CalciTech 20F 2009 Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 20-F

_________________________

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

S	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 2009

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

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

Date of event requiring this shell company report _____________________

For the year ended December 31, 2009

Commission File Number 0-20420

CALCITECH LTD.

(Exact name of Registrant as specified in its charter)

A CORPORATION FORMED UNDER THE LAWS OF BERMUDA

(Jurisdiction of Incorporation or Organization)

10 route de l’aeroport

1215 Geneva

Switzerland

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act: NONE

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

Common Shares

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NONE

The number of outstanding Common Shares as of June 8, 2010 is 185,639,086

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

Indicate by check mark if the Company is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. S Yes ¨ No

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

S Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer or a non-accelerated filer. ¨ Large accelerated filer ¨ Accelerated filer S Non-accelerated filer

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

U.S. GAAP ¨

International Financial Reporting Standards as issuedSOther ¨

by the International Accounting Standards Board

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

Item 17 ¨ Item 18 ¨

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

¨ Yes S No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the Company has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. NOT APPLICABLE

TABLE OF CONTENTS

		Page
PART I		1
Item 1.	Identity of Directors, Senior Management and Advisors	1
Item 2.	Offer Statistics and Expected Timetable	1
Item 3.	Key Information	1
3A.	Selected Financial Data	1
3B.	Capitalization and Indebtedness	2
3C.	Reasons for the Offer and Use of Proceeds	2
3D.	Risk Factors	2
Item 4(A).	Unresolved Staff Comments	4
Item 4.	Information on the Company	5
4A.	History and Development of the Company	5
4B.	Business Overview	5
4C.	Property, Plant and Equipment	16
Item 5.	Operating and Financial Review and Prospects	16
5A.	Operating Results	18
5B.	Liquidity and Capital Resources	19
5C.	Research and Development, Patents and Licenses, etc.	20
5D.	Trend Information	20
5E.	Off Balance Sheet Arrangements	20
5F.	Tabular Disclosure of Contractual Obligations	21
Item 6.	Directors, Senior Management and Employees	22
6A.	Directors, Senior Management	22
6B.	Compensation	23
6C.	Board Practices	23
6D.	Employees	24
6E.	Share Ownership	24
Item 7.	Major Shareholders and Related Party Transactions	25
7A.	Major Shareholders	25
7B.	Related Party Transactions	25
7C.	Interest of Experts and Counsel.	25
Item 8.	Financial Statements	26
8A.	Consolidated Statements and Other Financial Information	26
8B.	Significant Changes	26
Item 9.	The Offer and Listing	27
9A.	Price History of Stock	27
9B.	Plan of Distribution	27
9C.	Markets	28
9D.	Selling Shareholders	28
9E.	Dilution	28
9F.	Expenses of the Issue	28
Item 10.	Additional Information	28
10A.	Share Capital	28
10B.	Memorandum and Articles of Association	28
10C.	Material Contracts	29
10D.	Exchange Controls	29

10E.	Taxation	30
10F.	Dividends and Paying Agents.	33
10G.	Statement of Experts.	33
10H.	Documents on Display.	34
10I.	Subsidiary Information	34
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 12.	Description of Securities Other than Equity Securities	34
Item 13.	Defaults, Dividend Arrearages and Delinquencies	34
PART II		34
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	34
Item 15.	Controls and Procedures.	34
Item 16.		36
16A.	Audit Committee Financial Report	36
16B.	Code Of Ethics	36
16C.	Principal Accountant Fees And Services	36
16D.	Exemptions From The Listing Standards For Audit Committees	36
16E.	Purchases Of Equity Securities By The Issuer And Affiliated Purchasers	37
PART III		37
Item 17.	Financial Statements	37
Item 18.	Financial Statements	37
Item 19.	Exhibits	37

PART I

The following discussion contains forward-looking statements regarding events and financial trends, which may affect CalciTech Ltd’s (“CalciTech,” the “Company,” “we,” “our” or “us”) future operating results and financial position. Such statements are subject to risks and uncertainties that could cause our actual results and financial position to differ materially from those anticipated in forward-looking statements. These factors include, but are not limited to, the fact that we are in the development stage, will need additional financing to build our proposed plants and will be subject to certain technological risks associated with scaling up production to a commercial level, all of which factors are set forth in more detail in the section entitled “Risk Factors” in Item 3.D. and “Operating and Financial Review and Prospects” at Item 5.

Item 1.

Identity of Directors, Senior Management and Advisors

Not Applicable.

Item 2.

Offer Statistics and Expected Timetable

Not Applicable.

Item 3.

Key Information

3A.	Selected Financial Data

The following tables set forth selected consolidated financial data of the Company for the years ended December 31, 2009, 2008 and 2007, the 10 months ended December 2006, and the year ended February 28, 2006. We derived all figures from our financial statements, which were audited by our independent auditor and prepared in accordance with International Financial Reporting Standards (IFRS).

This information should be read in conjunction with our audited financial statements for the years ended December 31, 2009, 2008 and 2007 included in this annual report. Historical information for periods prior to the year ended December 31, 2007 are not included in this annual report.

All financial information is presented in U.S. dollars, unless indicated otherwise.

	year to			year to			year to			10 months to			Year to
	Dec 31, 2009			Dec 31, 2008			Dec 31, 2007			Dec 31, 2006			Feb 28, 2006

Operations Data	$			$			$			$			$
Revenue		0			0			58,291			47,649			59,805
Income (loss) from operations		(965,000	)		(1,234,000	)		(314,000	)		(394,000	)		(1,438,000	)
Net loss		(1,081,000	)		(2,025,000	)		(678,000	)		(620,000	)		(1,858,000	)
Number of shares		150,858,348			99,998,665			88,656,114			88,899,675			88,899,675
Loss per Common Share		(0.001	)		(0.002	)		(0.001	)		(0.07	)		(0.02	)

Balance Sheet Data
Cumulative Deferred
Development Expenditure		0			0			0			0			0
Total Assets		8,206,000			7,157,000			5,450,000			3,244,000			2,507,000
Long Term Obligations		2,297,000			5,545,000			1,782,000			1,993,,000			847,000
Capital stock		1,898,000			1,846,000			1,824,000			1,813,000			1,813,000
Total Stockholders’ Equity/ (Deficiency)		5,145,000			609,000			2,267,000			(77,000	)		(730,000	)

3B.	Capitalization and Indebtedness

Not Applicable.

3C.	Reasons for the Offer and Use of Proceeds

Not Applicable.

3D.	Risk Factors

In addition to the other information presented in this Annual Report, the following should be considered carefully in evaluating us and our business. This Annual Report contains forward-looking statements that involve risk and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed below and elsewhere in this Annual Report.

Notwithstanding the foregoing, our future success will be affected by many factors that are frequently associated with the development of a new business, which include, but are not limited to, the following:

We Have Incurred Net Losses Since Our Inception and Expect Losses to Continue. Except for net income of $732,000 for fiscal year ended February 28, 1996, we have not been profitable since our inception. During the year ended December 31, 2009, we earned $NIL from the sale of Synthetic Calcium Carbonate (“SCC”) samples. As our marketing activities have been concentrated during 2009 in other industrial sectors, no sample sales were possible with new products. For the year ended December 31, 2009, we had a net loss of $1,081,000 and an accumulated deficit of $47,474,000. The report of independent auditors on our December 31, 2009 financial statements includes an explanatory paragraph assuming the Company will continue as a going concern. Lack of operating funds may result in staff reductions and curtailing the construction currently planned. See Risk Factor entitled "If We Are Unable to Raise Funds Our Growth May Be Adversely Affected" below.

If We Are Unable to Raise Funds Our Growth May Be Adversely Affected. Historically, we have had to seek capital for research and development of our SCC products due to lack of revenues. Based on the available amount of $22,000 in cash and together with its working capital credit facility, and the continuing control of expenses, the Company has sufficient working capital to meet its obligations up to the next 12 months following the date of the approval of these financial statements. We have failed to secure the endorsement of a House Bank in Germany of our application to secure a grant from the European Regional Structural Fund towards a 50% of the capital expenditure (CapEx) of our planned 100,000 tonnes per annum plant in Leuna, Germany. This recently has been largely due to the difficulties in the banking sector in Germany, particularly affected by sub-prime debt and more recently the collapse of the credit markets. Although the Company has determined to seek a strategic partner, there is no assurance in the current economic climate that such a partner will participate in the total project CapEx which is now estimated at Euro 45 million.

We believe that due to the environmental aspect of our technology, substantial grants and loans will be available for future projects. However, in the event that there is a cash shortage and we are unable to obtain a debt financing or grants, additional equity financing will be required. The proposed plants in Germany will also require additional funds, if our revenues or grants are unable to cover the building expenses. Seeking additional financing would dilute the ownership of existing shareholders.

Our Inability to Protect Our Patents and Other Proprietary Rights Could Adversely Impact Our Competitive Position. We believe that our patents and other proprietary rights are important to our success and our competitive position. Accordingly, we devote substantial resources to the establishment and protection of our patents and proprietary rights. We currently hold patents for processes and have patents pending for additional processes that we intend to use to market our SCC technology. However, our actions to establish and protect our patents and other proprietary rights may be inadequate to prevent others from using our process outside of the jurisdiction of our patent or to prevent others from claiming violations of their patents and proprietary rights by us. If our processes are challenged as infringing upon patents of other parties, we will be required to modify our processes, obtain a license or litigate the issue, all of which may have an adverse effect on our business.

Failure to Protect Our Trade Secrets May Assist Our Competitors. We protect our trade secrets and proprietary know-how for our processes by various methods, including the use of confidentiality agreements with employees and strategic partners. However, such methods may not provide complete protection and there can be no assurance that others will not obtain our know-how or independently develop the same or similar technology. We prepare and file for patent protection on aspects of our technology, which we think will be integrated into final processes early in research phases, thereby limiting the potential risks.

We Have Never Produced SCC on a Commercial Scale. We operated a small process pilot plant based in Norway, which was moved to Leuna in Germany in 2002. The equipment was scaled up on a ratio of approximately 60:1 but still requires to be scaled up on a ratio of approximately 20:1 for the commercial plant. Although specialist suppliers of filtration and drying equipment have conducted trials for us and found the scale up ratio to be within acceptable limits, there are no guarantees that the technology will operate as planned or that costs for additional modifications will not occur. In addition, if we are unable to produce SCC on a commercial scale we will be unable to successfully commercialise our SCC technology as planned in our business plan.

Our Competitors May Develop a Competing Technology. One of our competitive advantages depends on our ability to use waste lime, which is a waste product available at little or no cost. If competitors are able to develop a competing technology, we may no longer have the free or low cost source of raw material.

Our SCC Product is at Initial Market Introduction and We Are Not Sure the Market Will Accept it. We intend to target our SCC products in the following markets: paper; food and pharmaceutical, plastic, sealants and adhesives industries. The market acceptance of SCC products produced by our process for use in pharmaceutical and food additives will depend upon consumers and regulatory authorities accepting them. Moreover, although our process can produce pure SCC from waste lime and letters of intent from paper and other industrial producers for the supply from the first commercial plant have been signed, there is no assurance that we will be able to convince customers to convert these to contracts of purchase, limiting the number of potential customers for our product to paper or chemical producers. Failure to achieve market share in these industries could have material adverse effects on our long-term business, financial condition and results of operation.

All of our operations are located outside of the United States, substantially all of our sales from samples are generated outside of the United States and all of our assets are located outside of the United States, subjecting us to risks associated with international operations. Our operations are in Europe and we have no operations in the United States. 100% of our revenue from our samples was generated from outside of the United States. The international nature of our business subjects us to the laws and regulations of the jurisdictions in which we operate and sell our products. In addition, we are subject to risks inherent in international business activities, including:

	·	difficulties in collecting accounts receivable and longer collection periods,
	·	changes in overseas economic conditions,
	·	fluctuations in currency exchange rates,
	·	potentially weaker intellectual property protections,
	·	changing and conflicting local laws and other regulatory requirements,
	·	political and economic instability,
	·	war, acts of terrorism or other hostilities,

	·	potentially adverse tax consequences,
	·	difficulties in staffing and managing foreign operations, or
	·	tariffs or other trade regulations and restrictions.

Our results of operations may be adversely impacted by currency fluctuations. Our revenue is in currencies other than United States dollars, primarily in Euros. Because our financial statements are reported in United States dollars, fluctuations in Euros against the United States dollar may cause us to recognise foreign currency transaction gains and losses, which may be material to our operations and impact our reported financial condition and results of operations.

Penny stock rules may make it more difficult to trade our Common Shares. The Securities and Exchange Commission has adopted regulations which generally define a “penny stock” to be any equity security that has a market price, as defined, less than U.S. $5.00 per share or an exercise price of less than U.S. $5.00 per share, subject to certain exceptions. Our securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors such as, institutions with assets in excess of U.S. $5,000,000 or an individual with net worth in excess of U.S. $1,000,000 or annual income exceeding U.S. $200,000 or U.S. $300,000 jointly with his or her spouse. For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchaser’s written agreement of the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also affect the ability of our investors to sell their shares in the secondary market.

Potential litigation or environmental exposure may have a material adverse effect on our financial condition or results of operation. Our operations are subject to international, federal, state and local governmental, tax and other laws and regulations, and potentially to claims for various legal, environmental and tax matters. While we carry liability insurance, which we believe to be appropriate to our business, an unanticipated liability, arising out of such a litigation matter or a tax or environmental proceeding could have a material adverse effect on our financial condition or results of operations.

Our share has been thinly traded and we cannot predict the extent to which a trading market will develop. Our Common Shares trades on the “OTCBB” and is thinly traded compared to larger, more widely known companies. Thinly traded common stock can be more volatile than common stock trading in an active public market. We cannot predict the extent to which an active public market for our Common Shares will develop or be sustained.

We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to U.S. holders. We believe that we were not a “passive foreign investment company”, or PFIC, for U.S. federal income tax purposes for our taxable year ending on December 31, 2009, and we do not expect to become one for our current taxable year or in the future, although there can be no assurance in this regard. A non-U.S. corporation will be considered a PFIC for any taxable year if either (1) at least 75.0% of its gross income is passive income or (2) at least 50.0% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income. The market value of our assets may be determined in large part by the market price of our Common Shares, which is likely to fluctuate. In addition, the composition of our income and assets will be affected by how, and how quickly, we spend the cash we receive. If we are treated as a PFIC for any taxable year during which U.S. holders hold our shares, certain adverse United States federal income tax consequences could apply to U.S. holders. See “Special United States Federal Income Tax Considerations - Passive Foreign Investment Company.”

Item 4(A). Unresolved Staff Comments

Not Applicable.

Item 4.

Information on the Company

4A.	History and Development of the Company

CalciTech Ltd., a Bermuda Company, has developed a new process for manufacturing high quality Synthetic Calcium Carbonate (“SCC”). Our process produces SCC from waste lime and air polluting carbon dioxide. SCC is a white pigment. It is also a calcium source for pharmaceuticals and food. As of the date of this report, we do not have facilities to commence production of SCC on a full commercial scale.

Originally, we were formed on November 9, 1978, under the laws of British Columbia, Canada with the name Cornwall Petroleum & Resources Ltd. We then changed our name to Rexplore Resources International Limited and which was engaged in petroleum and resource development. In December of 1987, we were restructured and the prior management replaced in connection with the acquisition of a license to develop Trylene Gas. In July 1994, we changed our domicile from British Columbia, Canada to Bermuda and changed our name from Kemgas Sydney Ltd. to Kemgas Ltd. On July 25, 2000, we changed our name from Kemgas Ltd. to our present name, CalciTech Ltd., to better reflect our change in business to the production and sale of SCC.

For the purpose of commercialising our technology, we established CalciTech Synthetic Minerals Ltd., a Bermuda company that is wholly owned by us. On February 1, 2003, we transferred all of our entire SCC intellectual property rights and associated business activity to CalciTech Synthetic Minerals Ltd. CalciTech Synthetic Minerals Ltd. has two wholly-owned companies, CalciTech Group Services SA, a Swiss corporation, and CalciTech Synthetic Minerals Europe Ltd., a UK corporation. CalciTech Synthetic Minerals Europe Ltd. has been licensed with the technology and is responsible for all European operations for the Company.

Our administration headquarters are located at World Trade Centre, 10 Route de l’Aeroport, Geneva, Switzerland. We currently do not have full-scale commercial plants. We are currently engaged in the commercialisation and project development stage using sample material produced by a small-scale production plant located in Leuna, Germany. This plant produced bulk samples to support the sales activity to place the first 100,000 tonnes per annum plant production under letters of intent. Construction and commissioning are expected to take 18 months from the conclusion of the project finance.

The Company, through CalciTech Synthetic Minerals Europe Ltd., is now planning a matrix of plants in Europe and has made presentations to the European Investment Bank (“EIB”) to confirm that such projects will qualify under its technological innovation program for financial support. The Company’s financial advisors are currently in negotiations with a number of UK banks, in the context of the EIB borrowing for funding of all European plants.

We are also evaluating new product developments for new market applications and testing various feedstocks. It is intended that the small-scale plant will continue to produce our sample material to support other projects in other regions. We are also engaged in planning and developing proposed full-scale commercial plants located elsewhere in Europe. See “4B. Business Overview – Business Activities.” No assurance can be given that the planned plants will be economically or technically feasible. We have generated no cash flows from our operations, other than those generated through limited sample sales. See "Item 3D Risk Factors."

4B. Business Overview

Synthetic Calcium Carbonate (“SCC”)

Since June 1999, we have actively pursued our plan to develop and commercialize SCC from waste lime using our own proprietary process. Acutely aware of the industrial waste created from the production of acetylene gas, one of our former businesses, we have moved forward to develop a method to extract a commercial product from what is considered to be waste product: waste lime. Waste lime is generated from (i) the production of acetylene gas, (ii) manufacture of dicyandiamide from calcium cyanamide, (iii) the manufacture of paper sludge ash from recycled paper, and (iv) the manufacture of other chemical and mineral processes. In our pursuit to turn an environmental problem into a commercially viable business, we have developed our proprietary process to extract and produce quality SCC from waste lime. SCC is a white filler pigment and is used for paper filling and coating, as well as in, for example paint, polymers, food and pharmaceuticals.

Currently, we are in discussions with industrial partner(s) to establish our first full scale commercial plants and are engaged in sales activity within the paper, polymers, paints, food, pharmaceutical and cosmetic industries to seek commitment from potential customers to purchase SCC products from the first full scale commercial plants. In addition, we will have to seek industrial partner(s) or raise additional funds through loans from business partners, debt or equity financing and/or through environmental grants from authorities to build our initial plants. Assuming we have the capital to proceed, we intend to build 13 to 15 commercial plants over the next 10 years in Europe, some through joint ventures with financial or industry partners.

Below is a discussion of our proprietary SCC process, conventional Precipitated Calcium Carbonate (“PCC”) production, our products and a summary of our current activities by site. We refer to the PCC produced by our technology as Synthetic Calcium Carbonate, SCC.

Our SCC Process

Our SCC process can utilise most grades of lime, including low quality lime or industrial waste lime such as carbide lime. In our process, the waste lime is mixed with a solution of water and a proprietary promoter in a digester, which selectively dissolves the calcium and leaves the impurities behind as insoluble solids, which are readily removed by subsequent flocculation. The clear calcium solution is then pumped into a reactor into which carbon dioxide from any industrial emission source is passed to produce synthetic calcium carbonate by precipitation. After the SCC product is filtered off, the promoter solution is recycled back into the digester. The SCC can be supplied directly as slurry or dried and bagged for market.

By the use of this process, we reduce waste lime and carbon dioxide emissions into the environment. Carbide lime is a waste problem in many countries. Currently, this waste lime is stored in large ponds with no or very limited disposal processes available. Its high pH has potential pollution impacts to soil and ground water. This is a common environmental problem in the former Eastern Block countries, including the eastern section of Germany and Slovakia and remains a problem in other industrial nations. Many of these governments have regulations for the clean up of these ponds, which gives us the opportunity to have sources of free or low cost waste lime. Many private companies are also willing to supply waste lime at little or no cost because they have limited storage for the waste lime. Additionally, each year over a million tonnes of waste lime is created as a by-product of on-going acetylene plants in China alone. Although availability of new waste carbide lime from acetylene production will reduce in the future, we expect to utilise other available waste lime sources. In particular paper sludge ash (“PSA”). The usage of recycled paper has reached 50 million tonnes in Europe and continues to grow as the demand for sustainable products increases. However it is not generally realised that paper contains up to 40% minerals, which remain as a waste sludge after the recovery of the cellulose fibres. The elimination of this sludge is a growing problem following the new EU Waste Directive. Similar problems exist with recycled paper in North America and China. By enabling the raw material to be renewed in a closed loop, the paper industry can move closer towards the goal of zero waste, zero environmental impact and carbon footprint-free production. This will significantly reinforce their sustainability credentials.

CalciTech's new process overcomes the problem of impurities that has hitherto hindered the re-use of the minerals. The new process uses CalciTech's original technology for treating waste lime and applies it to solve a growing environmental problem. Trials have been successfully completed with waste from a range of paper mills. The SCC produced from this waste is of exceptionally high brightness and low abrasivity. Extensive trials will be carried out with potential customers during 2010.

Conventional PCC Process

Other PCC producers must use the conventional method for producing their PCC starting from high-grade limestone, which has limited availability. High-grade limestone deposits are found in quarries that must be mined, creating dust and noise pollution and leaving scars on the land. The conventional process involves calcining high quality white limestone to produce high purity quicklime. The quicklime is slaked with water to create milk of lime. PCC is produced by sparging carbon dioxide through a batch reactor containing the milk of lime, then the PCC is filtered and sold dried at low solids or, more normally, as slurry in paper filling.

SCC Versus PCC Production Process

The SCC Process

There are a number of ways in which the SCC process differs from the conventional process. The advantages resulting from the differences between the SCC process and the PCC process are as follows:

The SCC process does not require lime slaking and classification steps. This gives us significant advantages in both quality and cost effectiveness.

The SCC process includes a digester circuit that facilitates the use of any waste lime, such as carbide lime, thereby removing the need to purchase lime as is required in the conventional process.

The SCC process includes a promoter recycle loop to enhance the process economics. Any impurities in the lime feed are rejected as insolubles in the digester resulting in a final SCC product of the highest purity. SCC is less dependent on the purity of the starting material and is always superior to that of the starting material.

In the SCC process, the total lime content is present in solution whereas in the conventional process the lime is present in suspension (milk-of-lime). The reaction times in the SCC process are therefore much shorter than in the conventional process as the SCC process eliminates the slow lime dissolution step. This advantage allows for the use of smaller equipment as well as providing a much higher degree of control over the process. The SCC solution process is therefore more flexible and easier controlled than the conventional suspension process enabling a narrower particle size distribution. Additionally, the higher level of control enables us to tailor make SCC products to serve a wide range of markets.

Patents

We first applied to patent our process of transforming waste lime into high quality SCC in 1998 and subsequently a patent was granted the United Kingdom. An international application was filed under the European Patent Cooperation Treaty in December of 1999 to expand the protection of our intellectual property on an international level. The patent examination was completed in May 2001 and patents were granted on July 31, 2003 in 13 European countries. Since then, patents have also been granted in Eurasia (Russia and the independent states formerly part of the Soviet Union), South Africa, Hong Kong, Indonesia, China, Republic of Korea, Slovakia, Australia, New Zealand and Poland. During 2008 further patents were granted in The United States, Canada, Brazil, Czech Republic, Hungary and India.

In October 2009, CalciTech filed an application for a new patent at the UK Patent Office. This new patent will protect the processes to be used by CalciTech to produce SCC with exceptional features including, but not limited to, a unique morphology (rice grain shape), a very narrow particle size distribution and exceptional purity, which itself gives very high brightness. Typically, CalciTech produce particles in the sub-micron range which satisfies the large majority of potential applications, as demonstrated by extensive trials with future customers. However, CalciTech can use the same process to produce other particle sizes in the nano and micron range but as there is further development work required, this has been delayed until market demand dictates. This wide range of capability opens up new applications in growing markets.

In December 2009, CalciTech filed a new patent at the United Kingdom Patent Office for a technology that enables paper producers to recycle all the minerals used in paper, in particular PSA.

When granted, these patents will extend the patent protection of CalciTech’s process and product in terms of lifetime and coverage.

Development of the SCC Technology

The research and development of our SCC process began in 1994 with J.W. Bunger & Associates, a technical research company based in Salt Lake City, USA. This led to a research project associated with the Swiss Federal Institute of Technology in Lausanne, Switzerland and University of Lyon in France. We began a pilot project in Manchester, England, which ran between September 1998 and November 1999. During the pilot project, we were successful in converting waste-lime into high quality SCC. The Recherche et Valorisation des Mineraux (“RVM”) of Paris, France confirmed the application as a superior quality paper coating pigment, a market currently dominated by GCC and kaolin. The pilot plant was moved to the site of an industrial partner at Odda in Norway, where the SCC development program continued.

In 2007, worldwide PCC capacity was 13 million tonnes, of which two-thirds was utilised by the paper industry. Within the paper industry, SCC is aimed at the coatings sector, currently dominated by Kaolin and GCC. In Western Europe, consumption of kaolin and GCC for coating was 2.6 million tonnes and 3.7 million tonnes respectively in 2002, representing around U.S. $1.5 billion in sales.

On July 8, 2002, we announced that we had commissioned and fine-tuned our Synthetic Calcium Carbonate “SCC” small scale production plant at Leuna, Germany. Presentations were held at Leuna in September 2002 to introduce the new small plant and our SCC technology to a variety of interested parties, including potential project partners, financial institutions and those from the region that may be involved with the project. A laboratory facility was also installed adjacent to the plant. Confirmation and fine-tuning of the key operational parameters of this plant was necessary as a result of the large scale-up from the original pilot plant. The plant has been used to test raw materials from various other sites located around the world in order to ascertain not only their suitability to the SCC process but also the quality of SCC that can be produced and for the ongoing production of samples for sales purposes and product developments with certain customers.

This plant has consistently produced a range of SCC products primarily in the sub micron range, all with a brightness of over 96% ISO and a steep particle size distribution. The SCC process produces particles of uniform size and shape, tailor made to the needs of our end markets. For the paper industry this means that a new pigment will be available that addresses key issues such as quality and runnability improvements.

In October 2002, we completed trials at the Centre Technique du Papier at Grenoble in France and with a paper manufacturer. These results met our expectations and led to the design and launch in February 2003 of our first two SCC products: CalciLSTM and CalciSGTM.

Development and Marketing of SCC Product

The SCC products manufactured by the use of our SCC process involves the selective dissolution of calcium from industrial waste and its subsequent precipitation from solution with waste CO2 into pure calcium carbonate. The high calcium selectivity at the initial dissolution step guarantees the final purity of the product at a unique level. The solution environment assures the exceptional uniformity of the final precipitate with easy control of the desired particle size, particle size distribution and crystal morphology.

We initially developed SCC products for the paper industry. However, since the introduction of our SCC products to the paper industry in February 2003, we have developed three non-paper SCC products targeting the food, pharmaceutical and cosmetic industry, and the plastic, sealant, rubber and adhesives industries.

Paper Industry

We currently have three SCC products targeting the paper industry: CalciLSTM, CalciSGTM and CalciRGTM. All three are directed at the high value end of the paper pigment market.

CalciLSTM Products. CalciLSTM is designed to maximize light scattering. CalciLSTM is targeted to partially replace and extend costly Titanium Dioxide “TiO2”, Aluminium TriHydrate “ATH” and Precipitated Silica “PS” and substitute calcined clay in fine paper applications and Super Calendered A+ (“SCA+”) on a cost effective basis. Examples of such applications are Bible paper, security paper, laminating paper, auto-adhesive labels, flexible packaging etc. Several trial runs on various applications confirmed the high performance of CalciLSTM. Using CalciLSTM in pre-coating, allows board producers to totally replace calcined clay, while finished product quality remains at the high levels required. CalciLSTM used as filler in SCA+ grades shows similar impressive results. Brightness increases of around 2.5 units can be expected, while opacity is maintained at levels reached with standard PCC filler. Porosity, a very important parameter for this type of paper grade, will also improve significantly.

CalciLSTM is also very suitable for pigmentation applications. Adding CalciLSTM to a starch based formulation helps the papermaker to increase brightness and opacity. The low binder demand due to the absence of fines will maintain paper dusting levels at normal levels.

CalciSGTM Products. CalciSGTM, is designed to provide a super gloss coating for premium grade printing and writing papers including both Ultra Light Weight Coated (“ULWC”) and Light Weight Coated (“LWC”) and coated folding boxboard. In the latter application, CalciSGTM allows for a reduction in calendaring nips to improve bulk at no loss in gloss.

CalciRGTM Products. In October 2004, we launched our third product, CalciRGTM for the paper coatings market. CalciRGTM is a performance-enhancing additive aimed at the rotogravure market. For the launch of this product, we worked closely with our potential customers to identify specific needs. CalciRGTM was designed and developed in collaboration with these customers, and thoroughly tested in commercial trials, showing the unique properties of our SCC based products.

Rotogravure is a printing method used, among others, for LWC and ULWC. These paper grades are predominantly aimed at the highly competitive catalogue and magazine markets, where bulk is an important factor contributing to costs. Lightweight papers typically consist of approximately 30% coating material. The worldwide market for LWC and ULWC papers is estimated to be around 10 million tonnes of which approximately 7 million tonnes is produced in Europe, with the US and Japan accounting for the balance. This market segment of the paper industry is intensely competitive. Other market segments using rotogravure are super calendared papers and lightweight papers for flexible packaging.

First commercial tests have shown that substituting as little as 10% of the original coatings mix with CalciRGTM show a significant improvement in opacity, a very important quality parameter in this segment due to the thinness of the paper and the demands for high quality prints. Other characteristics such as brightness, roughness reduction, and smoothness also showed a significant improvement in performance.

In addition to the normal quality parameters, CalciRGTM has the same rheological characteristics as our other SCC related products. With typical machine speeds for these paper types of around 1,200 m/min (45 mph), rheology of the coatings mix is extremely important. Using CalciRGTM as an additive to an existing coating product for the LWC and ULWC can provide a paper producer and its supplier of coating material with important cost and quality related competitive advantages.

In November 2004, we announced the results of the most exhaustive trial programme to date of our SCC based products, carried out by BASF. BASF is the dominant supplier to the paper coating industry for various additives. These additives do not have a pigment related function such as SCC but impart certain properties on the coatings mix and typically contribute up to 15%. A good example of this group of additives is a binding agent. BASF approached us in order to ascertain whether its additives would be compatible with SCC based products.

In the trials our SCC product was benchmarked against leading products in the mineral pigments for paper industry. It was shown that our SCC:

Is the only product to show consistent low viscosity at all shear levels: applying our SCC in a coatings mix will positively influence the running behaviour of the paper producing machinery, leading to increased productivity and lower costs.

Imparts superior whiteness and brightness: these are essential product quality parameters, required to produce high quality high-end paper.

Leads to greater opacity: another very important quality parameter, especially important for light-weight papers.

Has superior print gloss: this parameter greatly determines the quality of the printed product. Our SCC imparts a higher gloss on the coated paper, but over and above that, the contrast between the print and background shows superiority as well.

Gives slow ink settling: this leads to lower ink consumption and hence significant cost savings for the printer.

Provides superior rotogravure printability.

Following these tests using CalciSGTM, we developed our latest product, CalciRGTM for the rotogravure market as a high-end additive to Kaolin. In total, over twenty trials have been conducted with both scientific institutions and commercial paper producers, varying from lab scale to pilot machine trials.

In April 2003, we appointed GUSCO Handel as our sole sales representative to the paper and board industry for our SCC products: CalciLSTM and CalciSGTM. GUSCO Handel is a subsidiary of family owned G. Schürfeld Group, founded in 1937 and is active as an accredited agency in the marketing and sales of forest products (pulp, paper, board and timber). The broad experience of GUSCO Handel in the paper industry gained from its wide customer relations developed over many years, made them spot the unique growth opportunity presented by our SCC. GUSCO Handel was appointed as our sole European sales representative for paper to commence pre sales and reservation for the planned production from its proposed first commercial plant in Germany. We built a small scale plant at Leuna, Germany on a large industrial and chemical site owned and managed by InfraLeuna GmbH, who also provided all the necessary utilities. We also retained the services of W S Atkins plc of Stockport, UK, as consulting engineers for our first large scale commercial plant based on 40,000 tonnes production per annum, which resulted in their production of an in-depth feasibility study and technical due diligence report. InfraLeuna allocated a site in the complex upon which it was agreed that the Company would build its first commercial plant and an agreement was negotiated for its purchase. This agreement was to be completed on the finalization of the project financing. It was also upon the advice of InfraLeuna that a local company, WUP Consulting GmbH & Co. KG, was engaged to carry out the building and environmental permitting application. In September 2007, the Company received all the permitting documents for the planned plant. In September 2002, a launch presentation, hosted by InfraLeuna, was made by the Company.

During 2006, a major Finnish contractor, part of a multi-national Austrian group, was engaged to complete the design and planning work on a larger first commercial plant capable of producing 100,000 tonnes per annum. This contractor is able to provide all the principle components from companies within its group. All the additional design work has been carried out at the contractor’s own cost.

By the end of February 2005 we received Letters of Intent (“LOI”) from various German companies in the paper industry for our SCC products: CalciLSTM and CalciSGTM. These LOIs are subject to a definitive agreement that is to be executed upon the completion of a full-scale production plant in Leuna. If and when these LOI are converted into definitive contracts, we believe that approximately 80% of the projected revenue for our first planned merchant facility in Germany could be derived from these definitive contracts. The customers who have signed the LOIs are a cross section of major German companies in the paper industry. Each customer has signed confidentiality agreements and tested, at their own expense, our SCC sample product in their manufacturing process. The sample product has been purchased by GUSCO Handel as part of our agreement with GUSCO Handel and GUSCO Handel has the right to recover the sample cost in the event that any sale revenue is generated from the definitive agreements. Furthermore, GUSCO Handel has undertaken to collect all revenues earned on our behalf and guarantee our customer payments for an additional fee.

Food, Pharmaceutical and Cosmetic Industries

CalciSPTM Product. In October 2005, we launched our first product following the implementation of our diversification strategy. This product, CalciSPTM, is our first non-paper product that is aimed at the food, pharmaceutical and cosmetics industries. We launched this product following tests by the Geneva Institute of Technology, certifying that CalciSPTM shows extreme high purity, especially regarding heavy metals content. With the target industries for this product moving increasingly towards higher purity products, we expect that both the purity and processibility characteristics of CalciSPTM will contribute to advantageous competitive characteristics.

The first tests carried out on CalciSPTM show that the product has certain characteristics that make it very suitable for use in bakery and cacao products. Further tests are currently being conducted on other applications within the target markets. Since its introduction in October 2005, we have been marketing this product in trade shows and assessing different opportunities for the distribution of this product.

Plastic, Sealant, Rubber and Adhesives Industry

CalciRCTM Product. In January 2006, we launched our latest product, CalciRCTM. This product is aimed at polymer applications such as plastics, sealants, rubber and adhesives. Initial trials within the plastics industries have shown that CalciRCTM significantly improves certain strength characteristics of the finished product. When trialled in PVC profiles, significant improvements in gloss, brightness and lifetime were measured. Due to the rheological properties of the SCC, higher filler loadings can be achieved which reduce the amount of polymer resin used with consequent cost savings. Further trials are currently being conducted into the processibility characteristics of the product.

Paint Industry

SCC products are currently being developed and are expected to be launched in due course to serve the water based decorative paint market. SCC brings benefits of brightness and opacity that enables the producer to reduce the amount of expensive titanium dioxide in the formulation. While paint overall is growing at a rate of two percent (2%) annually, water based emulsion paint is growing at nine percent (9%) driven by environmental considerations and generally carries a premium price over paper industry products.

Business Activity: Small scale production plant

We have been operating a small-scale production plant in Leuna, Germany. The small-scale production plant, while not a full size commercial plant is, nevertheless, a commercial plant in that the products manufactured can be sold. In particular, high grade SCC. High grade PCC for the pharmaceutical industry is often sold in relatively small amounts and command prices in excess of Euro 800 per ton. We intend to manufacture and sell high-grade product in these specialist areas where supplies are not available to meet such demands.

Business Activity: Europe

After the collapse of the credit markets, the European Investment Bank (“EIB”) announced several programs late in 2008, to assist in financing of developments within the Member States of the European Union. In particular the Innovation and New Technology Programmes and EIB have confirmed that SCC plants, licensed with the CalciTech IPR from outside Europe, would qualify on an aggregated CapEx basis. This of course would be subject to all the normal due diligence requirements. The funding allows up to 50% of CapEx at favourable interest rates for extended terms. They have also confirmed that CalciTech Synthetic Minerals Europe Ltd. (“CSME”) may arrange all financings for each Member State through a UK House Bank, thereby facilitating the due diligence process. The proposed locations are generally speaking in depressed areas and many are eligible for grants of varying amounts depending on the rating of the region.

Typically all projects will require equity investment of some 20% of CapEx. We are in discussions with London financial advisers with a view to raising, by way of an institutional private placement for CSME, equity funding and working capital to prepare projects for building. Industrial partners in some projects will provide their share of funding for their equity participation.

When CSME equity financing is completed, CSME will operate entirely independently and allow CalciTech to concentrate on introducing SCC into other territories, initially the United States of America and certain developing territories.

Business Activity: Germany

We have finalised our plans to build our first full scale commercial SCC plant in Germany, on which our financing negotiations are based. The plant will produce 100,000 tonnes of SCC per year.

The commercial plant will utilise burnt lime as its raw material, whereas for future plant development, we signed an agreement with the German government agency, Mitteldeutsche Sanierungs - und Entsorgungsgesellschaft mbH (“MDSE”), on March 2, 2000, giving us exclusive access to the carbide lime stored in a portion of MDSE’s waste dump in Schkopau, Germany and an option to purchase an additional waste pond. In May 2004, we executed a further agreement with the MDSE in Germany for the exclusive access to a further 2.5 million tonnes of carbide lime waste at the Schkopau site near Leuna.

Following these transactions, we have access to over 3.5 million tonnes of carbide lime, but the original agreements will require re-negotiation for economic reasons for the material to be used in any future plant. MDSE is the government agency responsible for the management of the Environmental Legacy of Eastern Germany. When we use this historical waste lime it will form part of MDSE’s plan for landscape recovery.

The German federal state of Sachsen-Anhalt will proceed with the approval process for the provision of a grant on receiving the House Bank’s endorsement of the company’s application. A grant application was filed in December 2006 and it was proposed by the authority that this grant should be withdrawn so that the Company could re-apply and benefit from the more favourable 2007 grant. This will contribute up to 50% of the capital costs of the 100,000 tonnes per annum commercial plant located in Sachsen-Anhalt. The grant is made available by the European Regional Structural Fund and is available under the present program up until December 2010. During the first half of 2007 our House Bank informed us that the due diligence requirements would substantially change in seeking credit committee approval and that they were aware that the State guarantee was under review in Brussels and it was unlikely we would continue to qualify for this guarantee, under which circumstances credit approval was unlikely.

In addition we understood from PWC Berlin office and the State of Sachsen-Anhalt that a guarantee may be available up to 80% of the project finance portion and that we should apply for this support with our grant application.

By the autumn of 2007 it was still unclear as to whether we would have access to the State guarantee and thus a new House Bank was appointed, one of several recommended by the State of Sachsen Anhalt, who were prepared to fund 100% of our project finance without a State guarantee. This bank, an Austrian bank, conducted and concluded its due diligence in early 2008 and secured credit committee approval for the project. Due to deterioration in the credit markets, a consortium of lenders was proposed and assembled by late summer 2008, when the House bank had to withdraw in view of financial conditions. A consortium bank was later appointed in the role of House Bank, but this mandate was cancelled shortly afterwards following the collapse of Lehmann Brothers.

We were arranging 20% equity mainly within Germany and our House Bank would arrange project finance of 30%. In view of the difficulties in the financial markets, we concluded that we should seek a strategic partner to assist with the capital and funding of our project along the original lines conceived.

We intend to produce slurry and dry products for sale in Germany and neighboring countries. Germany is currently the largest producer of coated paper with 4.75 million tonnes and a further 1.25 million tonnes of coated board in 2003. Both applications currently use a mix of kaolin and GCC in their production.

Business Activity: Spain

In September 2009, the Company has signed a Letter of Intent with Calcinor SA of Spain. Calcinor is Spain’s largest producer of lime, which is the principal raw material for CalciTech’s Synthetic Calcium Carbonate (SCC). The objective is to build a plant at one of Calcinor’s sites.

Business Activity: Republic of Slovakia

We originally signed a memorandum of understanding with Novaky Chemical Company (“Novaky”) to form a joint venture company to produce SCC from Novaky's waste lime. A joint venture agreement was signed on March 23, 2004. Novaky currently has over 1.5 million tonnes of waste lime in temporary storage and continues to produce more in its ongoing acetylene production. Following the granting of our patent in the Slovak Republic in February 2005, we commenced the technical, financial and marketing feasibility of a large production facility plant to serve the Central European market.

Under the terms of the memorandum of understanding, we will control the joint venture. We expect the project to qualify for environmental and investment incentives from The Republic of Slovakia, which is an early entrant to the European Union enlargement. Following the granting of our patent in Slovakia in 2006, we are now actively working on developing this project.

Novaky, a renowned chemical conglomerate with a turnover of around U.S. $170 million, was founded in 1940. The company manufactures intermediate products such as electrolysis products, basic organic chemicals, vinyl chloride as well as end products manufactured from these intermediates and from polyvinyl chloride ("PVC"). Products are sold on both the domestic and the wider European market. Previously a state company, Novaky was partially privatized in 2001 when Canadian company Exall Resources was selected by the Slovak National Property Fund to buy a 40.97% stake in the company. With the entrance of the Slovak Republic into the EU, compliance with environmental standards has become critical. It was, therefore, the company that approached us for use of our proprietary technology in solving their carbide lime related environmental problems.

Following a change of management at Novacky and in view of delays with our project in Germany with the credit market turmoil, we determined to delay matters until our phased roll out program.

Business Activity: Americas

In August 2002, we appointed Charles Kunesh, formerly research director of Specialty Minerals Inc. in America, to represent our program to identify suitable waste deposits for possible SCC manufacture. This has led to a number of discussions and we announced in April 2003 an agreement to conduct feasibility studies for such a project with Carbide Industries LLC of Louisville, Kentucky. We are not pursuing this project or any other North American project at the present time until commencement of our roll out program.

Other Products, Patents and Licenses

We hold licenses to develop, produce and sell Trylene Gas, which is an acetylene based fuel gas. We also hold a Canadian patent covering certain processes producing Calcium Carbonates (No. 1179138). Our Canadian patent No. 1145113 expired on April 27, 2000 and patent No. 11791138 expires on December 11, 2001. We also hold a license to a U.S. patent on an acetylene gas process. Currently, we are not exploiting these patents or licenses, which were not assigned any value in the financial statements.

We first applied to patent our process of transforming waste lime into high quality SCC in 1998 and subsequently a patent was granted the United Kingdom. An international application was filed under the European Patent Cooperation Treaty in December of 1999 to expand the protection of our intellectual property on an international level. The patent examination was completed in May 2001 and patents were granted on July 31, 2003 in 13 European countries. Since then, patents have also been granted in Eurasia (Russia and the independent states formerly part of the Soviet Union), South Africa, Hong Kong, China, Indonesia, Slovakia, Australia, New Zealand, The United States, Brazil, Canada, Czech Republic, Hungary, India, Korea and Poland.

In December 2009, CalciTech filed a new patent at the United Kingdom Patent Office for a technology that enables paper producers to recycle all the minerals used in paper, in particular after incineration of paper sludge which produces a waste paper sludge ash.

We have no registered trademarks and no pending trademark applications.

Financing

We are currently financed through a loan facility, up to U.S. $3,000,000, from Epsom Asset Management Ltd (“Epsom”). In September 2007, Epsom agreed to convert U.S. $2,001,000 of the balance due under the credit facility agreement into our Common Shares on the basis of one share for each U.S. $0.29 of note. This conversion resulted in the issue of 6,900,000 Common Shares. In addition, in December 2007, Epsom agreed to convert a further U.S. $1,259,697 of the balance due under the credit facility agreement into our Common Shares on the basis of one share for each U.S. $0.30 of note. This conversion resulted in the issue of 4,198,990 Common Shares. In December 2007, Epsom agreed to extend the credit facility to August 30, 2009. In the third quarter of 2008, Epsom agreed to a temporary increase of the facility to $5 million up to December 31, 2008 in the absence of any new fund raising by placement of Common Shares. Epsom has extended the credit facility to August 30, 2011.

In addition, we had outstanding 6% convertible debenture notes, with a maturity date of December 31, 2009, which are only repayable in cash at our option. Holders of the debenture notes did not have such an option and may only convert into our Common Shares at a conversion price of U.S. $1.75 on the maturity date. This, therefore, had no effect on our liquidity.

During December 2008, all 6% convertible debenture holders with a value of U.S. $4,642,000 agreed to convert 50% of the capital with accrued interest to December 31, 2008, amounting to $2,321,000 into Common Shares of the Company at a price of U.S. $0.095 per share. The remaining debenture notes were extended until December 31, 2010 at an interest rate of 1.75% per annum, payable quarterly, with the right to convert into Common Shares of the Company at U.S. $0.75 per share, amended from a conversion of U.S. $1.75 per share. The Company has the right, upon 10 days notice, without penalty, to repay all or any portion of the outstanding principal.

In December 2009, the Company authorized a new series of convertible debenture notes with an annual interest rate of 4% and a conversion rate of $0.40 per share for a period of two years from date of issue. All other terms and conditions are the same as the previous series of convertible notes. Epsom has converted $1,500 of its outstanding loan facility into these new notes.

Revenue

During the fiscal year ended December 31, 2009 and the year ended December 31, 2008, we received revenues totalling $NIL and $NIL respectively from the sale of SCC samples. Only small sized samples are being sent out to potential customers for testing, especially in non-paper applications, for which it is customary not to charge clients. Please see the “Consolidated Statement of Comprehensive Income” and Item 3A, “Selected Financial Data”, and Item 5, “Operating and Financial Review and Prospects”, for more information.

Dependence on Customers and Suppliers

We are not dependent upon a single or a few customers or suppliers for revenues for our operations.

Project and Product Development

During the year ended December 31, 2007 and continuing through the fiscal year ended December 31, 2009, we moved out of the research and development stage and into the commercialization stage, and project and product development. Accordingly, we no longer expense project nor research and development expenses. U.S. $1,127,000 spent in the year on project and product development appears on the Balance Sheet as an intangible asset.

We expensed $NIL on research and development in the year ended December 31, 2009 and $NIL in the year ended December 31, 2008.

Organizational Structure: The following is our organizational chart:

4C. Property, Plant and Equipment

We hold a lease on our administrative service office facility in Switzerland, expiring in October 2010. After October 2010, we intend to continue to locate our principal facility in Switzerland, but will reassess our need for future expansion to meet our business plan.

We maintain a Synthetic Calcium Carbonate “SCC” small scale production plant at Leuna, Germany, through a branch office of CSME. This small plant has a maximum capacity of 800 tonnes per annum. A suitably equipped laboratory facility has also been installed adjacent to the plant, in the same building. No additional land or rental is involved.

Construction of the 100,000 tonnes per annum SCC plant in Germany has been delayed due to the current financial climate and is expected to commence in the fourth quarter of 2010 and is pending partner and financing arrangements. The cost of the construction is estimated at Euro 45 million. Construction and commissioning are expected to take 18 months.

Item 5. Operating and Financial Review and Prospects

Overview

We are currently in the process of commercialising our SCC based products. An important aspect of this commercialisation has been the building and commissioning of our small-scale production plant in Leuna, Germany. This facility has mainly been producing samples for potential clients to assess the desirability for their use in the production of coated paper. The trials conducted, varying from bench-scale testing to full machine trials, have been successful. We have received responses from paper producers indicating their interest to acquire substantial quantities of our SCC based products once the first full-scale commercial-scale plant has been commissioned.

More recently, we have provided sample material from the small-scale plant in dried form to non-paper companies. These trials, in the plastics, food and other industry sectors, have been successful and have led us to add a drying facility onto the planned large-scale plant in Sachsen-Anhalt in order to be able to serve this part of the market.

We are securing the financing for our commercial 100,000 tonnes per annum plant in Sachsen-Anhalt, Germany. At completion this will be financed by:

Grant from European Structural Fund: up to 50% of the capital expenditure for the first plant,

20% of capital expenditure arranged by the Company and a planned industrial partner, and

30% of capital expenditure by the operating subsidiary company’s House Bank.

Letters of Intent (LOIs) and contracts have been submitted for take-off of production once this plant is commissioned. These LOIs and contracts substantially oversubscribe the 100,000 tonnes per annum planned capacity.

We are currently financed through a loan facility, up to U.S. $3,000,000, from Epsom Asset Management Ltd. (“Epsom”). Epsom has extended the credit facility to August 30, 2011. In addition, we have outstanding convertible debenture notes, with a maturity date of December 31, 2010, which are only repayable in cash at our option. Holders of the debenture notes do not have such an option and may only convert into our Common Shares at a conversion price of U.S. $0.75 on the maturity date. This, therefore, has no effect on our liquidity.

Critical accounting policies

The significant accounting policies that we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Going concern

The financial statements have been prepared assuming we will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. In assessing whether the going concern assumption is appropriate, management takes into account all available information for the foreseeable future, in particular for the 12 months from the approval of the financial statements.

Assets and liabilities are recorded on the basis that we will be able to realise our assets and discharge our liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments to the carrying values of assets and liabilities that might be necessary should we be unable to continue as a going concern.

5A.	Operating Results

The following discussion and analysis relates to items that have affected our results of operations for the years ended December 31, 2009, December 31, 2008, and December 31, 2007. The information contained in the table below should be read in conjunction with our consolidated financial statements and accompanying notes included in this Annual Report on Form 20-F.

	Year Ended December 31, 2009			Year Ended December 31, 2008			Year Ended December 31, 2007
OPERATING REVENUE	$NIL			$NIL			$	58,000
COST OF REVENUES	$NIL			$	(37,000	)	$	(60,000	)
GROSS MARGIN	$NIL			$	(37,000	)	$	(2,000	)
Research and development expenses	$	-0-		$	-0-		$	-0-
Project development expenses	$	-0-		$	-0-		$	-0-
Product development expenses	$	-0-		$	-0-		$	-0-
General and administrative expenses	$	965,000		$	1,197,000		$	313,000
OPERATING LOSS	$	(965,000	)	$	(1,234,000	)	$	(314,000	)
NET LOSS BEFORE INCOME TAXES	$	(1,068,000	)	$	(2,025,000	)	$	(656,000	)
PROVISION FOR INCOME TAXES	$	(13,000	)	($NIL)			$	(22,000	)
NET LOSS	$	(1,081,000	)	$	(2,025,000	)	$	(678,000	)

December 31, 2009 compared to December 31, 2008.

Revenue. We had revenues totalling U.S. $NIL for the year ended December 31, 2009 compared to $NIL for the year ended December 31, 2008. Only small sized samples are being sent out to potential customers for testing, especially in non-paper applications, for which it is customary not to charge clients.

Expenses. Product development and project development costs remained at $NIL. Product development and project development expenditure of U.S. $1,127,000 (December 31, 2008: U.S. $2,037,000) was capitalised as an intangible asset. General Administrative expenditure decreased from $1,197,000 to $965,000. Professional and legal fees decreased from $355,000 to $106,000 and $113,000 to $70,000 respectively during the year. These decreases were mainly due to tight budgetary controls. Interest charges have decreased substantially from $791,000 to $103,000. This arose from re-negotiation of the Company’s credit facility and remaining debentures, as interest charges were reduced to 1.75% per annum. Even though we are now firmly engaged in the commercialisation stage, project and product development continue but are recorded as Intangible Assets.

Net Loss. The net loss in year ended December 31, 2009 decreased to U.S. $1,081,000. In the year ended December 31, 2008 it was U.S. $2,025,000.

December 31, 2008 compared to December 31, 2007.

Revenue. We had revenues totalling U.S. $NIL for the year ended December 31, 2008 compared to $58,000 for the year ended December 31, 2007. Revenues are derived from sales of samples produced at the small-scale production facility in Leuna, Germany.

Expenses. Product development and project development costs remained at $NIL. Product development and project development expenditure of U.S. $2,037,000 (December 31, 2007: U.S. $1,020,000) was capitalised as an intangible asset. General and administrative expenses increased by U.S. $884,000 to U.S. $1,228,000. Even though we are now firmly engaged in the commercialisation stage, project and product development continue but are recorded as Intangible Assets.

Net Loss. The net loss in year ended December 31, 2008 increased to U.S. $2,025,000. In the year ended December 31, 2007 it was U.S. $678,000.

Foreign Currency Exchange Rates

A significant portion of our business is conducted in currencies other than the United States dollar. As a result, we are subject to exposure from movements in foreign currency exchange rates. We do not currently engage in hedging transactions designed to manage currency fluctuation risks. See Notes to Consolidated Financial Statements – Note 2.5. Foreign Currency Translation.

Inflation

Historically, inflation has not affected our business in the current locations where it does business and we do not expect that it will do in the future.

Interest Rate Sensitivity

We are not currently subject to adverse movement in interest rates because our credit facilities are fixed at an interest rate of 1.50% and Convertible Debentures at an interest rate of 1.75% and 4.00%. The credit facility agreement requires repayment on August 31, 2011. We may redeem the Convertible Debentures before December 31, 2010. We do not currently engage in hedging transactions designed to manage interest rate fluctuation risks.

5B.	Liquidity and Capital Resources

As of December 31, 2009, our working capital deficiency decreased to U.S. $577,000 from the working capital deficiency of U.S. $744,000 on December 31, 2008. Cash deposits were down to U.S. $22,000 and current liabilities were down U.S. $239,000 on December 31, 2008.

As of December 31, 2008, our working capital deficiency decreased to U.S. $744,000 from the working capital deficiency of U.S. $1,000,000 on December 31, 2007. Cash deposits were down to U.S. $26,000 and current liabilities were down U.S. $398,000 on December 31, 2007.

As of December 31, 2007, our working capital deficiency increased to U.S. $1,000,000 from the working capital deficiency of U.S. $698,000 on December 31, 2006. Cash deposits were down U.S. $117,000 and current liabilities were up U.S. $73,000 on December 31, 2006.

To develop and commercialize our SCC technology, we believe we will require approximately U.S. $5,000,000 for working capital for the next 24 months. However, given the cash on hand of $26,000, together with the restructuring of our debt in order to facilitate the arrangement of on-going working capital in early 2009, and the continuing control of expenses, the Company has sufficient working capital to meet its obligations up to the next 12 months. We have received assurances from the provider of this credit facility that it will continue to keep this credit facility available for this period. To develop commercial production of the SCC products, this credit facility would be insufficient and further funding would be required.

We will need approximately U.S. $33,000,000 to provide the equity portion of our first full-scale plants with a production capacity of 500,000 tonnes per annum. The construction of these plants will be financed by a combination of grants from the European Structural fund for up to 50% of the capital expenditure , funding from the European Investment Bank and the remainder from arrangements made by the Company and by the Company’s house bank.

We are partially financed through a credit facility from Epsom Asset Management Ltd. (“Epsom”). This credit facility was originally issued by Epsom Investment Services, N.V., but was assigned to Epsom Asset Management Ltd. in November 2008 following a reorganization of the Epsom Group. The credit facility agreement with Epsom to provide up to U.S. $5,000,000 was re-negotiated during February 2003 whereby the maximum amount of draw down was reduced to U.S. $2,500,000 with a reduction in interest charged to 7.5% per annum. Pursuant to an addendum to the credit facility agreement dated August 2006, effective as of February 2006 Epsom no longer has a right to convert outstanding balance into our Common Shares. The credit facility has been extended several times, and as of June 2009, the credit facility has been extended until August 31, 2011.

From time to time, the balance of this facility has been reduced by the mutually agreed conversion of the balance into the common stock of the Company, in order to provide on-going working capital. During February 2005, Epsom agreed to convert part of this facility into equity for U.S. $1,400,000. As at February 28, 2006, U.S. $213,000 of this facility had been drawn down. In September 2007, Epsom agreed to convert U.S. $2,001,000 of the balance due under the credit facility agreement into our Common Shares on the basis of one share for each U.S. $0.29 of note. This conversion resulted in the issue of 6,900,000 Common Shares. In addition, in December 2007, Epsom agreed to convert a further U.S. $1,259,697 of the balance due under the credit facility agreement into our Common Shares on the basis of one share for each U.S. $0.30 of note. This conversion resulted in the issue of 4,198,990 Common Shares. In December 2007, Epsom agreed to extend the credit facility to August 30, 2009. As at December 31, 2008, with the prior written consent of Epsom, the facility was temporarily extended by U.S. $2,936,000 (December 31, 2007: U.S. $1,630,000 available). A restructuring of the debt in order to make available additional working capital was completed on June 2009. Epsom increased the credit facility to U.S. $3,000,000 and extended it until August 31, 2011.

In addition, we have outstanding convertible debenture notes. During December 2008, all 6% convertible debenture holders with a value of U.S. $4,642,000, agreed to convert 50% of the capital with accrued interest to December 31, 2008, amounting to U.S. $2,321,000 into Common Shares of the Company at a price of U.S. $0.095 per share. The remaining debenture notes were extended until December 31, 2010 at an interest rate of 1.75% per annum, payable quarterly, with the right to convert into Common Shares of the Company at $0.75 per share, amended from a conversion of $1.75 per share. The Company has the right, upon 10 days notice, without penalty, to repay all or any portion of the outstanding principal.

In December 2009, the Company authorized a new series of convertible debenture notes with an annual interest rate of 4% and a conversion rate of $0.40 per share for a period of two years from date of issue. All other terms and conditions are the same as the previous series of convertible notes. Epsom converted $1,500 of its outstanding facility into these new notes.

Additional financing will be required to enable us to implement our business strategy of growth, which includes investment in joint ventures in the SCC industry. No assurances can be given that we will be able to raise cash from additional financing efforts. If we are unable to obtain sufficient funds from future financing, we may not be able to fully achieve our business objectives.

5C.	Research and Development, Patents and Licenses, etc.

We expensed U.S. $NIL in the year ended December 31, 2009 and U.S. $NIL in the year ended December 31, 2008 on research and development.

5D.	Trend Information

Revenue from the principal activity commenced for trial purposes since the year ended February 29, 2004. At the present time, we have not generated any revenue from producing SCC on a commercial scale and have incurred substantial losses due to expenses associated with our close of past Trylene and Acetylene Gas businesses and research and development expenses.

5E.	Off Balance Sheet Arrangements

None.

5F.	Tabular Disclosure of Contractual Obligations

Contractual obligations for the fiscal year ended December 31, 2009 are disclosed as follows:

	Dec 31, 2009		Payments Due by Period
Contractual Obligations	Total		< 1 year		1-3 years		4-5 years		> 5 years
	$		$		$		$		$

Credit facility		797,000		0		797,000		0		0
Convertible debentures		0		0				0		0
Debenture Interest payable		0		0				0		0
Equipment leasing		0		0				0		0
Property rental		86,000		86,000				0		0

Total Contractual Cash Obligations		883,000		86,000		797,000		0		0

We categorized our contractual obligations based on the following:

Credit facility. This is the balance on the credit facility with Epsom as at December 31, 2009. It is not repayable until August 2011 and is therefore a non-current liability. Under the original the credit facility agreement with Epsom, any outstanding balance due under the credit facility agreement can be converted in part or in whole into our Common Shares at any time at the option of the Epsom. The conversion price is equal to 80% of the trading price per share of our Common Share on the date such note was made or additional advances were made. However, effective as of February 2006, the outstanding balance is no longer convertible into our Common Shares.

Convertible debentures. Debenture holders were offered and accepted new debentures with a maturity date of December 31, 2010, and falls into the 1-3 year(s) period.

Interest payable. The interest payable on convertible debentures is due up to the date of maturity.

Property rental. The lease for the building containing the Small Scale Plant expires in September 2011.

Item 6.

Directors, Senior Management and Employees

6A.	Directors, Senior Management

The following is a list of our directors and officers and a brief description of their business experience. There are no family relationships between any officers and directors.

At our Annual General Meeting of Shareholders held on December 7, 2009 the Board of Directors were elected.

Name	Age	Positions Held	Period

Roger A. Leopard	68	Director President and Chief Executive Officer	June 2001-Present February 2000 – Present

John M. Smith	73	Director	August 1993 – Present

Howard Edmund Browning	65	Director	March 2005 – Present

Michael J.B. Brickell	69	Director	March 2010 – Present

Roger A. Leopard. Mr. Leopard is our Chief Executive Officer, President and Director. Mr. Leopard is a Chartered Accountant, initially with Deloittes until leaving the profession in 1966 to join The Great Universal Stores as Assistant Treasurer. He played a key role in the development of the corporation’s financial services division. In 1976, Mr. Leopard was appointed Vice President of Finance of the CIG Group, a computer leasing and related product marketing and service operation with diversified European operations. He was subsequently appointed Chairman of the Board and Chief Executive of CIG Group’s U.S. listed parent company. During this period, he specialized in innovative methods of financing a wide range of businesses and was involved in early stage company development and finance. This involved the arranging of funding for many commercial organizations in North America, Western Europe, Russia and the CIG Group. Before becoming our director, Mr. Leopard was a director of Epsom Asset Management Ltd. Upon his appointment, he resigned from this position and is no longer involved with Epsom Asset Management Ltd

John M. Smith. Mr. Smith is our Director and earned his Bachelor of Arts degree with honours from the University of Hull, England. Mr. Smith has enjoyed a distinguished career in international banking; first with Barclays Bank from 1959 through 1971 in various postings worldwide, and subsequently as Assistant Manager with Barclays Geneva, which position he held until 1979. In 1979, Mr. Smith became a partner in a Geneva based fiduciary company. In 1989, he was appointed General Manager and subsequently, Managing Director of Rathbone Trust Company SA, a wholly owned subsidiary of Rathbone Brothers PLC, an established private banking and trust company quoted on the London Stock Exchange. Mr. Smith retired from his position as a non-executive director of Rathbone Trust Company SA on December 31, 2007. In 1995, Mr. Smith was awarded an MBE for voluntary services to the British Community in Switzerland.

Howard Edmund Browning. Dr. Browning is our Director, and obtained his MA and D. Phil. in Organic Chemistry at Oxford University and an IEP at Insead. Involved in the formation of Zeneca, he spent 27 years, from 1969 to 1996, with ICI/Zeneca, initially in research at ICI Plastics in the United Kingdom, then subsequently as Business Manager of ICI Resins and Petrochemicals, operating both in Europe and the Far East. Later as General Manager of ICI Bioproducts and Planning, he created the Zeneca Lifescience Molecules business. From 1996 until 2004, he was Chairman of the Tullis Russell Group plc, the papermaking and converting group, in the United Kingdom. Dr. Browning comes with a wealth of experience in the areas in which we are embarking, such as paints, resins and more recently, the paper industry.

Michael J.B. Brickell. Mr. Brickell is a Chartered Accountant and has over 40 years of experience at senior management levels in business enterprises in England, Europe and North America. He was formerly with The Great Universal Stores Ltd and a director of a number of ��subsidiary companies, both in the UK and continental Europe. Mr. Brickell was also President and COO of Holt, Renfrew & Co. Ltd. a leading fashion stores group operating throughout Canada. He is currently an owner and Chairman of Cotswold Collections Limited, a retail mail order company in England, and Deputy Chairman and non-executive director of Industrial Minerals Corporation, an Australian listed company involved in the exploration and production of mineral sands in the USA.

6B.	Compensation

During our fiscal year ended December 31, 2009, we paid an aggregate of U.S. $366,000 in compensation to our directors and officers as a group for services in all capacities. We did not make any payments for pension or retirement plans for officers and directors.

Directors’ Compensation

Directors, who are not our employees, are compensated by stock options and U.S. $1,000 for each board meeting attended, in addition to travel expenses. Directors, who are also our officers, do not receive additional compensation for serving as Directors.

Executive Compensation

The following table sets forth the aggregate cash compensation paid for the past fiscal year for executive compensation:

SUMMARY COMPENSATION TABLE

Annual Compensation

Awards

Long Term Compensation

and Payouts

Securities

Name and

Fiscal

Cash

Other Annual

Restricted

Underlying

LTIP

All Other

Principal Position

Period

Compensation

Stock

Options

Payouts

Compensation

Award(s)

Roger A. Leopard

C.E.O. & President

Dec 2009

250,935

Nil

1,250,000

Nil

6C.	Board Practices

Our Directors serve a one-year term and are elected at the Annual General Meeting of Shareholders. At the Annual General Meeting of Shareholders, held on December 7, 2009 the shareholders elected Messrs. Roger A. Leopard, John M. Smith, and Howard E. Browning as Directors. Our officers are elected by the Board to serve at the pleasure of the Board. We have no contracts with any of our Directors that provide for payments upon termination.

During the period ended December 31, 2009, Messrs. Browning and Smith comprised the Audit Committee and Messrs Leopard and Browning comprised the Compensation Committee. The primary functions of the Audit Committee are to review the scope and result of the audit performed by our independent accountants, our internal accounting controls, non-audit services performed by the independent accountants and the cost of accounting services. The Compensation Committee reviews all compensation proposed for senior management and Board members.

6D.

Employees

Our subsidiary, CalciTech Group Services SA, has two (2) full-time employees and one (1) part-time employees located in Switzerland. We have two (2) officers located in Switzerland: Mr. Leopard and Mr. Smith. CalciTech Synthetic Minerals Europe Ltd. has two (2) full-time employees and no part-time employees located in Germany. We and our other subsidiaries do not have employees.

6E.	Share Ownership

The following table sets forth the share ownership of our Officers and Directors as of date of April 30, 2010.

	Dec 31, 2009
	Number of
	Shares	Percent

Roger A. Leopard (non-beneficial)	1,468,125	1.5%
John M. Smith	225,668	0.23%
Howard Browning	0	0
Michael J.B. Brickell	0	0

Mr. Leopard is a non-beneficiary of the above shares as they are owned by a trust in which he has no interest.

Stock Option Plan/Equity Incentive Plans

Our stock option plan is available for directors, officers and employees. Options may be granted with the approval of the Board of Directors and are subject to the approval of the listing authority. All options must be exercised within 30-days of the optionee leaving us, otherwise they lapse. Shareholders approved the plan and approve the directors’ authority to grant a certain number of options in their general meeting.

During the fiscal year ended December 31, 2009, we issued 7,450,000 share options. The Balance of outstanding options held by directors is shown in the table below:

Outstanding Options

Name	Shares Underlying Options	Exercise Price	Purchase Price, if any	Expiration Date


Roger A Leopard	750,000	U.S. $0.30	-	February 28, 2013
	500,000 500,000	U.S. $0.27 U.S. $0.095	- -	October 10, 2013 December 30, 2013

John M Smith	100,000	U.S. $0.24	-	February 25, 2010
	250,000	U.S. $0.37	-	February 25, 2013
	100,000	U.S. $0.27	-	October 10, 2013
	250,000	U.S. $0.095		December 30, 2013

Howard E Browning	250,000	U.S. $0.23	-	June 30, 2010
	250,000	U.S. $0.30		February 28, 2013
	250,000	U.S. $0.095		December 30, 2013

M.J.B. Brickell	250,000	U.S. $0.095		December 9, 2014

Item 7.

Major Shareholders and Related Party Transactions

7A.	Major Shareholders

Past development expenditures were and are currently funded through a Credit Facility Agreement with Epsom Asset Management Ltd (“Epsom”), whose clients collectively hold less than 15% of the equity interest in us. Epsom has no control over these shares as they are held by clients in their own right. Subject to the foregoing, we are not directly or indirectly owned or controlled by any other corporation or by any foreign government. Further, we do not know of any arrangement, which may by its operation result in a change in our control at some subsequent date.

On July 18, 2005, New Star Institutional Managers, Ltd., Family UK Equity Fund, Stephen Whittaker, Gregor Logan, Mark Beale, Ian Bettie, Timothy Bray, Keith Brown, Howard Covington, John Duffield, Anna Kirk, Richard Lewis, Rupert Francis James Henry Ruvigny, Michelle Sanders and Deborah Weekes collectively filed a Schedule 13G with the SEC to report their beneficial ownership of 4,419,000 Common Shares which constituted 5.5% of the outstanding Common Shares.

On January 16, 2006 New Star converted 1,919,000 warrants into Common Shares. As per New Star’s latest filing of Schedule 13G/A with SEC, their current holding is 6,338,000 shares which represented 6.3% of the outstanding Common Shares.

During November 2009, CalciTech was advised that a Schedule 13G has been filed by Envirinvest Ltd., reporting that it beneficially owns 12.16% of CalciTech’s Common Stock.

Envirinvest Ltd. is a European private investment fund with particular emphasis on environmental and sustainable technologies. They have been a shareholder and supporter of the Company since 2002 and substantially increased their stake in the recent restructuring of CalciTech previously announced.

As of December 31, 2009, there were 1,014 record holders of Common Shares in the United States representing approximately 85.1% of the total shareholders as reported to be held in the records of Computershare Trust Company, the Registrar and Transfer Agent for the Common Shares.

7B.	Related Party Transactions

The amount paid to our shareholders, directors and officers and their related companies for consulting and other services totaled U.S. $408,000 and U.S. $702,000 for the year ended December 31, 2009 and for the year ended December 31, 2008 respectively.

In the financial year ended December 31, 2009, this amount included U.S. $7,782 paid to directors and U.S. $40,875 paid to EuroHelvetia TrustCo S.A. In the financial year ended December 31, 2008, this amount included U.S. $39,405 paid to directors (U.S. $6,925 in the period ended December 31, 2007) and U.S. $57,000 paid to EuroHelvetia TrustCo S.A. (U.S. $57,000 in the period ended December 31, 2007), who were contracted by us to act as our exclusive financial advisors. EuroHelvetia charge their fees for work related to advice on private placements, fund raising and project finance. Roger A. Leopard, our Chief Executive Officer and President, is also a director of EuroHelvetia TrustCo S.A. EuroHelvetia also provides administration of Epsom.

The fees and services were approved by the independent directors.

7C.	Interest of Experts and Counsel.

Not Applicable.

Item 8.

Financial Statements

8A.	Consolidated Statements and Other Financial Information

We have attached the following financial statements to this Annual Report:

Auditors’ Report.

Consolidated Statement of Financial Position as of December 31, 2009 and December 31, 2008.

Consolidated Statement of Comprehensive Income for the years ended December 31, 2009, December 31, 2008, and December 31, 2007.

Consolidated Statement of Shareholders’ (Deficit) Equity for the years ended December 31, 2009, December 31, 2008, and December 31, 2007.

Consolidated Statement of Cash Flows for the years ended December 31, 2009, December 31, 2008, and December 31, 2007.

Notes to Consolidated Financial Statements.

Dividend Policy

We have never paid any dividends and do not intend to in the near future.

8B.	Significant Changes

None.

Item 9.

The Offer and Listing

9A.	Price History of Stock

Until January 19, 2005, our Common Shares were listed in Canada on the TSX Venture Exchange (“TSX”), under the symbol CLK and in the United States on the OTC Electronic Bulletin Board (“OTC Bulletin Board”), under the symbol CLKTF.OB. On May 15, 2002, our shares were approved to trade on the Third Segment of the Frankfurt Stock Exchange in Germany, under the symbol XCH. However, following our voluntary delist from the TSX, our Common Shares no longer have a quotation on the Freiverkehr. In July 2005, our Common Shares were approved for listing on the OFEX under the symbol CLK. Due to the high costs of maintaining this listing, our Common Shares were withdrawn from OFEX in December 2008.

The high and low prices for our Common Shares expressed in United States dollars quoted on the OTC Bulletin Board for the last six (6) months, each quarter for the last two (2) fiscal years and annually for the last five (5) years are as follows:

	OTC Bulletin Board		OFEX
	US$	US$	UK£	UK£

2009	High	Low	High	Low
4th Qtr ended December 31, 2009	$ 0.10	$ 0.05	N/A	N/A
3rd Qtr ended September 30, 2009	$ 0.10	$ 0.08	N/A	N/A
2nd Qtr ended June 30, 2009	$ 0.10	$ 0.06	N/A	N/A
1st Qtr ended March 31, 2009	$ 0.12	$ 0.02	N/A	N/A


2008	High	Low	High	Low
4th Qtr ended December 31, 2008	$ 0.29	$ 0.20	N/A	N/A
3rd Qtr ended September 30, 2008	$ 0.28	$ 0.20	N/A	N/A
2nd Qtr ended June 30, 2008	$ 0.29	$ 0.20	£0.13	£0.12
1st Qtr ended March 31, 2008	$ 0.29	$ 0.20	£0.14	£0.14

2007	High	Low	High	Low
4th Qtr ended December 31, 2007	$ 0.35	$ 0.20	£0.16	£0.12
3rd Qtr ended September 30, 2007	$ 0.35	$ 0.16	£0.17	£0.11
2nd Qtr ended June 30, 2007	$ 0.44	$ 0.26	£0.24	£0.17
1st Qtr ended March 31, 2007	$ 0.56	$ 0.35	£0.25	£0.21

Period	High	Low	High	Low
Jan 1, 2007 - Dec 31, 2009	$ 0.56	$ 0.02	£0.25	£0.11
Jan 1, 2006 - Dec 31, 2008	$ 0.60	$ 0.13	£0.29	£0.13
Jan 1, 2005 - Dec 31, 2007	$ 0.29	$ 0.15	£0.12	£0.11

9B.	Plan of Distribution

Not Applicable.

9C.

Markets

Our Common Shares are listed in the United States on the OTC Bulletin Board under the symbol CLKTF.OB. Up until January 19, 2005, our Common Shares were listed in Canada on TSX, when delisting from this exchange was formalized. With effect from May 15, 2002, our Common Shares have been listed in Germany on the Third Segment of the Frankfurt Stock Exchange under the symbol XCH. However, following our voluntary delist from the TSX-V, our shares no longer have a quotation on the Freiverkehr. In July 2005, our Common Shares were approved for listing on the PLUS Markets (then still named OFEX) under the symbol CLK. Due to the high cost of maintaining this listing and the lack of market makers provided by the PLUS markets, we decided to delist our shares in December 2008.

9D.	Selling Shareholders

Not Applicable.

9E.

Dilution

Not Applicable.

9F.	Expenses of the Issue

Not Applicable.

Item 10.

Additional Information

10A.	Share Capital

Not Applicable.

10B.	Memorandum and Articles of Association

We were incorporated on November 9, 1978 in from British Colombia, Canada. On February 13, 1995, we filed a memorandum of continuance to reincorporate from British Colombia, Canada to Bermuda. On September 11, 2000, we amended our Articles to change our name to CalciTech Ltd.

Common Shares

We are authorized to issue 300,000,000 Common Shares, par value $0.001. All issued and outstanding Common Shares are fully paid and non-assessable. Each holder of record of Common Shares is entitled to one vote for each common share so held on all matters requiring a vote of shareholders, including the election of directors. Shareholders are not entitled to cumulative voting for directors. The holders of Common Shares will be entitled to dividends on a pro-rata basis, if and when declared by the Board of Directors. There are no preferences, conversion rights, pre-emptive rights, subscription rights, or restrictions on transfers attached to the Common Shares. In the event of our liquidation, dissolution or winding up, the shareholders are entitled to participate in the distribution of our assets available after satisfaction of the claims of creditors.

Powers and Duties of Directors

The Directors shall manage or supervise the management of our affairs and business and shall have authority to exercise all such powers as are not, by the Company Act, Articles or Bye-laws, required to be exercised by the shareholders in a general meeting or prohibited by law.

Directors serve for one (1) year, until the next annual meeting of shareholders. In general, a Director who is, in any way, directly or indirectly interested in an existing or proposed contract or transaction with us whereby a duty or interest might be created to conflict with his duty or interest as a director, shall declare the nature and extent of his interest in such contract or transaction or the conflict or potential conflict with his duty and interest as a director. Such a Director shall not vote in respect of any such contract or transaction with us if the Chairman disqualifies him. If he votes, his vote shall not be counted, but he shall be counted in the quorum present at the meeting at which such a vote is taken. The shareholders at the general meeting shall determine the remuneration of the Directors. However, notwithstanding the foregoing, Directors shall be paid all expenses incurred in attending meetings or conducting business on our behalf.

The Directors may from time to time on our behalf: (a) borrow money in such manner and amount from such sources and upon such terms and conditions as they think fit; (b) issue bonds, debentures and other debt obligations; or (c) mortgage, charge or give other security on the whole or any part of our property and assets.

Our Directors are not required to be residents of Bermuda. There is no age limitation or minimum share ownership for our Directors.

Shareholders

An Annual General Meeting of Shareholders shall be held once in every year at such time and place as may be determined by the Directors. Notice of the meeting must be given not less than twenty-one (21) nor more than fifty (50) days. A quorum at an Annual General Meeting and Special Meeting shall be two shareholders. There is no limitation imposed by the laws of Bermuda or by the charter or other constituent documents of us on the right of a non-resident to hold or vote Common Shares.

In accordance with our Bye-laws , Directors shall be elected by an “ordinary resolution” which means (a) a resolution passed by our shareholders in a General Meeting by a simple majority of the votes cast in person or by proxy, or (b) a resolution that has been submitted to our shareholders who would have been entitled to vote on it in person or by proxy at our general meeting and that has been consented to in writing by all of our shareholders entitled to vote on it.

The Bermuda law and our Articles and Bye-laws contain no provisions that would prevent or delay a change in control of us.

10C.	Material Contracts

Credit Facility Agreement between Epsom Investment Services N.V. and CalciTech Ltd. dated February 27, 1998. On February 28, 1998, we entered into a credit facility agreement of up to $2,330,000 with Epsom Investment Services N.V. bearing interest at 8% per annum and a repayment date of 2000. In November 2008, Epsom Investment Services, N.V., assigned the credit facility to Epsom Asset Management Ltd. (“Epsom”) following a reorganization of the Epsom Group. The credit facility has been amended several times over the years. Currently, the revolving 1.75% credit facility is for U.S. $3,000,000 of which U.S. $ 796,690 is owing as of December 31, 2009. The credit facility is due on August 31, 2011.

10D.	Exchange Controls

Control over foreign currency has existed in Bermuda since 1940 and is now governed by the Exchange Control Act of 1972 (the “Exchange Control Act”) and regulations promulgated thereunder and is administered by the Bermuda Monetary Authority (“Foreign Exchange Control”). The Exchange Control Act regulates foreign currency transactions between a resident of Bermuda and a non-resident of Bermuda. However, exempted companies, like us, are designated as “non-resident” for purposes of the Exchange Control Act, and as such, are entitled to maintain foreign currency bank accounts and to freely convert the balances in such accounts into currencies of other countries. Because exempted companies are designated as “non-resident” under the Exchange Control Act, consent from Foreign Exchange Control is required prior to incorporation. Prior consent of Foreign Exchange Control is also required to issue or transfer any share, debenture or other security of an exempted company. General permission may be given to issue or transfer shares or other securities, in connection with a public issue, which are to be freely transferable. We received Bermuda’s permission to transfer our shares, which may be traded on the OTC Bulletin Board.

10E.

Taxation

There are no income, profits, capital gains, sale of goods, death, or inheritance taxes in Bermuda. Exempted companies, such as us, pay annual fees to the Bermuda government, which are determined by the amount of its share capital. Although the United States and the United Kingdom of Great Britain and Northern Ireland (on behalf of Bermuda) signed a mutual assistance and insurance tax agreement on July 11, 1986, the agreement does not provide for the withholding of taxes on the distribution of dividends to United States taxpayers. While the convention provides for the sharing of information, it primarily deals with the taxation of insurance premiums paid by United States residents to insurance companies domiciled in Bermuda.

Certain United States Federal Income Tax Considerations

The following is a summary of United States federal income tax considerations material to a holder of Common Shares who is a United States citizen or resident or a United States domestic corporation who owns the Common Shares ("U.S. Investor"). The summary is of a general nature only and is not exhaustive of all possible income tax consequences applicable to U.S. Investors and does not address the tax consequences of U.S. Investors subject to special provisions of federal income tax law.

This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations, court decisions and current administrative rulings and pronouncements of the United States Internal Revenue Service ("IRS") that are currently applicable, all of which are subject to change, possibly with retroactive effect. There can be no assurance that future changes in applicable law or administrative and judicial interpretations thereof will not adversely affect the tax consequences discussed herein. Potential investors are advised to consult their own tax advisors regarding the tax consequences of acquiring, holding or disposing of the Common Shares in light of their particular circumstances.

Since your United States federal income and withholding tax treatment may vary depending upon your particular situation, you may be subject to special rules not discussed below. Special rules will apply, for example, if you are:

an insurance company;

a tax-exempt organization;

a financial institution;

a person subject to the alternative minimum tax;

a person who is a broker-dealer in securities;

an S corporation;

an expatriate subject to Section 877 of the Code;

an owner of, directly, indirectly or by attribution, 10% or more of the outstanding Common Shares; or

an owner holding Common Shares as part of a hedge, straddle, synthetic security or conversion transaction.

In addition, this summary is generally limited to persons holding common stock as “capital assets” within the meaning of Section 1221 of the Code and whose functional currency is the U.S. dollar. The discussion below also does not address the effect of any United States state or local tax law or foreign tax law. Prospective investors are advised to consult their own tax advisors with respect to their particular circumstances and with respect to the effects of state, local or foreign tax laws to which they may be subject.

Dividends. For United States federal income tax purposes, the gross amount of a distribution, including any foreign withholding taxes, with respect to your Common Shares will be treated as a taxable dividend to the extent of our current and accumulated earnings and profits, computed in accordance with United States federal income tax principles. For taxable years beginning before January 1, 2011, if you are a non-corporate taxpayer such dividends may be taxed at the lower applicable capital gains rate provided (1) certain holding period requirements are satisfied, (2) we are eligible for the benefits of the income tax treaty, and (3) we are not, for the taxable year in which the dividend was paid, or in the preceding taxable year, a “passive foreign investment company.” Non-corporate U.S. Investors are strongly urged to consult their own tax advisors as to the applicability of the lower capital gains rate to dividends received with respect to the Common Shares. Distributions in excess of our current or accumulated earnings and profits will be applied against and will reduce your tax basis in your Common Shares and, to the extent in excess of such tax basis, will be treated as gain from a sale or exchange of such Common Shares. You should be aware that we do not intend to calculate our earnings and profits for United States federal income tax purposes and, unless we make such calculations, you should assume that any distributions with respect to common stock generally will be treated as a dividend, even if that distribution would otherwise be treated as a return of capital or as capital gain pursuant to the rules described above. If you are a corporation, you will not be allowed a deduction for dividends received in respect of distributions on Common Shares, which is generally available for dividends paid by U.S. corporations.

A dividend distribution will be treated as foreign source income and will generally be classified as “passive income” or, in some cases, “financial services income” for United States foreign tax credit purposes. For taxable years beginning after December 31, 2006, dividends will generally constitute “passive category income” but could, in the case of certain U.S. Investors, constitute “general category income.” The rules relating to the determination of the foreign tax credit, or deduction in lieu of the foreign tax credit, are complex and you should consult your own tax advisors with respect to those rules.

Dispositions of Common Shares. Subject to the discussion below of the consequences of being treated as a passive foreign investment company, gain or loss realized by a U.S. Investor (other than a 10-percent shareholder) on the sale or other disposition of Common Shares will be subject to United States federal income tax as capital gain or loss in an amount equal to the difference between such U.S. Investor’s basis in the Common Shares and the amount realized on the disposition. In general, such capital gain or loss will be long-term capital gain or loss if the U.S. Investor has held the Common Shares for more than one year at the time of the sale or exchange. If you are an individual, such realized long-term capital gain is generally subject to a reduced rate of United States federal income tax. Limitations may apply to your ability to offset capital losses against ordinary income.

In general, gain from a sale, exchange or other disposition of the Common Shares by a U.S. Investor will be treated as U.S. source income. Therefore the use of foreign tax credits relating to any foreign taxes imposed upon such sale may be limited. You are strongly urged to consult your own tax advisors as to the availability of tax credits for any foreign taxes withheld on the sale of Common Shares.

Special United States Federal Income Tax Considerations

Passive Foreign Investment Company. Management has determined that we have not been a passive foreign investment company ("PFIC") for United States federal income tax purposes for prior taxable years and believe that we will not be treated as a PFIC for the current and future taxable years, but this conclusion is a factual determination made annually and thus subject to change. We will be a PFIC with respect to a U.S. Investor if, for any taxable year in which such U.S. Investor held our Common Shares, either (i) at least 75% of our gross income for the taxable year is passive income, or (ii) at least 50% our assets are attributable to assets that produce or are held for the production of passive income. In each case, we must take into account a pro rata share of the income and the assets of any company in which we own, directly or indirectly, 25% or more of the stock by value (the "look-through" rules). Passive income generally includes dividends, interest, royalties, rents (other than rents and royalties derived from the active conduct of a trade or business and not derived from a related person), annuities, and gains from assets that produce passive income. Because we are not publicly traded as defined under the statute and regulations governing PFICs, and are not a controlled foreign corporation ("CFC"), we would apply the 50% asset test based on fair market values unless we elect to use the adjusted tax bases of our assets.

If we are a passive foreign investment company for any taxable year during which a U.S. Investor holds Common Shares the U.S. Investor will be subject to special tax rules with respect to:

any “excess distribution” that the U.S. Investor receives on Common Shares, and

any gain the U.S. Investor realizes from a sale or other disposition (including a pledge) of the Common Shares, unless the U.S. Investor makes a “mark-to-market” election as discussed below.

Distributions the U.S. Investor receives in a taxable year that are greater than 125% of the average annual distributions the U.S. Investor received during the shorter of the three preceding taxable years or the U.S. Investor’s holding period for the Common Shares will be treated as an excess distribution. Under these special tax rules:

the excess distribution or gain will be allocated ratably over your holding period for the Common Shares,

the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a passive foreign investment company, will be treated as ordinary income, and

the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses, and gains (but not losses) realized on the sale of the Common Shares cannot be treated as capital, even if the U.S. Investor holds the Common Shares as capital assets.

A U.S. Investor of a passive foreign investment company may avoid taxation under the excess distribution rules discussed above by making a “qualified electing fund” election to include the U.S. Investor’s share of our income on a current basis. However, a U.S. Investor may make a qualified electing fund election only if we, as a passive foreign investment company, agree to furnish the shareholder annually with certain tax information. We do not presently intend to prepare or provide such information.

Alternatively, a U.S. Investor of “marketable stock” in a passive foreign investment company may make a mark-to-market election for stock of a passive foreign investment company to elect out of the excess distribution rules discussed above. If a U.S. Investor makes a mark-to-market election for the Common Shares, the U.S. Investor will include in income each year an amount equal to the excess, if any, of the fair market value of the Common Shares as of the close of the U.S. Investor’s taxable year over the U.S. Investor’s adjusted basis in such shares. A U.S. Investor is allowed a deduction for the excess, if any, of the adjusted basis of the shares over their fair market value as of the close of the taxable year only to the extent of any net mark-to-market gains on the shares included in the U.S. Investor’s income for prior taxable years. Amounts included in a U.S. Investor’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Common Shares are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the Common Shares, as well as to any loss realized on the actual sale or disposition of the Common Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Common Shares. A U.S. Investor’s basis in the Common Shares will be adjusted to reflect any such income or loss amounts. The tax rules that apply to distributions by corporations which are not passive foreign investment companies would apply to distributions by us.

The mark-to-market election is available only for stock which is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, or the national market system established pursuant to section 11A of the Exchange Act, or any exchange or market that the IRS has determined has rules sufficient to carry out the purposes of the income tax rules. We are not currently a company meeting the requirements of mark-to-market so such an election is not currently available if we were to be a PFIC.

Non-U.S. Investors

A Non-U.S. Investor generally will not be subject to U.S. federal income tax on dividends paid by us with respect to our Common Shares unless the income is effectively connected with the Non-U.S. Investor’s conduct of a trade or business in the United States.

A Non-U.S. Investor generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our Common Shares unless such gain is effectively connected with the Non-U.S. Investor’s conduct of a trade or business within the United States or the Non-U.S. Investor is a natural person who is present in the United States for 183 days or more and certain other conditions exist.

Dividends and gains that are effectively connected with a Non-U.S. Investor’s conduct of a trade or business in the United States generally will be subject to tax in the same manner as they would be if the Non-U.S. Investor were a U.S. Investor, except that the passive foreign investment company rules will not apply. Effectively connected dividends and gains received by a corporate Non-U.S. Investor may also be subject to an additional branch profits tax.

U.S. Information Reporting and Backup Withholding

In general, information reporting requirements will apply to dividends in respect of our Common Shares, or the proceeds received on the sale, exchange or redemption of our Common Shares paid within the United States (and, in certain cases, outside the United States) to U.S. Investors other than certain exempt recipients, such as corporations, and backup withholding tax may apply to such amounts if the U.S. Investor fails to provide an accurate taxpayer identification number or to report interest and dividends required to be shown on its U.S. federal income tax returns. The amount of any backup withholding from a payment to a U.S. Investor will be allowed as credit against the U.S. Investor’s U.S. federal income tax liability provided that the appropriate returns are filed. Holders that are not U.S. persons generally are not subject to information reporting or backup withholding, but such holders may be required to provide certification as to their Non-U.S. status.

A U.S. Investor who holds Common Shares in any year in which we are a passive foreign investment company would be required to file IRS Form 8621 regarding distributions received on our shares and any gain realized on the disposition of our Common Shares.

10F.	Dividends and Paying Agents.

Not Applicable.

10G.	Statement of Experts.

Not Applicable.

10H.	Documents on Display.

We file Annual Reports and other information with the Securities and Exchange Commission. These accounts are filed electronically at the SEC Edgar website. You may read and copy any document that we file at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or by accessing the SEC's website (http://www.sec.gov). Please call the Securities and Exchange Commission at 1-800-SEC-0330 for more information about the Public Reference Rooms.

Copies of our material contracts are kept in our administrative headquarters.

10I.	Subsidiary Information

Not Applicable.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

We have no significant market sensitive instruments other than foreign currency transactions discussed in Item 5.A.

Item 12. Description of Securities Other than Equity Securities

Not Applicable.

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Part II

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15. Controls and Procedures.

(a) Disclosure Controls and Procedures.

As a Bermuda company listed on the Over-the-Counter Bulletin Board (OTCBB), CalciTech complies with the disclosure requirements of the Securities and Exchange Commission (SEC) and the OTCBB for foreign private issuers. These include the requirement to make certain filings with the SEC. As a foreign private issuer, some of the SEC’s regulations and requirements which apply to domestic issuers are not applicable to CalciTech. CalciTech’s reports, including its annual report on Form 20-F, are available at www.calcitech.com/investors.

As of the end of the period covered by this annual report, an evaluation was carried out under the supervision of management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of CalciTech’s disclosure controls and procedures (as defined in Rule 13a–15e) under the US Securities Exchange Act of 1934. Based upon that evaluation, the CEO and CFO concluded that these disclosure controls and procedures were effective as of the end of the period covered by this annual report. No significant changes were made in CalciTech’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

In addition, our officers have also concluded that our disclosure controls and procedures are effective to ensure that information required under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow all timely decisions regarding required disclosure.

It should be noted that while our management believes that our disclosure controls and procedures provide a reasonable level of assurance, they do not expect that our disclosure controls and procedures or internal financial controls will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

(b) Management’s Annual Report on Internal Control over Financial Reporting.

The management of CalciTech Ltd. (CalciTech) is responsible for establishing and maintaining adequate internal control over financial reporting. CalciTech’s internal control over financial reporting is designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. CalciTech’s internal control over financial reporting includes those policies and procedures that:

·	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets;

·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation and fair presentation of financial statements, and that receipts and expenditures of the company are being made only in accordance with authorizations of CalciTech management; and

·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

CalciTech management assessed the effectiveness of CalciTech’s internal control over financial reporting as of December 31, 2009 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework, Guidance for Smaller Public Companies. Based on this assessment, management believes that, as of December 31, 2009, CalciTech’s internal control over financial reporting was effective.

Not Applicable.

(d) Changes in Internal Control over Financial Reporting.

None.

Item 16.

16A	Audit Committee Financial Report

There are currently two members on the Audit Committee. Mr. Michael J.B. Brickell and Dr. Howard Browning constitute the members of the Audit Committee. Both Messrs Smith and Browning are independent directors. Due to the size of the Audit Committee, the Board has not determined that a member of the Audit Committee is qualified as an Audit Committee Financial Expert.

16B	Code Of Ethics

We have adopted a "code of ethics" (as that term is defined in Form 20-F) (the "Code of Ethics"), which is available on our website at www.calcitech.com.

16C	Principal Accountant Fees And Services

The independent auditor for the fiscal years ended December 31, 2009, December 31, 2008 and December 31, 2007 was HW Fisher & Co.

Audit Fees

The aggregate fees billed by HW Fisher & Co for professional services rendered for the audit of our annual financial statements on Form 20-F for the fiscal year ended December 31, 2009 was $50,000.

The aggregate fees billed by HW Fisher & Co for professional services rendered for the audit of our annual financial statements on Form 20-F for the fiscal year ended December 31, 2008 was $53,250.

The aggregate fees billed by HW Fisher & Co for professional services rendered for the audit of our annual financial statements on Form 20-F for the fiscal year ended December 31, 2007 was $55,000.

Audit-Related Fees

The aggregate fees billed for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements for the year ended December 31, 2009 was $NIL, December 31, 2008 was $NIL and December 31, 2007 was $ NIL

Tax Fees

The aggregate fees billed for tax compliance, tax advice and tax planning rendered by our independent auditors for the fiscal year ended December 31, 2009 was $NIL, December 31, 2008 was $NIL, and December 31, 2007 was $NIL.

All Other Fees

The aggregate fees billed for all other professional services rendered by our independent auditors for the fiscal year ended December 31, 2009 was $NIL, December 31, 2008 was $NIL, and December 31, 2007 was $NIL.

The Audit Committee does not have any pre-approval policies or procedures. The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.

16D	Exemptions From The Listing Standards For Audit Committees

Not applicable.

16E	Purchases Of Equity Securities By The Issuer And Affiliated Purchasers

None.

Part III

Item 17. Financial Statements

The following Financial Statements pertaining to us are filed as part of this Annual report:

Auditors’ Report.

Consolidated Statement of Financial Position as of December 31, 2009 and December 31, 2008.

Consolidated Statement of Comprehensive Income for the years ended December 31, 2009, December 31, 2008, and December 31, 2007.

Consolidated Statement of Shareholders’ (Deficit) Equity for the years ended December 31, 2009, December 31, 2008, and December 31, 2007.

Consolidated Statement of Cash Flows for the years ended December 31, 2009, December 31, 2008, and December 31, 2007.

Notes to Consolidated Financial Statements.

Item 18. Financial Statements

See Item 17.

Item 19. Exhibits

Exhibit No. Name

1.1	Articles of Kemgas Ltd. (1)

1.2	Altered Memorandum of Kemgas. (1)

1.3	Altered Memorandum of Kemgas, dated July 29, 1994 (2)

1.4	Certificate of Continuance to Bermuda, dated February 13, 1995 (2)

1.5	Bye-Laws of Kemgas, as adopted June 1995 (2)

1.6	Certificate of Incorporation on Change of Name dated September 11, 2000 (3)

1.7	Certificate of Deposit of Memorandum of Increase of Share Capital, dated January 5, 2010*

4.1	Addendum to Credit Facility Agreement between Epsom Investment Services N.V. and CalciTech Ltd. dated February 28, 2005 (4)

4.2	Addendum to Credit Facility Agreement between Epsom Investment Services N.V. and CalciTech Ltd. dated April 2006 (5)

4.3	Addendum to Credit Facility Agreement between Epsom Investment Services N.V. and CalciTech Ltd. dated August 15, 2006 (5)

4.4	Addendum to Credit Facility Agreement between Epsom Investment Services N.V. and CalciTech Ltd. dated February 25, 2009*

4.5	Addendum to Credit Facility Agreement between Epsom Investment Services N.V. and CalciTech Ltd. dated March 31, 2010*

4.6	Form of 5% Convertible Debenture due February 28, 2005 (4)

4.6	Form of Addendum to 5% Convertible Debenture Due February 28, 2005 (4)

4.7	Consulting Agreement between CalciTech Ltd. and H.J. Mark Tompkins dated February 25, 2005 (4)

8.1	List of Subsidiaries (4)

12.1	Certification of the Principal Executive Officer under the Sarbanes-Oxley Act*

12.2	Certification of the Principal Financial Officer under the Sarbanes-Oxley Act*

13.1	Certification under Section 1350*

____________________________________________

*	To be filed herewith

(1)	Previously filed with Registration Statement on Form 20-F under the Securities Exchange Act of 1934 on June 29, 1992.

(2)	Previously filed with the Form 20-F submitted for the fiscal year ended February 28, 1997.

(3)	Previously filed with the Form 20-F submitted for the fiscal year ended February 29, 2000.

(4)	Previously filed with the Form 20-F submitted for the fiscal year ended February 28, 2005.

(5)	Previously filed with the Form 20-F submitted for the fiscal year ended February 28, 2006.

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.

DATED: June 25, 2010	CALCITECH LTD.


	By:	/s/ Roger A. Leopard
		Roger A. Leopard
		President and Chief Executive Officer

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2009

Report of Independent Auditors

CalciTech Ltd

To the shareholders and board of directors of CalciTech Ltd

We have audited the accompanying consolidated balance sheet of CalciTech Ltd as of December 31, 2009, December 31, 2008 and December 31, 2007, the related consolidated statement of operations, shareholders' equity (deficiency), and cash flows for the year ended December 31, 2009, December 31, 2008, and December 31, 2007. 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 audit.

We conducted our audit in accordance with International Standards on Auditing and 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. An audit 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, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The financial statements have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CalciTech Ltd as of December 31, 2009, December 31, 2008 and December 31, 2007, and the consolidated results of its operations and its cash flows for the years ended December 31, 2009, December 31, 2008, and December 31, 2007 in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2.1 to the financial statements, the Company has incurred losses and negative cash flows from operations for the years ended December 31, 2009, December 31, 2008, and December 31, 2007. These matters raise doubt about its ability to continue as a going concern. Management plans in regard to these matters are also described in Note 2.1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

H. W. Fisher & Company

Chartered Accountants

Acre House

11-15 William Road

London

NW1 3ER

United Kingdom

F-2

CALCITECH LTD

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of December 31, 2009, December 31, 2008 and December 31, 2007

(amounts in thousands of US dollars, except per share data)

	Notes		Year to Dec 31, 2009		Year to Dec 31, 2008		Year to Dec 31, 2007
ASSETS			$		$		$

Current assets
Cash and cash equivalents		2.6		22		26		117
Inventories				0		0		7
Receivables, prepaid expenses and other current assets		3		165		233		277

Total current assets				187		259		401

Non-current assets
Property, plant and equipment, net		4		1,023		1,029		1,181
Intangible assets	2.8 and 5			6,996		5,869		3,867

Total non-current assets				8,019		6,898		5,049

TOTAL ASSETS			$	8,206	$	7,157	$	5,450

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

F-3

CALCITECH LTD

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of December 31, 2009, December 31, 2008 and December 31, 2007

(amounts in thousands of US dollars, except per share data)

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

LIABILITIES & SHAREHOLDERS' EQUITY	Notes		year to Dec 31, 2009			year to Dec 31, 2008			year to Dec 31, 2007
			$			$			$
Current liabilities
Accounts payable				498			534			865
Accruals				168			353			211
Tax provisions		2.12		13			0			22
Deferred gain on sale and leaseback - current portion				0			0			99
Hire Purchase Agreement - current portion		7		85			85			177
Deferred income - current portion				0			31			27

Total Current Liabilities			$	764		$	1,003		$	1,401

Non Current Liabilities
Credit facility		6		797			5,436			1,630
Deferred income - non-current portion				0			109			152

Total Non Current Liabilities			$	797		$	5,545		$	1,782

Long Term Liabilities
Convertible debenture notes				1,500			0			0

Total liabilities			$	3,061		$	6,548		$	3,183

Commitments and Contingencies

Shareholders' Equity		8
Common stock, Cdn $ 0.001 par value; 300,000,000 shares authorised; issued & fully paid 185,639,086 at December 31, 2009, (126,588,812 at December 31, 2008) (99,998,665 at December 31, 2007)				1,898			1,846			1,824
Share premium, holders' options outstanding on credit facility and contribution surplus				48,652			43,165			40,661
Convertible debentures				2,321			2,321			4,642
Accumulated deficit during the development stage				(47,474	)		(46,393	)		(44,368	)
Cumulative foreign currency translation adjustments				(252	)		(330	)		(492	)

Total Shareholders' Equity				5,145			609			2,267

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $				8,206		$	7,157			5,450

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

F-4

CALCITECH LTD

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended December 31, 2009,

the year ended December 31, 2008,

and the year ended December 31, 2007,

(amounts in thousands of US dollars, except per share data)

	Notes	year to Dec 31, 2009			year to Dec 31, 2008			year to Dec 31, 2007
		$			$			$

Revenues			0			0			58
Cost of revenues			0			(37	)		(60	)

Gross profit			0			(37	)		(2	)

General and administrative expenses			965			1,197			313

Operating loss			(965	)		(1,234	)		(314	)

Interest expense			(103	)		(791	)		(341	)
Loss before income taxes			(1,068	)		(2,025	)		(656	)

Provision for income taxes			(13	)		0			(22	)
Net Loss		$	(1,081	)	$	(2,025	) $		(678	)

Other Comprehensive Income
Exchange differences on translation foreign operations		$	78			163			(227	)

TOTAL COMPREHENSIVE INCOME			(1,003	)		(1,862	)		(905	)

Net loss per share:
Basic		$	(0.001	)	$	(0.002	) $		(0.001	)

Shares used in net loss per share calculation:
Basic			150,858,348			99,998,665			88,656,114

Please refer to note 11 for details of related party transactions.

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

F-5

CALCITECH LTD

CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT) EQUITY

For the year ended December 31, 2009,

the year ended December 31, 2008,

and the year ended December 31, 2007

(amounts in thousands of US dollars except number of shares)

	Note	Common stock				Share premium, holders' option outstanding and contributed surplus			Convertible debentures			Accumulated deficit during development stage			Cumulative foreign currency translation adjustments			Total consolidated shareholders' (deficit) equity
		Shares		$		$			$			$			$			$
Balances, December 31, 2006			88,899,675		1,813		37,457			4,613			(43,690	)		(269	)		(76	)

Net loss							(3	)					(678	)		(224	)		(905	)
Issuance of common stock on conversion of credit facility			11,098,990		11		3,249			0			0			0			3,260
Debentures: non-current portion adjs							(42	)		29			0			0			(13	)

Balances, December 31, 2007			99,998,665		1,824		40,661			4,642			(44,368	)		(493	)		2,266

Net loss													(2,025	)		163			(1,862	)
Issuance of common stock on conversion			26,590,147		22		2,504												2,526
of credit facility Debentures: non-current portion adjs										(2,321	)								(2,321	)

Balances, December 31, 2008			126,588,812		1,846		43,165			2,321			(46,393	)		(330	)		609

Net loss													(1,081	)		78			(1,003	)
Issuance of common stock on conversion of credit facility and creditors			59,050,274		52		5,417												5,469
Placing Fees							70												70
Debentures: non-current portion adjs										0									0

Balances, December 31, 2009			185,639,086		1,898		48,652			2,321			(47,474	)		(252	)		5,145

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

F-6

CALCITECH LTD

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended December 31, 2009,

the year ended December 31, 2008,

the year ended December 31, 2007

(amounts in thousands of US dollars)

	year to Dec 31, 2009			year to Dec 31, 2008			year to Dec 31, 2007
	$			$			$
Cash flows from operating activities
Net loss		(1,081	)		(2,025	)		(678	)
Adjustments for:
Loss on disposal of fixed assets		36			0			0
Depreciation and amortization		12			131			139
Interest expense		0			0			0
Operating loss before working capital changes		(1,033	)		(1,894	)		(539	)

Changes in working capital:
Receivables, prepayments & current assets		68			51			(39	)
Accounts payable, accruals and provisions		(239	)		(211	)		149

Net cash used in operating activities		(1,204	)		(2,054	)		(429	)

Cash flows from investing activities in:
Purchase of property, plant and equipment		(23	)		(33	)		(348	)
Plant pre-financing, project & product development		(1,127	)		(1,893	)		(2,152	)
Patents		(19	)		(55	)		(72	)

Net cash used in investing activities		(1,169	)		(1,981	)		(2,572	)

Cash flows from financing activities:
Repayment of other loans		(109	)		(138	)		(197	)
Cash outflow from sale and leaseback		0			(92	)		(140	)
Proceeds from credit facility		(4,639	)		3,806			50
Proceeds from convertible note		1,500			0			0
Proceeds from conversion		5,539			205			3,261

Net cash provided by financing activities		2,291			3,781			2,974

Effect of exchange rate changes on cash and cash equivalents		78			163			(240	)

Net decrease in cash & cash equivalents		(4	)		(91	)		(268	)
Cash and cash equivalents, beginning of year		26			117			385

Cash and cash equivalents, end of year	$	22		$	26		$	117

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

F-7

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

1. BUSINESS OF THE COMPANY

CalciTech Ltd (the "Company") is incorporated in the jurisdiction of Bermuda. Starting from the production of acetylene from which revenues were generated until 1997, the Company changed its business model to concentrate on the production of precipitated calcium carbonate (PCC). PCC is a white pigment, which can only be produced from pure, white limestone deposits and is currently mainly used in filling and, to a lesser extent, in other industrial applications. After an extended period of development, a PCC technology, substantially different from the existing technology was discovered and patented. The Company’s technology to produce Synthetic Calcium Carbonate (“SCC”) can utilize most grades of lime, including low quality lime or industrial waste lime such as carbide lime and paper sludge ash. SCC can be applied in a wide variety of industrial applications including paper, polymers, paints, foods and pharmaceuticals.

The Company has been in the development stage since 2000 and revenue from the principal activity commenced for trial purposes in the year ended February 29, 2004. In 2006, the Company changed its accounting year-end to December 31 partly to recognise the move from the development stage to the commercialization stage. New patents have extended the range of waste products, which can be utilized. Extensive project development and marketing, on a worldwide basis, has taken place. However, the main thrust during the year has been focused on Europe where the Company expects to develop its products in a number of industry applications and build its first plants to produce the offtake required.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Going concern

The financial statements have been prepared assuming the Company will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. In assessing whether the going concern assumption is appropriate, management takes into account all available information for the foreseeable future, in particular for the twelve months from the date of approval of the financial statements.

The Company is in the commercialization stage and has a growing portfolio of defined products for which samples are being produced and tested by many potential customers in a wide range of industrial applications. The Company has completed a number of feasibility studies, some with potential industrial partners, for the construction of plants to produce SCC and continues to seek out new projects. An additional patent was filed during the year and will extend the life of its original patent. Up to December 31, 2009, cumulative losses were $47,474.

Management believes that given the cash and cash equivalents of $22 together with its working capital credit facility, and the continuing control of expenses, the Company has sufficient working capital to meet its obligations up to the next 12 months following the date of the approval of these financial statements. However, when the Company commences the start-up of the building of commercial plants, this credit facility would be insufficient and further funding would be required. The Company is currently working with a number of financial institutions, subject to market conditions, to secure the necessary funding.

F-8

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

The Company is in the process of finalizing plans to build our first full scale SCC plants in Europe. Construction is dependent on availability of funds through financing.

The Company, through CSME, is now planning a matrix of plants in Europe and has made presentations to the European Investment Bank (“EIB”) to confirm that such projects will qualify under its technological innovation program for financial support. The Company’s financial advisors are currently in negotiations with a number of UK banks, in the context of the EIB borrowing and funding for all European plants.

The German federal state of Sachsen-Anhalt will proceed with the approval process for the provision of a grant on the planned plant in Leuna after receiving a house bank’s endorsement of the company’s application. This will contribute 50% of the capital costs of the 100,000 tonnes per annum planned plant. The Company expects similar European Union grants, in varying amounts, to be available.

A working capital facility has been available from Epsom Asset Management Ltd. (“EAM”) since February 1998. From time to time, the balance of this facility has been reduced by the mutually agreed conversion of the balance into the common stock of the Company, in order to provide on-going working capital. A restructuring of the debt in order to make available additional working capital was completed in early 2009. The EAM working capital credit facility of $3,000 is available and has been extended until August 31, 2011.

During 2007, debentures with a value of $4,642 were re-negotiated by their retirement against the issue of new 6% debentures with a value of $4,642 to December 31, 2009. In December 2008, following negotiations with the debenture holders, an agreement was reached whereby all the debenture holders agreed to convert 50% of their notes, plus accrued interest to December 31, 2008, into common shares of the Company at a price of $0.095 per share. The notes were further amended with an interest rate of 1.75% and a new conversion price of $0.75 per share. These notes were also extended until December 31, 2010.

In December 2009, the Company authorised a new series of convertible debenture notes with an annual interest rate of 4% and a conversion rate of $0.40 per share for a period of two years from date of issue. All other terms and conditions are the same as the previous series of convertible notes. EAM has agreed to convert $1,500 of its outstanding facility into these new notes.

Assets and liabilities are recorded on the basis that the Company will be able to realise its assets and discharge its liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments to the carrying values of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

F-9

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

2.2 Basis of presentation

The consolidated financial statements are prepared under the historical cost convention and they are also presented in accordance with International Financial Reporting Standards (“IFRS”).

2.3 Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated.

2.4 Use of estimates

The preparation of financial statements in conformity with International Financial Reporting Standards requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For example, the carrying value of the intangible assets are assumed on the basis that future financing will be secured to complete the projects thus leading to future income generation.

2.5 Foreign currency translation

The reporting currency of the Group is the US dollar ($), which is also the measurement currency of the parent company. The parent company elected the US dollar as its measurement currency rather than the Bermudan dollar (BMD), which is the currency of its country of domicile, to reflect the fact that the majority of its transactions are denominated in US dollars.

The measurement currency of the Company's operating foreign subsidiaries is their local currency, generally the Euro. Assets and liabilities of the Company's foreign subsidiaries are translated into US dollars using the exchange rate in effect at the balance sheet date. Additionally, their expenses are translated using exchange rates approximating average rates prevailing during the year. Translation adjustments that arise from translating their financial statements from their local currencies to US dollars are accumulated and reflected as a separate component of shareholders' equity.

Gains and losses that arise from the effect of exchange rate changes on balances denominated in currencies other than the measurement currency of each of the Company and its subsidiaries are included in the statements of operations as incurred.

F-10

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	year to Dec 31, 2009		year to Dec 31, 2008			year to Dec 31, 2007
	$		$			$
Unrealised gain / (loss) on currencies		88		(146	)		370

Change in foreign currency adjustments		78		163			(225	)

Exchange Gain	$	166	$	17		$	146

2.6 Cash and cash equivalents

Cash and cash equivalents include all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

2.7 Property, plant and equipment

Property, plant and equipment are stated at historical cost and are depreciated on a straightline basis over their estimated useful lives:

Plant and equipment	5 to 10 years
Office furniture and equipment	3 to 8 years

Asset residual values and useful lives are reviewed and adjusted if appropriate at the end of each year. The asset carrying amounts are written down to recoverable amount if greater. Maintenance and repairs are charged to expenses when incurred. Gains and losses on sale are equal to the proceeds less the carrying amount and are taken to the statement of comprehensive income.

2.8 Intangible Assets

Expenditure on intangible assets (Product Development, Project Development, Commercial Plant pre-financing costs and Patents) will be capitalised and amortised against production and sales of SCC. Legal expenditure for the protection of technology developed by the Group is recognised as an expense in the statement of operations, as incurred, except when additional future economic benefits can be attributed to such protection at closing date. The intangible assets are not amortised because the Group is not yet utilizing them on a commercial level. Amortisation will begin upon the commencement of commercial production. Management regularly review the intangible assets to consider their carrying value and whether there is any impairment in light of the project or product development.

2.9 Research and development

Research and development costs are expensed as incurred, except for Project Development and Product Development costs, which are deferred as intangible assets as the Group can demonstrate all of the following:

F-11

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

●	the technical feasibility of completing the intangible asset so that it will be available for use or sale;

●	its intention and ability to use or sell the intangible asset;

●	the existence of a market for the output of the intangible asset or the intangible asset itself;

●

the availability of adequate technical resources to complete the development; the availability of adequate financial and other resources to complete the development and to use or sell the intangible asset, subject to the ability of the Company to continue as a going concern, as described in Note 2.1, the carrying value of the intangible assets are assumed on the basis that future financing will be secured to complete the projects thus leading to future income generation and;

●	its ability to measure the expenditure attributable to the intangible asset during its development reliably.

Deferred Project Development costs of $6,097, Product Development costs of $1,091, and Patents of $366 are recorded at cost, which include:

●	expenditure on materials and services used or consumed in generating the intangible asset;

●	the salaries, wages and other employment related costs of personnel directly engaged in generating the asset, and

●	any expenditure that is directly attributable to generating the asset, such as the amortisation of patents used to generate the asset.

Any costs capitalised are amortized on a straight-line basis over the period of expected future benefit.

The intangible assets of Project Development and Product Development are not yet being amortized.

2.10 Net loss per common share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares outstanding.

For the purpose of calculating diluted earnings per share, the net loss attributable to ordinary shareholders and the weighted average number of shares outstanding is adjusted for the effects of all dilutive potential ordinary shares. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted earnings per share. Potential ordinary shares are anti-dilutive when their conversion to ordinary shares would decrease loss per share from continuing operations. 9,750,000 options have been excluded from the loss per share calculation, as the effect is anti-dilutive.

2.11 Fair value of financial instruments

Carrying amounts of certain of the Group's financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short maturities, based on borrowing rates currently available to the Company. This would include convertible debentures where the fair value of the conversion option is recognised under shareholders’ equity.

F-12

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

2.12 Deferred and current taxation

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are recorded for deferred tax assets that are not more likely that not to be realised.

Deferred tax assets are recognised only to the extent that future taxable profit will be available such that realisation of the related tax benefit is more likely than not.

Current tax is that payable to the Swiss Tax Authorities on profits generated by the Company’s administrative headquarter company, CalciTech Group Services S.A.

2.13 Stock options

The Company has a stock option plan, which allows stock options to be issued up to 10% of the Company’s issued share capital. The Company does not recognise any compensation expense with respect to stock options as all the exercise prices of all option issues are abovethe current market price of the Company’s shares.

2.14 Convertible debt accounting

On issue of convertible debentures and credit facility, the fair value of the conversion element is determined. This amount is recognised in shareholders' equity. The obligation to make future payments of principal and interest to the holder of the option is calculated using a deemed market interest rate for an equivalent non-convertible debt. The obligation to make future payments of interest is carried as a liability until extinguished on conversion or payment. When the Company has the option to convert the principal and, if applicable, the interest on these notes, the obligation to make future payments of principal to the holder is carried as equity.

The fair value of the liability component, representing the obligation to make future payments of interest to the holder of the conversion option is calculated on the issue of the instrument using a deemed market interest rate for an equivalent non-convertible instrument. The residual amount, representing the value of the equity conversion component, is included in shareholders' deficiency.

2.15 Modification of debt instruments

The Company may effect a modification or an exchange of debt instruments with a creditor. The modification or exchange may include changes in the principal amount, interest rate, term to maturity, borrowing currency or creditor. Whether a modification or exchange of debt instruments represents a settlement of the original debt or merely a renegotiation of that debt determines the accounting treatment that is applied by the Group. A modification or exchange of debt instruments represents a settlement when the terms of the new or modified debt are substantially changed from the terms of the original debt instrument. Substantial change occurs when:

F-13

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

a.	The present value of the cash flows under the terms of the modified or new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original debt instrument;

b.	There is a change in the borrowing currency; or

c.	There is a change in the creditor and the original debt is legally discharged by the debtor through a cash payment or otherwise.

If a modification or an exchange of debt instruments represents a settlement, the Company calculates a loss or gain that is charged, or credited, to income when settlement occurs. This loss or gain is the difference between the fair value of the new debt instrument and the carrying amount of the original debt instrument, together with all unamortized debits or credits related to the original debt instrument.

If a modification or exchange of debt instruments does not represent a settlement but, instead, is merely a renegotiation of a debt instrument, all existing deferred debits and credits related to the original debt instrument are maintained and are amortised over the remaining term of the renegotiated debt.

2.16 Government grants

Government grants are recognised when there is reasonable assurance that the Group will comply with the conditions attaching to them, and the grants will be received or earned. A government grant that becomes receivable as compensation for research and development expenses already incurred with no future related costs is recognised as a reduction in research and development expenses in the period in which it becomes receivable.

Grants for the acquisition of assets and development activities that are capitalised are set off against the cost price of the assets for which grants are awarded.

2.17 Leases

Leases are classified as finance leases wherever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value at the date of acquisition or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against the statement of operations. Assets held under finance leases are depreciated at the shorter of the lease term and their useful economic lives.

F-14

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

2.18 Revenue recognition

The Company has no large-scale commercial SCC plants, and since 2004 has received revenues from the sale of SCC samples only. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Interest is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the accounts receivable balance. Management determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. The Group writes off accounts receivable when they become uncollectible. The Group currently has no allowance for doubtful accounts.

2.19 Borrowing costs

All borrowing costs are recognized in the consolidated statement of operations in the period in which they are incurred.

2.20 Inventories

Inventories are stated at the lower of cost and net realisable value. The Company has no inventory at present but will apply the First In First Out (FIFO) method when this arises.

3. RECEIVABLES, PREPAID EXPENSES AND OTHER CURRENT ASSETS

Receivables, prepaid expenses and other current assets consist of the following:

	Dec 31, 2009		Dec 31, 2008		Dec 31, 2007
	$		$		$
Accounts receivable		0		195		90
Other debtors		0		0		13
VAT receivable		17		7		72
Deposits		30		16		45
Prepaid expenses		118		15		58
Total	$	165	$	233	$	277

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

F-15

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	Computer Equipment			Building, Plant & Equipment			Commercial Plant Pre- financing		Office Furniture & Equipment			Total
	$			$					$			$
Balance at December 31, 2008		8			446			558		17			1.029
Additions		1			0			0		22			23
Disposals		0			0			0		(17	)		(17	)
Depreciation during year		(7	)		0			0		(4	)		(11	)
Foreign Currency Adjustments		(1	)		0			0					(1	)

Balance at December 31, 2009	$	1			446			558		18			1.023

Gross Amount		40			991			558		22			1.611
Accumulated Depreciation		(39	)		(545	)		0		(4	)		(588	)

Balance at December 31, 2009	$	1			446			558		18			1.023

For the year ended December 31, 2009, the year ended December 31, 2008, and the year ended December 31, 2007, depreciation expense totalled $12, $132 and $138 respectively. The commercial plant pre-financing costs have been reclassified and transferred to intangible assets to reflect the true nature of this asset.

During the year ended February 29, 2004, the Company disposed of its small-scale plant and leased it back for an annual rental of €120 ($176) for a period of five years at the end of which the Company retains the right to re-acquire the plant. The amount capitalised in respect of this plant is $446, of which depreciation of $NIL was recognised in the period ending December 31, 2009, as the plant was not in use during the period (December 31, 2008: $120 and December 31, 2007: $124). The final payment on the lease agreement was made in February 2010 and under the terms of the agreement the plant was acquired for €1.

The assets and liabilities under capital leases are recorded at the lower of present values of the minimum lease payments or the fair values of the assets. The assets are included in property and equipment and are depreciated over their estimated useful lives.

As of December 31, 2009, the future minimum lease payments under non-cancellable finance leases for the following periods:

Not later than one year		85
Later than one year and not later than five years		0
Later than five years		0
Total Future minimum lease payments	$	85

5. INTANGIBLE ASSETS

Intangible Assets can be summarised as following:

F-16

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	Project Development		Product Development			Commercial Plant Pre financing		Patents			Total
	$		$			$		$			$
Balance at December 31, 2008		2,124		1,435			1,944		366			5,869
Reclassification		718		(718	)		0		0			0
Additions		753		374			0		19			1,146
Disposals		0		0			0		(19	)		(19	)
Amortisation during period		0		0			0		0			0
Foreign Currency Adjustments		0		0			0		0			0

Balance at December 31, 2009	$	3,595		1,091			1,944		366			6,996

Gross Amount		3,595		1,091			1,944		393			7,023
Accumulated Amortisation		0		0			0		(27	)		(27	)

Balance at December 31, 2009	$	3,595		1,091			1,944		366			6,996

For the year ended December 31, 2009, the year ended December 31, 2008 and the year ended December 31, 2007, amortization expense totaled $NIL, $NIL and $2 respectively. When full-scale production plants are producing revenues, patents will be amortised on a straightline basis over the life of the patent.

6. CREDIT FACILITY AGREEMENT

Since February 28, 1998 the Company has had available a credit facility with EAM. From time to time, the balance due payable under the facility has been reduced, by mutually agreed conversions of the debt into the common stock of the Company. A restructuring of the debt in order to make available additional working capital was completed in early 2009. During February 2009, EAM agreed to convert the full amount of the credit facility as at December 31, 2008, amounting to $5,436, at a price of $0.095 per share. The credit facility was increased to $3,000 with a reduced interest rate of 1.75% per annum. The conversion of the aforementioned EAM facility and creditors resulted in the issue of 59,050,274 common shares.

As part of the restructuring, the original charge agreement with Epsom Investment Services N.V. was assigned, by mutual consent to EAM providing the first charge over the intellectual property rights, collateralized by 100% of the issued share capital of CalciTech Synthetic Minerals Ltd. with the new facility.

In December 2009, EAM agreed to convert $1,500 of its credit facility into a new series of convertible debenture notes and to extend the facility of $3,000 to 31st August 2011.

The credit facility is presented as follows:

F-17

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	year to Dec 31, 2009			year to Dec 31, 2008			year to Dec 31, 2007
	$			$			$
Face value of note issued during the year		2,241			3,629			3,136

Interest expense		56			177			175
Conversion of note into common shares		(5,436	)		0			(3,261	)
Convertible debenture notes		(1,500	)
Payments made during the year		0			0			0

		(4,639	)		3,806			50

Non-current liability at beginning of period		5,436			1,630			1,580

Non-current liability at end of period	$	797		$	5,436		$	1,630

Effective interest rate at period end		1.75	%		8.50	%		7.75	%

The caption “Payments made during the year” includes the effect of direct offset to the credit facility of various transactions in the total amount of $NIL during the year ended December 31, 2009 ($NIL, during the year ended December 31, 2008, and $NIL for the year ended December 31, 2007), as further described in Note 11. The carrying amount of the credit facility approximates its fair value.

7. OTHER LOANS

Other loans are as follows:

	Dec 31, 2009		Dec 31, 2008		Dec 31, 2007
	$		$		$
Other loans		0		0		0
Finance lease		85		85		177

Total loans $	$	85	$	85		177

Falling due split:
Amounts due within one year
Other loans		0		0		0
Finance lease		85		85		177

Total amounts due within one year		85		85		177

Amounts due after one year
Other loans		0		0		0
Finance lease 1 -2 years		0		0		0
Finance lease 2 -5 years		0		0		0

Balance at the end of the year	$	85	$	85	$	177

F-18

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

8. SHAREHOLDERS' EQUITY

The Company has ordinary common shares with the par value of $ 0.001 there are no restrictions on the distribution of dividends and repayment of capital.

8.1 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

8.2 Convertible debentures

In February 2001, the Company issued 8% convertible debenture notes in the sum of $1,500. These notes are redeemable by the Company, in whole or in part, up to the date of maturity. On maturity, the Company also has the right, but not the obligation, to convert any or all of the amounts of principal and any accrued interest, into common stock. Further debenture notes were issued in July 2001 in the sum of $2,500.

By December 31, 2007, none of the debentures or outstanding interest were converted into common stock. At this date, the Company’s 5% convertible debentures with a value of $4,402 and €188 were re-negotiated by their retirement against the issue of new 6% debentures with a value of $4,642, to December 31, 2009. The Company had the right, but not the obligation, upon 10 days notice, without penalty, to repay all or any portion of the outstanding principal. Debenture holders had the right to convert on 31st December 2009 at $1.75. All other terms of the convertible debentures remained unchanged from the original debenture notes.

During December 2008, all 6% convertible debenture holders with a value of $4,642, agreed to convert 50% of the capital with accrued interest to December 31, 2008, amounting to $2,526 into common shares of the Company at a price of $0.095 per share. The remaining debenture notes were extended until December 31, 2010 at an interest rate of 1.75% per annum, payable quarterly, with the right to convert into common shares of the Company at $0.75 per share, amended from a conversion of $1.75 per share. The Company has the right, but not the obligation, upon 10 days notice, without penalty, to repay all or any portion of the outstanding principal. These debentures have been classified as equity as there is no contractual obligation to deliver cash and the contract will be settled by the company delivering a fixed number of its own equity instruments in exchange for a fixed amount of cash.

In December 2009, the Company authorised $5,000 in a new series of convertible debenture notes with an annual interest rate of 4% payable quarterly in arrears. These notes, with a two year maturity date, are convertible into ordinary shares of the Company at $0.40 per share. All other terms and conditions remain the same as those of the existing series of debentures.

The equity element can be summarised as follows:

F-19

CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	Dec 31, 2009		Dec 31, 2008			Dec 31, 2007
	$		$			$
Principal amount of debentures at issuance		2,321		4,642			4,642
Less finders' fee		0		0			0
Debentures Converted		0		(2,321	)		0

	$	2,321	$	2,321		$	4,642

8.3 Conversion of credit facility

The original Epsom Investment Services N.V. (“Epsom”) credity facility, effected in February 1998, has been subject to a number of conversions of the balance into common stock of the Company in order to reduce the balance and thereby provide additional working capital both during and after assignment date of November 2008 to EAM.

In September 2007, Epsom agreed to convert a further $2,000 of the balance due on the credit facility agreement into common stock of the Company on the mutually agreed basis of one share for each $0.29 of note. This conversion resulted in the issue of 6,900,000 common shares.

In December 2007, Epsom agreed to convert a further $1,260 of the balance due on the credit facility agreement into common stock of the Company on the mutually agreed basis of one share for each $0.30 of note. This conversion resulted in the issue of 4,198,990 common shares.

During February 2009, EAM agreed to convert the full amount of the credit facility as at December 31, 2008, amounting to $5,436, at a price of $0.095 per share. EAM agreed to this conversion and the placement of 50% of the resulting shares with its clients, providing other existing shareholders and new shareholders acquire the remaining 50% of the shares at the same price per share. The proceeds were loaned to the Company under the existing credit facility for working capital purposes with interest charged at a reduced rate of 1.75% per annum, payable quarterly. The conversion of the aforementioned EAM facility and creditors resulted in the issue of 59,050,274 common shares. It was further agreed to increase the facility to $3,000.

In December 2009, EAM agreed to convert $1,500 of its credit facility into the new series of convertible debenture notes issued by the Company. The credit facility was extended to 31st August 2011.

8.4 Stock option plan

Under the provision of the Company’s share option plan, a maximum total of 10% of issued shares may be granted to directors, officers and employees of the Company in the form of stock options. The options generally expire five years from the date of the grant. 6,650,000 stock options granted are not subject to vesting requirements. The balance of 3,100,000 will vest upon the construction of the first commercial plant. Stock option activity was as follows:

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CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	Number of Shares		Exercise price per share

Balance at December 31, 2007		2,300,000
			Cdn $0.30 to 0.45
Options exercised		0
Options lapsed		0
Options granted		0

Balance at December 31, 2008		2,300,000	$0.23 to 0.24
			Cdn $0.23 to 0.45
Options exercised		0
Options lapsed		0
Options granted		7,450,000

Balance at December 31, 2009		9,750,000	$0.095 to 0.24
			Cdn $0.23 to 0.45

The following table summarises information with respect to stock options as of December 31, 2009:

Exercise Price	Weighted- average Number of options outstanding	Number of options exercisable	Weighted average remaining contractual life (years)

Cdn $0.30	250,000	250,000	2.16
Cdn $0.33	850,000	850,000	0.94
Cdn $0.45	500,000	500,000	1.15
$0.24	450,000	450,000	2.16
$0.23	250,000	250,000	2.50
$0.095	7,450,000	7,450,000	4.50
Total	9,750,000	9,750,000

All stock options are issued at or over the market price of the Company’s shares on the date of their granting and therefore there is no effect on profit and loss.

9. INCOME TAXES

Under the current Bermuda law, the Company is not required to pay any income taxes in Bermuda. The Company has received an undertaking from the Minister of Finance of Bermuda that in the event of any such taxes being imposed, the Company will be exempted from such taxation until March 28, 2016.

Net loss before income taxes consists of the following:

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CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	year to Dec 31, 2009			Year to Dec 31, 2008			year to Dec 31, 2007
	$			$			$

Bermuda		(1,126	)		(1,657	)		(646	)
Rest of world		46			(369	)		(124	)

Total	$	(1,080	)	$	(2,025	)	$	(770	)

There are no significant deferred taxes reflecting the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

There are no significant operating loss carry-forwards, which would have an impact on income tax as of December 31, 2009.

10. PROVISIONS AND CONTINGENCIES

The Company is subject to legal proceeding, claims, and litigation arising in the ordinary course of business. The Company and its subsidiaries are occasionally challenged by local tax authorities. The Company records a provision for these tax risks based on its most available information on the tax claim in each tax jurisdiction. The Company's management does not expect that the ultimate cost to resolve these matters will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

11. RELATED PARTY TRANSACTIONS

For the year ended December 31, 2009, the year ended December 31, 2008 and the year ended December 31, 2007, the amounts paid to shareholders, directors and officers of the Company and their related companies for consulting and other services totalled as follows:

	year to Dec 31, 2009		year to Dec 31, 2008		year to Dec 31, 2007
	$		$		$
Amounts paid to shareholders, directors and officers of the Company for consulting and other services	$	259	$	702	$	106

Amounts paid to EuroHelvetia TrustCo SA for financial advice	$	222	$	57	$	66

Amounts payable at Balance Sheet date	$	183	$	0	$	39

EuroHelvetia TrustCo S.A. is contracted by CalciTech to act as the Company’s financial advisors. EuroHelvetia charge their fees for work related to advice on private placements, fund raising and project finance. Roger A. Leopard, Chief Executive Officer and President of administration of EAM. All these transactions were at “arms length”.

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CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

12. FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND GEOGRAPHIC AREA

The Company operates in one business segment. The following table presents information by geographical area:

	year to Dec 31, 2009		year to Dec 31, 2008		year to Dec 31, 2007
Revenues	$		$		$
Bermuda		0		0		0
Rest of world		0		0		48
Total	$	0	$	0	$	48

	year to Dec 31, 2009			year to Dec 31, 2008			year to Dec 31, 2007
Operating loss	$			$			$
Bermuda		(800	)		(865	)		(269	)
Rest of world		59			(369	)		(46	)
Total	$	(741	)	$	(1,234	)	$	(314	)

Identifiable assets
Bermuda		8,007			3,320			1,782
Rest of world		199			3,837			3,668
Total	$	8,206		$	7,157		$	5,450

13. ANALYSIS OF MAJOR EXPENDITURES INCLUDED IN GENERAL AND ADMINISTRATIVE EXPENSES

The following is a breakdown of the major expenditures included in General and Administrative Expenses:

	year to Dec 31, 2009		year to Dec 31, 2008		year to Dec 31, 2007
	$		$		$
Employee costs		346		107		159
Professional fees		106		355		40
Investor relations		57		124		126
Rent, rates & charges		45		93		49
Travel		7		24		18
Depreciation		12		131		139

14. IFRS 7: RISKS ARISING FROM FINANCIAL INSTRUMENTS

The Group’s market risk is identified as those financial instruments that are subject to foreign exchange fluctuations. Below is a table of cash and cash equivalents, accounts receivable and accounts payable that are subject to the risk described. A sensitivity analysis is shown below suggesting the value of such financial assets and liabilities and % risk involved had thehighest and lowest exchange rates been applied during the year ending December 31, 2009, and during the year ending December 31, 2008:

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CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

	year to			year to						year to
Market Risk	Dec 31, 2009			Dec 31, 2009						Dec 31, 2009
				High			%			Low			%
	$			$						$
Cash at Bank		20			20			0	%		19			-5.0	%
Petty Cash		2			2			0	%		2			0	%
Accounts Receivable		0			0			0.	%		0			0	%
Accounts Payable		(498	)		(501	)		0.6	%		(438	)		-12.0	%
Accruals		(181	)		(182	)		0.7	%		(167	)		-7.7	%

	year to			year to						year to
Market Risk	Dec 31, 2008			Dec 31, 2008						Dec 31, 2008
				High			%			Low			%
	$			$						$
Cash at Bank		22			23			0.6	%		21			-5.0	%
Petty Cash		4			4			0.7	%		3			-9.0	%
Accounts Receivable		195			196			0.5	%		161			-17.6	%
Accounts Payable		(534	)		(538	)		0.6	%		(470	)		-12.0	%
Accruals		(353	)		(355	)		0.7	%		(326	)		-7.70	%

The Group does not feel that exposure to currency fluctuations is material to operations at the present time.

Liquidity risk is identified as the Group’s ability to satisfy Accounts Payables out of liquid assets at December 31, 2009. Even though liquid assets only represent 4% of accounts payable, the Group does not regard liquidity as a material risk at the present time. This is because the Group has the ability to draw down sufficient funds from its current credit facility, hence there is no strategy currently in place to hedge against this risk.

CalciTech’s credit risk is identified as the Group’s ability to recover outstanding receivables in full at December 31, 2009. On accounts receivable, the Group currently offers terms of 60 days to customers. However the Group relies on strong and longstanding relationships with its existing debtors, and therefore has not made provision for bad and doubtful debts.

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CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

Credit Risk	2009		<30 days		30-60 days		60-90 days		>90 days
	$		$		$		$		$
Accounts Receivable	$	0		0		0		0		0

Credit Risk	2008		<30 days		30-60 days		60-90 days		>90 days
	$		$		$		$		$
Accounts Receivable	$	195		0		0		0		195

15. LIST OF PRINCIPAL CONSOLIDATED COMPANIES

Principal consolidated companies are as follows:

Name of Company	Countries	Holding	Proportion	Nature of business
			held
CalciTech Synthetic Minerals Ltd.	Bermuda	Ordinary shares	100%	Technology licensor
CalciTech Group Services SA	Switzerland	Ordinary shares	100%	HQ Administration
CalciTech Synthetic Minerals Europe Ltd.	UK	Ordinary shares	100%	European holding company and operations licensee

On February 1, 2003, the Company’s intellectual property interests in its Synthetic Calcium Carbonate (“SCC”) technology were assigned to a new Bermuda organized wholly owned subsidiary, CalciTech Synthetic Minerals Ltd., which now acts as the holding Company and will license within the group rights and use of the technology on a territorial basis.

As previously reported, CalciTech Holdings ApS and its wholly-owned subsidiary, CalciTech Deutschland GmbH, have been liquidated. As a result, these companies have been deconsolidated from these financial statements.

As part of the restructuring, in April 2009, a new wholly owned subsidiary of CalciTech Synthetic Minerals Ltd. was established. CalciTech Synthetic Minerals Europe Ltd., a UK company, has become the principal company for all European operations. A branch office was registered in Germany for the operation of the Company’s small scale production plant.

16. ULTIMATE CONTROLLING PARTY

No individual has an ultimate controlling interest in the Company.

17. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Non-cash transactions were as follows:

	year to Dec 31, 2009			year to Dec 31, 2008			year to Dec 31, 2007
	$			$			$
Issuance of common stock
Upon conversion of credit facility		5,436			0			3,261
Convertible Debenture Notes		1,500			0			0
Issuance of common stock
Upon private placement through credit facility		0			0			0
Interest expense through credit facility		(56	)		(428	)		(175	)

Total	$	6,880		$	(428	)	$	3,086

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CALCITECH LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2009 (amounts in thousands of US dollars, except share data)

18. COMMITMENT

The Group rents its principal management services office under an annually renewable agreement. During the period ending December 31, 2009, the Group paid $34. There are no future obligations for rent over 12 months.

19. NUMBER OF EMPLOYEES (UNAUDITED)

Headcount was 5, 4 and 8 as of December 31, 2009, December 31, 2008, and December 31, 2007. It is the Group’s practice to employ consultants in various capacities due to the specific nature of the industries in which they are operating. As at December 31, 2009, the Group employed 7 consultants. Various additional professional firms are also employed for the prevision of specialist advice.

20. POST BALANCE SHEET EVENT

There were no post balance sheet events to report.

21. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the board of directors and authorised for issue on June 23, 2010.

/s/ Roger A Leopard

Roger A Leopard

/s/ Michael Brickel

M.J. Brickel

CalciTech Limited

P.O Box HM 2257, 3rd Floor, Par la Ville Place, 14 Par-La-Ville Road

Hamilton HM JX, BERMUDA

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CalciTech (CLKTF) Inactive 20-F2009 FY Annual report (foreign)

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