Any withdrawal of a demand for appraisal made more than 60 days after the effective date of the merger may only be made with the written approval of Curaxis. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the court.

Failure to follow the steps required by Section 262 for perfecting appraisal rights may result in the loss of appraisal rights. In view of the complexity of Section 262, stockholders who may wish to dissent from the merger and pursue appraisal rights should consult their legal advisors.

Curaxis is sending a notice of appraisal rights to Curaxis stockholders with this information statement. Dissenting stockholders must, by no later than 20 days following Curaxis’ mailing of the notice of appraisal rights demand in writing from Curaxis or Auto Search the appraisal of such holders’ shares.

THE MERGER AGREEMENT

This section summarizes the material provisions of the Merger Agreement. The following is not a complete statement of all the provisions of the Merger Agreement. Detailed terms and conditions are contained in the Merger Agreement, a copy of which is attached to this information statement as Exhibit 2.1 and is incorporated into this information statement by reference. For a complete presentation of this information, please read the full text of the Merger Agreement.

Structure of the Merger and Conversion of Curaxis Common Stock

General

Pursuant to the Merger Agreement, Acquisition Corp. will merge with and into Curaxis, with Curaxis being the Surviving Corporation and a wholly-owned subsidiary of Auto Search. The Merger will become effective as of the date and at such time as the Certificate of Merger is filed with the Secretary of State of the State of Delaware (the “Effective Time”). In accordance with the terms of the Merger Agreement, at the Effective Time, each share of Curaxis Common Stock will be converted into the right to receive one (1) share of Auto Search Common Stock, par value $0.0001 per share. After the Merger is completed, it is expected that Curaxis pre-merger stockholders will own approximately 63,943,524 shares of Auto Search Common Stock or approximately 91% of the outstanding shares of the combined company, subject to adjustment under the terms of the Merger Agreement. At the Effective Time, shares of Curaxis Common Stock will no longer be outstanding and shall automatically be cancelled and retired and cease to exist, and each holder of Curaxis Common Stock shall cease to have any rights with respect to the shares of Curaxis Common Stock, except the right to receive the merger consideration (as described above).

Each share of the Auto Search Common Stock issued to the Curaxis stockholders pursuant to the Merger Agreement shall be restricted from trading or resale for a period of one (1) year commencing at the Effective Time. Such restriction shall not apply to shares of Auto Search Common Stock issued in exchange for shares of Curaxis Common Stock that were issued in Curaxis’ Bridge Financing (as defined in the Merger Agreement).

Exchange of Curaxis Common Stock for certificates representing shares of Auto Search Common Stock

When the Merger is completed, shares of Curaxis Common Stock will be canceled and the former holders of Curaxis Common Stock will receive certificates representing shares of Auto Search Common Stock which constitute the number of full shares of Auto Search Common Stock to which they are entitled under the Merger Agreement.

Restrictions on Sales of Shares Held by holders of Auto Search Common Stock

Shares of Auto Search Common Stock to be issued to holders of Curaxis Common Stock in the merger are required to be registered by Auto Search in a registration statement on form S-4 prior to the Effective Time. Any material “blue sky” and other state securities laws applicable to the registration and qualification of Auto Search Common Stock issuable or required to be reserved for issuance pursuant to the Merger Agreement are also required to be complied with.

Conditions to the Merger

Conditions to Auto Search’s and Curaxis’ Obligations

Neither Auto Search nor Curaxis are obligated to complete the Merger unless various conditions are satisfied or waiver, including without limitation the following:

•	No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect; provided, however, that the Auto Search and Curaxis shall use their reasonable best efforts to have any such injunction, order, restraint or prohibition vacated;
•	Other than the filing of the Delaware Certificate of Merger, all authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any governmental entity in connection with the Merger and the consummation of the other transactions contemplated by the Merger Agreement, the failure of which to file, obtain or occur is reasonably likely to have a Material Adverse Effect with respect to Auto Search or a Material Adverse Effect with respect to Curaxis, shall have been filed, been obtained or occurred on terms and conditions which would not reasonably be likely to have a Material Adverse Effect with respect to Auto Search or Curaxis;
•	This Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order, and any material "blue sky" and other state securities laws applicable to the registration and qualification of Auto Search Common Stock issuable or required to be reserved for issuance pursuant to this Merger Agreement shall have been complied with;
•	No stop order suspending the use of the Information Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened in writing by the SEC or its staff;
•	The Merger and the Merger Agreement shall have been approved and adopted by the requisite vote of the holders of shares of Curaxis Common Stock to the extent required pursuant to the requirements of the Certificate of Incorporation and the DGCL;

Conditions to Auto Search’s Obligations

Auto Search is not obligated to complete the Merger unless various conditions are satisfied or waived, including without limitation the following:

•	The representations and warranties of Curaxis contained in the Merger Agreement shall be true and correct in all material respects on and as of the Closing Date, with the same force and effect as if made on and as of the Closing Date, except for (i) changes contemplated by the Merger Agreement or in the applicable disclosure schedules, (ii) representations and warranties that are qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects, and (iii) representations and warranties which address matters only as of a particular date, in which case such representations and warranties qualified as to materiality or Material Adverse Effect shall be true and correct in all respects, and those not so qualified shall be true and correct in all material respects, on and as of such particular date;
•	Curaxis has performed, in all material respects, all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with, in all material respects, by Curaxis prior to the Effective Time;
•	Since the dated of the Merger Agreement, there shall not have occurred any Material Adverse Effect or Material Adverse Change (in each case as defined in the Merger Agreement) with respect to Curaxis;

Conditions to Curaxis Obligations

Curaxis is not obligated to complete the merger unless various conditions are satisfied or waived, including, without limitation, the following:


•	The representations and warranties of Auto Search contained in the Merger Agreement shall be true and correct in all material respects on and as of the Closing Date, with the same force and effect as if made on and as of the Closing Date, except for (i) changes contemplated by the Merger Agreement or in the applicable disclosure schedules, (ii) representations and warranties that are qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects, and (iii) representations and warranties which address matters only as of a particular date, in which case such representations and warranties qualified as to materiality or Material Adverse Effect shall be true and correct in all respects, and those not so qualified shall be true and correct in all material respects, on and as of such particular date;
•	Auto Search shall have performed, in all material respects, all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with, in all material respects, by it prior to the Closing Date;
•	There shall not be pending by any governmental entity or any other person or solely with respect to any governmental entity, threatened by any suit, action or proceeding, challenging or seeking to restrain or prohibit the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement; and

Representations and Warranties

The Merger Agreement contains customary representations and warranties of the parties. These include representations and warranties of Auto Search and Curaxis with respect to, among other things: organization and qualification; authority; capitalization; equity interests; financial statements; absence of undisclosed liabilities; absence of certain changes or events; compliance with laws; permits and litigation.

The representations, warranties and covenants made by Auto Search and Curaxis in the Merger Agreement are qualified by information contained in disclosure schedules delivered to one another in connection with the execution of the Merger Agreement.

Material United States Federal Income Tax Consequences

The following is a summary of certain material United States federal income tax consequences of the Merger. The following discussion is based upon the current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated under the Code, Internal Revenue Service (“IRS”) rulings and pronouncements, and judicial decisions now in effect, all of which are subject to change at any time by legislative, judicial or administrative action. Any such changes may be applied retroactively.

Neither Curaxis nor Auto Search has sought and they will not seek any rulings from the IRS or opinions from counsel with respect to the United States federal income tax consequences discussed below. The discussion below does not in any way bind the IRS or the courts or in any way constitute an assurance that the United States federal income tax consequences discussed below will be accepted by the IRS or the courts. The tax treatment of a stockholder may vary depending on such stockholder’s particular situation or status. With respect to holders of Curaxis Common Stock, this discussion is limited to holders of Curaxis Common Stock who hold their Curaxis Common Stock as capital assets and it does not address aspects of United States federal income taxation that may be relevant to Curaxis holders of Curaxis Common Stock who are subject to special treatment under United States federal income tax laws, such as dealers in securities, financial institutions, insurance companies, tax-exempt entities, persons holding Curaxis Common Stock as part of a hedge, straddle or other risk reduction transaction, and persons that are subject to loss disallowance rules with respect to their shares of Curaxis Common Stock. In addition, the discussion does not consider the effect of any applicable foreign, state, local or other tax laws, or estate or gift tax considerations or the alternative minimum tax. Curaxis provides no assurance with respect to any individual holder’s tax status or taxable position with respect to the Merger, the Merger Agreement or the transactions contemplated thereby and holders are encouraged to seek independent advice from the tax advisors.

HOLDERS OF CURAXIS COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS AND OF CHANGES IN APPLICABLE TAX LAWS.

The following notice is based on United States Treasury Regulations governing practice before the IRS: (1) any United States federal tax advice contained in this information statement is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding United States federal tax penalties that may be imposed on the taxpayer, (2) any such advice is written to support the promotion or marketing of the transactions described in this memorandum, and (3) each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

Curaxis has elected to be subject to tax as a “corporation” for federal income tax purposes. As a result, the Merger is intended to qualify for federal income tax purposes as a “tax-free reorganization” within the meaning of Section 368(a) of the Code. Assuming the merger qualifies as a tax-free reorganization, (i) no gain or loss will be recognized for federal income tax purposes by the holders of Curaxis Common Stock upon consummation of the Merger, (ii) neither Curaxis nor Auto Search will recognize any gain or loss as a result of the Merger, (iii) the aggregate tax basis of the shares of Auto Search Common Stock received in the Merger by all holders of Curaxis Common Stock will be the same as the aggregate tax basis of the shares of Curaxis Common Stock held by such holders prior to the Effective Time, and (iv) the holding period of the Common Stock received in the Merger will include the period for which the shares of Curaxis Common Stock were held.

INFORMATION ABOUT AUTO SEARCH

DESCRIPTION OF BUSINESS

Corporate Information

We were incorporated on February 1, 2008, under the laws of the State of Nevada. We acquired our operating business in a transaction in which we exchanged 2,000,000 shares of common stock for an assignment of 100% of the ownership interest in the domain www.autosearchcars.com held by Jonathan J. Martin, our sole officer and director. Our executive offices are located at 164 Eleven Levels Road, Ridgefield, Connecticut 06877. Our fiscal year end is December 31.

On December 9, 2009, the Board of Directors and the Shareholders authorized the Company to undertake a 91 - 1 forward stock split of the Corporation’s issued and outstanding common stock. FINRA declared the forward stock split effective on January 12, 2010.

Business

Assuming the Merger with Curaxis is consummated, Auto Search plans to concentrate its business on development of Curaxis’ therapeutic candidates, including particularly VP4896, Curaxis’ candidate for the treatment of mild to moderate Alzheimer’s disease. As a result, Auto Search will discontinue its efforts to develop a web-based e-commerce site focused on online vehicle sales. Therefore, the discussion that follows will only be of continuing relevance if the Merger is not approved.

Our principal business objective is developing a web-based e-commerce site designed to be a price leader in the online vehicle sales and service market. Inclusive in our business plan is to develop our website as a platform to provide information, not just for the sale of vehicles but also for information such as vehicle financing and warranties. We intend to create a marketplace that is local, regional and national in nature. By providing such a marketplace, we intend to bring vehicle sellers and other industry participants, such as vendors of automotive services and advertisers, together with consumers actively engaged in a search for a vehicle or vehicle related products.

Since our inception, we have been engaged in business activities, including the launch of our preliminary non-operational website, website development, market research, developing our economic models and financial forecasts, performing due diligence regarding e-commerce marketing and identifying future sources of capital.

We developed an online vehicle sales and service website. Autosearchcars.com plans to be a price leader in online vehicle sales, offering a web site and services comparable to the market leaders but for only $9.95 per listing, as compared to an average of $19.00 to $69.00 charged by market leaders such as Autotrader.com. We intend to offer free listings on our website for three to six months after its official launch, as an incentive for consumers to use our products.

We implemented a full set of features including geographic search criteria, pictures and make/model search options.

Almost all online vehicle sales sites use some form of a tiered pricing system whereby users are offered different pricing for different levels of memberships. For example, Autotrader.com uses a tier system offering options such as: Online Ad, Magazine Ad, Run ‘till It Sells, 18 Online Photos, 1 Magazine Photo and Thumbnail Photo at costs ranging from $19.00 to $69.00, depending on the selected services. We plan to offer all of these services excluding the magazine advertising for $9.95 per month.

Revenue Generation

The primary revenue sources of most classified advertising websites are fees derived from consumer classified advertising. Average classified advertising fees have been slowly increasing in the industry and most commonly range from $19.00 to $69.00, while some small sites attempting to be price leaders may be as low as $15.00 per month. We believe we will be competitive from both a price and feature standpoint, offering all options for only $9.95 per classified advertisement. In order to build a significant membership base, we will offer our products at no cost for our first six months of operation. After this grace period, we will implement paid listings and intend to convert a large percentage of existing users to paid listings.

We intend to also generate advertising revenues by selling our banner space to industry participants interested in marketing their services to our consumer audience. Our ability to generate advertising revenues will be dependent largely on the number of members who will use our website, the number of page views they generate and the number of times potential clients reuse our service.

Marketing

Initial marketing efforts are geared toward raising awareness of www.autosearchcars.com and our free membership period. This will primarily be accomplished by our issuance of press releases and other attempts to garner traffic generation to the website. We will also undertake other web-oriented marketing efforts such as marketing partnerships and affiliate arrangements.

Competitive Business Conditions

Our primary competition is from vehicle manufacturers’ own websites and websites containing electronic classified advertisements. There are between 20 to 30 major online vehicle classified advertising sites, and several hundred sites overall. We will be one of the newest and smallest sites in the industry. Presently the market is quite segmented with Autotrader.com and Yahoo.com, being widely considered the industry leaders. Autotrader.com claims more than 3,000,000 listings at any one time. Achieving critical mass with respect to market share is crucial for our business. Competitors, such as Autotrader.com and Yahoo.com, which already have an established market share, will be in a better competitive position than us. Management believes it can offset any such competitive disadvantages by being a price leader in the marketplace, first through free listings, and thereafter through more competitively priced listings.

Number of Total Employees and Number of Full Time Employees

We are currently in the development stage. During this development period, we plan to rely exclusively on the services of Jonathan J. Martin, our sole officer and director, to establish business operations and perform or supervise the minimal services our business requires at this time. We believe that Mr. Martin is capable of handling our initial operations, which are primarily administrative at this time. There are no other full or part-time employees.

Employment Agreements

We do not have an employment agreement in place with Mr. Martin, our sole officer, and do not anticipate entering into any employment agreements in the foreseeable future.

Significant Employees

We have no significant employees other than Mr. Martin.

DESCRIPTION OF PROPERTY

Our executive office is currently located in the residence of Mr. Martin, who provides the space to us at no charge. The address of our executive office is 164 Eleven Levels Road, Ridgefield, Connecticut 06877. We do not own or lease interests in any property.

We do not intend to renovate, improve, or develop any real property. We are not subject to competitive conditions for property and currently have no property to insure. We have no policy with respect to investments in interests in real estate and no policy with respect to investments in real estate mortgages. Further, we have no policy with respect to investments in securities of or interests in persons primarily engaged in real estate activities.

LEGAL PROCEEDINGS

There are no pending, nor to our knowledge threatened, legal proceedings against us.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Name		Age		Position
Jonathan Martin		32		President and Director

Jonathan Martin, President, Director

Mr. Martin has served as Auto Search’s President, Principal Executive Officer, Principal Financial Officer and Chairman since Auto Search’s inception on February 1, 2008. Mr. Martin has over ten years of experience in the entrepreneurial world including export and financial related transactions. Since January 2008, Mr. Martin has served as associate legal counsel for a Connecticut-based finance firm. From January 2007, through December 2007, Mr. Martin worked with East Coast Venture Capital, Inc., a company which specializes in small business investments. During 2005, Mr. Martin served as a developer representative at Skyline Equities Reality, a real estate developer based in Miami, Florida. From 2003 to 2006, Mr. Martin served as a consultant for international corporations in Miami, Florida including Intimade SA, a Mexican based apparel company. From 2001 to 2003, Mr. Martin served as an equity trader with the New York based Broadway Trading. Mr. Martin received his BS in Finance from the University of Miami and his JD from Florida International University.

There are no family relationships among our officers, directors and significant employees.

Board of Directors

Members of our Board of Directors (the “Board”) are elected for one-year terms serving until the next annual stockholders’ meeting or until their death, resignation, retirement, removal, disqualification, or until a successor has been elected and qualified. All officers are appointed annually by the Board and serve at the discretion of the Board. Currently, our directors receive no compensation for their service on our Board and we do not anticipate paying any compensation to directors in the foreseeable future.

Director Independence

Our determination of independence of directors is made using the definition of “independent director” contained in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ Stock Market (“NASDAQ”), even though such definitions do not currently apply to us because we are not listed on NASDAQ. We have determined that Mr. Martin, our sole director, is not “independent” within the meaning of such rules because he currently serves as our sole officer.

Committees of the Board of Directors

Concurrent with having sufficient members and resources, the Board intends to establish an audit committee and a compensation committee. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will review and recommend compensation arrangements for the officers and employees. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees. We believe that we will need a minimum of three independent directors to have effective committee systems.

EXECUTIVE COMPENSATION

2009 SUMMARY COMPENSATION TABLE

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the period ended December 31, 2009 and 2008.

Non-Equity

Incentive

Name and

Principal Position

Year

Salary

($)

Bonus

($)

Stock

Awards ($)

Option

Awards ($)

Plan

Compensation ($)

All Other

Compensation ($)

Total ($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

Jonathan J. Martin,

2009

None

Founder, Officer and director(1)

2008

None

(1)

Mr. Jonathan J. Martin is the Founder, sole officer and director of Auto Search, Inc.�� Auto Search did not pay any compensation to its sole officer and director during the two years ended December 31, 2009. Auto Search does not intend to compensate its executive officers for the foreseeable future. However, Auto Search may compensate its executive officers after that time if Auto Search has the financial resources to do so.

OUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR-END

At December 31, 2009, there were no grants or other plan-based awards outstanding; equity awards outstanding; options outstanding or exercised; no pension benefit plans and non-qualified deferred compensation.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information known to Auto Search with respect to the beneficial ownership of Auto Search’s common stock as of December 31, 2009, unless otherwise noted, by:


•	each stockholder known to Auto Search to own beneficially more than 5% of Auto Search’s common stock;
•	each of Auto Search’s directors;
•	each of Auto Search’s executive officers, including each of the Named Executive Officers listed in the “2009 Summary Compensation Table” included in this information statement; and
•	all of Auto Search’s current directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or dispositive power relating to securities. Except as indicated by footnote, and subject to the community property laws where applicable, the persons or entities named in the table have sole voting and dispositive power with respect to all shares of common stock shown as beneficially owned by them. The information below is based on information supplied to Auto Search by the executive officers, directors, certain stockholders and on Schedule 13Gs filed with the SEC. None of the directors, nominees or executive officers listed below owns any shares of Auto Search common stock of record but not beneficially. Except as otherwise noted below, the address of each person or entity listed in the table is c/o Auto Search, Inc. 164 Eleven Levels Road, Ridgefield, Connecticut 06877.

	Amount and
	Nature of
Name and Address	Beneficial Ownership(1)	Percentage of Total

DIRECTORS AND EXECUTIVE OFFICERS
Jonathan J. Martin, Sole Officer and Director	2,000,000	96.3	%
All current directors and executive officers as a group (1 person)	2,000,000	96.3	%

(1)

As of December 31, 2009, there were 2,076,700 shares of Auto Search’s common stock outstanding. At December 31, 2009, there were no shares of preferred stock, options or warrants for the purchase of common stock.

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

On February 15, 2008, and May 28, 2008, Auto Search received loans in the amounts of $1,000 and $10,000 dollars respectively, from its founder and sole director for audit and stock transfer related costs. The total of $11,000 bears no interest and is due on demand.

Related party transactions are measured at the exchange amount which is the amount of consideration agreed to between the related parties.

MARKET FOR COMMON STOCK

Auto Search’s Common Stock is quoted on the over-the counter electronic bulletin board under the trading symbol “ASCH.” However, Auto Search’s Common Stock has not traded to date.

DESCRIPTION OF SECURITIES

Auto Search’s authorized capital stock as stated in Auto Search’s Amended and Restated Certificate of Incorporation consists of 480,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of preferred stock, $0.0001 par value per share. The following summary of Auto Search’s common stock and preferred stock is not complete and may not contain all the information you should consider before investing Auto Search’s common stock. This description is subject to and qualified in its entirety by provisions of Auto Search’s Amended and Restated Certificate of Incorporation and amended and restated bylaws and by applicable Nevada law.

Common Stock

As of February 8, 2010 there were 188,979,700 shares of Auto Search common stock issued and outstanding. The holders of shares of common stock have no subscription, redemption, subscription, sinking fund or conversion rights. In addition, the holders of shares of common stock have no preemptive rights to maintain their percentage of ownership in future offerings or sales of Auto Search’s stock. The holders of shares of common stock have one vote per share in all elections of directors and on all other matters submitted to a vote of Auto Search’s stockholders. The holders of common stock are entitled to receive ratably dividends, if any, as and when declared from time to time by Auto Search’s board of directors out of funds legally available therefor. Upon liquidation, dissolution or winding up of Auto Search’s affairs, the holders of common stock will be entitled to participate equally and ratably, in proportion to the number of shares held, in Auto Search’s net assets available for distribution to holders of common stock. The shares of common stock currently outstanding are fully paid and nonassessable.

Preferred Stock

The board of directors, without further stockholder authorization, may issue from time to time up to 20,000,000 shares of preferred stock in one or more series, to establish the number of shares to be included in any of these series and to fix the designations, powers, preferences and rights of the shares of each of these series and any qualifications, limitations or restrictions thereof, including dividend rights and preferences over dividends on the common stock, conversion rights, voting rights, redemption rights, the terms of any sinking fund therefor and rights upon liquidation.

EXPERTS

The financial statements for Auto Search for the year ended December 31, 2008, included in this prospectus, and included in the Registration Statement, were audited by Bernstein & Pinchuk LLP, an independent registered public accounting firm, as stated in their report appearing with the financial statements herein and incorporated in this Registration Statement, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

LEGAL MATTERS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

WHERE YOU CAN FIND MORE INFORMATION

Auto Search files reports and other information with the SEC as required by the Exchange Act. You can find, copy and inspect information that Auto Search files at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 for further information about the public reference room. You can review Auto Search’s electronically filed reports, proxy and information statements on the SEC’s web site at http://www.sec.gov.

You should rely only on the information contained in this information statement/prospectus or on information to which Auto Search has referred you. Auto Search has not authorized anyone else to provide you with any information. Auto Search provided the information concerning Auto Search, and Curaxis provided the information concerning Curaxis, appearing in this information statement/prospectus.

This information statement/prospectus is part of a registration statement that Auto Search filed with the SEC. The registration statement contains more information than this information statement/prospectus regarding Auto Search and the securities, including exhibits and schedules. You can obtain a copy of the registration statement at the address listed above or from the SEC’s web site.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with our financial statements and the notes thereto which appear elsewhere in this report and in connection with the Form 10K, which we filed with the Securities and Exchange Commission on April 9, 2009. The results shown herein are not necessarily indicative of the results to be expected for any future periods.

This discussion contains forward-looking statements, based on current expectations. All statements regarding future events, our future financial performance and operating results, our business strategy and our financing plans are forward-looking statements and involve risks and uncertainties. In many cases, you can identify forward-looking statements by terminology, such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. These statements are only predictions. Known and unknown risks, uncertainties and other factors could cause our actual results and the timing of events to differ materially from those projected in any forward-looking statements. In evaluating these statements, you should specifically consider various factors, including, but not limited to, those set forth in the Registration Statement and in this report.

General

Auto Search is a start up business engaged in the development and marketing of a web-based e-commerce site designed to be a price leader in the online auto sales market.

Auto Search has not yet earned revenues from its business operations. Accordingly, Auto Search may be required to raise cash from sources other than our operations in order to continue its business plan. Auto Search may raise this additional capital either through debt or equity. No assurance can be given that such efforts will be successful. Auto Search has no specific plans at present for raising additional capital.

Since Auto Search’s inception, Auto Search has been engaged in business planning activities, including the launch of a preliminary non-operational website, website development, market research, developing its economic models and financial forecasts, performing due diligence regarding e-commerce marketing and identifying future sources of capital.

Auto Search has launched its initial website but can give no assurances as to the date which it will be fully operational including the support needed to process listing fees from consumer-placed classified advertisements. Additionally, Auto Search can give no assurances to when our user base will be at the point of critical mass and free listings will cease and paid listings will be implemented.

Results of Operations for the Three Months Ended September 30, 2009 as Compared to the Three Months Ended September 30, 2008

Auto Search is a development stage company and have generated no revenues to date.

General and administrative expenses decreased by $1,600 to $798 for the three months ended September 30, 2009, as compared to $2,398 for three months ended September 30, 2008. The decrease in our general and administrative expense is attributable to the one-time fees, operating expenses and professional fees that were incurred in connection with the initial launch of our business during the quarter ended September 30, 2008, including transfer agent services and legal fees which did not re-occur during the quarter ended September 30, 2009.

Net loss decreased by $1,600 to $798 for the three months ended September 30, 2009, as compared to $2,398 for the three months ended September 30, 2008. The decrease was attributable to the one-time fees, operating expenses and professional fees that were incurred in connection with the initial launch of our business including transfer agent services and other miscellaneous expenses.

Results of Operations for the Nine Months Ended September 30, 2009 as Compared to the Period From Inception (February 1, 2008) through September 30, 2008

General and administrative expenses decreased by $11,615 to $3,931 for the nine month period ended September 30, 2009, as compared to $15,546 for the period from February 1, 2008 (inception) through September 30, 2008. The decrease in general and administrative expenses was attributable to the one-time fees, operating expenses and professional fees that were incurred in connection with the initial launch of our business including transfer agent fees and legal fees.

Net loss decreased by $11,415 to $3,931 for the nine month period ended September 30, 2009, as compared to $15,346 for the period from February 1, 2008 (inception) through September 30, 2008. The decrease in our net loss was attributable to the expenses related to the preparation and filing of a registration statement which were incurred for the period from February 1, 2008 through September 30, 2008 in connection with the preparation of our registration statement on Form S-1 (File No. 333-150937) which did not re-occur during the nine months ended September 30, 2009.

Liquidity and Capital Resources

Auto Search’s cash balance at September 30, 2009 was $518 a decrease of $3,968 from $4,486 at December 31, 2008. The decrease was attributable to printing, transfer agent and state fees we incurred in connection with our ongoing business operations. At September 30, 2009 we had liabilities of $13,296, a decrease of $37 from $13,333 at December 31, 2008. The decrease in our liabilities was attributable to lower continuing expenses incurred in connection with our operations.

Auto Search has limited capital resources, as, among other things, we are a development stage company with a limited operating history. We have not generated any revenues to date and may not be able to generate sufficient revenues to become profitable in the future.

Auto Search has cash reserves may not be sufficient to meet our obligations for the next 6 months. As a result, Auto Search will need to seek additional funding in the near future. Auto Search currently does not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. At this time, Auto Search cannot provide any assurance that it will be able to raise sufficient funding from the sale of its common stock to meet its obligations over the next 12 months. Auto Search does not have any arrangements in place for any future equity financing.

Auto Search does not currently own any significant plant or equipment that we will seek to sell in the near future.

Auto Search does not anticipate the need to hire employees over the next 12 months with the possible exception of administrative support should our business grow and necessitate such expenditure. Auto Search believes the services provided by its sole officer and director-are sufficient at this time. Auto Search believes that its operations are currently on a small scale and are manageable by one individual.

Contractual Obligations

Auto Search has no significant contractual obligations that may affect our financial condition.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Index to Financial Statements

Balance Sheets	F–1
Statements of Operations	F–2
Statements of Cash Flows	F–3
Notes to Financial Statements	F–4 to F-7

AUTO SEARCH CARS, INC

(A Development Stage Company)

BALANCE SHEETS

	September 30, 2009			December 31, 2008
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$	518		$	4,486
Total Current Assets		518			4,486

Other Assets
Organization costs		200			200
	$	718		$	4,686

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Accounts payable and accrued liabilities	$	2,296		$	2,333
Due to director		11,000			11,000
Total Current Liabilities		13,296			13,333

Stockholders’ Deficiency
Preferred Stock, $0.0001 par value, 1,000,000 shares authorized, none issued		–			–
Common stock, $0.0001 par value, 74,000,000 shares authorized, 2,076,700 shares issued and outstanding		208			208

Additional paid-in capital		7,662			7,662
Accumulated deficit during development stage		(20,448	)		(16,517	)
Total Stockholders’ Deficiency		(12,578	)		(8,647	)
	$	718		$	4,686

See Notes to Financial Statements

F-1

AUTO SEARCH CARS, INC

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months ended September 30, 2009			Three Months ended September 30, 2008			Nine Months ended September 30, 2009			February 1,-2008 (inception) through September 30, 2008			February 1,-2008 (inception) through September 30, 2009
Revenues	$	–		$	–		$	–		$	–		$	–

General and administrative expenses		798			2,398			3,931			15,546			20,448
Loss from Operations		(798	)		(2,398	)		(3,931	)		(15,546	)		(20,448	)

Other income		–			–			–			200			200
Net loss	$	(798	)	$	(2,398	)	$	(3,931	)	$	(15,346	)	$	(20,248	)
Basic and diluted loss per share	$	(0.00	)	$	(0.001	)	$	(0.00	)	$	(0.001	)
Weighted average common shares outstanding – basic and diluted		2,076,700			2,076,700			2,076,700			2,025,075

See Notes to Financial Statements

F-2

AUTO SEARCH CARS, INC

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30, 2009			February 1, 2008 (inception) through September 30, 2008			February 1, 2008 (inception) through September 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,931	)	$	(15,346	)	$	(20,448	)
Adjustments to reconcile net loss to net cash used in operating activities: Changes in operating liabilities:
Accounts payable and accrued liabilities		(37	)		2,843			2,296
NET CASH USED IN OPERATING ACTIVITIES		(3,968)			(12,503	)		(18,152	)


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of common stock		–			7,670			7,670
Loan from director		–			11,000			11,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		–			18,670			18,670

Net increase (decrease) in cash and cash equivalents		(3,968	)		6,167			518

Cash and cash equivalents at beginning of period		4,486			–			–
Cash and cash equivalents at end of period	$	518		$	6,167		$	518

Supplemental disclosures of cash flow information:
Interest paid	$	–		$	–		$	–
Income taxes paid	$	–		$	–		$	–

See Notes to Financial Statements

F-3

AUTO SEARCH CARS, INC

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(Unaudited)

NOTE 1 - Nature of Business and Summary of Significant Accounting Policies

Organization

Auto Search Cars, Inc. (A Development Stage Company) (the “Company”) was incorporated on February 1, 2008 (Date of Inception) under the laws of the State of Nevada. In February 2008, the Company acquired its website, www.autosearchcars.com, from its sole officer and director.

Nature of Operations

The Company is developing its website into a local, regional and national marketplace for buyers and sellers of vehicles and for consumers seeking information regarding automotive services, such as financing and warranties. By providing this marketplace, the Company intends to bring automobile sellers and other industry participants, such as vendors of automotive services and advertisers, together with consumers actively engaged in a search for a vehicle or vehicle related services.

The Company’s business model is built on multiple anticipated revenue streams including online consumer classified listings and banner advertising by industry participants interested in marketing their services to the Company’s consumer audience.

The Company is considered to be a development stage company in its start up phase of operations.

NOTE 2 - Summary of Significant Accounting Policies

Basis of Presentation – Development Stage Company

The Company has not earned any revenue from operations. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Company" as set forth in Financial Accounting Standards Board Statement No. 7 ("SFAS 7") (ASC 915). Among the disclosures required by SFAS 7 are that the Company's financial statements be identified as those of an development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.

The Company reports revenue and expenses using the accrual method of accounting for financial and tax reporting purposes. These unaudited financial statements should be read in conjunction with the financial statements and related footnotes included in the Company’s Annual Report on Form10-K filed with the Securities and Exchange Commission on April 9, 2009.

The results of operations for the quarter ended September 30, 2009 are not necessarily indicative of the results to be expected for the full year ending December 31, 2009.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

F-4

AUTO SEARCH CARS, INC

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(Unaudited)

Cash and Cash Equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Compensation Expense

The Company has not paid any compensation to its sole officer and director and accordingly, no compensation expense is reported in these financial statements.

Revenue Recognition

The Company’s revenues are anticipated to be derived from multiple sources. Revenue sources will include listing fees derived from consumer-placed classified advertisements as well as banner advertising for companies in the auto industry. Revenues from these advertisements will be recognized ratably over the period in which the advertisement is featured on the website. Advertising revenues are anticipated to be generated from short-term contracts in which the Company typically guarantees a fixed fee. These revenues will be recognized ratably over the term of the agreement, provided that the amount recognized does not exceed the amount that would be recognized based upon actual impressions delivered.

Web Site Development Costs

There were no web site development costs incurred during the period ended September 30, 2009.

Advertising Costs

Advertising costs will be expensed as incurred; however there were no advertising costs incurred during the period ended September 30, 2009.

Income Taxes

The Company follows Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes” (“SFAS No. 109”) (ASC 740) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Basic and Diluted Loss per Share

The Company computes loss per share in accordance with SFAS No. 128 (ASC 260). “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

F-5

AUTO SEARCH CARS, INC

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(Unaudited)

Recent Pronouncements

The following accounting guidance has been issued and will be effective for the Company in or after fiscal year 2009:

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“SFAS No. 168”). Under SFAS No. 168 the “FASB Accounting Standards Codification” (“Codification”) will become the source of authoritative U. S. GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.

SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. On the effective date, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. SFAS No. 168 is effective for the Company’s interim quarterly period beginning July 1, 2009. The Company does not expect the adoption of SFAS No. 168 to have an impact on future financial statements.

NOTE 3 - Related Party Transactions – Due to Director

On May 21, 2008, the Company received a $10,000 loan from its founder, sole officer and director, Jonathan J. Martin, for transfer agent-related costs. On February 15, 2009, the Company received a loan in the amount of $1,000 from its founder, sole officer and director, Jonathan J. Martin, for audit related costs. These loans bear no interest and are due on demand.

NOTE 4 - Stockholder’s Deficiency

The Company is authorized to issue 1,000,000 shares of preferred stock at $0.0001 par value per share and 74,000,000 shares of common stock at $0.0001 par value per share. As of September 30, 2009, the Company had 2,076,700 shares of common stock outstanding and no shares of preferred stock outstanding.

F-6

AUTO SEARCH CARS, INC

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(Unaudited)

NOTE 5 - Commitments and Contingencies

The Company is not presently involved in any litigation.

NOTE 6 – Going Concern

The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not established any source of revenue to cover its costs. The Company is evaluating strategic options to increase its cash on hand including equity offerings and debt financings; however, there can be no assurance that the Company will be successful in negotiating financing on terms agreeable to it or at all. The financial statements do not reflect any adjustments which might result from the outcome of this uncertainty.

NOTE 7 – Subsequent Events

As of the date of this interim financial report, November 13, 2009, there have been no subsequent events that warrant disclosure by the Company

F-7

Financial Statements of Auto Search Cars, Inc.

Index to Financial Statements

		Page


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-9

FINANCIAL STATEMENTS

	Balance Sheet	F-10

	Statement of Operations	F-11

	Statement of Changes in Stockholders' Deficiency	F-12

	Statement of Cash Flows	F-13

	Notes to Financial Statements	F-14 to F-17

F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Auto Search Cars, Inc (A Development Stage Company)

We have audited the accompanying balance sheet of Auto Search Cars, Inc (A Development Stage Company) (the “Company”) as of December 31, 2008, and the related statements of operations, changes in stockholders’ deficiency, and cash flows for the period from February 01, 2008 (inception) to December 31, 2008. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2008, and the results of its operations and its cash flows for the period from February 01, 2008 (inception) to December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has incurred significant losses from operations since its inception and has incurred a net loss, which substantially exceeds its working capital and has not yet established any source of revenues. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management��s plans in regard to these matters are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Bernstein & Pinchuk LLP

March 31, 2009

New York, NY

F-9

Auto Search Cars, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 2008

ASSETS

Current Assets
Cash and cash equivalents	$	4,486
Total Current Assets		4,486
Other Assets
Organization costs		200
	$	4,686


LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilites
Accounts payable and accrued liabilities	$	2,333
Loan from director		11,000
Total Current Liabilities		13,333


Stockholders' Deficiency
Preferred Stock, $.0001 par value, 1,000,000 shares authorized,
none issued		-
Common stock, $.0001par value, 74,000,000 shares authorized,
2,076,700 shares issued and outstanding		208

Additional paid-in capital		7,662
Deficit accumulated during development stage		(16,517	)
Total Stockholders' Deficiency		(8,647	)
	$	4,686

See Notes to Financial Statements

F-10

Auto Search Cars, Inc.

(A Development Stage Company)

Statement Of Operations

Period from February 1, 2008 (Inception) to December 31, 2008

Revenues	$	-

General and administrative expenses		16,717

Net loss from operations		(16,717	)

Other income		200
Net loss	$	(16,517	)

Basic and diluted loss per share		(0.01	)
Weighted average common shares outstanding – basic and diluted		2,076,700

See Notes to Financial Statements

F-11

Auto Search Cars, Inc

Statement Of Changes In Stockholders' Deficiency

Period from February 1, 2008 (Inception) to December 31, 2008

							Deficit accumulated
	Common stock				Additional		during development			Total Stockholders'
	Shares		Amount		Paid-in capital		stage			Deficiency
Common shares issued for services		2,000,000		200	$	-	$	-		$	200
Insurance of common stock for cash at .0001		76,700	$	8		7,662		-			7,670
Net loss								(16,517	)		(16,517	)
Balance as of December 31, 2008		2,076,700	$	208	$	7,662	$	(16,517	)	$	(8,647	)

See Notes to Financial Statements

F-12

Auto Search Cars, Inc.

(A Development Stage Company)

Statement Of Cash Flows

Period from February 1, 2008 (Inception) to December 31, 2008

Cash flows from operating activities
Net loss	$	(16,517	)
Change in Operating liabilities
Accounts payable		2,333
Net cash used in operating activities		(14,184	)

Cash flows from financing activities
Proceeds from sales of common stock		7,670
Loan from director		11,000
Net cash provided by financing activities		18,670

Net increase in cash		4,486

Cash and Cash equivalents at beginning of period		-

Cash and Cash equivalents at end of period	$	4,486

Supplemental disclosures of cash flow information:
Interest paid	$	-
Income taxes paid	$	-

Other non-cash transactions:
200 shares of common stock issued for services.

See Notes to Financial Statements

F-13

Auto Search Cars, Inc.

(A Development Stage Company)

Notes to Financial Statements

Note 1 - Nature of Business and Summary of Significant Accounting Policies

Organization

Auto Search Cars, Inc. (the “Company”) was incorporated on February 1, 2008 (the “Date of Inception”) under the laws of the State of Nevada. In February 2008, the Company acquired its website from its sole officer and director.

Nature of Operations

The Company has developed a website which will function as a marketplace for buyers and sellers of vehicles and for consumers seeking information regarding automotive services, such as financing and warranties. By providing this marketplace, the Company intends to bring automobile sellers and other industry participants, such as vendors of automotive services and advertisers, together with consumers actively engaged in a search for a vehicle or vehicle-related services.

The Company is a development stage company. The statements of operations and cash flows include all expenditures from the Date of Inception to December 31, 2008.

Use of Estimates

Cash and Cash Equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Revenue Recognition

The Company’s revenues are anticipated to be derived from multiple sources. Revenue sources include fees derived from consumer placed classified advertisements as well as banner advertising. Revenues from these services will be recognized ratably over the period in which the service is provided. Advertising revenues are anticipated to be generated from short-term contracts which the Company will typically guarantee for a fixed fee. These revenues will be recognized ratably over the term of the agreement, provided that the amount recognized does not exceed the amount that would be recognized based upon actual impressions delivered.

Web Site Development Costs

Web site development costs for the period ended December 31, 2008 were not significant, and were paid by the Company’s founder, sole officer and director, Jonathan J. Martin. The Company issued to Mr. Martin 2,000,000 shares of common stock at a value of $0.0001 or $200, in exchange for Mr. Martin’s business plan, business concept, and website in February 2008.

F-14

Auto Search Cars, Inc.

(A Development Stage Company)

Notes to Financial Statements

Advertising Costs

Advertising costs will be expensed as incurred; however there were no advertising costs included in general and administrative expenses as of December 31, 2008.

Loan from Director

On February 15, 2008, and May 28, 2008 the Company received loans for the amount of $1,000 and $10,000 dollars respectively, from its founder, sole officer and director for audit and stock transfer related costs. The total amount of $11,000 bears no interest and is due on demand.

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2008. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash. Fair values were assumed to approximate carrying values for cash because they are short term in nature and their carrying amounts approximate fair values.

Earnings per Share

The Company follows Statement of Financial Accounting Standards No. 128. “Earnings per Share” (“SFAS No. 128”). Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Income Taxes

The Company follows Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes” (“SFAS No. 109”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

F-15

Auto Search Cars, Inc.

(A Development Stage Company)

Notes to Financial Statements

Recent Pronouncements

In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3 “Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities” (“EITF Issue No. 07-3”) which is effective for fiscal years beginning after December 15, 2007. EITF Issue No. 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized. Such amounts will be recognized as an expense as the goods are delivered or the related services are performed. The Company does not expect the adoption of EITF Issue No. 07-3 to have a material impact on the financial results of the Company.

In March 2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 will be effective for financial statements issued for fiscal years and interim periods beginning on May 1, 2009. The Company will adopt SFAS No. 161 beginning in the first quarter of 2009. The Company does not expect that the adoption of SFAS No. 161 will significantly impact its financial position, cash flows and results of operations.

On December 21, 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB 110 provides guidance to issuers on the method allowed in developing estimates of expected term of “plain vanilla” share options in accordance with SFAS No. 123(R), “Share-Based Payment”. The staff will continue to accept, under certain circumstances, the use of a simplified method beyond December 31, 2007 which amends question 6 of Section D.2 as included in SAB 107, “Valuation of Share-Based Payment Arrangements for Public Companies”, which stated that the simplified method could not be used beyond December 31, 2007. SAB 110 is effective May 1, 2008 for the Company. The Company is currently evaluating the potential impact, if any, that the adoption of SAB 110 will have on its financial statements.

Note 2 - Stockholder’s Deficiency

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share and 74,000,000 shares of common stock with a par value of $0.0001 (the “Common Stock”).

In February 2008, the Company issued to its founder, sole officer and director 2,000,000 shares of Common Stock (valued at $200) in exchange for the founding officer’s business plan, business concept, and website. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration “transactions by an issuer not involving any public offering.”

During February and March 2008 the Company’s founder, sole officer and director sold 76,700 shares of Common Stock, at a price of $0.10 per share for a total amount of $7,670. These shares are considered to have been outstanding since inception in February 2008.

There have been no other issuances of common stock.

F-16

Auto Search Cars, Inc.

(A Development Stage Company)

Notes to Financial Statements

Stock-based Compensation

The Company has not adopted a stock option plan and has not granted any stock options from its inception. Accordingly, no stock-based compensation has been recorded to date.

Note 3 – Going Concern

Note 4 - Related Party Transactions

On February 15, 2008, and May 28, 2008 the Company received loans for the amount of $1,000 and 10,000 dollars respectively, from its founder and sole director for audit and stock transfer related costs. The total of $11,000 bears no interest and is due on demand.

Related party transactions are measured at the exchange amount which is the amount of consideration agreed to between the related parties.

Note 5 - Income Taxes

The provision for income taxes reported differs from the amounts computed by applying aggregate income tax rates for the loss before tax provision due to the following:

	2008
Loss before income taxes	$	(16,517	)
Total Loss in 2008	$	16,517

At December 31, 2008, the Company had accumulated non-capital loss carry forwards of approximately $16,517, which may be available to reduce taxable income in future taxation years.

The potential future tax benefits of these expenses and losses carried forward have not been reflected in these financial statements due to the uncertainty regarding their ultimate realization.

F-17

INFORMATION ABOUT CURAXIS

DESCRIPTION OF BUSINESS

Corporate Information

We were incorporated on February 27, 2001, under the laws of the State of Delaware. Our executive offices are located at 12600 Deerfield Parkway, Suite 100, Alpharetta, Georgia 30004. Our fiscal year end is December 31.

Business

Our Alzheimer’s Disease Program

Alzheimer’s Disease

Background and Demographics

Alzheimer’s disease is named after Dr. Alois Alzheimer, a German physician, who first described the disease in 1906. Alzheimer’s disease is a progressive, degenerative and ultimately terminal brain disorder that gradually destroys a person’s memory and ability to learn, reason, make judgments, communicate and carry out daily activities. Alzheimer’s disease patients may also experience changes in personality and behavior, such as anxiety, suspiciousness and agitation, as well as delusions or hallucinations as the disease progresses. Alzheimer’s disease is invariably associated with, and defined by, the loss of connections between, and the death of, neurons, as well as deposits of beta amyloid plaque and the formation of neurofibrillary tangles in the brain. Existing approved therapies treat the symptoms of some patients with Alzheimer’s disease by temporarily enhancing a patient’s cognitive function and general behavior for a period of time; however, there is no existing treatment that stops or materially slows Alzheimer’s disease progression. Unless the patient first succumbs to some other disease, Alzheimer’s disease eventually leads to the patient’s total incapacitation and ultimately to death.

Alzheimer’s disease is an age-related disease. The Alzheimer’s Association estimates that 13% of all individuals over the age of 65 suffer from Alzheimer’s disease and that nearly 50% of all individuals who reach age 85 suffer from Alzheimer’s disease. According to the 2009 World Alzheimer Report by Alzheimer’s Disease International, an international coalition of national Alzheimer’s organizations, 35 million people worldwide suffer from Alzheimer’s disease, including an estimated 5.3 million in the United States, and the number of people with Alzheimer's is expected to nearly double every 20 years, to 65.7 million in 2030 and 115.4 million in 2050. The Alzheimer’s Association estimates that approximately 450,000 new cases of Alzheimer’s disease are diagnosed annually in the United States. More women suffer from Alzheimer’s disease than do men. Alzheimer’s disease onset has been reported in Down’s syndrome individuals aged as young as 30, with a dramatic increase in prevalence with aging.

The Alzheimer’s Association reports that Alzheimer’s disease patients live an average of eight years, with many patients living as much as 20 years, from the initial onset of symptoms. Direct and indirect annual costs of caring for individuals with Alzheimer’s disease in the United States are at least $140 billion, according to estimates used by the Alzheimer’s Association and the National Institute on Aging. The Alzheimer’s Association estimates the average lifetime cost of care for an individual with Alzheimer’s disease in the United States to be approximately $174,000 and have predicted that the costs associated with caring for Alzheimer’s patients will increase dramatically as the population, on average, becomes older.

Current Scientific Theories

Curaxis’ LH Hypothesis

Based upon our preclinical and clinical studies, we believe that inappropriately elevated levels of pituitary hormones produced in response to normal aging may be important in promoting the development of Alzheimer’s disease. At the time of menopause in females, when estrogen production by the ovaries falls precipitously, gonadotropins become elevated. In aging males, testosterone production by the testes drops about one percent per year, leading to a more gradual increase in gonadotropins over time. Our preclinical research suggests that luteinizing hormone, or LH, which is released by the pituitary gland, is associated with many of the pathologies currently being researched in Alzheimer’s disease, including amyloid beta deposition which leads to plaques, tau phosphorylation which leads to tangles, abnormal cell division, oxidative stress, and inflammation. We believe that elevated levels of LH that are known to occur with aging contribute to many of these pathological changes, ultimately resulting in cognitive decline and Alzheimer’s disease. We refer to the hypothesis that links LH to the development of Alzheimer’s disease as the LH hypothesis.

Our lead product candidate, VP4896, is designed to dramatically reduce levels of LH in the bloodstream and in brain tissue through administration of a long-term, controlled release dose of leuprolide acetate, which suppresses LH production. We hold an issued United States patent with claims directed to the treatment of Alzheimer’s disease by administering any agent, including leuprolide acetate,that reduces or eliminates serum levels of gonadotropins. In our Phase I trial, trial 105, Curaxis’ proprietary dosage form of leuprolide acetate, VP4896, has been demonstrated to dramatically suppress or eliminate LH levels in serum.

The following summarizes the prominent hypotheses regarding the cause of Alzheimer’s disease and provides an overview of evidence we have that links the LH Hypothesis to each of these hypotheses.

Beta Amyloid Hypothesis

There are several hypotheses regarding the cause of Alzheimer’s disease, the predominant one being the beta amyloid hypothesis. The assumption behind this hypothesis is that amyloid beta protein, which makes up the plaques present in the brains of Alzheimer’s disease patients, is toxic and is the causative agent of the disease. The generally accepted view is that inhibiting the production of, and enhancing the clearance of, amyloid beta protein would reduce the formation of and possibly eliminate amyloid plaques that might be toxic to neurons, therefore preventing or treating Alzheimer’s disease. Based on this hypothesis, many companies have designed therapies to suppress or eliminate amyloid beta protein in order to affect the rate of progression of Alzheimer’s disease. Research based on the beta amyloid hypothesis has been ongoing for two decades without yielding any approved therapies to date.

While we do not specifically target amyloid beta elimination, we have evidence that links leuprolide acetate treatment in animal models to significant reductions in amyloid beta concentrations, and more importantly to a decreased rate of cognitive decline.

In a paper published in the Journal of Biological Chemistry in May 2004, we showed that leuprolide treatment of normal mice significantly reduced the concentrations of brain amyloid beta 1-42 by 71% after four weeks, and amyloid beta 1-40 by 40% after eight weeks. Amyloid beta 1-42 and 1-40 are different segments of amyloid present in the brain. (Luteinizing hormone, a reproductive regulator that modulates the processing of amyloid-beta precursor protein and amyloid-beta deposition. J Biol Chem 279(19):20539-20545)

In a paper published in Biochemica Biphysica Acta in April 2006, we showed that leuprolide, when given to mice with Alzheimer’s-like disease, significantly reduced concentrations of brain amyloid beta, and resulted in stabilized, and in some cases, improved cognition when leuprolide treated mice were compared to those which received placebo. (Luteinizing hormone modulates cognition and amyloid-ß deposition in Alzheimer APP transgenic mice. Bioch Biophys Acta 1762(4)447-452)

Tau Hypothesis

Another prominent theory is the tau hypothesis. In Alzheimer’s disease, tau proteins gain unusually high levels of phosphate groups (become phosphorylated) and a portion of the protein is apparently sliced off. These altered tau proteins lose their ability to function normally and stick together in structures called neurofibrillary tangles which form within the neuron and are thought to be neurotoxic. These tangles together with amyloid plaques formed by amyloid beta are the primary hallmarks of Alzheimer’s disease found in the brains of Alzheimer’s disease patients when autopsied.

While we do not target the reduction of neurofibrillary tangles, we have evidence that LH, which is suppressed by VP4896, actively and rapidly induces the phosphorylation of tau proteins and may therefore be one of the causative agents for tangle formation. We have evidence from laboratory experiments that LH treatment of neuroblastoma cell lines results in increased phosphorylation of tau protein, whereas leuprolide acetate reduces the levels and slows the kinetics of tau phosphorylation.

Abnormal Cell Division Hypothesis

Another hypothesis, called the cell cycle hypothesis, proposes that neurological and biochemical changes associated with Alzheimer’s disease are caused by the abnormal re-entry of brain cells into the cell division cycle, a process by which one cell replicates itself and divides into two cells. In general, it is thought that adult brain cells have lost the ability to successfully divide. Thus, this hypothesis suggests that when adult brain cells are stimulated to divide, the neurological changes seen in Alzheimer’s disease result. The proponents of this hypothesis believe that instead of successfully completing cell division, these brain cells die, and this brain cell death is believed to produce the clinical deficits observed in Alzheimer’s disease patients. We have evidence from laboratory experiments that LH treatment of glioblastoma and neuroblastoma cells in culture causes increased cell division, that can subsequently be prevented by concomitant treatment with leuprolide acetate.

Oxidative Stress

Oxidative stress results from the production of toxic chemical by-products that arise from normal cellular metabolism and has also been implicated and studied as a potential cause of Alzheimer’s disease. These toxic by-products may cause direct damage to cells or may induce genetic mutations or DNA damage. With respect to the LH hypothesis, treatment of a neuronal cell line with LH in vitro has produced preliminary data that suggests that LH may inhibit enzymes that are essential to the body’s management of oxidative stress. In other words, LH may enhance oxidative stress and the elimination of LH might reduce the impact of oxidative stress on cells.

Inflammation

Inflammation, which is a normal physiological reaction to infection, can sometimes produce damage. Autoimmune diseases such as rheumatoid arthritis and multiple sclerosis are examples of undesirable and uncontrolled inflammatory events. Inflammation has been implicated as a possible cause of Alzheimer’s disease and it has been suggested that reducing chronic inflammation might provide benefit. Several anti-inflammatory therapies, including drugs as common as Ibuprofen, have been clinically tested for their ability to benefit Alzheimer’s patients. To date, anti-inflammatory therapies have not proven successful. With respect to the LH hypothesis, laboratory data suggests that LH promotes the production of growth factors (cytokines) that enhance or magnify the inflammatory response and LH may, therefore, contribute to Alzheimer’s disease by exacerbating inflammatory processes in the brain.

LH Hypothesis – The Human Reproductive Hormone Feedback Loop

Most biochemical processes in the body are tightly regulated and are subject to both positive and negative feedback. Positive feedback promotes a certain reaction, such as the synthesis of a hormone, while negative feedback inhibits a reaction or event. The concentration of certain hormones secreted by a region of the brain called the hypothalamus, the pituitary gland and the gonads is regulated by a feedback loop that has both positive and negative feedback components. The loop is initiated when the hypothalamus releases gonadotropin-releasing hormone, or GnRH. GnRH then stimulates the pituitary to secrete the two gonadotropins—LH and follicle-stimulating hormone, or FSH. The gonadotropins bind to receptors on the gonads, the ovaries in females and the testicles in males, and stimulate the gonads to produce the sex steroid hormones, estrogen and testosterone.

Once the hypothalamus senses that the sex steroid hormones are at an acceptable level, it reduces the release of GnRH. The reduced level of GnRH provides feedback to the pituitary gland to reduce the secretion of gonadotropins, resulting in reduced gonadotropin levels. Reduced gonadotropin levels then provide feedback to the gonads to reduce the production of the sex steroid hormones. Once the hypothalamus senses the sex steroid hormones dropping below a particular level, the hypothalamus increases the release of GnRH, which re-initiates the hormonal feedback loop and the production of the two gonadotropins.

Our Scientific Approach

Our scientific approach is based on the observation that many diseases of aging may be caused by the age-related changes in levels of reproductive hormones that are secreted by the hypothalamus, the pituitary gland and the gonads. This approach is built on the premise that these hormones are beneficial early in life, because they regulate and promote development and growth through cell division and differentiation in order to achieve reproduction, but are harmful later in life because they become unregulated and cause abnormal processes including pathologies associated with AD. We believe that this change in hormone levels is a primary cause of many age-related diseases, including Alzheimer’s disease and various cancers.

We believe that the gonadotropin LH is an important and pivotal cause of Alzheimer’s disease. Our research suggests that LH serves as the catalyst that potentially leads to increased production of amyloid beta protein, drives changes in tau protein and possibly impacts other factors such as oxidative stress and inflammation which, in total, lead to the cognitive decline associated with Alzheimer’s disease. We base these beliefs on both experimental evidence and scientific observations, principally resulting from our work and the work of our consultants

Preclinical Support for the Combined Treatment of Leuprolide Acetate and Acetylcholinesterase Inhibitors in Alzheimer’s Disease

Curaxis’ Phase II proof of concept study in female patients with mild-to-moderate Alzheimer’s disease demonstrated efficacy of 22.5 mg Lupron Depot™ when administered together with acetylcholinesterase inhibitors (AChEIs), as assessed by the ADAS-cog, ADCS-CGIC and ADCS-ADL outcome measures, when compared to patients receiving AChEIs alone. As this was an unexpected clinical result, subsequent preclinical work has focused on understanding the potential “crosstalk” of these biological signaling pathways. In an attempt to better understand the mechanism of action or potential crosstalk between GnRH analogues and AChEIs, cell culture studies were performed to explore the role of AChEIs in modulation of the hypothalamic-pituitary-gonadal (HPG) axis of hormones and receptors, using neuroblastoma cells. Our findings in these studies demonstrate that an AChEI can modulate HPG axis genes and may support the clinical findings that the two drugs together provide more benefit than either drug alone. A patent application detailing the use of GnRH analogues in combination with AChEIs or NMDA receptor antagonists to treat Alzheimer’s disease and mild cognitive impairment is pending in the United States, Europe and other countries.

Limitations of Current Alzheimer’s Disease Therapies

There are currently five drugs approved for the treatment of Alzheimer’s disease in the United States:

·	Aricept, marketed by Pfizer, Inc. and Eisai Company, Ltd.

·	Exelon, marketed by Novartis AG

·	Reminyl, also known as Razadyne, marketed by Shire Pharmaceuticals Group plc and Janssen Pharmaceutical Products, LP

·	Cognex, marketed by Sciele Pharmaceuticals Corp

·	Namenda, marketed by Forest Pharmaceuticals, Inc.

The first four of these drugs are acetylcholinesterase inhibitors or AChEIs; the fifth is an N-methyl-D-asparate or NMDA receptor antagonist. These drugs target the symptoms of Alzheimer’s disease by enhancing some patients’ cognitive function and general behavior, but generally are not thought to slow progression of the disease.

Our Solution: Memryte

Memryte is a proprietary, small, biodegradable implant comprised of leuprolide acetate and a polymer. Each implant is approximately 1.5 millimeters in diameter and 3.0 centimeters in length. Memryte is designed to provide controlled, long-term, sustained release of leuprolide acetate. The polymer in Memryte is similar to the material in re-sorbable surgical stitches and degrades in the body. As a result, and in contrast to some other types of implantable drug delivery devices, surgical removal is not required. Memryte implants are inserted subcutaneously through a needle in the fleshy region on the side of the patient’s abdomen. The procedure is conducted in a physician’s office using a local anesthetic and takes approximately ten minutes. Administration of leuprolide acetate using the Memryte implant has been demonstrated in our Phase I ALADDIN 105 trial to minimize an initial dosage peak and provide a steady leuprolide acetate level throughout the two-month dosing period.

We administered an injectable formulation of leuprolide acetate in our two Phase II dose-ranging clinical trials for Alzheimer’s disease while we were developing Memryte. Leuprolide acetate has been marketed for almost two decades, primarily as a treatment for advanced prostate cancer. It is also approved for use in other hormone-related conditions, such as endometriosis and anemia caused by uterine fibroids in women, and precocious puberty in children. It is administered for these indications by intramuscular injection. The safety profile of leuprolide acetate has been well established over many years. The most common side effects are similar to those seen with menopause and surgical castration such as hot flashes and osteoporosis. Since all of the women who enter our trials are post-menopausal, these side effects should be nominal. As a raw material, leuprolide acetate is available from a number of manufacturers.

Clinical Trials

We are conducting a comprehensive clinical program to test leuprolide acetate and VP4896 for the treatment of mild to moderate Alzheimer’s disease. We call our clinical trial program “Antigonadotropin-Leuprolide in Alzheimer’s Disease Drug INvestigation,” for which we use the acronym ALADDIN. Our clinical program includes: A completed Phase I safety and pharmacokinetic study of VP4896, ALADDIN 105; and three Phase II clinical trials, two of which used an injectable formulation of leuprolide acetate and one of which used our proprietary implant, VP4896.

These clinical trials are summarized in the following table:

Trial Name / Clinical Phase	Enrollment Criteria	Number of Clinical Sites	Number of Participants	Trial Duration	Status
ALADDIN 301 / Phase II	Men and women aged 60 years or older with mild to moderate Alzheimer’s disease; patients were required to receive AChEIs during and for at least 120 days prior to trial	62 in the United States and Canada	612 recruited, 370 included in data set due to discontinuation	56 weeks	Discontinued on October 18, 2006. Approximately 369 patients at 24 weeks, 193 patients at 32/34 weeks and 89 patients at 40 weeks

ALADDIN I / 103 Phase II	Women aged 65 years or older with mild to moderate Alzheimer’s disease; patients were allowed, but not required, to receive AChEIs during and prior to trial	5 in the United States	108	48 weeks	Completed

ALADDIN II / 104 Phase II	Men aged 65 years or older with mild to moderate Alzheimer’s disease; patients were allowed, but not required, to receive AChEIs during and prior to trial	17 in the United States	119	48 weeks	Completed

ALADDIN 105 / Phase I	Healthy women aged 45 to 70 years and men aged 50 to 70 years	1 in the United States	50	24 weeks	Completed

We employ a variety of clinically validated and FDA accepted efficacy measurements in our Alzheimer’s disease clinical trials. These include:

The Alzheimer’s Disease Assessment Scale-Cognitive Subscale, or ADAS-cog. ADAS-cog is a test of memory and cognition that is designed to measure changes in Alzheimer’s disease subjects that might occur in response to a pharmacological intervention, or the action of a given drug. An increasing score on this measure indicates cognitive decline, while a decreasing score indicates cognitive improvement.

·	The Alzheimer’s Disease Cooperative Study-Clinical Global Impression of Change, or ADCS-CGIC. ADCS-CGIC is a global measure of a subject’s change in condition from baseline in Alzheimer’s disease. The score is based on information gained from interviews with the subject and the subject’s caregiver.

Alzheimer’s Disease Cooperative Study-Activities of Daily Living Inventory, or ADCS-ADL. ADCS-ADL is a comprehensive rating scale designed to measure a subject’s capacity to perform activities of daily living, including ability to eat, dress, bathe, telephone, travel, shop and perform other household chores. The score is based on interviews of the subject’s caregiver. An increasing score on this measure indicates additional capacity to perform activities of daily living, while a decreasing score indicates less capacity.

The ADAS-cog, the ADCS-CGIC and the ADCS-ADL are recognized by the FDA and regulatory agencies outside the United States as the most commonly used assessments for endpoints in Alzheimer’s disease clinical trials. To minimize the side effects associated with the loss of testosterone due to leuprolide acetate therapy, male subjects who received leuprolide acetate in these clinical trials also received testosterone on a daily basis in the form of a transdermal gel. To protect the blind randomization, male subjects randomized to placebo receive a placebo transdermal gel on a daily basis. Since women with Alzheimer’s disease are post-menopausal and are no longer producing much estrogen, side effects associated with the loss of estrogen are minimal and do not require hormonal supplementation.

The intent-to-treat population in these trials consists of participants who received at least one dose of randomized drug and who had at least one assessment beyond baseline of at least one primary efficacy variable. For patients who do not complete the trial, the last assessment taken is carried forward to each of the subsequent assessments time points.

In general, the results of our Phase II dose ranging studies in women are encouraging and point to a potentially significant new treatment for women with Alzheimer’s disease. The results in men have been less encouraging, in part because a number of men on placebo unexpectedly performed at or above baseline during the trials. Therefore, for the short-and medium-term, we plan to concentrate our development efforts on the use of leuprolide acetate to treat women, although we will continue our efforts to better understand mechanisms that might lead to improved outcomes in men.

Phase II / ALADDIN I

We have completed a randomized, double blind, placebo controlled, dose-ranging, 48-week, Phase II clinical trial to assess the efficacy and safety of an injectable formulation of leuprolide acetate on cognitive and global function in women with mild to moderate Alzheimer’s disease. We call this clinical trial ALADDIN I or trial 103. The trial was conducted at five investigative study sites in the United States. Women aged 65 or older with mild to moderate Alzheimer’s disease were eligible to participate in the trial. Patients were allowed to receive AChEIs during the trial if they began taking this medication at least 90 days prior to the trial and continued a stable dose throughout the trial.

A total of 109 women were enrolled in this study, 108 of which were included in the intent-to-treat population and assigned to one of three groups comprised of 36 participants each:

·	a low dose leuprolide acetate group; 11.25 mg of leuprolide every 12 weeks

·	a high dose leuprolide acetate group; 22.5 mg of leuprolide every 12 weeks and

·	a placebo group

Each participant was administered an injection of leuprolide acetate or placebo once every 12 weeks during the trial. The primary efficacy endpoints of the trial were a patient’s score on the ADAS-cog and the ADCS-CGIC at 48 weeks compared to baseline. There were various secondary efficacy endpoints, including a patient’s score on the ADCS-ADL at 48 weeks compared to baseline. There was a trend at week 48 in favor of the high dose leuprolide acetate group in this Phase II trial indicating a relative stabilization of the disease compared to the placebo group. However, we did not achieve the primary efficacy endpoints or any of the secondary efficacy endpoints in this trial with statistical significance.

In accordance with the written statistical analysis plan we had previously adopted for ALADDIN I, we also performed an analysis of 78 patients in the intent-to-treat population who were taking AChEIs, comparing results for the group of 24 patients treated with AChEIs plus the high dose of leuprolide acetate used in the study and the group of 28 patients treated with AChEIs plus the 11.25 mg dose of leuprolide acetate against the results for a group of 26 patients who were treated with AChEIs and received placebo in the study. The results for the group that received an AChEI plus the 11.25 mg dose of leuprolide acetate were not statistically significantly different from the results for the group that received an AChEI plus placebo.

As described below, the group that received the 22.5 mg dose of leuprolide acetate plus an AChEI demonstrated a benefit in comparison to the group that received an AChEI plus placebo. In addition, on each of the seven occasions during the 48-week study at which we assessed these two groups, the mean score of the 22.5 mg dose of leuprolide acetate plus AChEI group was more favorable than the mean score of the placebo plus AChEI group on each of the ADAS-cog, ADCS-CGIC and ADCS-ADL measures.

Statistical significance is measured by a p-value, which is a mathematical calculation used to determine the likelihood that the measured result was obtained by chance. A p-value of 0.05 means that the probability that this result occurred by chance is one in 20. A low p-value indicates a greater likelihood that the observed result did not occur by chance, and therefore implies greater statistical significance.

For purposes of this subgroup analysis of the results of our ALADDIN I trial, we calculated p-values in two different ways. First we calculated unadjusted p-values, which indicate statistical significance as if this subgroup analysis had been a primary efficacy endpoint. However, because we performed several comparisons, we were required to adjust the p-values of the results to account for multiple comparisons. This was done by using what is referred to as the Bonferroni correction which applies an estimated statisticl penalty to account for the number of comparisons made.

In this subgroup analysis, the mean ADAS-cog score in the group receiving the 22.5 mg dose of leuprolide acetate and an AChEI worsened by 0.18 points at week 48 from baseline compared to a mean worsening of 3.30 points in the group receiving placebo and an AChEI. The p-value for this difference was 0.026 on an unadjusted basis and 0.078 on an adjusted basis.

In the ADCS-CGIC analysis, 58% of the subgroup receiving the 22.5 mg dose of leuprolide acetate and an AChEI scored no change or better at week 48 in comparison with baseline versus 38% of the subgroup receiving placebo and an AChEI. The p-value for this difference was 0.031 on an unadjusted basis and 0.093 on an adjusted basis.

The mean ADCS-ADL score in the subgroup receiving the 22.5 mg dose of leuprolide acetate and an AChEI declined 0.54 points at week 48 from baseline compared to a mean decline of 6.85 points in the subgroup receiving placebo and an AChEI. The p-value for this difference was 0.015 on an unadjusted basis and 0.044 on an adjusted basis.

The following graphs summarize the results of this subgroup analysis.

p=0.026,

p=0.078 adjusted

p = 0.015,

p = 0.044

ALADDIN 301

In August 2006, we completed enrollment in ALADDIN 301, the first of our two randomized, double-blind, placebo-controlled, 56-week, Phase III clinical trials of the VP4896 implant for the treatment of mild to moderate Alzheimer’s disease as adjunctive therapy to AChEIs. Men and women aged 60 or older who had been diagnosed with mild to moderate Alzheimer’s disease were eligible to participate in the trials. One of the trial inclusion criteria was that all subjects shall have been on an AChEI for at least 120 days prior to baseline and continue to receive that AChEI throughout the trial.

The protocol provided for study participants to be randomized to VP4896 or placebo in a ratio of three to two. VP4896 or placebo was administered every eight weeks in the form of a subcutaneous implant. Each participant received two implants on each occasion. The dosage level from the two implants was approximately equal to the high dose of leuprolide acetate being administered in ALADDIN II and 150% of the high dose in ALADDIN I. Our method of administration in these trials was different from our ALADDIN I and ALADDIN II clinical trials, in which leuprolide acetate was administered by injection at 12-week intervals over a 48-week period.

The primary evaluation of the efficacy of VP4896 in the treatment of mild to moderate Alzheimer’s disease was measured by the difference from placebo in the scores on ADAS-cog and ADCS-CGIC compared to baseline. Secondary efficacy endpoints in each trial were to assess the efficacy of VP4896 compared to placebo as measured by change from baseline in a variety of other commonly used Alzheimer’s disease measurements, including ADCS-ADL, at 50 weeks.

In October 2006, we discontinued this trial due to financial constraints and converted it to a Phase II trial. At the time this trial was terminated, approximately 625 patients had been enrolled at 62 sites in the United States and Canada. After this discontinuation, we had approximately 369 patients who had received their 24 week assessment, approximately 193 patients who had received their 32/34 week assessment, and approximately 89 patients who had received their 40 week assessment.

In May 2007, in accordance with the written statistical analysis plan we had previously adopted for the trial, we completed an analysis of the results of ALADDIN 301 for (1) men and women as a single group and (2) for women separately, for participants who reached their 24, 32/34 or 40 week assessments. The analysis of the combined group of men and women showed no significant differences in favor of the group that received VP4896, in part because a number of men on placebo unexpectedly performed at or above baseline during the trials. However, the results in women who received VP4896 supported the efficacy signal in women that was demonstrated in ALADDIN 103. The following graphs reflect the results of the analysis for women in ALADDIN 301.

Female patients with ADAS-cog baseline scores that were considered to be extreme observations (too low or too high) were removed from the analysis (10 patients were removed from both groups, placebo and VP4896). ADAS-cog change from baseline scores were plotted and the numbers of patients included at each time point are given. The graph above includes the last-observation-carried-forward (LOCF) cases at 24, 32/34 and 40 weeks, i.e., all of the females completed through week 24 and if they discontinued after weeks 24 or 32/34, their scores are included in the 40 week data point. VP4896-treated females demonstrated better ADAS-cog scores at 24, 32/34 and 40 weeks, compared to placebo females.

Female patients with ADAS-cog baseline scores that were considered to be extreme observations (too low or too high) were removed from the analysis (10 patients were removed from both groups, placebo and VP4896). Clinical global impression of change (CGIC) scores were plotted and the numbers of patients included at each time point are given. The bars represent the percent of females that were scored as unchanged or better at each time point. The graph above includes the observed cases at 24, 32/34 and 40 weeks. VP4896-treated females demonstrated better CGIC scores at 32/34 weeks, compared to placebo females.

Female patients with ADAS-cog baseline scores that were considered to be extreme observations (too low or too high) were removed from the analysis (10 patients were removed from both groups, placebo and VP4896). Clinical global impression of change (CGIC) scores were plotted and the numbers of patients included at each time point are given. The bars represent the percent of females that were scored as unchanged or better at each time point. The graph above includes the last-observation-carried-forward (LOCF) cases at 24, 32/34 and 40 weeks, i.e., all of the females completed through week 24 and if they discontinued after weeks 24 or 32/34, their scores are included in the 40 week data point. VP4896-treated females demonstrated better CGIC scores at 32/34 weeks, compared to placebo females.

Female patients with ADAS-cog baseline scores that were considered to be extreme observations (too low or too high) were removed from the analysis (10 patients were removed from both groups, placebo and VP4896). ADCS-ADL change from baseline scores were plotted and the numbers of patients included at each time point are given. The graph above includes the last-observation-carried-forward (LOCF) cases at 24, 32/34 and 40 weeks, i.e., all of the females completed through week 24 and if they discontinued after weeks 24 or 32/34, their scores are included in the 40 week data point. VP4896-treated females demonstrated better ADL scores at 24, 32/34 and 40 weeks, compared to placebo females.

ALADDIN II

We have completed a randomized, double blind, placebo controlled, dose-ranging, 48-week, Phase II clinical trial, ALADDIN II, to assess the efficacy and safety of an injectable formulation of leuprolide acetate on cognitive and global function in men with mild to moderate Alzheimer’s disease. We call this clinical trial ALADDIN II or trial 104. The trial was conducted at 17 investigative study sites in the United States. Men aged 65 or older with mild to moderate Alzheimer’s disease were eligible to participate in the trial. Patients were allowed to receive AChEIs during the trial if they began taking this medication at least 60 days prior to the trial and continued a stable dose throughout the trial.

A total of 119 men were enrolled in this study and were included in the intent-to-treat population and assigned to one of three groups comprised of:

·	a low dose leuprolide acetate group; 22.5 mg of leuprolide per 12 weeks; 39 men

·	a high dose leuprolide acetate group; 33.75 mg of leuprolide per 12 weeks; 42 men and

·	a placebo group; 38 men

Each participant was administered an injection of leuprolide acetate or placebo once every 12 weeks during the trial. The primary efficacy endpoints of the trial were a patient’s score on the ADAS-cog and the ADCS-CGIC at 48 weeks compared to baseline. There were various secondary efficacy endpoints, including a patient’s score on the ADCS-ADL at 48 weeks compared to baseline. The low and high dose produced very similar results. We did not achieve the primary efficacy endpoints or any of the secondary efficacy endpoints in this trial with statistical significance.

We analyzed data from patients receiving either 22.5 mg or 33.75 mg doses of leuprolide acetate in conjunction with AChEIs and compared those to placebo patients also receiving AChEIs. There was a small but not statistically significant signal on the ADAS-cog in favor of both leuprolide treatment groups at week 48. We did not achieve our primary or secondary endpoints for either group.

Results on the ADCS-CGIC rating demonstrated that 44% of the men who received 22.5 mg of leuprolide acetate plus AChEIs, and 47% of the men who received 33.75 mg of leuprolide acetate plus AChEIs, were either improved or showed no change compared to 31% of the men who received placebo plus AChEIs. The p-value for this difference was 0.18 on an adjusted basis.

In the ALADDIN II study, leuprolide acetate administered as an injection was well tolerated at both dose levels without any evidence of a dose-related increase in adverse events. The safety profile in ALADDIN II was similar to that of ALADDIN I.

Phase I / ALADDIN 105

We have completed a Phase I single center, randomized, double blind, placebo controlled, multiple-dose and formulation comparison study of VP4896. We enrolled 50 healthy volunteers in this study consisting of post-menopausal women aged 45 to 70 years and men between the ages of 50 and 70 years. The primary objective of this trial was to determine the safety and tolerability of VP4896 implants at various dose combinations monitored over a period of 24 weeks. Secondary objectives were to study the pharmacokinetics of VP4896 implants over a period of up to 48 weeks and to compare the pharmacokinetic profile of a single administration of a VP4896 implant with the pharmacokinetic profile of a single administration of one-month leuprolide acetate by injection over a period of eight weeks.

The implants provided a relatively constant systemic release of leuprolide acetate over an eight-week dosing interval. Following the first 24 hours of dosing, steady concentrations of the drug were established, rising slowly to a peak that occurred at approximately four weeks and, thereafter, declining slowly to the end of the eight-week dosing period to a level similar to the level at the end of 24 hours.

There were no serious adverse events reported in this trial. All safety events in this trial believed to be related to leuprolide acetate were consistent with those listed in the package insert for leuprolide acetate’s approved indications. Some patients experienced minor bruising or irritation as a result of the implant procedure that resolved within two weeks.

Planned Phase IIb Study

The next step in our clinical development plan is a Phase IIb study in approximately 200-250 women. The purpose of this study is to confirm the efficacy results we attained in women in our ALADDIN I and ALADDIN 301 clinical trials and provide a foundation for determining the size and duration of Phase III studies of VP 4896. We anticipate that the study will be a 12-month, double-blind, placebo-controlled study consisting of 1 active arm and the placebo arm, with a 60/40 split between the active arm and the placebo arm. Assuming the study commences in the second quarter of 2010, and that enrollment is completed by the end of 2010, we anticipate that the results of the study would be available during the first quarter of 2012.

Our Oncology Program

We have conducted an extensive preclinical research program in the use of leuprolide acetate to treat a number of cancers, including hormone refractory prostate cancer, brain cancers, kidney cancer, pancreatic cancer and non-small-cell lung cancer.

Our work in oncology is based on new insights into the growth of cancer cells that have been discovered by our scientists. In particular, our scientific findings relating to autocrine-paracrine signaling and the replication of the hypothalamic-pituitary-gonadal axis (the HPG axis) inside of cancer cells point to a previously unknown mechanism that drives the growth of cancer cells and an entirely new method of attacking those cancer cells; i.e., using high doses of leuprolide acetate to eliminate the gonadotropins that may be driving the growth of those cells.

We plan to use the same compound for several cancer Phase II clinical trials as we are using for clinical trials of VP4896. Since we have completed Phase I safety trials of VP4896, we believe that we will be able to commence our clinical programs for various cancers with Phase II clinical trials instead of Phase I safety trials. The FDA will have to agree to the commencement of these clinical programs with Phase II clinical trials when we submit our Investigational New Drug Applications, or INDs, to the FDA. However, we do not intend to initiate any such Phase II trials until our planned Phase IIb trial of VP 4896 for the treatment of mild to moderate Alzheimer’s in women is completed and, in any event, our ability to initiate such trials will be subject to the availability of adequate financial resources to support such trials.

Manufacturing

We do not own or intend to own manufacturing facilities for the production of clinical or commercial quantities of leuprolide acetate or any of the compounds that we are testing in our preclinical programs. We currently rely, and our strategy is to continue to rely, on third parties for the manufacture of our product candidates and any products for which we may obtain regulatory approval to commercially manufacture and market.

In August 2008, we entered into an agreement with Covidien Ltd. under which Covidien has agreed to supply, and we have agreed to purchase, 75% of our annual quantities of leuprolide. In the event Covidien is unable to supply leuprolide in the quantities we require on a timely basis, we have the right to purchase leuprolide from other sources.

The implants for VP4896 are manufactured by Durect Corporation using a melt extrusion process in which leuprolide acetate is mixed with a polymer. The mixture is then formed and cut into small rod-shaped implants that are approximately 1.5 millimeters in diameter and 3.0 centimeters in length.

Our Durect Agreement

In July 2002, we entered into a Feasibility, Development and Commercialization Agreement with Southern Biosystems, Inc., a company which subsequently merged into its parent corporation, Durect. Under this agreement, Durect produces VP4896 for us using Durect’s biodegradable polymeric implant technology to provide a sustained release formulation of leuprolide acetate to treat Alzheimer’s disease. Durect has the right to subcontract its responsibilities under the agreement, provided that Durect remains responsible for its obligations under the agreement.

We must pay all of Durect’s costs associated with development and regulatory approval activities and make payments to Durect upon the achievement of specified development and regulatory milestones for VP4896. We have made milestone payments to Durect totaling $500,000 and are obligated to make additional payments, up to an aggregate maximum amount of $2,500,000, if specified additional milestones are met. We have agreed to purchase quantities of VP4896 from Durect at transfer prices equal to specified percentages of Durect’s fully allocated costs to produce it. We are also obligated to pay royalties to Durect on commercial sales of VP4896 based on percentages of annual worldwide net sales levels. These royalties are payable to Durect for the maximum time permitted by law in each country, which may be longer than the life of any patents that Durect licensed to us.

Under the agreement, Durect granted us an exclusive license under its intellectual property rights to use its polymeric implant technology to develop and commercialize VP4896 on a worldwide basis for the treatment of Alzheimer’s disease. The Durect intellectual property licensed by us includes patent applications covering the VP4896 formulation and the method of making VP4896. Our license from Durect of its technology does not extend to the use of VP4896 for the treatment of any other indications. We are required under the agreement to diligently, and in accordance with the timelines for clinical development set by us, conduct all required clinical trials, obtain all necessary regulatory approvals and commercialize VP4896 in the United States for Alzheimer’s disease. We and Durect have established a joint development team, consisting of two representatives from each company, to manage the development of VP4896. Ultimately, we have final decision making authority with respect to VP4896 development matters.

Sales and Marketing

We intend to maximize the commercial potential of our product candidates by selectively entering into collaboration agreements with leading pharmaceutical and biotechnology companies to assist us in furthering the development of our product candidates. In particular, we intend to enter into these third-party arrangements for target indications in which our potential collaborator has particular expertise or that involve a large, primary care market that must be served by large sales and marketing organizations. In entering into these collaboration agreements, our goal will be to maintain co-promotion or co-commercialization rights in the United States and, in some cases, other markets.

We expect to contract with third parties to warehouse and distribute our products and to provide administrative functions, such as accounts receivable management and other similar activities.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies and private and public research institutions.

Many of our competitors have significantly greater financial resources and experience in research and development, manufacturing, preclinical testing, clinical trials, regulatory approvals and marketing approved products than we do. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our commercial opportunity will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, are easier to administer or are less expensive than any products that we may develop. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies and technology licenses complementary to our programs or advantageous to our business.

If approved, our Alzheimer’s product will compete against the five drugs currently approved for the treatment of Alzheimer’s disease as monotherapies. Four of the drugs are AChEIs, including: Aricept, marketed by Pfizer, Inc. and Eisai Company, Ltd.; Exelon, marketed by Novartis AG; Reminyl, marketed by Shire Pharmaceuticals Group plc and Janssen Pharmaceutical Products, LP; and Cognex, marketed by Sciele Pharmaceuticals Corporation. The fifth drug, Namenda, marketed by Forest Pharmaceuticals, Inc., is an NMDA receptor antagonist. These products have well-known brand names, are distributed by large pharmaceutical companies and have achieved widespread acceptance among physicians and patients. In addition, our product could face competition from other leuprolide acetate products that are already on the market or may later be approved for other indications, if they are used or prescribed off label for Alzheimer’s disease.

In addition, there are many companies and academic and research institutions researching and developing potential treatments for Alzheimer’s disease. Some of these companies are large pharmaceutical companies, while others are smaller companies that may also prove to be significant competitors, particularly through collaborative arrangements with large pharmaceutical and biotechnology companies. Companies with compounds to treat Alzheimer’s disease in human clinical trials include Pfizer, Eli Lilly, Glaxo SmithKline, Wyeth, Elan and Medivation.. To our knowledge, none of these companies or any other company is working on a potential Alzheimer’s disease treatment that has a mechanism of action that is the same as that of our Alzheimer’s product.

Patents and Proprietary Rights

Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing United States and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.

Our patent portfolio includes one issued United States patent and numerous patent applications in the United States, foreign countries and regions under the Patent Cooperation Treaty. Use of VP4896 in therapeutically effective amounts to treat Alzheimer’s disease is covered by our United States patent, which claims, among other things, the use of leuprolide acetate in therapeutically effective amounts to treat Alzheimer’s disease through a reduction or elimination of blood serum levels of FSH and LH. This United States patent expires in 2018. Depending on the timing, duration and specifics of FDA approval of the use of VP4896 for the treatment of Alzheimer’s disease, this patent may be eligible for patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act. A foreign counterpart application to this patent is pending only in Canada. We are aware of one issued third party U.S. patent, filed after our issued U.S. patent was filed, which may nonetheless be prior art to our patent and which might form the basis of an interference proceeding or invalidity challenge. See “Risk Factors—If we infringe or are alleged to infringe intellectual property rights of third parties, it will adversely affect our business.”

Our portfolio also includes patent applications directed to the treatment of Alzheimer’s disease with a combination of leuprolide acetate and AChEIs and/or NMDA receptor antagonists, to the treatment of various diseases and disorders associated with senescence, including Parkinson’s disease and prostate cancer, to the treatment of brain cancers, and to the treatment of cancers that express the genes of the HPG axis. Counterpart filings to these patent applications have been made in a number of other jurisdictions, including Europe and Japan. As described above, we also hold an exclusive license from Durect for their sustained release technology for VP4896 for the treatment of Alzheimer’s disease. Leuprolide acetate, the active pharmaceutical ingredient in VP4896, is off-patent, therefore we expect to rely on method of use and formulation patents to protect our market position.

We may rely, in some circumstances, on trade secrets to protect our technology. However, trade secrets are difficult to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors and other contractors, as well as physical security of our premises and our information technology systems. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our consultants or contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Regulatory Matters

Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution, marketing and export and import of pharmaceutical products such as those we are developing. The process of obtaining regulatory approvals and the subsequent substantial compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

U.S. Government Regulation

In the United States, the information that must be submitted to the FDA in order to obtain approval to market a new drug varies depending on whether the drug is a new product whose safety and effectiveness has not previously been demonstrated in humans or a drug whose active ingredient(s) and certain other properties are the same as those of a previously approved drug. A new drug will follow the New Drug Application, or NDA, route.

NDA Approval Processes

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, and implementing regulations. Failure to comply with the applicable regulatory requirements at any time may result in administrative or judicial sanctions. These sanctions could include the FDA’s imposition of a clinical hold on trials, refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. Any agency or judicial enforcement action could have a material adverse effect on us.

The testing and approval process requires substantial time, effort, and financial resources, and each may take several years to complete. The FDA may not grant approval on a timely basis, or at all. We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our products. The FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the products. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval.

Post-Approval Requirements

After regulatory approval of a product is obtained, we are required to comply with a number of post-approval requirements. For example, as a condition of approval of an NDA, the FDA may require post marketing testing and surveillance to monitor the product’s safety or efficacy. In addition, holders of an approved NDA are required to report certain adverse reactions and production problems to the FDA to provide updated safety and efficacy information and to comply with requirements concerning advertising and promotional labeling for their products. Also, quality control and manufacturing procedures must continue to conform to cGMP after approval. The FDA periodically inspects manufacturing facilities to assess compliance with cGMP, which imposes certain procedural, substantive, and recordkeeping requirements. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

Foreign Regulation

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary greatly from country to country.

Under European Union regulatory systems, we may submit marketing authorizations either under a decentralized procedure or, if our product is eligible, under a centralized procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The decentralized procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an application to the remaining member states. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval.

Reimbursement

In both domestic and foreign markets, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third party payors to those who use our products. Third party payors include government health administrative authorities, managed care providers, private health insurers and other organizations. These third party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to the coverage status and reimbursement amount of newly approved healthcare product candidates. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products. Depending on the results of such studies, our product candidates may not be considered cost-effective. Adequate third party reimbursement may not be available to health care providers to cover the costs of using any products we may develop, which may not allow us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Employees

We believe that our success will depend greatly on our ability to identify, attract, and retain capable employees. As of January 31, 2010, we had four full time employees. Our employees are not represented by any collective bargaining unit, and we believe our relations with our employees are good.

DESCRIPTION OF PROPERTY

Our executive offices occupy approximately 2,000 square feet in an executive office suite in Alpharetta, GA.

LEGAL PROCEEDINGS

Curaxis is a party to the legal proceedings described below, which relate primarily to claims by various trade creditors arising in connection with Curaxis’ truncated ALADDIN 301 trial.

In 2008, Aptuit, Inc. obtained a judgment for approximately $1.1M, relating to work it performed for Curaxis in connection with our truncated ALADDIN 301 trial. We subsequently entered into a settlement agreement with Aptuit that requires payment of $900,000 over the next two years to satisfy this judgment.

In 2009, Genzyme Corporation obtained a judgment for $424,000 relating to leuprolide supplied to Curaxis in 2006 for our truncated ALADDIN 301 trial. . Genzyme has informally agreed through their counsel to defer any collection activities until aprroximately mid-2010 and we expect to have discussions with Genzyme to establish a payment schedule for this judgment at that time.

In 2009, Margolin Brain Institute obtained a default judgment for $128,469, including interest and attorneys fees, relating to work it performed in our truncated ALADDIN 301 trial. We expect to engage in discussions concerning settlement and payment of this judgment later in 2010.

In 2009, Premier Research Atlanta, Inc. filed a suit which relates to a claim for approximately $45,000 for statistical services in connection with clinical trials.The suit is in the discovery phase and Curaxis believes it has defenses to this claim, although no prediction can be made as to its outcome at this time.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS

Name

Age

Title

Patrick S. Smith

Chairman of the Board, President and Chief Executive Officer

David J. Corcoran

Executive Vice President, Chief Financial Officer and Director

Judith S. T.Geaslen

Vice President of Finance

Sheldon L. Goldberg

Director

William E. McConville

Director

Ronald V. Pompeo

Director

Patrick S. Smith is a co-founder of Curaxis and has served as Curaxis’ President, Chief Executive Officer and a director since its inception in February 2001. From December 1992 to February 2001, Mr. Smith was involved with various charitable and philanthropic causes, which principally involved developing not-for-profit private schools. In 1981 Mr. Smith founded Critical Care America, an alternative-site healthcare company, and served as Chairman and Chief Executive Officer until November 1992. Mr. Smith has served as a member of the boards of directors of various privately-held corporations including Integrated Care Systems, Cardio-Care America, Women’s Care America, Pediatricare America, Infusion Centers America and Naples Community Hospital System, Inc. Mr. Smith is a graduate of John Carroll University and holds an Honorary Doctorate from New York Medical College.

David J. Corcoran is a co-founder of Curaxis and has served as Curaxis’ Chief Financial Officer and a director since its inception in February 2001. From September 1999 to February 2001, Mr. Corcoran was a self-employed consultant working with Mr. Smith in certain of his charitable activities which principally involved developing not-for-profit private schools. In June 1996, Mr. Corcoran co-founded MedNet Affiliates, a provider of office-based orthopedic services and served as Vice President and a director until August 1999. He also previously served as general counsel to Critical Care America from its founding in 1981 through 1992. Mr. Corcoran is a graduate of Bowdoin College and of Northwestern University School of Law.

Judith S. T. Geaslen has been our Vice President of Finance and Chief Accounting Officer since January 2010 after serving as Corporate Controller and Accountant since July 2004. From March 1999 to April, 2000, Ms. Geaslen served as Vice President and Corporate Controller at Wilmington Trust Corporation, a financial holding company engaged in providing a range of banking and other financial services through its banking and other subsidiaries, and from1994 to 1999, served as Vice President and Manager of the Asset Review Division. From September 1984 to September 1994, Ms. Geaslen was employed by Ernst & Young, a registered public accounting firm, mostly recently serving as Audit Senior Manager. Ms. Geaslen is a graduate of Saint Mary’s College, Notre Dame, Indiana.

Sheldon L. Goldberg has been a director since February 2006 and served as our Senior Vice President of Corporate Development from April 2005 through December 2008. From October 2002 to March 2005, Mr. Goldberg served as President and Chief Executive Officer of the Alzheimer’s Association, a patient advocacy group for Alzheimer’s disease. From September 1999 to May 2005, Mr. Goldberg served as Chairman of the Board of AARP Services Inc. a subsidiary of AARP which markets products and services to AARP members. From October 1995 to October 2002, Mr. Goldberg served as President and Chief Executive Officer of the Jewish Home and Hospital Lifecare Systems in New York, a long-term care health provider. Mr. Goldberg is a graduate of the University of the Wisconsin.

Father William E. McConville has been a director since February 2006. Since September 2001, Father McConville has been associate pastor for St. Francis of Assisi. From July 1989 to June 2001, he was a professor of religious studies at Sienna College. Father McConville has served as a member of the boards of directors and board of trustees of various educational and charitable institutions. Father McConville is a graduate of Catholic University of America and received his M.A. in Theology from Washington Theological Union and his Ph.D. in Systematic Theology from Vanderbilt University. Father McConville is a member of the Order of Friars Minor.

Ronald V. Pompeo has been a director since July 2009. Mr. Pompeo is a long-time shareholder of Curaxis and is President and CEO of Rudy V. Pompeo, Inc., a general construction contractor based in Weymouth, Massachusetts. In addition, Mr. Pompeo is active in a number of volunteer and not for profit organizations. He is a graduate of Boston College.

EXECUTIVE COMPENSATION

2009 SUMMARY COMPENSATION TABLE

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers and directors by us during the period ended December 31, 2009, 2008, and 2007.

								Non-Equity
								Incentive
				Stock		Option		Plan	All Other
Name and Principal Position	Year	Salary ($)	Bonus ($)(1)	Awards ($)		Awards ($)		Compensation ($)	Compensation ($)		Total ($)
(a)	(b)	(c)	(d)	(e)		(f)		(g)	(h)		(i)
Patrick S. Smith,	2009	$87,500	None	None		$48,290	(3)	None	$13,000	(6)	$148,790
President, Chief Executive Officer	2008	$126,783	None	None		$53,348	(4)	None	$13,361	(7)	$193,492
and Chairman of the Board	2007	$192,500	None	None		$75,442	(5)	None	$13,361	(7)	$281,303

David J. Corcoran,	2008	$74,375	None	None		$36,219	(3)	None	$10,250	(8)	$120,844
Executive Vice President,Chief	2008	$97,167	None	None		$40,011	(4)	None	$10,361	(9)	$147,539
Financial Officer and Director	2007	$147,500	None	None		$56,583	(5)	None	$10,361	(9)	$214,444

Judith S. T. Geaslen	2008	$50,000	None	None		$52,274	(3)	None	5,460	(10)	$107,734
Vice President, Finance	2008	$80,514	None	None		$35,487	(4)	None	None		$116,001
	2007	$85,200	None	None		$35,389	(5)	None	None		$120,589

Sheldon L. Goldberg,	2008	None	None	$30,000	(12)	$137,443	(3)	None	None		$167,443
Director and Former Senior Vice	2008	$31,950	None	None		$112,253	(4)	None	$1,361	(11)	$145,564
President, Corporate Development(1)	2007	$124,500	None	None		$111,973	(5)	None	$7,361	(11)	$243,834

William E. McConville	2009	None	None	None		$64,729	(3)	None	None		$64,729
Director	2008	None	None	None		$89,976	(4)	None	None		$89,976
	2007	None	None	None		$84,982	(5)	None	None		$84,982

Ronald V. Pompeo	2009	None	None	None		$526	(3)	None	None		$526
Director(2)	2008	None	None	None		None		None	None		None
	2007	None	None	None		None		None	None		None

(1)	Mr. Goldberg resigned as Senior Vice President, Corporate Development effective December 31, 2008. Mr. Goldberg continues as a member of the Board of Directors. The information in this table for Mr. Goldberg relates to compensation he received in his capacity as Senior Vice President, Corporate Development 2007 and 2008 compensation he received in his sole capacity as a Board member for 2009.

(2)	Mr. Pompeo was elected to the Board of Directors effective July 2009.

(3)	Represents the aggregate expense under SFAS No. 123R recognized by Curaxis for 2009 as a result of option awards held by the applicable executive officer, disregarding estimated forfeitures. Assumptions made in the SFAS No. 123R valuation were consistent with those applied in years 2008 and 2007. For a description of these assumptions, see Notes 1 and 6 to the financial statements for the year ended December 31, 2008

(4)	Represents the aggregate expense under SFAS No. 123R recognized by Curaxis for 2008 as a result of option awards held by the applicable executive officer, disregarding estimated forfeitures. For a description of the assumptions made in the SFAS No. 123R valuation, see Notes 1 and 6 to the financial statements for the year ended December 31, 2008.

(5)	These options vest as to 20% on May 18, 2007 and 20% vested on each May 18th thereafter based on continued employment through May 18, 2011.

(6)	Represents car allowance of $3,000 plus retention payment of $10,000.

(7)	Represents annual car allowance of $12,000 plus the value of our contributions on behalf of Mr. Smith under our long-term disability insurance plan.

(8)	Represents car allowance of $2,250 plus retention payment of $8,000.

(9)	Represents annual car allowance of $9,000 plus the value of our contributions on behalf of Mr. Corcoran under our long-term disability insurance plan.

(10)	Represents car allowance of $1,800 plus retention payment of $3,660.

(11)	Represents annual car allowance of $6,000 for 2006 and 2007 plus the value of our contributions on behalf of Mr. Goldberg under our long-term disability insurance plan.

(12)	Represents the fair value of 150,000 shares of Curaxis common stock granted to Mr. Goldberg to satisfy, in full, amounts due under an original five-year employment contract.

Explanatory Information Relating to 2009 Summary Compensation Table

Please note the following points in connection with the information in the 2009 Summary Compensation Table:

•

The compensation of the executive officers of Curaxis is reviewed on an annual basis by the Board of Directors. Each year, Curaxis considers whether to adjust the base salaries of senior management, including the executive officers, in order to reward individual performance, keep pace with cost of living increases and respond to competitive considerations. However, due to lack of funding, no increases have been rewarded to senior management and executive officers during the three years ended December 31, 2009. In many cases, base salaries have been reduced significantly. No accruals have been made to compensate officers for the reduced wages in future periods.

OUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR-END

	Option Awards					Stock Awards
									Equity
									Incentive
								Equity	Plan
								Incentive	Awards:
								Plan	Market
								Awards:	or Payout
								Number	Value of
							Market	of Unearned	Unearned
	Number of	Number of				Number of	Value of	Shares,	Shares,
	Securities	Securities				Shares or	Shares or	Units or	Units or
	Underlying	Underlying				Units of	Units of	Other	Other
	Unexercised	Unexercised	Option			Stock That	Stock That	Rights	Rights That
	Options	Options	Exercise		Option	Have Not	Have Not	That Have	Have
	(#)	(#)	Price		Expiration	Vested	Vested	Not Vested	Not Vested
Name	Exercisable	Unexercisable	($)		Date	(#)	($)	(#)	($)
(a)	(b)	(c)	(d)		(e)	(f)	(g)	(h)	(i)
Patrick S. Smith(1)	240,000	—	$	0.83	06/20/12	—	—	—	—
Patrick S. Smith(2)	80,000	—	$	2.00	09/15/13	—	—	—	—
Patrick S. Smith(3)	32,000	8,000	$	8.00	01/17/15	—	—	—	—
Patrick S. Smith(4)	72,000	48,000	$	1.51	02/05/17	—	—	—	—
David J. Corcoran(1)	180,000	—	$	0.83	06/20/12	—	—	—	—
David J. Corcoran(2)	60,000	—	$	2.00	09/15/13	—	—	—	—
David J. Corcoran(3)	24,000	16,000	$	8.00	01/17/15	—	—	—	—
David J. Corcoran(4)	54,000	36,000	$	1.51	02/05/17	—	—	—	—
Judith S. T. Geaslen(7)	3,500	—	$	4.00	12/01/14	—	—	—	—
Judith S. T. Geaslen(3)	4,000	1,000	$	8.00	01/17/15	—	—	—	—
Judith S. T. Geaslen(8)	800	200	$	10.00	05/04/15	—	—	—	—
Judith S. T. Geaslen(5)	20,000	5,000	$	6.00	05/18/16	—	—	—	—
Judith S. T. Geaslen(4)	18,000	12,000	$	1.51	02/05/17	—	—	—	—
Judith S. T. Geaslen(13)	100,000	—	$	0.20	02/19/19	—	—	—	—
Sheldon Goldberg(9)	18,000	4,500	$	8.00	04/18/15	—	—	—	—
Sheldon Goldberg(10)	42,000	8,000	$	8.00	04/18/15	—	—	—	—
Sheldon Goldberg(8)	8,000	2,000	$	10.00	05/04/15	—	—	—	—
Sheldon Goldberg(5)	48,000	12,000	$	6.00	05/18/16	—	—	—	—
Sheldon Goldberg(4)	54,000	36,000	$	1.51	02/05/17	—	—	—	—
Sheldon Goldberg(14)	150,000	—	$	0.20	09/08/19	—	—	—	—
William E. McConville(11)	35,000	—	$	6.00	02/20/16	—	—	—	—
William E. McConville(12)	60,000	40,000	$	1.51	02/05/17	—	—	—	—
William E. McConville(6)	20,000	30,000	$	1.00	06/11/17	—	—	—	—
William E. McConville(14)	150,000	—	$	0.20	09/08/19	—	—	—	—
Ronald V. Pompeo (15)	50,000	—	$	0.20	09/08/19	—	—	—	—

(1)	These stock options vested as to 20% of the shares on June 20, 2003 and 20% vested on each June 20th thereafter based on continued employment through June 20, 2007.

(2)	These stock options vested as to 20% of the shares on September 15, 2004 and 20% vested on each September 15th thereafter based on continued employment through September 15, 2008.

(3)	These stock options vested as to 20% of the shares on January 17, 2006 and 20% vested on each January 17th thereafter based on continued employment through January 17, 2010.

(4)	These stock options vested as to 20% of the shares on January 1, 2008 and 20% vested on each January 1st thereafter based on continued employment through January 1, 2012.

(5)	These stock options vest as to 20% on May 18, 2007 and 20% vested on each May 18th thereafter based on continued employment through May 18, 2011.

(6)		These stock options granted to Senior officers and non-employee Board members vested as to 20% of the shares on June 11, 2008 and 20% vested on each June 11th thereafter based on continued employment or service as a director of Curaxis through June 11, 2012 provided that such vesting shall be accelerated and each such option shall become fully-vested upon the first to occur of any of the following: (1) a sale by the Corporation of all or substantially all of its assets or similar acquisition or merger transaction approved by the Board; (2) closing of an out licensing transaction or similar collaboration agreement by the Corporation that is approved by the Board and provides Curaxis with at least $5 million in upfront cash payments at closing; or (3) closing of an equity investment in the Corporation by one or more institutional investors totaling at least $15 million at closing.

(7)		These stock options granted to Ms. Geaslen upon employment vested as to 20% of the shares on December 1, 2005 and 20% vested on each December 1st thereafter based on continued employment through December 1, 2009.

(8)		These stock options vested as to 20% of the shares on May 4, 2006 and 20% vested on each May 4th thereafter based on continued employment through May 4, 2010.

(9)		These stock options vested as to 20% of the shares on April 18, 2006 and 20% vested on each April 18th thereafter based on continued employment through April 18th 2010.

(10)		These stock options granted to Mr. Goldberg upon employment vested as to 20% of the shares at April 18, 2005 and 16% vested on each April 18th thereafter based on continued employment through April 18th 2010.

(11)		These stock options vested as to 1/3 of the shares on February 20, 2007 and 1/3 vested on each February 20th thereafter until fully vested based on continued service as a director of Curaxis.

(12)		These stock options vested as to 20% of the shares on January 1, 2008 and 20% vested on each January 1st thereafter through January 1, 2012 based on continued service as a director of Curaxis.

(13)		These stock options vested as to 100% of the shares on the grant date of February 19, 2009.

(14)		These stock options vested as to 100% of the shares on the grant date of September 9, 2009.

(15)		These stock options vested as to 20% of the shares on September 8, 2009 and 20% vested on each September 8th thereafter through September 8, 2014 based on continued service as a director of Curaxis.

BENEFICIAL OWNERSHIP OF CURAXIS SHARES

The following table sets forth information known to Curaxis with respect to the beneficial ownership of Curaxis's common stock as of December 31, 2009, unless otherwise noted, by:

	•	each stockholder known to Curaxis to own beneficially more than 5% of Curaxis’ common stock;

	•	each of Curaxis’ directors;

	•	each of Curaxis’ executive officers, including each of the Named Executive Officers listed in the “2009 Summary Compensation Table” included in this proxy statement; and

	•	all of Curaxis’ current directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or dispositive power with respect to securities. Ordinary shares relating to options or warrants currently exercisable, or exercisable within 60 days of December 31, 2009, are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to the community property laws where applicable, the persons or entities named in the tables have sole voting and dispositive power with respect to all shares shown as beneficially owned by them. Except as otherwise noted in the tables below, the address of each person or entity listed in the table is c/o Curaxis Pharmaceutical Corporation, 12600 Deerfield Parkway, Suite 100, Alpharetta, Georgia 30004.

	Amount and Nature
	of Beneficial Ownership			Percentage
Name and Address	of Ordinary Shares (1)			of Total

DIRECTORS AND EXECUTIVE OFFICERS
Patrick S. Smith, President, Chief Executive Officer and Director		13,306,453	(2)		19.6%
David J. Corcoran, Executive Vice President, Chief Financial Officer and Director		3,657,961	(3)		5.4%
Judith S. T. Geaslen, Vice President, Finance		157,100	(4)		—
Sheldon Goldberg, Former Senior Vice President, Corporate Development and Director		615,000	(5)		—
William E. McConville, Director		265,000	(6)		—
Ronald V. Pompeo, Director		60,800	(7)		—
All current directors and executive officers as a group (6 persons)		18,062,314	(8)		25.6%

SHAREHOLDERS OWNING MORE THAN 5%
Richard L. Bowen		10,162,560			14.9%

Jerry Smith, et al.		3,492,500	(9)		5.1%

—	Less than 1%
(1)	Based on 62,810,774 shares of common stock issued and outstanding as of December 31, 2009, assuming exercise of the 5,327,089 warrants outstanding at December 31, 2009, but assuming no exercise of outstanding options.
(2)	Includes 432,000 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of December 31, 2009. Also includes 4,345,000 shares owned by the Patrick S. Smith Charitable Remainder Trust, of which Mr. Smith is the trustee, and 300,000 shares held by RBC Dain Rauscher Inc. as custodian for Patrick S. Smith IRA.
(3)	Includes 324,000 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of December 31, 2009, and 741,382 shares and 36,150 warrants owned by the Patrick S. Smith Irrevocable Trust u/d/t dated June 25, 1991, for which David J. Corcoran serves as trustee. Mr. Corcoran has full investment and voting power over the shares held in the Trust, but disclaims beneficial ownership thereof. Also includes 87,000 shares held by the David J. Corcoran Rollover IRA.
(4)	Includes 147,300 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of December 31, 2009. Also includes 4,000 shares held by Wachovia Securities as custodian fbo Judith S. T. Geaslen.
(5)	Includes 320,000 shares of Common Stock issuable upon exercise of stock options exercisable within 60 days of December 31, 2009. Also includes 50,000 shares owned by Shelberg LLC of which Sheldon Goldberg is the general partner and 185,000 shares and 60,000 warrants held by the Sheldon Goldberg Trust for which Sheldon L, Goldberg is the trustee.
(6)	Includes 265,000 shares of Common stock issuable upon the exercise of stock options exercisable within 60 days of December 31, 2009.
(7)	Includes 5,000 shares and 30,000 warrants held by Charles Schwab &Co., Inc. as custodian for the Ronald V. Pompeo IRA.
(8)	See notes 1-7 above.
(9)	Includes 1,662,500 shares owned by Jetsmith Partnership of which Jerry Smith is the general partner and 885,000 shares held by Charles Schwab &Co., Inc. as custodian for the Jerry Smith IRA.

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

There are no reportable transactions with Related Persons, Promoters and Certain Control Persons

MARKET FOR COMMON STOCK

There is presently no public market for shares of Curaxis Common Stock.

Curaxis is authorized to issue 100,000,000 shares of common stock, par value $0.001. As of February 5, 2010, there were 63,943,574 shares of Curaxis Common Stock issued and outstanding.

DESCRIPTION OF SECURITIES

Common Stock

As of February 5, 2010, there were 63,943,574 shares of Curaxis Common Stock issued and outstanding. The holders of shares of Curaxis Common Stock have no subscription, redemption, subscription, sinking fund or conversion rights. In addition, the holders of shares of Curaxis Common Stock have no preemptive rights to maintain their percentage of ownership in future offerings or sales of Curaxis Common Stock. The holders of shares of Curaxis Common Stock have one vote per share in all elections of directors and on all other matters submitted to a vote of Curaxis’ stockholders. The holders of Curaxis Common Stock are entitled to receive ratably dividends, if any, as and when declared from time to time by the Curaxis Board of Directors out of funds legally available therefor. Upon liquidation, dissolution or winding up of Curaxis’ affairs, the holders of Curaxis Common Stock will be entitled to participate equally and ratably, in proportion to the number of shares held, in Curaxis’ net assets available for distribution to holders of Curaxis Common Stock. The shares of Curaxis Common Stock currently outstanding are fully paid and nonassessable.

Preferred Stock

We have no preferred shares authorized.

Warrants

From January 2006 though May 2007, Curaxis raised $16.6 million through the sale of 1,661,000 units at $10 per unit. A unit consisted of one share of common stock and warrants to purchase two additional shares of common stock at $12 per share. Curaxis amended this offering on August 21, 2006. Under the amendment each unit consists of one share of common stock and warrants to purchase six additional shares of common stock at $0.10 per share. As of February 5, 2010, 3,486,384 warrants remain outstanding. These warrants to purchase common stock expire in 2011.

During 2008, the Curaxis issued stock purchase warrants to select vendors to satisfy, in part, liabilities generated from services performed in conjunction with it's terminated Phase III clinical trial, VP-AD-301. The warrants provide for the purchase 54,800 shares of common stock at $.50 per share and expire on December 31, 2011.

On May 28, 2009 Curaxis entered into a Transaction Management Agreement with Southridge Business Solutions Group LLC (“Southridge”). Under the terms of the Agreement, the Company retained Southridge, on a non-exclusive basis, to provide services to enable the Company to restructure its balance sheet and execute a potential public offering or other public transaction.

As part of the consideration for the services to be provided, Curaxis issued a total of 1,656,549 warrants to Southridge to purchase the company‘s stock at $.001 per share. The warrants provide for a cashless exercise and expire seven years after the date of issuance. Per the agreement, additional warrants will be issued at the transaction date in so that the total warrants issued to Southridge equal 3% of the outstanding shares of common stock of the surviving corporation.

On June 12, 2009 Curaxis engaged Canterbury Investment Partners LLC (“Canterbury’) to assist Curaxis in negotiating reductions, deferrals or equity exchanges with its trade creditors and in developing a strategy to raise equity from current and prospective investors. In exchange for the services to be provided, Curaxis paid Canterbury a retainer and agreed to a monthly management fee for a for a period of twelve months commencing September 1, 2009 when Curaxis raised $600 thousand in new equity investment. Further, Curaxisis to issue warrants to Canterbury equal to 10% of the number of shares issued by Curaxis in new equity raised for cash consideration from the date of the agreement to the date a public transaction is completed which are to be priced at 110% of the per share price for the new equity or $0.22. The warrants are to have registrations rights and a cashless exercise feature.

On September 15, 2009, Curaxis entered into an agreement with GroupMark Financial Services Ltd. to perform investor relation services and develop Curaxis's new website. Upon completion of the website, as part of the consideration for the services rendered, Curaxis is to issue 100,000 warrants to GroupMark to purchase shares of the company’s common stock at $0.30 per share. The warrants will provide for a cashless exercise and expire five years from the date of issuance.

EXPERTS

The financial statements for Curaxis for the years ended 2008, 2007, 2006, included in this prospectus, and included in the Registration Statement, were audited by Rosenberg Rich Baker Berman and Company, an independent registered public accounting firm, as stated in their report appearing with the financial statements herein and incorporated in this Registration Statement, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the sections of the information statement/prospectus entitled “Information about the Companies — Curaxis Pharmaceutical Corporation.” beginning on page 4 and “Risk Factors” beginning on page 16, as well as Curaxis’ financial statements and related notes contained elsewhere in this information statement/prospectus. This discussion contains forward-looking statements based on Curaxis’ current expectations. There are various factors — many beyond Curaxis’ control — that could cause Curaxis actual results or the occurrence or timing of expected events to differ materially from those anticipated in these forward-looking statements. Some of these factors are described below and other factors are described elsewhere in this information statement/prospectus, including above under “Risks Factors” beginning on page 16. In addition, there are factors not described in this information statement/prospectus that could cause actual results or the occurrence or timing of expected events to differ materially from those anticipated in these forward-looking statements. All forward-looking statements included in this information statement/prospectus are based on information available to Curaxis as of the date hereof, and, except as required by law, Curaxis assumes no obligation to update any such forward-looking statements.

Overview

Curaxis is an emerging specialty pharmaceutical company with a pipeline of product candidates in Alzheimer’s disease and oncology. Our therapeutic platform is based on the hypothesis that many diseases of aging may be caused by age-related dysregulation of the hypothalamic-pituitary-gonadl (HPG) axis. We believe that our discovery of a duplicate HPG axis at the cellular level in brain tissue from Alzheimer’s patients and in multiple tumors may enable us to develop significant new treatments for Alzheimer’s disease as well as many tumors.

Curaxis’ most advanced product candidate is Memryte, a proprietary, small, biodegradable implant that is comprised of leuprolide acetate and a polymer, VP4896, that we are developing for the treatment of mild to moderate Alzheimer’s disease. From inception through early 2006, Curaxis completed two Phase II clinical trials, Aladdin I and Aladdin II, to support the efficacy of its drug candidate in women and men, respectively. In addition, a Phase I trial was completed to support safety and the release profile of the proprietary subcutaneous implant. In August 2006, Curaxis completed enrollment in Aladdin 301, the first of its two Phase III clinical trials of the VP4896 implant for the treatment of mild to moderate Alzheimer’ s disease. In October 2006, this trial was discontinued due to financial constraints and converted to a Phase II trial. At the time of termination, approximately 625 patients had been enrolled at 62 sites located throughout the United States and Canada.

We were incorporated in February 2001, as Angel Care, Inc. and subsequently changed our name to Angel Care America, Inc (“Angel Care”). Angel Care was founded to provide support services for a clinic-based treatment program for Alzheimer’s disease and conducted only limited operations. In November 2001, Angel Care merged with Voyager Pharmaceutical Corporation and the surviving corporation remained Voyager Pharmaceutical Corporation (“Voyager”). In December 2009, Voyager changed its name to Curaxis Pharmaceutical Corporation.

Since our inception, we have not received approval to market any product, have had no revenues from product sales and have devoted substantially all of our efforts to the development of our treatment for mild to moderate Alzheimer’s disease. We have funded our operations primarily through the sale of common stock and warrants to private investors, which have provided net cash proceeds of approximately $74.3 million as of September 30, 2009. We have never been profitable and, as September 30, 2009, we had an accumulated deficit of $86.8 million. We had net losses of $1.9 million, $6.7 million and $28.2 million for the three years ended December 31, 2008, 2007 and 2006, respectively, and a net loss of $55.6 million for the cumulative period from inception through December 31, 2007. Net income of $5.8 million was recognized for the nine months ended September 30, 2008 as a result of successful restructuring of trade debt. At September 30, 2009 we had $0.9 million in cash and cash equivalents. We expect our minimum cash needs to fund our operating expenses and capital expenditures for the twelve-month period ending September 30, 2010 to be approximately $3.3 million. We expect to incur significant and increasing operating losses for at least the foreseeable future as we advance our drug candidates from research through preclinical testing and clinical trials and seek regulatory approval and eventual commercialization for any drug candidates that may receive regulatory approval. We will need to generate significant revenues to achieve profitability and may never do so.

We do not expect to generate revenue for at least the next several years. We expect that our operating expenses will continue to increase and may vary substantially from quarter to quarter and year to year based on the timing of clinical trial patient enrollment and our other research and development activities. In particular, as we initiate a second Phase II and pivotal Phase III trials of Memryte, our lead drug candidate for the treatment of mild to moderate Alzheimer’s disease, we expect that our research and development expenses will increase significantly. We expect general and administrative costs also to increase as we add personnel and begin to operate as a public company. In connection with our preparation for the commercial launch of Memryte, we expect that our capital expenditures may increase as a result of increased manufacturing equipment costs. We plan to establish our own commercialization capability, including a large field sales force in the United States, and expect to incur significant costs related to marketing and sales activities prior to the time we generate any revenue. We believe that period-to-period comparisons of our results of operations are not meaningful and should not be relied on as indicative of our future performance.

The successful development of pharmaceuticals, including our lead product candidate, Memryte, for the treatment of mild to moderate Alzheimer’s disease, is uncertain. We estimate that we will incur expenses of at least $48 million over the course of the next several years in order to complete the clinical development of Memryte in accordance with our current development plan and seek FDA approval to market Memryte. If we or the FDA cause a change or delay in our development plan for Memryte, our costs could increase substantially. We cannot reasonably estimate or know the nature, timing and estimated expenses of the efforts necessary to complete the remainder of the development of, or the period, if ever, in which material net cash inflows will commence from Memryte for this indication or other product candidates due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

·	the scope, rate of progress and expense of our clinical trials and other research and development activities;

·	future clinical trial results;

·	the expense, timing and outcome of seeking regulatory approvals;

·	the expense of establishing clinical and commercial supplies of our product candidates and anyproducts that we may develop;

·	the effect of competing technological and market developments; and

·	the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

We do not expect to generate product revenue for at least the next several years, if at all. If any of our programs experience delays or do not result in a commercial product, we would not generate revenue from that program in a timely manner or at all.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations set forth below are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or “GAAP.” The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those described below. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following accounting policies are the most critical to our financial statements. We believe they are important to the presentation of our financial condition and require the greatest degree of management judgment to make the estimates necessary to ensure their fair presentation.

Accrued Expenses

As part of the process of preparing financial statements, we are required to estimate accrued expenses. This process involves identifying services which have been performed on our behalf and estimating the level of service performed and the associated cost incurred for such service as of each balance sheet date in our financial statements. Services for which we must estimate accrued expenses include:

·	costs of services performed by contract research organizations and clinical sites in conjunction with clinical trials;

·	costs of services performed by contract manufacturers in conjunction with the production of clinical trial materials; and

·	professional service fees and expenses.

In accruing service fees, we estimate the time period over which services will be provided and the level of effort in each period. If the actual timing of the provision of services or the level of effort varies from the estimate, we will adjust the accrual accordingly. The majority of our service providers invoice us monthly in arrears for services performed. In the event that we do not identify costs that have begun to be incurred or we underestimate or overestimate the level of services performed or the costs of such services, our actual expenses could differ from such estimates. The date on which some services commence, the level of services performed on or before a given date and the cost of such services are often subjective determinations. We make judgments based upon the facts and circumstances known to us in accordance with GAAP.

Research and Development

We expense all research and development costs as incurred. Research and development expense includes, among other things, clinical trial costs. We account for our clinical trial costs by estimating the total cost to treat a patient in each clinical trial and recognizing this cost, based on a variety of factors, beginning with the preparation for the clinical trial. This estimated cost includes payments to our contract research organizations for trial site and patient-related costs, including laboratory costs related to the conduct of the trial, and other costs. Our cost per patient varies based on the type of clinical trial, the site of the clinical trial and the length of the treatment period for each patient. As actual costs become known to us, we adjust our accrual. These changes in estimates may result in a material change in our clinical study accrual, which could materially affect our results of operations. Research and development expenses includes those costs described under “Financial Operations Overview—Research and Development” below.

Stock-Based Compensation

As a normal practice, we compensate employees and non-employee directors through stock-based compensation. We apply Statement of Financial Accounting Standards No. 123R Share-based Payment, codified in ASC 718 Compensation – Stock Compensation, to stock-based compensation awards. SFAS No. 123R requires the measurement and recognition of non-cash compensation expense for all share-based payment awards made to employees and directors, including employee stock options related to our 2001 Stock Option Plan and 2005 Stock Option Plan, based on fair values. We adopted this Statement on January 1, 2006 using the modified prospective application.

Stock compensation arrangements with non-employee service providers are accounted for in accordance with EITF No. 96-18, Accounting for Equity Instruments that are issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, codified in ASC 505-50 Equity-Based Payments to Non-Employees, using a fair value approach. The compensation costs of these arrangements are subject to remeasurement over the vesting terms as earned.

The measurement of stock-based compensation requires the use of complex option pricing models and application of judgment in selecting the appropriate valuation assumptions, such as volatility and expected term. We value our stock-based compensation using the Black-Scholes option pricing model and the single option award approach, in accordance with the requirements of SFAS No. 123R and Staff Accounting Bulletin (SAB) No. 107, Share-Based Payment.

Curaxis does have sufficient history of exercise behavior to develop estimates of expected terms since as of December 31, 2008, no options issued since inception of the plans have been exercised. The expected remaining terms is based on the contractual life on the options granted and the estimated time period to elapse prior to commercialization of the Curaxis’ initial product. For options to outside consultants, Curaxis uses a term which is equal to the average the period required for the options to fully vest and the contractual life of the option. As we gather more history regarding its option exercise pattern, and as information regarding the option pattern of comparable companies in its industry becomes publically available, it will review these estimates and revise them as appropriate. Different estimates of volatility and expected term could materially change the value of an option and the resulting expense.

In addition, we monitor equity instruments with non-standard provisions, such as performance-based vesting conditions, accelerated vesting based on achievement of performance milestones and features that require instruments to be accounted for as liabilities. We account for transactions in which services are received from non-employees in exchange for equity instruments based on the fair value of such services received or of the equity instruments issued, whichever is more reliably measured, in accordance with SFAS No. 123 and the 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.

Accounting for equity instruments granted or issued by us under SFAS No. 123 and EITF Issue No. 96-18 requires fair value estimates of the equity instrument granted or sold. If our estimates of the fair value of these equity instruments are too high or too low, our expenses may be over or understated. The fair value of our common stock is determined by our board of directors. In the absence of a public trading market for our common stock, our board of directors considers objective and subjective factors in determining the fair value of our common stock. In all periods, the board of directors evaluated events that provided indicators of the fair value of our common stock. These events included, depending on the period, the purchase price of our common stock that was issued in private placements during the three years ended December 31, 2008 and the results of our clinical trials. Based on these factors, our board of directors determined that the value of the common stock underlying the stock options granted to employees through September 30, 2009 had a fair value that was equal to the exercise price.

Financial Operations Overview

Revenue

We have not yet generated any product revenue and do not expect to generate any product revenue for at least the next several years. We will seek to generate revenue from product sales if any of our drug candidates receive marketing approval and we begin commercial activities. We expect that any revenue we generate will fluctuate from quarter-to-quarter as a result of the timing, nature and amount of our commercialization activities, whether through direct sales by us or by payments under distribution or other collaboration agreements.

Research and Development Expense

Research and development expense consists primarily of:

·	salaries and related expenses for personnel engaged in research and development activities;

·	fees paid to contract research organizations and clinical sites in conjunction with clinical trials;

·	fees paid to contract manufacturers in conjunction with the production of clinical materials;

·	fees paid to research organizations in conjunction with preclinical studies;

·	costs of materials used in research and development;

·	consulting and sponsored research fees paid to third parties; and

·	fees paid to external legal counsel and third parties filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

·	depreciation of capital assets used to discover and develop our product candidates.

We expense both internal and external research and development costs as incurred. Research and development expenses have diminished over the last several years due to termination of our clinical trials and closure of our research facility. Upon completion of the Merger, we expect research and development expenses to increase substantially in 2010 and thereafter and due to:

·	initiation of our Phase IIB clinical trials for Memryte for the treatment of mild to moderate Alzheimer’s disease in women;

·	initiation of our Phase III pivotal trials for Memrtye for the treatment of mild to moderate Alzheimer’s disease in women;

·	manufacture of clinical trial materials for these trials and continued development of the production process for Memryte; and

·	increased preclinical testing and clinical trials of its other oncology drug candidates.

Substantially all research and development expenses incurred by Curaxis to date relate to our efforts to develop Memryte for the treatment of mild to moderate Alzheimer’s disease. We expect that a substantial percentage of its research and development expense in the future will be incurred in support of our current and future preclinical and clinical development programs. These expenditures are subject to numerous uncertainties in timing and cost to completion. We test compounds in numerous preclinical studies for safety, toxicology and efficacy. We then conduct clinical trials for each drug candidate. As we obtain results from trials, we may elect to discontinue or delay clinical trials for some product candidates in order to focus our resources on more promising product candidates. Completion of clinical trials may take several years or more, but the length of time generally varies substantially according to the type, complexity, novelty and intended use of a drug candidate. The cost of clinical trials may vary significantly over the life of a project as a result of a variety of factors, including:

·	the number of patients who participate in the trials;

·	the number of sites included in the trials;

·	the length of time required to enroll trial participants;

·	the duration of the treatment period in the trials;

·	the effect of regulatory requirements on the trials;

·	the duration of patient follow-up; and

·	the efficacy and safety profile of the product candidate.

None of our drug candidates has received FDA or foreign regulatory marketing approval. In order to achieve marketing approval, the FDA or foreign regulatory agencies must conclude that our clinical data establishes the safety and efficacy of the drug candidates.

As a result of the uncertainties discussed above, although duration and costs will be substantial, we are unable to predict accurately the duration and completion costs of our research and development projects or if, when and to what extent we will receive cash inflows from the commercialization and sale of a product.

General and Administrative

General and administrative expense consists primarily of salaries and related expenses for personnel in administrative, finance, operations and human resource functions. Other costs include fees for general legal and other professional services, accounting fees, and directors’ and officers’ liability insurance premiums.

Marketing

Through September 30, 2009, marketing expense consists primarily of salaries and related expenses for personnel responsible for clinical trial recruitment and costs of attendance at various scientific and industry meetings. Other costs include advertising for patient enrollment of clinical trials, promotion materials relating to scientific publications and fees for professional services related to public relations. We expect these expenses to increase significantly as we begin to develop our own commercialization capabilities.

Net Interest Income (expense)

Interest income consists of interest earned on our cash and cash equivalents. Interest expense consists of interest incurred on notes and mortgage debt payable and equipment and insurance premium debt financing.

Results of Operations

Nine Months Ended September 30, 2009 and 2008

The table below summarizes the results of operations of Curaxis for the nine month periods ended September 30, 2009 and 2008.

	For the nine-months ended September 30,
	2009			2008
Operating expenses:
Research and development	$	74		$	69
General and administrative		430			1,218
Marketing		-			-
Total operating expenses		504			1,287
Loss from operations		(504	)		(1,287	)
Gain on debt restructuring		6,562			-
Interest expense (net)		(299	)		(361	)
Net income (loss)	$	5,759		$	(1,648	)

Curaxis accounts for equity awards to employees and non-employee directors and service providers under Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment (SFAS No. 123R) codified in ASC 718 Compensation – Stock Compensation and EITF 96-18. As of September 30, 2009, there was $1.2 million of total unrecognized compensation costs related to unvested stock options. That cost is expected to be amortized on a straight-line basis over a weighted average service period of years. Share-based compensation expenses recorded in the nine months ended September 30, 2009 and 2008 were $0.5 million and $0.3 million, respectively.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Research and Development Expense

	Nine Months Ended
	September 30,
	2009			2008			$ Change		% Change
	(Unaudited - Dollars in thousands)
Research and development costs	$	74		$	69		$	5		7.3	%
Percent of total operating expenses		14.7	%		5.4	%

During 2007, Curaxis terminated all clinical trial activities and closed its’ research facility. As a result, research and development expenses in 2008 and 2009 were limited to salary and benefits costs associated with personnel devoted to research activities, legal fees associated with the pursuit and maintenance of various patents and pending patent applications related to our Alzheimer’s disease and oncology drug candidates and depreciation of remaining capital assets used in the manufacturing of our proprietary implant.

In May of 2008, Curaxis received a refund of $31,000 upon termination of its product liability insurance coverage obtained in anticipation of enrollment of Aladdin 302, the Phase III international clinical trial, and reversed $34,000 in certain costs previously recorded for Aladdin 301, the Phase III domestic clinical trial, upon final reconciliation and settlement with certain clinical sites. The resulting increase in expenses for the nine months ended September 31, 2009 of $65,000 was offset by a decrease in salaries and related benefit costs of $25,000 due to the ultimate termination of all research personnel in early 2008; a decrease in legal fees of $24,000 associated with the company’s patent and pending patent applications; a decrease of $9,000 in depreciation of capital assets due to the ultimate sale of certain lab equipment in early 2008; and a decrease of $2,000 in miscellaneous fees associated with the Company’s research and development activities.

General and Administrative Expenses

	Nine Months Ended
	September 30,
	2009			2008			$ Change		% Change
	(Unaudited - Dollars in thousands)
General and administrative expenses	$	430		$	1,218		$	(788)		(64.7	%)
Percent of total operating expenses		85.3	%		94.6	%

The decrease in general and administrative expenses for the nine months ended September 30, 2009 as compared to the same period for 2008 was primarily related a reduction in payroll and related benefit costs of $1 million. For the seven-month period ended July 31, 2009, no compensation was paid or accrued for any employees including senior officers of Curaxis. In addition $.4 million in bonus expense was reversed in January of 2009 upon the termination of certain employees who had not fulfilled service requirements related to the 2004 Stock Bonus Plan. This decrease was offset by consulting and investment advisory fees paid. Specifically, during the nine-month period ended September 30, 2009, expenses of $.2 million were recognized under agreements executed between the Curaxis and Southridge Business Solutions and Canterbury Investment Partners. Under the agreements executed, Southridge and Canterbury are to assist Curaxis in negotiating settlements with its creditors to eliminate or substantially reduce and defer its trade date and assist Curaxis in merging with a publicly traded corporation to establish a public trading market for its stock.

Gain on Debt Restructuring

	Nine Months Ended
	September 30,
	2009		2008		$ Change		% Change
	(Unaudited - Dollars in thousands)
Gain on debt restructuring	$	6,562	$	-	$	6,562		100	%

On September 23, 2009, Curaxis reached an agreement with one of its vendors to satisfy related trade debt outstanding. The agreement requires Curaxis to make payments totaling $2 million commencing September 1, 2010 and ending March 31, 2012. Curaxis has the right to prepay any balances due without penalty. In addition, Curaxis agreed to prepay the entire balance of such payments in the event of an acquisition of all or substantially all of Curaxis’ assets or stock; in the event our lead product candidate is licensed to a third party; in the event any patent related to our lead product candidate is sold to any third party; or in the event we obtain financing in excess of $20 million. Any payment not made in accordance with the agreement shall bear interest at 18% per annum. A gain totaling $6.5 million was realized on the vendor settlement.

Interest expense, Net

	Nine Months Ended
	September 30,
	2009		2008		$ Change			% Change
	(Unaudited - Dollars in thousands)
Interest expense, net	$	299	$	361	$	(62	)		(17.1	%)

Interest expense, net for the nine-months ended September 30, 2009 and 2008 includes mainly interest accrued on Curaxis’ outstanding promissory notes payable to certain vendors and clinical sites. The majority of the notes outstanding were issued during 2007 and 2008 to satisfy, in part, liabilities generated for services performed in conjunction with the terminated Phase III clinical trial. The decrease in expense for the nine-month period ended September 30, 2009, as compared to the respective period of 2008, can be attributed to judgments issued in late 2008 and early 2009 on two notes outstanding resulting in a decrease in related interest expense of $36,000 and a decrease in interest expense related to the restructured trade debt of $28,000. These decreases were offset by an increase in interest expense recognized on notes to clinical sites of $2 thousand.

Net Income (Loss)

	Nine Months Ended
	September 30,
	2009		2008			$ Change		% Change
	(Unaudited - Dollars in thousands)
Net income (loss)	$	5,759	$	(1,648	)	$	7,407		449.5	%

Net income for the nine months ended September 30, 2009, was $5.7 million, including $6.5 million relating to the restructuring of trade debt, compared to $1.6 million net loss for the same period in 2008. The increase in net income is primarily related to the restructuring of debt and a decrease in operating expenses.

Years Ended December 31, 2008, 2007 and 2006

The table below summarizes the results of operations of Curaxis for each of the years ended December 31, 2008, 2007 and 2006 are as follows:


	Year Ended December 31,
	2008			2007			2006
	(Dollars in thousands)
Operating expenses:
Research and development	$	75		$	3,057		$	21,054
General and administrative		1,433			2,472			5,188
Marketing		-			357			2,074
Loss on lease termination		-			374			-
Total operating expenses		1,508			6,260			28,316
Loss from operations		(1,508	)		(6,260	)		(28,316)
Interest income (expense), net		(478	)		(484	)		81
Net loss	$	(1,986	)	$	(6,744	)	$	(28,235	)

During 2007, Curaxis terminated all clinical trial activities and closed its research facility. As a result, research and development expenses in 2008 were limited to salary and benefit costs associated with remaining personnel devoted to research activities, legal fees associated with the pursuit and maintenance of our patents related to our Alzheimer’s disease and oncology drug candidates and depreciation of remaining capital assets used in the manufacturing of our proprietary implant.

For fiscal year 2007, research and development costs included expenses associated with the closure of clinical trials related out lead drug candidate, Memryte and development of new products as well as enhancements to existing products.

For fiscal year 2007, marketing expenses primarily consisted of salaries and related benefits and overhead costs for employees associated with marketing activities. Such activities were limited to coordination efforts related to the closure of clinical sites.

Curaxis accounts for equity awards to employees and non-employee directors and service providers under Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment (SFAS No. 123R) codified in ASC 718 Compensation – Stock Compensation and EITF 96-18. As of December 31, 2008, there was $0.7 million of total unrecognized compensation costs related to unvested stock options. That cost is expected to be amortized on a straight-line basis over a weighted average service period of years. Stock-based compensation expense recorded in the years ended December 31, 2008, 2007 and 2006 were $0.5 million, $0.9 million and $1.1 million, respectively.

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

Research and Development Expense

	Year Ended
	December 31,
	2008			2007			$ Change			% Change
	(Dollars in thousands)
Research and development expense	$	75		$	3,057		$	(2,982	)		(97.6	)%
Percent of total operating expenses		5.0	%		48.8	%

The decrease in research and development was primarily related to the termination of the clinical trial activities of Curaxis and closure of its research facility in 2007. Research and development expense for fiscal year 2008 includes salary and related benefit costs of $28,000 compared to $660,000 for fiscal year 2007; a decrease of $632,000 reflecting the elimination of nine full time staff equivalents from January 1, 2007 to March 31, 2008.

Costs associated with the clinical trials, specifically VP-AD-103 and VP-AD-301, storage and destruction of the related drug supply, and related insurance costs totaled $1.3 million for fiscal year 2007; no costs related to these activities were recognized in fiscal year 2008. Further, in 2008, Curaxis received a refund of $31,000 upon termination of its product liability insurance coverage obtained in anticipation of enrollment of Aladdin 302, the Phase III international clinical trial, and reversed $34,000 in certain costs previously recorded for Aladdin 301, the Phase III domestic clinical trial, upon final reconciliation and settlement with certain clinical sites.

Expenses associated with our research facility including, rent, utilities, depreciation, external research and allocated overhead costs totaled $706,000 for fiscal year 2007 compared to $60,000 for fiscal year 2008; a decrease of $646,000. The 2008 expense relates solely to the depreciation of capital assets used in the manufacturing process.

In addition, for the nine-months ended September 30, 2009, services and activities provided by outside legal counsel and the Scientific Advisory Board were curtailed significantly resulting in decreased expenses of $200,000 and $30,000, respectively.

General and Administrative Expense

	Year Ended
	December 31,
	2008		2007		$ Change		% Change
	(Dollars in thousands)
General and administrative expense	$	1,433	$	2,472	$	(1,039)		(42.0)%
Percent of total operating expenses		95.0%		39.5%

The majority of the decrease in general and administrative expense can be attributed to reductions in general and administrate staff, a reduction is salary for all officers, and downsizing of the corporate office. General and administrative expense for fiscal year 2008 includes salary and related benefit costs of $672,000 compared to $1.2 million for fiscal year 2007; a decrease of $528,000 reflecting the elimination of five full time staff equivalents from January 1, 2007 to March 31, 2008 and a 15% reduction in the salary of all exempt employees effective April 1, 2008. In addition, share-based compensation expenses recognized for fiscal year 2008 totaled $469,000 compared to $783,000 for fiscal year 2007; a decrease of 314,000.

General and administrative expense for fiscal year 2008 includes rent, utilities, depreciation and maintenance expenses totaling $121,000 compared to $605,000 for fiscal year 2007; a decrease of $484,000 reflecting relocation and downsizing of the corporate office location and the transfer related furniture and fixtures to the landlord upon early termination of Curaxis’ sublease agreement.

Due to the reduction in personnel and corporate activities decreases in legal and professional fees, corporate insurance, travel expense, board of directors fees and other miscellaneous expenses of $81,000, $83,000, $37,000, $30,000, and $16,000, respectively, were recognized for fiscal year 2008 as compared to fiscal year 2007. Further, in 2008, Curaxis recognized $50,000 income on terminated sponsorships which reduced the reported general and administrative expense.

The above decreases in general and administrative expense were offset by an increase in allocated corporate overhead of $584,000 for fiscal year 2008 as compared to fiscal year 2007 due to the elimination of research and development and marketing activities of Curaxis in 2008.

Marketing Expense

	Year Ended
	December 31,
	2008			2007			$ Change			% Change
	(Dollars in thousands)
Marketing expense	$	-		$	357		$	(357	)		(100.0	)%
Percent of total operating expenses		-	%		5.7	%

The decrease in marketing expense can be attributed to the decision of management to cease all marketing related activities due to financial restraints in the third quarter of 2007 and to terminate all related employees. The expense recognized for fiscal year 2007 includes salaries and related benefit costs of $204,000, share-based compensation expense of $60,000, travel expense of $19,000 and allocation of corporate expenses including rent, utilities, supplies and insurance totaling $173,000. These expenses were offset by the reversal of $98,000 in bonus expense upon the termination of certain marketing employees who had not fulfilled service requirements related to the 2004 Stock Bonus Plan as of their termination date.

Loss on Lease Termination

	Year Ended
	December 31,
	2008			2007			$ Change			% Change
	(Dollars in thousands)
Loss on Lease Termination	$	-		$	374		$	(374	)		(100.0	)%
Percent of total operating expense		0.0	%		6.0	%

On June 30, 2007, Curaxis entered into a Termination of Sublease Agreement with its Sub landlord for release on its obligation related to its corporate office location. The original lease term expired on March 31, 2011. In consideration for acceptance of the early release, Curaxis conveyed furniture and equipment located on the premises and executed a Promissory note in the amount of $300,000. A loss on the early termination of the sublease agreement of $374,000 was recognized by Curaxis.

Interest expense, net

	Year Ended
	December 31,
	2008		2007		$ Change			% Change
	(Dollars in thousands)
Interest expense, net	$	478	$	484	$	(6	)		(1.2	)%

Interest expense, net for fiscal year 2008 reflects interest expense recognized on promissory notes payable outstanding to certain vendors and clinical trial sites. Interest expense, net for fiscal year 2007 reflects interest expenses recognized on promissory notes payable to certain vendors and clinical sites totaling $510,000 net of interest income recognized on cash available for investment totaling $26,000.

The majority of the promissory notes outstanding were issued during 2007 and 2008 to satisfy, in part, liabilities generated for services performed in conjunction with Curaxis’ terminated Phase III clinical trial. The decrease in interest expense recognized for the year ended December 31, 2008, compared to the year ended December 31, 2007, of $32,000 can be attributed to a decline in the average balance outstanding approximating $200,000 coupled with a decrease in the weighted average rate of current borrowings from 11.8% to 10.8%.

Net Loss

	Year Ended
	December 31,
	2008			2007			$ Change			% Change
	(Dollars in thousands)
Net loss	$	(1,986	)	$	(6,744	)	$	(4,578	)		(70.6	)%

Net loss for the year ended December 31, 2008, was $2.0 million compared to net loss of $6.7 million for the same period in 2007. The reduction in the net loss of $4.7 million resulted from a decrease in research and development expenses of $3.0 million, a decrease in general and administrative expenses of 1.0 million, a decrease in marketing expense of $0.4 million and the elimination of the loss of $.4 million recognized on the early termination of a lease agreement in June of 2007.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

Research and Development Expense

	Year Ended
	December 31,
	2007			2006			$ Change			% Change
	(Dollars in thousands)
Research and development expense	$	3,057		$	21,054		$	(17,997	)		(85.5	)%
Percent of total operating expenses		48.8	%		74.4	%

The decrease in research and development is primarily related to the termination of the clinical trial activities of Curaxis and closure of its research facility in 2007. During fiscal year 2006, expenses directly related the clinical trial activities of Curaxis including site costs, external lab fees, data management services and services rendered by the contract research organizations totaled $11.8 million and expenses related to the manufacturing, packaging, storage and distribution of clinical trial material totaled $4.7 million. For fiscal year 2007, expenses directly related to the clinical trial activities were limited to the collection and analysis of the data from the truncated Phase III trial, closure of the remaining clinical sites and storage and destruction of remaining clinical trial material. These costs totaled $1.3 million for fiscal year 2007; a decrease of $15.2 million from fiscal year 2006.

Research and development expense for fiscal year 2007 includes salary and benefit expense related to personnel directly associated with the clinical trials and on–going development of Curaxis’ product candidates and contracted labor totaling $660,000 compared to $2.2 million for fiscal year 2006; a decrease of $1.5 million reflecting the elimination of ten full time staff equivalents from January 1, 2006 to December 31, 2007. In addition, share based compensation expense and employee travel expense for fiscal year 2007 decreased $300,000 and $100,000, respectively, as compared to fiscal year 2006.

Expenses associated with Curaxis’ research facility including, rent, utilities, depreciation, sponsored research and allocated overhead costs totaled $700,000 for fiscal year 2007 compared to $1.6 million for fiscal year 2006; a decrease of $900,000. Research activities were significantly reduced in 2007 due to financial constraints and ultimately ceased with the closure of the lab facility in September of 2007.

General and Administrative Expense

	Year Ended
	December 31,
	2007			2006			$ Change			% Change
	(Dollars in thousands)
General and administrative expense	$	2,472		$	5,188		$	(2,716	)		(52.4	)%
Percent of total operating expenses		39.5	%		18.32	%

The majority of the decrease in general and administrative expense can be attributed to reductions in general and administrate staff, a reduction in salary for all officers, downsizing of the corporate office and reduced travel due to financial constraints. General and administrative expense for fiscal year 2007 includes salary and related benefit costs and share-base compensation expense totaling $2.0 million compared to $3.2 million for fiscal year 2006; a decrease of $1.2 million reflecting the elimination of eight full time staff equivalents from January 1, 2006 to December 31, 2007 and a 50% reduction in the salary of all senior officers effective May 1, 2007.

Legal fees and professional fees for fiscal year 2007 totaled $187,000 compared to $1.1 million for 2006; a decrease of $900,000. Significant legal and professional fees were incurred in 2006 to secure external funding and to mitigate contingencies arising from the Company’s failed public offering in late 2005.

General and administrative expense for fiscal year 2007 includes rent, utilities, depreciation and maintenance expenses totaling $605,000 compared to $1.1 million for fiscal year 2006; a decrease of $595,000 due to downsizing of the corporate office location and the transfer related furniture and fixtures to the landlord upon early termination of Curaxis’ sublease agreement.

General and administrative expense for fiscal year 2007 includes travel expense of $40,000 compared to $330,000 for fiscal year 2006; a decrease $290,000 due to management’s effort to reduce costs due to financial constraints and elimination of international travel associated with Curaxis’ participation in the 2006 ICAD conference held in Madrid, Spain.

Due to the reduction in personnel and many corporate activities, decreases in corporate insurance, board of directors fees and other miscellaneous expenses of $70,000, $112,000, and $108,000 respectively, were recognized for fiscal year 2007 as compared to fiscal year 2006.

The decreases in general and administrative expense for fiscal year 2007 as compared to fiscal year 2006 were offset by an increase in corporate overhead not allocated to the research and development and marketing functions.

Marketing Expense

	Year Ended
	December 31,
	2007			2006			$ Change			% Change
	(Dollars in thousands)
Marketing expense	$	357		$	2,074		$	(1,717	)		(82.8	)%
Percent of total operating expenses		5.7	%		7.32	%

The decrease in marketing expense can be attributed to the decision of management to curtail and ultimately cease all marketing related activities due to financial restraints.

Marketing expense recognized for fiscal year 2007 includes salaries and related benefit costs of $200,000 and share-based compensation expense of $60,000 compared to salaries and related benefit costs of $830,000 for fiscal and share-based compensation expenses of $190,000 for fiscal year 2006; in aggregate, decrease of $760,000 resulting from the elimination of 3 full time staff equivalents and a 50% reduction in salary for all senior officers effective May 1, 2007. Further, the 2007 expenses were offset by the reversal of $100,000 in bonus expense upon the termination of certain marketing employees who had not fulfilled service requirements related to the 2004 Stock Bonus Plan as of their termination date.

During fiscal year 2006, significant marketing costs were incurred for the company’s sponsorship and participation in the International Conference on Alzheimer’s disease held in Madrid, Spain. Costs incurred including conference sponsorship, set-up of our presentation booth including banners, promotional giveaways and equipment rental, corporate image and public relations fees and related travel totaled $550,000. Curaxis did not engage in any similar activities during 2007.

Marketing expense for fiscal year 2007 includes the allocation of corporate expenses including rent, utilities, supplies and insurance and other miscellaneous charges totaling $170,000 compared to $470,000 for fiscal year 2006; a decrease of $300,000 resulting from the reduction staff and termination of all marketing activities.

Loss on Lease Termination

	Year Ended
	December 31,
	2007			2006			$ Change		% Change
	(Dollars in thousands)
Loss on Lease Termination	$	374		$	-		$	374		100.0	%
Percent of total operating expense		6.0	%		0.0	%

Interest expense, net

	Year Ended
	December 31,
	2007		2006			$ Change		% Change
	(Dollars in thousands)
Interest expense (income), net	$	484	$	(81	)	$	565		697.5	%

Interest expense, net for fiscal year 2007 reflects interest expenses recognized on promissory notes payable to certain vendors and clinical sites totaling $510,000 net of interest income recognized on cash available for investment totaling $26,000. Interest expense, net for fiscal year 2006 reflects interest expenses recognized on promissory notes payable to certain vendors totaling $160,000 net of interest income recognized on cash available for investment totaling $240,000.

The majority of the promissory notes outstanding were issued during 2007 to satisfy, in part, liabilities generated for services performed in conjunction with Curaxis’ terminated Phase III clinical trial. The increase in interest expense recognized for the year ended December 31, 2007 compared to the year ended December 31, 2006 of $350,000 can be attributed to a increase in the average balance outstanding approximating $3.7 million.

The decrease in interest income recognized for fiscal year 2007 compared to fiscal year 2006 of $214,000 is directly related to the decrease in cash available for investment.

Net Loss

	Year Ended
	December 31,
	2007			2006			$ Change			% Change
	(Dollars in thousands)
Net loss	$	(6,744	)	$	(28,235	)	$	(21,491	)		(76.1	)%

Net loss for the year ended December 31, 2007 was $6.7 million compared to net loss of $28.2 million for the same period in 2006. The reduction in the net loss of $21.5 million resulted from a decrease in research and development expenses of $18.0 million, a decrease on general and administrative expenses of $2.7 million and a decrease in marketing expense of $1.7 million. The decreases in the above operating expenses were offset slightly by the loss of $.4 million recognized on the early termination of a lease agreement in June of 2007.

Liquidity and Capital Resources

Since inception, Curaxis has incurred losses from operations and has reported negative cash flows. As of September 30, 2009, Curaxis had an accumulated deficit of $86.8 million and cash and cash equivalents of $.9 million. Curaxis does not expect to reach cash flow positive operations for fiscal years 2009 and 2010, and, as a standalone company, it expects to continue to generate losses from operations for the foreseeable future.

Off-Balance Sheet Arrangements

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

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Company)

Financial Statements

December 31, 2008 and 2007

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Index to Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-1

Balance Sheets	F-2

Statements of Operations	F-3

Statements of Changes in Stockholders’ Equity (Deficit)	F-4 – F-5

Statements of Cash Flows	F-6 – F-7

Notes to Financial Statements	F-8 – F-23

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Company):

We have audited the accompanying balance sheets of Curaxis Pharmaceutical Corporation (formerly known as Voyager Pharmaceutical Corporation) (a Development Stage Company) as of December 31, 2008 and 2007, and the related statements of operations, changes in stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2008 and for the period from inception (February 27, 2001) to December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Curaxis Pharmaceutical Corporation for the period from inception to December 31, 2005. Those statements were audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates to amounts for the period from inception to December 31, 2005, included in the cumulative totals, is based solely upon the report of the other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Curaxis Pharmaceutical Corporation as of December 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the development stage, has incurred losses from operations since its inception and has a net stockholders’ deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Rosenberg Rich Baker Berman & Company

Somerset, New Jersey

December 2, 2009

F-1

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Balance Sheets

(in thousands)

	December 31,						September 30, 2009
	2007			2008			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	15		$	5		$	869
Accounts receivable from related parties		-			5			13
Prepaid and other assets		118			88			249
Total current assets		133			98			1,131
Property and equipment, net		127			46			5
Other assets		19			3			-
Total assets	$	279		$	147		$	1,136

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	7,642		$	7,436		$	2,738
Accrued expenses		1,661			1,930			1,264
Current portion of capital lease obligation		3			4			-
Notes payable		3,942			4,728			2,178
Total current liabilities		13,248			14,098			6,180

Capital lease obligation, less current portion		6			-			-
Accrued compensation		278			351			-
Deferred purchase credit		-			500			500
Deferred revenue		1,727			1,727			1,727
Long-term notes payable		574			15			1,750
Total liabilities		15,833			16,691			10,157

Commitments and contingencies

Stockholders’ equity (deficit):
Common stock, $0.001 par value; 100,000 authorized; 49,981, 55,142
and 61,902 shares issued and outstanding at December 31, 2007
and 2008 and September 30, 2009 (unaudited), respectively		50			55			62
Additional paid-in capital		74,947			75,938			77,695
Deficit accumulated during the development stage		(90,551	)		(92,537	)		(86,778	)
Total stockholders’ equity (deficit)		(15,554	)		(16,544	)		(9,021	)
Total liabilities and stockholders’ equity (deficit)	$	279		$	147		$	1,136

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

F-2

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Statements of Operations

(in thousands, except per share amounts)

	For the Years Ended December 31,									Cumulative from Inception (February 27, 2001) to December 31,			Nine Months Ended September 30,						Cumulative from Inception (February 27, 2001) to September 30,
	2006			2007			2008			2008			2008			2009			2009
													(unaudited)						(unaudited)
Operating expenses
Research and development	$	21,054		$	3,057		$	75		$	61,223		$	69		$	74		$	61,297
General and administrative		5,188			2,472			1,433			23,741			1,218			430			24,171
Marketing		2,074			357			-			5,557			-			-			5,557
Loss on investment in real estate		-			-			-			1,091			-			-			1,091
Loss on lease termination		-			374			-			374			-			-			374
Total operating expenses		28,316			6,260			1,508			91,986			1,287			504			92,490

Operating loss		(28,316	)		(6,260	)		(1,508	)		(91,986	)		(1,287	)		(504	)		(92,490	)
Gain on debt restructuring		-			-			-			-			-			6,562			6,562
Interest income (expense), net		81			(484	)		(478	)		(551	)		(361	)		(299	)		(850	)

Net income (loss)	$	(28,235	)	$	(6,744	)	$	(1,986	)	$	(92,537	)	$	(1,648	)	$	5,759		$	(86,778	)
Basic net income (loss) per share	$	(0.65	)	$	(0.14	)	$	(0.04	)				$	(0.03	)	$	0.10
Diluted net income (loss) per share	$	(.065	)	$	(0.14	)	$	(0.04	)				$	(0.03	)	$	0.10
Weighted average common shares outstanding – basic		43,158			47,934			54,070						53,709			56,134
Weighted average common shares outstanding – diluted		43,158			47,934			54,070						53,709			59,016

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

F-3

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Statements of Changes in Stockholders’ Equity (Deficit)

(in thousands)

	Common Stock					Additional Paid-in-			Deficit Accumulated during the Development
	Shares			Amount		Capital			Stage			Total
Balances at Inception (February 27, 2001)		―		$	―	$	―		$	―		$	―
Sale of common stock		25,657			26		1,073			―			1,099
Stock-based compensation		―			―		100			―			100
Net loss		―			―		―			(1,219	)		(1,219	)

Balances at December 31, 2001		25,657			26		1,173			(1,219	)		(20	)
Sale of common stock		4,054			4		4,105			―			4,109
Issuance of common stock in exchange for consulting services		12			―		10			―			10
Stock-based compensation		―			―		272			―			272
Net loss		―			―		―			(3,190	)		(3,190	)

Balances at December 31, 2002		29,723			30		5,560			(4,409	)		1,181
Sale of common stock		4,794			5		8,239			―			8,244
Issuance of common stock in exchange for consulting services		36			―		55			―			55
Repurchase of common stock		(330	)		―		(379	)		―			(379	)
Stock-based compensation		―			―		78			―			78
Net loss		―			―		―			(6,633	)		(6,633	)

Balances at December 31, 2003		34,223			35		13,553			(11,042	)		2,546
Sale of common stock		4,388			4		12,491			―			12,495
Issuance of common stock in exchange for consulting services		20			―		66			―			66
Net loss		―			―		―			(11,626	)		(11,626	)

Balances at December 31, 2004		38,631			39		26,110			(22,668	)		3,481
Sale of common stock		3,305			3		28,839			―			28,842
Issuance of common stock in exchange for consulting services		4			―		33			―			33
Stock-based compensation		―			―		10			―			10
Repurchase of common stock		(1	)		―		(9	)		―			(9	)
Net loss		―			―		―			(32,904	)		(32,904	)

Balances at December 31, 2005		41,939			42		54,983			(55,572	)		(547	)
Sale of common stock		1,513			1		15,127			―			15,128
Sale of common stock under warrants		2,886			3		286			―			289
Stock-based compensation		―			―		1,155			―			1,155
Repurchase of common stock		(150	)		―		―			―			―
Net loss		―			―		―			(28,235	)		(28,235	)
Balances at December 31, 2006		46,188		$	46	$	71,551		$	(83,807	)	$	(12,210	)

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

F-4

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Statements of Changes in Stockholders’ Equity (Deficit), continued

(in thousands)

	Common Stock				Additional Paid-in-		Deficit Accumulated during the Development
	Shares		Amount		Capital		Stage			Total
Sale of common stock		1,822	$	2	$	2,336	$	―		$	2,338
Sale of common stock under warrants		1,971		2		171		―			173
Stock-based compensation		―		―		889		―			889
Net loss		―		―		―		(6,744	)		(6,744	)
Balances at December 31, 2007		49,981		50		74,947		(90,551	)		(15,554	)
Sale of common stock		5,120		5		518		―			523
Sale of common stock under warrants		41		―		4		―			4
Stock-based compensation		―		―		469		―			469
Net loss		―		―		―		(1,986	)		(1,986	)
Balances at December 31, 2008		55,142		55		75,938		(92,537	)		(16,544	)
Sale of common stock (unaudited)		5,622		6		1,020		―			1,026
Sale of common stock under warrants (unaudited)		1,138		1		113		―			114
Issuance of warrants (unaudited)		―		―		329		―			329
Stock-based compensation (unaudited)		―		―		295		―			295
Net income (unaudited)		―		―		―		5,759			5,759
Balances at September 30, 2009 (unaudited)		61,902	$	62	$	77,695	$	(86,778	)	$	(9,021	)

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

F-5

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Statements of Cash Flows

(in thousands)

	For the Years Ended December 31,									Cumulative from Inception (February 27, 2001) to December 31,			Nine Months Ended September 30,						Cumulative from Inception (February 27, 2001) to September 30,
	2006			2007			2008			2008			2008			2009			2009
													(unaudited)						(unaudited)
Cash flows from operating activities
Net income (loss)	$	(28,235	)	$	(6,744	)	$	(1,986	)	$	(92,537	)	$	(1,648	)	$	5,759		$	(86,778	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		382			228			81			949			64			40			989
Stock-based compensation expense		1,155			889			469			2,973			494			416			3,389
Common stock issued in exchange for consulting services		―			―			―			164			―			―			164
Loss (gain) on disposal of property and equipment		―			175			―			178			(1	)		(9	)		169
Loss on investment in real estate		―			―			―			1,091			―			―			1,091
Gain on restructuring of trade debt		―			―			―			―			―			(6,562	)		(6,562	)
Changes in operating assets and liabilities:
Prepaid expenses		81			155			30			(88	)		21			47			(41	)
Accounts receivable		(25	)		25			(5	)		(5	)		(5	)		(8	)		(13	)
Other assets		―			2			16			(3	)		16			3			―
Accounts payable		3,815			(144	)		(206	)		7,436			(140	)		(3	)		7,433
Accrued expenses		(1,049	)		89			269			1,930			168			298			2,228
Deferred purchase credit		―			―			500			500			500			―			500
Deferred revenue		―			1,727			―			1,727			―			―			1,727
Accrued compensation		137			(109	)		73			351			55			(351	)		―
Net cash used in operating activities		(23,739	)		(3,707	)		(759	)		(75,334	)		(476	)		(370	)		(75,704	)
Cash flows from investing activities
Purchase of property and equipment		(5	)		―			―			(1,193	)		―			―			(1,193	)
Purchase of real estate investment		―			―			―			(3,155	)		―			―			(3,155	)
Proceeds from the sale of property and equipment		―			40			―			40			―			10			50
Proceeds from the sale of real estate		2,064			―			―			2,064			―			―			2,064
Decrease in restricted cash		1,465			―			―			―			―			―			―
Net cash provided by (used in) investing activities	$	3,524		$	40		$	―		$	(2,244	)	$	―		$	10		$	(2,234	)

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

F-6

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Statements of Cash Flows, continued

(in thousands)

	For the Years Ended December 31,									Cumulative from Inception (February 27, 2001) to December 31,			Nine months Ended September 30,						Cumulative from Inception (February 27, 2001) to September 30,
	2006			2007			2008			2008			2008			2009			2009
													(unaudited)						(unaudited)
Cash flows from financing activities
Issuance of common stock	$	15,417		$	2,511		$	527		$	73,244		$	527		$	1,239		$	74,483
Issuance of notes payable		4,579			189			243			5,011			260			―			5,011
Issuance of long-term debt		―			574			18			592			―			―			592
Payments on notes payable		―			(826	)		(31	)		(857	)		(29	)		(11	)		(868	)
Payments on capital lease obligation		(4	)		(4	)		(5	)		(16	)		(3	)		(4	)		(20	)
Repurchase of common stock		―			―			―			(388	)		―			―			(388	)
Repayments of notes payable to related parties		―			―			(37	)		(202	)		―			―			(202	)
Payments on long-term debt		―			―			(3	)		(3	)		―			―			(3	)
Proceeds from notes payable to related parties		―			―			37			202			―			―			202
Repayment of mortgage note payable		(3,100	)		―			―			(3,100	)		―			―			(3,100	)
Proceeds from the issuance of mortgage note		―			―			―			3,100			―			―			3,100
Net cash provided by financing activities		16,892			2,444			749			77,583			755			1,224			78,807
Net increase (decrease) in cash and cash equivalents		(3,323	)		(1,223	)		(10	)		5			279			864			869
Cash and cash equivalents, beginning of period		4,561			1,238			15			―			15			5			―
Cash and cash equivalents, end of period	$	1,238		$	15		$	5		$	5		$	294		$	869		$	869


Supplemental disclosure of cash flow information:
Cash paid for interest	$	41		$	2		$	2		$	239		$	1		$	2		$	242
Non-cash financing activities:
Conversion of trade payables to notes	$	4,579		$	763		$	261		$	5,603		$	260		$	―		$	5,603
Restructuring of trade debt	$	―		$	―		$	―		$	―		$	―		$	6,562		$	6,562

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

F-7

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(1)	Organization and Summary of Significant Accounting Policies

Curaxis Pharmaceutical Corporation (formerly known as Voyager Pharmaceutical Corporation) was incorporated in the State of Delaware on February 27, 2001 under the name Angel Care America, Inc. to develop clinical applications of its Alzheimer’s treatment. On March 20, 2001, a separate corporation called Voyager Pharmaceutical Corporation (“Old Voyager”) was incorporated in Delaware with the intent of focusing exclusively on research, clinical trials, and FDA approval. On November 28, 2001, Old Voyager was merged into Angel Care America, Inc., and the company’s name was changed to Voyager Pharmaceutical Corporation. On December 2, 2009, the name of Voyager Pharmaceutical Corporation was changed to Curaxis Pharmaceutical Corporation (the “Company”). Prior to the merger, the Company and Old Voyager were entities under common control and, accordingly, the accompanying financial statements include the accounts of Old Voyager from March 20, 2001 (the date of Old Voyager’s inception) through November 28, 2001 (the date of its merger with Angel Care America, Inc.). The Company is dedicated to finding cures for major age-related diseases, including Alzheimer’s disease, by bringing treatment to market through FDA approval.

The Company is a development stage company and has focused its efforts to date on raising capital and research and development. The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has a limited operating history and has incurred losses from operations since its inception. The cash position of the Company has deteriorated significantly over the last three years and the Company has been unable to satisfy its outstanding liabilities with many vendors. In late 2006, the company terminated its’ Phase III clinical trial VP-AD-301 and in 2007 closed its’ research facility.

In 2009, the Company entered into a series of agreements with Southridge Business Solutions LLC (“Southridge”) and Canterbury Investment Partners LLC (“Canterbury”) in order to restructure its’ balance sheet and establish a trading market for its common stock. Under the terms of those agreements, Southridge and Canterbury will assist the Company in negotiating settlements with its creditors to eliminate or substantially reduce and defer its trade debt and assist the Company in merging with a publicly traded corporation to establish a public trading market for its stock. Further, upon filing an initial registration statement, Southridge will provide an equity facility under which the Company can periodically, over a period of two years, sell up to $20 million of its common stock to Southridge. The proceeds of the equity facility will be used to fund further development of the Company’s lead drug candidate through to commercialization.

Although management continues to work with Southridge and Canterbury to pursue these plans, there is no assurance that the Company will be successful in completing the proposed merger transaction and obtaining the necessary funding or financing on terms acceptable to the Company. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

In May 2003, the Company affected a 3-for-1 stock split of its common stock in the form of a stock dividend.

Unaudited Interim Financial Statements

The unaudited financial statements as of September 30, 2009 and for the nine months ended September 30, 2008 and 2009 have been prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for a fair statement of the results of these interim periods have been included. The results of operations for the nine months ended September 30, 2009 are not necessarily indicative of the results that may be expected for the full year. All references to September 30, 2009 or to the nine months ended September 30, 2008 and 2009 in the notes to the consolidated financial statements are unaudited.

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

F-8

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company’s financial instruments consist mainly of cash, cash equivalents, accounts payable, accrued expenses, capital lease obligations, notes payable and deferred credits. The carrying values of the short-term financial instruments approximate their fair value due to the short-term nature of these instruments. The fair values of the long-term lease and notes payable obligations reflect that which would have been paid if the obligations were settled at year-end.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are stated at cost and consist of bank deposits and a money market fund that invests in short-term debt securities. The carrying amount of cash and cash equivalents approximates fair value.

Property and Equipment

Property and equipment is stated at cost. Equipment acquired under capital leases is initially recorded at the present value of the minimum lease payments at inception of the lease.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets which range from three to five years. Leasehold improvements and equipment held under capital leases are amortized over the related lease terms, which is shorter than the estimated useful lives of the assets.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate the book value of the assets may not be recoverable. In accordance with Statement of Financial Accounting Standards No. 144, (“SFAS No. 144”) codified in ASC 360-10-35-15 Impairment or Disposal of Long-Lived Assets, recoverability is measured by comparing the book value of the asset to the future net undiscounted cash flows expected to be generated by the asset.

No events or changes in circumstances have been identified which would impact the recoverability of the Company’s long-lived assets reported at December 31, 2007 and 2008, or September 30, 2009.

Stock-Based Compensation

The Company applies Statement of Financial Accounting Standards No. 123R Share-based Payment, codified in ASC 718 Compensation – Stock Compensation, to stock-based compensation awards. SFAS No. 123R requires the measurement and recognition of non-cash compensation expense for all share-based payment awards made to employees and directors, including employee stock options related to our 2001 Stock Option Plan and 2005 Stock Option Plan, based on fair values. The Company adopted this Statement on January 1, 2006 using the modified prospective application.

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

F-9

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

Stock-Based Compensation (continued)

Stock Purchase Warrants

The Company has issued warrants to purchase shares of its common stock. Warrants have been accounted for as equity in accordance with the provisions of EITF Issue No. 00-19: Accounting for Derivative Financial Instruments Indexed to, and potentially Settled in, a Company’s Own Stock, codified in ASC 480, Distinguishing Liabilities from Equity.

Research and Developmen

Research and development costs include all direct costs related to the development of the Company’s products, including clinical trial costs, salaries and related benefits of personnel, costs of producing drug material for clinical trials and fees paid to consultants. Research and development costs are expensed as incurred.

Segment Reporting

Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information, codified in ASC 280, Segment Reporting, establishes standards for reporting information about the Company’s operating segments. The Company operates in one business segment, the business of discovery, development and commercialization of pharmaceutical treatments for major age-related diseases.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

On January 1, 2007, the Company adopted FASB Interpretation No. 48 (FIN 48), “Accounting for Uncertainty Income Taxes, codified in ASC 740-10-25, Income Taxes- Overall-Recognition. The Company did not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations as a result of adopting FIN 48. The Company’s practice is to recognize interest and /or penalties related to income tax matters in income tax expense as incurred.

Comprehensive Loss

The Company has adopted the provisions of Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (“SFAS No. 130”), codified in ASC 220, Comprehensive Income which establishes rules for the reporting and display of comprehensive loss and its components. For all periods presented, there were no differences between net loss and comprehensive loss.

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

F-10

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

Certain Risks and Uncertainties

The Company’s product candidates under development require approval from the United States Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance our products will receive the necessary clearance. If the Company is denied clearance or clearance is delayed, it may have a material adverse impact on the Company.

The Company’s product is concentrated in rapidly changing, highly competitive markets, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. Any failure by the Company to anticipate or to respond adequately to technological developments in our industry, changes in customer requirements or changes in regulatory requirements or industry standards, or any significant delays in the development or introduction of products or services, could have a material adverse effect on the Company’s business, operating results and future cash flows. The Company relies on one corporation as a sole source provider of Memryte for use in its clinical trials.

Recently Issued Accounting Pronouncements

In December 2007, the FASB amended FASB ASC Topic 805, Business Combinations , (“FASB ASC 805) (formerly FASB Statement No. 141(R), Business Combinations ), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree, and the goodwill acquired in an acquisition. FASB ASC 805 also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. FASB ASC 805 is effective for acquisitions in fiscal years beginning after December 15, 2008, and early adoption is prohibited. We will apply the provisions of this topic to any future acquisitions.

In February 2008, the FASB issued an amendment to FASB ASC Topic 820, Fair Value Measurements and Disclosures (“FASB ASC 820”) (formerly FASB Staff Position (“FSP”) FAS No. 157-2, Effective Date for FASB Statement No. 157 ). This amendment permitted the delayed application of FASB ASC 820 for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. The adoption did not have a material impact on the Company’s financial condition or results of operations or cash flows.

In April 2008, the FASB issued an amendment to FASB ASC Topic 350, Intangibles — Goodwill and Other (“FASB ASC 350”) (formerly FSP No. 142-3, Determination of the Useful Life of Intangible Assets ). This amendment modifies the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB ASC 350. This amendment is effective for fiscal years beginning after December 15, 2008. The implementation of this topic did not have a material effect on the Company’s financial condition or results of operations or cash flows.

In April 2009, the FASB issued an amendment to FASB ASC Topic 825, Financial Instruments (“FASB ASC 825”) (formerly FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments). This amendment requires disclosures about fair value of financial instruments in interim as well as in annual financial statements. This amendment also requires those disclosures in all interim financial statements. This amendment was effective for interim and annual periods ending after June 15, 2009. The implementation of this amendment did not have a material effect on the Company’s financial condition or results of operations or cash flows.

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

F-11

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

Recently Issued Accounting Pronouncements (continued)

In May 2009, the FASB issued an amendment to FASB ASC Topic 855, Subsequent Events (“FASB ASC 855”) (formerly FASB Statement No. 165, Subsequent Events ). FASB ASC 855 provides general standards for the accounting and reporting of subsequent events that occur between the balance sheet date and issuance of financial statements. The topic requires the issuer to recognize the effects, if material, of subsequent events in the financial statements if the subsequent event provides additional evidence about conditions that existed as of the balance sheet date. The issuer must also disclose the date through which subsequent events have been evaluated and the nature of any non-recognized subsequent events. Non-recognized subsequent events include events that provide evidence about conditions that did not exist as of the balance sheet date, but which are of such a nature that they must be disclosed to keep the financial statements from being misleading. The topic is effective for interim and annual periods ending after June 15, 2009. The implementation of this topic did not have a material impact on our financial position, results of operations or cash flows.

In June 2009, the FASB issued FASB ASC Topic 105, Generally Accepted Accounting Principles (“FASB ASC 105”) (formerly FASB Statement No. 168, The “FASB Accounting Standards Codification” and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162 ). FASB ASC 105 provides for the FASB Accounting Standards Codification (the “Codification”) to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (GAAP). FASB ASC 105 is effective for interim and annual periods ending after September 15, 2009. This topic has no impact on the Company’s financial position, results of operations or cash flows.

(2) Property and Equipment, Net

Property and equipment consists of the following at (in thousands):

	December 31,						September 30, 2009
	2007			2008			(unaudited)
Furniture and office equipment	$	192		$	189		$	107
Laboratory and manufacturing equipment		243			243			240
Vehicles		23			23			-
Leasehold improvements		35			-			-
		493			455			347
Accumulated depreciation and amortization		(366	)		(409	)		(342	)
	$	127		$	46		$	5

Depreciation expense totaled $382 thousand, $228 thousand, and $81 thousand for the years ended December 31, 2006, 2007 and 2008, respectively and $64 thousand and $40 thousand for the nine months ended September 30, 2008 and 2009, respectively.

(3) Accrued Expenses

Accrued expenses consist of the following (in thousands):

	December 31,				September 30, 2009
	2007		2008		(unaudited)
Development and clinical trial expenses	$	1,014	$	806	$	806
Interest		647		1,124		359
Costs associated with equity raise		-		-		99
	$	1,661	$	1,930	$	1,264

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

F-12

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(4) Notes payable

Notes payable consist of the following (in thousands):

	December 31,				September 30, 2009
	2007		2008		(unaudited)
Notes payable to clinical research sites	$	189	$	415	$	412
Promissory Note dated September 15, 2006		2,829		2,804		2,000
Promissory Installment Note dated September 26, 2006		924		924		924
Promissory Noted dated July 1, 2007		300		300		300
Promissory Note dated August 21, 2007		274		274		274
Promissory Note and Security Agreement dated September 22, 2008		-		26		18
		4,516		4,743		3,928
Less: Current portion of notes payable		3,942		4,728		2,178
	$	574	$	15	$	1,750

Weighted average interest rates on current notes payable at December 31, 2007 and 2008, and September 30, 2009 were 11.8%, 10.8% and 9.7%, respectively.

Notes payable to clinical sites represent unsecured promissory notes executed during 2007 and 2008 to repay clinical sites for services performed in conjunction with our terminated Phase III clinical trial, VP-AD-301. The notes were issued for six-month to one year terms and bear interest at an annual rate of 12% to 18%. At December 31, 2008, all notes payable to clinical sites had matured and were in default for lack of payment.

Promissory note dated September 16, 2006 in the amount of $4 million was executed in conjunction with a Repayment agreement between the Company and a significant vendor. The note was issued to satisfy, in part, liabilities generated for service performed in conjunction with our terminated Phase II clinical trial. The unsecured note bears interest at 12.0% and required installment payments commencing October 1, 2006. At the request of the Company, the Repayment Agreement has been amended to cure all events of default for non-payment. However, payment of principal in full and accrued interest to date was due on May 31, 2008. On September 23, 2009, the Company reached an agreement this vendor to satisfy amounts owed related to notes payable and trade debts outstanding. The agreement requires the Company to make payments totaling $2 million commencing September 1, 2010 and ending March 31, 2012. A gain totaling $6.5 million was realized on the vendor settlement. (See Subsequent Event Footnote #11).

Promissory Installment Note dated September 26, 2006 in the amount of $1.1 million was executed in conjunction with Letter of Agreement between the Company and a significant vendor to satisfy liabilities generated for the receiving, distribution and return processing of clinical trial material. The note is secured against inventory held by the vendor and required monthly payments commencing September 26, 2006 of principal plus a 1% fee on the outstanding balance. The Company was in default for non payment as of December 31, 2006. On April 3, 2008, a Final and Amended Judgment was awarded on behalf of the creditor against the Company in the amount $924 thousand principal and $135 thousand in late fees, for a total of $1.059 million.

Promissory Note dated July 1, 2007 in the amount of $300 thousand was executed in conjunction with a Termination of Sublease Agreement between the Company and its’ landlord as consideration for early termination of the sublease agreement. The original sublease agreement for corporate office space was executed on April 20, 2005 and was to expire on March 31, 2011. The promissory note bears interest at 10%. Payment of principal and all accrued interest is due June 30, 2009. The Promissory note was in default for non-payment as of July 1, 2009.

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

F-13

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(4) Notes payable (continued)

Promissory note dated August 21, 2007 in the amount of $274 thousand was executed in conjunction with a Structured Settlement Agreement between the Company and a significant vendor to satisfy, in part, payments due to the vendor for the purchase of clinical trial material. The unsecured note bears interest at an annual rate of 8% and required payment in full not later than July 15, 2012. In addition, the Company was required to make graduated monthly payments commencing June 25, 2007 to satisfy amounts outstanding at the date of the agreement not reflected in the Promissory Note. At December 31, 2008, the Company was in default of the Structured Settlement Agreement for non-payment of the monthly amounts set forth by the agreement. On April 6, 2009, an Order of Default Judgment was awarded on behalf of the creditor against the Company in the amount $420 thousand principal and $5 thousand in accrued interest and fees, for a total of $425 thousand. As a result, the note has been reclassified as a current liability at December 31, 2008.

Promissory Note and Security Agreement dated September 22, 2008 in the amount of $27 thousand was executed pursuant to the terms of the Fifth Amendment to Lease between the Company and it’ landlord as consideration for the Company to relocate and reduce the size of its’ leased office space. The Promissory note bears interest at an annual rate of 9% and requires equal monthly installment payments to be made commencing November 1, 2008 though April 11, 2011.

(5) Common Stock and Stock Purchase Warrants

At December 31, 2007 and 2008, the Company was authorized to issue 100 million shares, respectively, of $0.001 par value common stock. The holders of common stock are entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors. Each share of common stock is entitled to one vote.

In May 2003, the Company declared a 3 for 1 stock split of its common stock in the form of a stock dividend. All common share and per share information in the financial statements and related notes have been retroactively restated to reflect the stock split.

Upon inception, the Company issued 5,728 million shares of common stock to its founders. Issuances of common stock through private placements are as follows (in thousands except for per share amounts):

	Shares		Proceeds		Price per share
March through August 2001		1,268	$	846	$	0.66
November 2001		4		3		0.83
January through July 2002		2,591		2,158		0.83
August through December 2002		1,463		1,951		1.33
January through May 2003		1,719		2,292		1.33
June through October 2003		2,581		5,162		2.00
December 2003		164		410		2.50
January through April 2004		3,371		8,429		2.50
February through July 2004		1,017		4,066		4.00
January through March 2005		2,102		16,814		8.00
June through July 2005		1,203		12,028		10.00

From January 2006 though May 2007, the Company raised $16.6 million through the sale of 1,661,000 units at $10 per unit. A unit consisted of one share of common stock and warrants to purchase two additional shares of common stock at $12 per share. The Company amended this offering on August 21, 2006. Under the amendment each unit consists of one share of common stock and warrants to purchase six additional shares of common stock at $0.10 per share. The warrants to purchase common stock expire in 2011.

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

F-14

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(5) Common Stock and Stock Purchase Warrants (continued)

From June 2007 to December 2008, the Company raised $1.4 million through the sale of 6,792,000 shares of common stock at $1.00 per share. This offering was amended on August 22, 2007 and March 6, 2008 to reduce the pricing to $.50 and $.20 per share, respectively and 3,669,000 additional shares were issued on a retroactive basis. The accounting for the issuance of these additional shares followed the character of the initial offering and no expense was recorded.

In November 2001, the Company issued 18,657,000 shares of common stock in exchange for 3,007,000 shares of Old Voyager common stock which were originally issued in March 2001 for $250 thousand.

In May 2003, the Company repurchased and reissued 120,000 shares of common stock for $100 thousand, or $0.83 per share. During the same period, the Company repurchased and reissued 210 thousand shares of common stock for $280 thousand, or $1.33 per share.

During 2008, the Company issued stock purchase warrants to select vendors to satisfy, in part, liabilities generated from services performed in conjunction with our terminated Phase III clinical trial, VP-AD-301. The warrants provide for the purchase 54,800 shares of common stock at $.50 per share and expire on December 31, 2011.

At December 31, 2008 and September 30, 2009 outstanding warrants to purchase the company’s common stock are as follows:

Number of Shares
December 31, 2008		September 30, 2009		Exercise Price		Expiration Date
		(unaudited)
	5,063,600		3,926,100	$	0.10	December 31, 2011
	54,800		54,800	$	0.50	December 31, 2011
	-		1,656,600	$	0.001	August 31, 2016
	5,118,400		5,637,500

(6) Stock Option Plan

During 2001, the Company adopted the 2001 Stock Option Plan (the “2001 Plan”) under which 1,500,000 shares of the Company’s common stock was reserved for issuance to employees, directors and consultants. Options granted under the Plan may be incentive stock options or non-qualified stock options. On January 31, 2005, the Company adopted the 2005 Stock Option Plan (the “2005 Plan”) with terms and conditions similar to the 2001 Plan under which 3,500,000 shares of the Company’s common stock are reserved for issuance to employees, directors and consultants. The Board of Directors determines the exercise price, term and the period over which options become exercisable at each grant date. The Board of Directors determines what it deems to be the fair market value of the stock based on the price per share of the most recent private placement of common stock and other relevant information. Since inception, all options were granted to employees with an exercise price equal to the deemed fair value of the common stock on the date of grant. Under the 2001 Plan and the 2005 Plan, options vest over various periods, generally annually over five years, and expire not more than ten years after the date of grant.

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

F-15

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(6) Stock Option Plan (continued)

The Company has granted 684,000 stock options outside of the approved 2001 Plan and 2005 Plan to several consultants that vested upon completion of certain services. In addition, the Company has granted 53,000 options under the 2005 Plan to other non-employees. Upon adoption of ASC 718, the Company continues to account for the resulting non-employee stock-based compensation for all options granted to non-employees based on the estimated fair value of the options, determined using the Black-Scholes option valuation model, in accordance with ASC 505-50, and amortizes such expense on a straight –line basis. The measurement date for the calculation of compensation expense is considered to be the date when all services have been rendered or the date that options are fully vested.

During the years ended December 31, 2006, 2007 and 2008 and the nine months ended September 30, 2008 and 2009, the Company recognized stock-based compensation expense/(benefit) related to its stock option plans in the accompanying statements of operations as follows (in thousands):

	Year ended December 31,							Nine months ended September 30,
	2006		2007			2008		2008		2009
								(unaudited)
Employee-related stock-based compensation	$	1,103	$	931		$	469	$	494	$	295
Non-employee related stock based compensation		52		(42	)		-		-		121
	$	1,155	$	889		$	469	$	494	$	416

Total stock-based compensation expense/ (benefit) recognized in the accompanying statement of operations is included in the following categories:

	Year ended December 31,						Nine months ended September 30,
	2006		2007		2008		2008		2009
							(unaudited)
Research and development	$	297	$	46	$	-	$	494	$	295
General and administrative		670		783		469		-		-
Marketing		188		60		-		-		121
	$	1,155	$	889	$	469	$	494	$	416

The Company estimates the fair value of stock options at the date of grant using the Black-Scholes option valuation model. The Company calculated the fair value of employee stock options for the years ended December 31, 2006 and 2007 using the following assumptions:

	Year ended December 31,		Nine months ended September 30,
	2006	2007	2009
			(unaudited)
Risk-free interest rate	4.58 to 5.00%	3.49 to 5.10%	3.28 to 3.06%
Expected remaining term (in years)	6.5	7.5	7.5
Expected volatility	100%	100%	100%
Expected dividends	0%	0%	0%

No stock options were granted during the year ended December 31, 2008.

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

F-16

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(6) Stock Option Plan (continued)

The risk-free rate is estimated to equal U.S. Treasury security rates for applicable terms. Estimated volatility is based on the historical stock price volatility of comparable companies’ common stock as our stock is not publicly traded. The Company does have sufficient history of exercise behavior to develop estimates of expected term since as of December 31, 2008, no options issued since inception of the plans have been exercised. The expected remaining terms is based on the estimated time period to elapse prior to commercialization of the Company’s initial product. For options to outside consultants, the Company uses a term which is equal to the average the period required for the options to fully vest and the contractual life of the option. As the Company gathers more history regarding its option exercise pattern, and as information regarding the option pattern of comparable companies in its industry becomes publically available, it will review these estimates and revise them as appropriate. Different estimates of volatility and expected term could materially change the value of an option and the resulting expense.

The following table summarizes the Company’s stock option activity under the 2001 Plan, the 2005 Plan, as well as 674,000 options granted to consultants outside of the 2001 and 2005 Plans, including number of shares (“Number”) and weighted average exercise price (“WAEP”) for the years ended December 31, 2006, 2007 and 2008 and for the nine months ended September 30, 2009:

	Number of Shares			Weighted Average Exercise Price		Weighted- Average Contractual Term		Weighted Average Grant Date Fair Value per Share
Outstanding at December 31, 2005		2,509,000		$	0.08
Options granted		798,000		$	6.00
Options cancelled		(577,000	)	$	2.72
Outstanding at December 31, 2006		2,730,000		$	3.37		6.90	$	3.41
Options granted		2,496,000		$	1.30
Options cancelled		(1,015,000	)	$	3.70
Outstanding at December 31, 2007		4,211,000		$	1.87		6.12	$	1.19
Options granted		-		$	-
Options cancelled		(1,314,000	)	$	1.78
Outstanding at December 31, 2008		2,897,000		$	2.21		5.69	$	1.26
Options granted (unaudited)		550,000		$	0.20
Options cancelled (unaudited)		(170,000	)	$	2.19
Outstanding at September 30, 2009 (unaudited)		3,277,000		$	1.87		5.40	$	1.07

Exercisable at December 31, 2008		2,272,000		$	2.07		5.03	$	1.16
Exercisable at September 30, 2009 (unaudited)		2,856,000		$	1.81		5.10	$	1.01

The weighted-average grant-date fair value of options granted during the years ended December 31, 2006, 2007 and 2008 and the nine months ended September 30, 2009 were $4.97, $0.82, $0 and $0.17, respectively. No options were exercised during the three years ended December 31, 2008 and the nine months ended September 30, 2009.

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

F-17

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(6) Stock Option Plan (continued)

A summary of the status of the Company’s non-vested shares as of December 31, 2008 and the nine months ended September 30, 2009 is presented below:

				Weighted-
				Average Grant
	Shares			Date Fair Value

Non-vested at January 1, 2008		1,527,000		$	1.62
Options Granted		-			-
Options vested		(334,000	)		1.65
Options cancelled		(568,000	)		1.61
Non-vested at December 31, 2008		625,000		$	1.61


				Weighted-
				Average Grant
	Shares			Date Fair Value

Non-vested at January 1, 2009		625,000		$	1.61
Options Granted		550,000			0.17
Options vested		(584,000	)		0.42
Options cancelled		(170,000	)		1.35
Non-vested at September 30, 2009		421,000		$	1.49

As of December 31, 2008, there was $708 thousand of total unrecognized compensation cost related to non-vested shares based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted –average period of 1.3 years. The total fair value of shares vested during the years ended December 31, 2006, 2007, and 2008 was $860 thousand, $1.056 million, and $550 thousand, respectively.

During the years ended December 31, 2006, the Company extended the contractual life of 372,000 fully vested share options held by two outside consultants. No additional expense was recognized at December 31, 2006 as a result of the modifications.

During the years end December 31, 2006, 2007 and 2008, the Company extended the contractual life of 33,000, 629,000, and 10,000 vested options, respectively, held by several former employees. No additional expense was recognized as a result of the modifications.

(7) Earnings Per Share

In accordance with SFAS No. 128, Earnings per Share (“SFAS No. 128”), codified in ASC 260, basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted net loss per common share is computed similarly to basic net loss per share, except that the denominator is increased to include all potential dilutive common shares, including outstanding options and warrants. Potentially dilutive common shares have been excluded from the diluted loss per common share computation for each of the three years ended December 31, 2006, 2007 and 2008 and for the nine months ended September 30, 2008, because such securities have an anti-dilutive effect on loss per share due to the Company’s net loss.

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

F-18

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(7) Earnings Per Share (continued)

The following table sets forth a reconciliation of the number of shares used in the basic and diluted EPS computation for the years ended December 31, 2006, 2007 and 2008 and the nine months ended September 30, 2008 2009:

	at December 31,						at September 30,
	2006		2007		2008		2008		2009

Weighted average common shares outstanding		43,158		47,934		54,070		53,709		56,134
Dilutive securities Options and warrants		-		-		-		-		2,882
Diluted average common stock equivalents outstanding		43,158		47,934		54,070		53,709		59,016

The following table sets forth the number of potential shares of common stock that have been excluded from diluted earnings per share because their effect was anti-dilutive (in thousands):

	at December 31,						at September 30,
	2006		2007		2008		2008		2009

Outstanding stock options		2,730		4,210		2,897		2,897		2,907
Outstanding warrants		6,192		5,105		5,118		5,118		3,125
		8,922		9,315		8,015		8,015		6,032

(8) Income Taxes

No provision for Federal or state income taxes has been recorded as the Company has incurred net operating losses since inception.

Significant components of the Company’s deferred tax assets at December 31, 2008 and 2007 consist of the following (in thousands):

	December 31,
	2007			2008
Deferred tax assets
Domestic and operating loss carryforwards	$	33,189		$	33,728
Research and development credits		2,756			2,756
Contributions		55			55
Fixed assets		15			19
Stock based compensation		792			971
Accrued compensation		107			135
Total deferred tax asset		36,914			37,664
Valuation allowance for deferred assets		(36,914	)		(37,664	)
Net deferred tax asset	$	―		$	―

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

F-19

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(8) Income Taxes (continued)

At December 31, 2007 and 2008, the Company provided a full valuation allowance against its net deferred tax assets since realization of these benefits is not considered to be more likely than not. The increase in the valuation allowance of $11.1 million, $2.8 million and $750 thousand for 2006, 2007 and 2008, respectively, resulted primarily from the additional net operating loss carryforward generated.

At December 31, 2008, the Company had Federal net operating loss carryforwards of $87 million that expire in varying amounts between 2021 and 2028, and state net operating loss carryforwards of $87 million that expire in varying amounts between 2017 and 2023. Additionally, the Company has research and development credit carryforwards of $2.8 million as of December 31, 2008 for Federal tax purposes that expire in varying amounts between 2022 and 2025.

The Tax Reform Act of 1986 contains provisions which limit the ability to utilize net operating loss carryforwards and tax credit carryforwards in the case of certain events including significant changes in ownership interests. If the Company’s NOLs and/or tax credits are limited, and the Company has taxable income which exceeds the permissible yearly NOL, the Company would incur a Federal income and/or state tax liability even though NOLs would be available in future years.

Taxes computed at the statutory Federal income tax rate of 34 percent are reconciled to the provision for income taxes for the years ended December 31 as follows (in thousands):

	2006			% of pretax loss			2007			% of pretax loss			2008			% of pretax loss
United States Federal tax (benefit) at statutory rate	$	(9,600	)		34.0		$	(2,293	)		34.0		$	(675	)		34.0
State taxes (benefit) (net of federal benefit		(437	)		1.6			(104	)		1.6			(31	)		1.6
Change in valuation reserve		11,115			(39.4	)		2,780			(41.2	)		750			(37.8	)
Research and development credits		(1,429	)		5.1			(1,429	)		21.2			(1,429	)		72.0
Other non-deductible expenses		351			1.2			1,046			(15.6	)		1,385			(69.8	)
Provision for income taxes	$	―			―		$	―			―		$	―			―

(9) Commitments

Leases

The Company is obligated under a capital lease that expires in 2009 for office equipment. Included in property and equipment are assets recorded under this capital lease obligation with a cost of $20,200 at December 31, 2008. Depreciation expense related to these assets of $6,700 and $6,700 is reported for the years ended December 31, 2006, and 2007, respectively. The assets were fully depreciated at December 31, 2007.

The Company had several non-cancelable operating leases, primarily for facilities and office equipment. Rental expense, including maintenance charges, for operating leases during 2006, 2007 and 2008 was $887 thousand, $513 thousand and $63 thousand, respectively. The rental expense for the years ended December 31, 2006, 2007 and 2008 is reduced by sub lease payments received of $80 thousand, $123 thousand and $53 thousand, respectively.

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

F-20

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(9) Commitments (continued)

On June 30, 2007, the Company entered into a Termination of Sublease Agreement with its Sub landlord for release on its obligation related to the corporate office location. The original lease term expired on March 31, 2011. In consideration for acceptance of the early release, the Company conveyed furniture and equipment located on the premises and executed a Promissory note in the amount of $300 thousand. A loss on the early termination of the sublease agreement of $374 thousand was recognized by the Company.

Effective September 22, 2008 the Company agreed to a Fifth Amendment to Lease agreement with its landlord. Pursuant to the terms of the amendment, the Company reduced the size of its’ leased space and relocated its’ office within the building. The term of the amended lease expires on April 30, 2011. In consideration for the reduced lease obligation, the Company agreed to pay the landlord a relocation fee of $27 thousand pursuant to the terms of a Promissory note. The relocation fee has been included as rental expense for the year ended December 31, 2008. Annual payments required under the amended lease for the years ended December 31, 2009, 2010 and 2011 total $35 thousand, $36 thousand and $3 thousand, respectively.

Supplier Arrangement

The Company has entered into a non-exclusive worldwide agreement with Durect Corporation to develop and manufacture clinical and commercial supplies of the Company’s unique formulation for Alzheimer’s’ treatment. The Company has an exclusive worldwide license to Durect’s sustained release technology used in the production of this formulation. During the years ended December 31, 2004 and 2005, the Company made payments of $250 thousand and $250 thousand, respectively, upon initiation of the first Phase I trial for the product and initiation of the first Phase III trial for the product. These milestone payments were recorded as research and development expense. The Company will make additional payments of up to $2.5 million to Durect upon the achievement of certain development and regulatory milestones, as well as payments for research and development expenditures, and royalties based on product sales. The agreement is non-cancelable by Durect, except for material default by the Company. Research and development expenses recognized under the contract totaled $1.7 million for the year ended December 31, 2006. As of December 31, 2006, the Company was in default of the agreement due to non –payment,

On January 23, 2007 the agreement with Durect Corporation was amended to provide financial assistance to Company. Pursuant to the Amendment, Durect permanently waived its right to receive payments for development costs incurred totaling $727 thousand and its’ right to terminate the agreement as allowed for non-payment for outstanding development costs. Further, Durect remitted $1 million to the Company to assist in funding work required to compile and analyze data relating to the terminated Phase III clinical trial. In consideration for the above, the Company agreed to increase future royalty payments due Durect on product sales from a range of 5% to 7% to a range of 10% to 14% dependent upon volumes and to make a minimum royalty payment of $250 thousand annually commencing the year in which the first commercial sale is made. The liabilities forgiven by Durect and the financial payment made totaling $1.8 million have been recorded as deferred credits by the Company. The liability will be amortized over the projected royalty stream upon commercialization of the respective product.

On July 28, 2008, the Company entered into a Supply Agreement with Mallinckrodt Inc. to provide the Company with Lueprolide Acetate for a period of five years commencing January 1, 2009. Under the terms of the Agreement, the company is required to purchase 75% of its annual requirements for the product from Mallinckrodt at an agreed upon price of $550 per gram. The price will be adjusted annually to reflect cost increases of the supplier on a dollar-for dollar basis. The price to be paid by the Company will be reduced by $50 per gram from the price in effect once the first volume of 75% of its annual requirements is accepted under the “FMOC” manufacturing process as defined by the agreement. The agreement will be automatically renewed for an additional 5 year term unless Mallinkrodt provides written notice at least six months prior to the end of the initial term. The Agreement may be terminated by written agreement of the parties. Upon execution of the Agreement, Mallinkckrodt paid $500 thousand to the Company with the understanding that the Company would be in a position to accept product as of January 1, 2009. The Company has recorded the payment as a deferred purchase credit at December 31, 2008. The Company was in default of the Agreement at January 1, 2009, as it was unable to accept product.

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

F-21

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

Clinical Trials

In April 2005, the Company entered into a Master Service Agreement with Quintiles, Inc. (“Quintiles Agreement”) under which Quintiles provides services to the company related to the conduct of the Phase III clinical trials for the Company’s unique formulation for Alzheimer’s treatment. Pursuant to this agreement, Quintiles performs clinical trials and services, and other research and development services, as requested by the Company. The Company is obligated to pay fees, expenses and pass through costs of Quintiles in accordance with work orders issued under the agreement. The term of the agreement is for five years unless terminated sooner by the Company without cause upon 60 days written notice or by either party upon 30 days written notice of any breach of the agreement which is not cured within the 30 day notice.

Due to lack of funding, the Company was forced to terminate the Phase III clinical in September 2006. A final work order was executed on January 25, 2007 to close-out the study and terminate the contract. Research and development expenses recognized with respect to work orders issued under the Master Service Agreement totaled $8.7 million and $1.5 million for the years ended December 31, 2006 and 2007, respectively.

(10) Related Party Transactions

In December 2004, the Company purchased an executive officer’s former residence in Florida for $3.1 million. The residence was subsequently sold in January 2006. A loss of $1.1 million was recorded on the residential property as of December 31, 2005.

During March 2008, an executive officer loaned the Company $37 thousand. The interest free loan was paid in full as of September 30, 2008. During the two years ended December 2008, the Company funded travel expenses of the officer not directly related to the Company’s business. Travel expenses paid by the Company on behalf of the officer totaled $14 thousand. Payments made to the Company by the employee total $9 thousand. A receivable in the amount of $5 thousand has been recorded at December 31, 2008.

In May 2006, an executive officer of the company transferred 150,000 shares of common stock to the Company. The treasury shares acquired were retired by the Company.

(11) Subsequent Events

From January through November 30, 2009, the Company raised $1.3 million through the sale of 6.0 million shares of common stock at $0.20 per share and the issuance of 1.3 million shares of common stock upon exercise of outstanding warrants at $0.10 per share. These proceeds are net of expenses associated with warrants to be issued to outside consultants for services rendered in connection with the financing round totaling $99,000.

On May 28, 2009 the Company entered into a Transaction Management Agreement with Southridge Business Solutions Group LLC (“Southridge”). Under the terms of the Agreement, the Company retained Southridge, on a non-exclusive basis, to provide services to enable the Company to restructure its balance sheet and execute a potential public offering or other public transaction. In conjunction with the Transaction Management Agreement, Southridge provided a Term sheet for an Equity Purchase Agreement to be executed in conjunction with a public offering or other public transaction. Under the terms of the proposed Equity Purchase Agreement, Southridge would commit to purchase $20 million of the Company’s common stock during a two-year period commencing ninety days after the closing of the proposed public transaction. The purchase price of the common stock purchased under the Equity Purchase Agreement shall equal 92% of the average of the three low closing bid prices during the ten days commencing on the first trade date that notice is provided by the Company of its intent to draw down on the equity facility.

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

F-22

Curaxis Pharmaceutical Corporation

(formerly known as Voyager Pharmaceutical Corporation)

(A Development Stage Corporation)

Notes to Financial Statements

(11) Subsequent Events (continued)

In consideration for the services to be provided, the Company is required to pay Southridge a monthly management fee of $10 thousand commencing June 1, 2009 which is to be accrued and become payable upon the Company raising capital in excess of $50 thousand. Upon closing of a public transaction, the management fee will continue at $10 thousand per month and will be non-cancelable for a period of twelve months subsequent to the transaction date. As of November 30, 2009, management fees of $60 thousand had been paid by the Company. In addition, the Company issued a total of 1.7 million warrants to Southbridge to purchase the company‘s stock at $.001 per share. The warrants provide for a cashless exercise and expire seven years after the date of issuance. Per the agreement, additional warrants will be issued at the transaction date in so that the total warrants issued to Southridge equal 3% of the outstanding shares of commons stock of the surviving corporation on a diluted basis. For the nine months ended September 30, 2009 expense recognized by the Company on the issuance of the beneficial warrants totaled $121 thousand.

On June 12, 2009 the Company engaged Canterbury Investment Partners LLC (“Canterbury’) to assist the Company in negotiating reductions, deferrals or equity exchanges with its trade creditors and in developing a strategy to raise equity from current and prospective investors. In exchange for the services to be provided, the Company paid Canterbury a retainer of $50 thousand, $20 thousand payable on August 7, 2009 when the Company raised a total of $150 thousand in new equity investment and $30 thousand payable on August 21, 2009 when the Company raised a total of $500 thousand in new equity investment. The Company is required to pay a monthly fee of $5,833 for a period of twelve months commencing September 1, 2009 when the Company raised $600 thousand in new equity investment. As of November 30, 2009, monthly fees of $17 thousand had been paid by the Company Further, the Company is to issue warrants to Canterbury equal to 10% of the number of shares issued by the Company in new equity raised for cash consideration from the date of the agreement to the date a public transaction is completed.

On September 14, 2009 the Company executed a Letter of Intent to merge with a fully reporting US public company. Upon closing of the proposed transaction, the shareholders of the Company will own approximately 85% of the outstanding common stock of the merged entity.

On September 23, 2009, the Company reached an agreement with one of its vendors to satisfy amounts owed related to notes payable and trade debt outstanding. The agreement requires the Company to make payments totaling $2 million commencing September 1, 2010 and ending March 31, 2012. The Company has the right to prepay any balances due without penalty. In addition, the company agreed to prepay the entire balance of such payments in the event of an acquisition of all or substantially all of the Company’s assets or stock; in the event the company’s lead product candidate is licensed to a third party; in the event any patent related to the Company’s lead product candidate is sold to any third party; or in the event the Company obtains financing in excess of $20 million. Any payment not made in accordance with the agreement shall bear interest at 18% per annum. A gain totaling $6.5 million was realized on the vendor settlement. The basic and diluted EPS on the aggregate gain for the nine months ended September 30, 2009 were $.12 and $.11, respectively.

On December 2, 2009, the Board of Directors granted 150,000 shares of common stock to a former executive officer to satisfy, in full, amounts due under an original five year-employment employment contract.

On December 2, 2009 the Board of Directors approved the formation of a subsidiary, Curaxis Pharmaceutical Corporation. Further, the Board of Directors approved the merger of the subsidiary into Voyager Pharmaceutical Corporation upon which the Company’s name changed to Curaxis Pharmaceutical Corporation.`

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

F-23

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

OF AUTO SEARCH AND CURAXIS

The unaudited pro forma condensed combined financial statements presented below are based on the historical financial statements of Auto Search and Curaxis, adjusted to give effect to the acquisition of Auto Search by Curaxis for accounting purposes. The unaudited pro forma adjustments are described in the accompanying notes presented on the following pages. These adjustments do not give effect to any synergies that may be realized as a result of the Merger, nor do they give effect to any nonrecurring/unusual restructuring charges that may be incurred as a result of the integration of the two companies. As provided in the Merger Agreement, the unaudited pro forma condensed combined financial statements assume that, at the effective time of the Merger, all of Auto Search’s common stock not subject to cancellation will convert into Curaxis common shares at the ratio of 1 to 1.

The unaudited pro forma condensed combined balance sheet as of September 30, 2009 gives effect to the proposed Merger as if it occurred on September 30, 2009 and combines the historical balance sheets of Auto Search and Curaxis as of September 30, 2009. The Curaxis balance sheet information was derived from its unaudited balance sheet as of September 30, 2009 included herein. The Auto Search balance sheet information was derived from its unaudited condensed balance sheet included in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009 and also included herein.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2009 and the year ended December 31, 2008 are presented as if the Merger was consummated on January 1, 2008, and combines the historical results of Auto Search and Curaxis for the nine months ended September 30, 2009 and the year ended December 31, 2008. The historical results of Curaxis were derived from its unaudited statement of operations for the nine months ended September 30, 2009 and its audited statement of operations for the year ended December 31, 2008 included herein. The historical results of Auto Search were derived from its unaudited condensed statement of operations for the nine months ended September 30, 2009 included in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, and its audited statement of operations included in its Annual Report on Form 10-K for the year ended December 31, 2008 and also included herein.

The unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had Auto Search and Curaxis been a combined company during the specified periods. The pro forma adjustments are based on the preliminary information available at the time of the preparation of this proxy statement/prospectus. The unaudited pro forma condensed combined financial statements, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the historical financial statements of Curaxis for the nine months ended September 30, 2009 and for the year ended December 31, 2008 included herein, and the historical condensed financial statements of Auto Search included in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, and the historical financial statements of Auto Search included in its Annual Report on Form 10-K for the year ended December 31, 2008, also included herein.

Unaudited Pro Forma

Condensed Combined Balance Sheet

	September 30, 2009
	Auto Search			Curaxis			Pro Forma			Pro Forma
	Historical			Historical			Adjustments			Combined
	(In thousands)
Assets
Current assets:
Cash, cash equivalents	$	1		$	869		$	334	(A)	$	1104
								(100)	(C)
Accounts receivable from related parties					13						13
Prepaid expenses & other current assets					249			(208)	(D)		41
Total current assets		1			1,131			26			1,158
Property and equipment, net					5						5
Total assets	$	1		$	1,136		$	26		$	1,163

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2		$	2,738		$			$	2,740
Accrued expenses		—			1,264			80	(D)		1,374
								30	(E)
Notes payable		—			2,178						2,178
Due to related party		11									11
Total current liabilities		13			6,180			110			6,303
Deferred purchase credit					500						500
Deferred revenue					1,727						1,727
Long-term debt					1,750						1,750
Total liabilities		13			10,157			110			10,280
Stockholders’ equity (deficit):
Preferred stock		—			—
Common stock		—			62			2	(A)		7
								19	(B)
								(181)	(C)
								105	(F)
Additional paid-in-capital		8			77,695			332	(A)		78,077
								(19)	(B)
								81	(C)
								135	(D)
								(30)	(E)
								(125)	(F)
Accumulated deficit		(20	)		(86,778	)		(423)	(D)		(87,201)
								20	(F)


Total stockholders’ equity (deficit)		(12	)		(9,021	)		(84)			(9,117	)
Total liabilities and stockholders’ equity (deficit)	$	1		$	1,136		$	26		$	1,163

Unaudited Pro Forma Condensed Combined Statement of Operations


	Nine Months Ended September 30, 2009
	Auto Search			Curaxis			Pro Forma			Pro Forma
	Historical			Historical			Adjustments			Combined
	(In thousands, except per share amounts)
Operating expenses:
Research and development	$	—		$	74					$	74
Selling and marketing		—			—						—
General and administrative		4			430			423	(D)		857
Total operating expenses		4			504			423			931
Operating loss		(4	)		(504	)		(423)			(931	)
Gain on debt restructuring		—			6,562						6,562
Interest income(expense), net		—			(299	)					(299	)
Net income(loss)	$	(4	)	$	5,759			(423)		$	5,332
Net income (loss) per share-basic	$	(0.00	)	$	0.10					$	0.07
Net loss per share-diluted	$	(0.00	)	$	0.10					$	0.07
Weighted average shares of common stock outstanding-basic		2,077			56,134						71,996
Weighted average shares of common stock outstanding- diluted		2,077			54,070						79,756

Unaudited Pro Forma Condensed Combined Statement of Operations

	Year Ended December 31, 2008
	Auto Search Historical			Curaxis Historical			Pro Forma Adjustments			Pro Forma Combined
	(In thousands, except per share amounts)
Operating expenses:
Research and development	$	—		$	75					$	75
Selling and marketing		—			—						—
General and administrative		17			1,433			544	(D)		1,994
Total operating expenses		17			1,508			544			2,069
Operating loss		(17	)		(1,508	)		(544)			(2,069	)
Interest income(expense), net		—			(478	)					(478	)
Net income(loss)	$	(17	)	$	(1,986	)		(544)		$	(2,547)
Net income (loss) per share-basic	$	(0.01	)	$	0.04					$	0.04
Net loss per share-diluted	$	(0.01	)	$	0.04					$	0.04
Weighted average shares of common stock outstanding-basic		2,077			54,070						71,996
Weighted average shares of common stock outstanding- diluted		2,077			54,070						71,996

100

NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL INFORMATION

1.	Basis of Presentation

On February 8, 2010 Auto Search and Curaxis entered into the Merger Agreement pursuant to which Curaxis will merge with and into Auto Search. Auto Search will be the surviving corporation and will operate under the name Curaxis Pharmaceutical Corporation following the merger. Each outstanding share of Curaxis will be cancelled at the effective time of the merger and, in exchange therefore, Auto Search will issue shares of Auto Search common stock. Following the Merger, Curaxis stockholders will no longer have any interest in Curaxis, but will have an equity stake in Auto Search. Immediately after the Merger, existing Auto Search stockholders are expected to represent 9% of the outstanding shares of Auto Search common stock and the former Curaxis stockholders are expected to own approximately 91% of the Auto Search common stock. The Merger is intended to qualify as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code. The Merger is subject to customary closing condions.

Because Curaxis shareholders will own approximately 85% of the common stock of the combined company upon consummation of the Merger, Curaxis is deemed to be the acquiring company for accounting purposes and the transaction will be accounted for as a reverse acquisition under the purchase method of accounting for business combinations in accordance with accounting principles generally accepted in the United States. Accordingly, the assets and liabilities of Auto Search will be recorded as of the merger closing date at their estimated fair values.

The unaudited pro forma condensed combined financial statements assume that, immediately prior to the effective time of the Merger, all of Curaxis common stock will convert into Auto Search common shares at the ratio of 1 to 1 and subject to further adjustment to account for the occurrence of certain events discussed elsewhere in this proxy statement/prospectus.

2.	Method of Accounting

ASC Topic 805 revises the definition of the acquisition date as the date the acquirer obtains control of the acquiree. This is typically the closing date, and is used to measure the fair value of the consideration paid. When the acquirer issues equity instruments as full or partial payment for the acquiree, the fair value of the acquirer’s equity instruments will be measured at the acquisition date, rather than an earlier measurement date (i.e. the merger announcement date). Transaction costs are excluded from the acquisition accounting. They are instead accounted for under other generally accepted accounting principles, which may mean the costs are expensed as incurred (e.g., due diligence costs), or, to the extent applicable, treated as a cost of issuing equity securities.

ASC Topic 805, as amended also retains the guidance in SFAS 141 for identifying and recognizing intangible assets separately from goodwill. However, as amended, the scope is broader than that of SFAS 141, which was applied to only business combinations in which control was obtained by transferring consideration. Since the transaction is expected to close after January 1, 2009, the application of ASC Topic 805, as amended, has been considered in arriving at the unaudited pro forma results.

101

NOTES TO UNAUDITED PRO FORMA CONDENSED

COMBINED FINANCIAL INFORMATION

3.	Pro Forma and Purchase Accounting Adjustments

The unaudited pro forma condensed combined financial statements include pro forma adjustments to give effect to certain significant capital transactions occurring as a direct result of the proposed Merger and the acquisition of Auto Search by Curaxis for accounting purposes.

The pro forma adjustments are as follows:

(A) To reflect the sale of 1,601,460 shares of common stock and the exercise of 439,740 warrants for the purchase of common stock of Curaxis subsequent to September 30, 2009 as part the Bridge Financing initiated by Curaxis in 2009 to fund the Merger transaction.

(B) To reflect the 91 to 1 forward share split of the common stock of Auto Search, $.0001 par value per share, effective January 12, 2010.

(C) To reflect the cancelation of 181,285,000 shares of Auto Search common shares and consideration paid including $100,000 cash and the issuance of 3,589,460 warrants. As stated by the Merger Agreement, the surviving Cooperation will issue will issue one common share for every one ordinary shares held by Auto Search shareholders for a total of 7,694,700 shares of the surviving corporation common stock.

Immediately following the effective time of the Merger and attributing ownership to warrants issued in consideration of the Merger, Curaxis shareholders will own approximately 85%, and Auto Search’s existing stockholders will own approximately 15%, of the common stock of Curaxis, the surviving corporation.

(D) To reflect estimated additional costs to consummate the Merger and to register the shares issued in the Merger that are not yet reflected in the historical results of Auto Search and Curaxis at September 30, 2009. Merger costs include fees payable for investment banking services, legal, accounting, printing and other consulting services. The costs reflect the value fair of 179,096 shares of common stock to be issued by Curaxis in exchange for legal services and the fair value of 492,599 additional warrants to be issued by Curaxis for investment advisory services rendered in connection with the Merger transaction. These costs are expensed as incurred and the additional Curaxis costs are reflected as an increase in other accrued liabilities and accumulated deficit.

(E) To reflect the issuance of additional warrants for consulting services directly associated with the Bridge Financing completed immediately prior to the Merger date.

(F) To reflect the recapitalization of the capital structure as a result of the merger. Upon completion of the Merger, 71,996,465 shares of common stock of the parent corporation, par value of $.0001, will be outstanding.

102

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Indemnification of Officers and Directors

Our directors and officers are indemnified as provided by the Nevada corporate law and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

Exhibits and Financial Statements

The exhibits listed below in the “Exhibit Index” are part of this Registration Statement and are numbered in accordance with Item 601 of Regulation S-K.

103

Undertakings

(a) The undersigned registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement., (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(c) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) The undersigned registrant hereby undertakes that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form.

(e) The registrant undertakes that every prospectus (i) that is filed pursuant to the immediately preceding paragraph or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(f) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

104

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, on this 11 day of February 2010.

AUTO SEARCH CARS, INC.


Date: February 11, 2010	By:	/s/ Jonathan Martin
		Jonathan Martin Chief Executive Officer (Principal Executive Officer)


Date: February 11, 2010	By:	/s/ Jonathan Martin
		Jonathan Martin Chief Financial Officer (Principal Accounting Officer)

Exhibit Number	Description of Document
2.1	Agreement and Plan of Merger and Plan of Reorganization by and Among Auto Search Cars, Inc., Auto Search Cars Acquisition Corp., Curaxis Pharmaceutical Corporation
3.1	Articles of Incorporation (incorporated by reference to the Company’s Registration Statement on Form S-1, filed with the SEC on May 15, 2008 (Registration No. 333-150937)).
3.2	By-laws of the Company (incorporated by reference to the Company’s Registration Statement on Form S-1, filed with the SECon May 15, 2008 (Registration No. 333-150937)).
5.1	Opinion of Anslow & Jaclin LLP
23.1	Consent of counsel (included in Exhibit 5.1)
23.2	Consent Rich Baker Berman and Company
23.3	Consent of Bernstein & Pinchuk LLP, Chartered Accountants

105

CURAXIS PHARMACEUTICAL Inactive S-4Registration of securities issued in business combination transactions