EXHIBIT 99.1

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD LOOKING STATEMENTS

The statements in this filing that are not descriptions of historical
facts may be forward-looking statements. Those statements involve substantial
risks and uncertainties. You can identify those statements by the fact that they
contain words such as "anticipate", "believe", "estimate", "expect", "intend",
"project" or other terms of similar meaning. Those statements reflect
management's current beliefs, but are based on numerous assumptions, which we
cannot control and that may not develop as we expect. Consequently, actual
results may differ materially from those projected in the forward-looking
statements. Among the factors that could cause actual results to differ
materially are: uncertainty of financial estimates and projections, the
competitive environment for Internet telephony, our limited operating history,
changes of rates of all related telecommunications services, the level and rate
of customer acceptance of new products and services, legislation that may affect
the Internet telephony industry, rapid technological changes, and the risks,
uncertainties and other matters discussed under "CAUTION" and elsewhere in our
Annual Report on Form 10-KSB for the year ended August 31, 2006 and in other
periodic reports filed with the U.S. Securities and Exchange Commission.

All references to "we," "our," "us," "Oncologix" or the "Company" refer
to Oncologix Tech Inc., and its predecessors and subsidiaries, including
Oncologix Corporation.

CRITICAL ACCOUNTING POLICIES

"Management's Discussion and Analysis or Plan of Operation" ("MD&A")
discusses our consolidated financial statements that have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amount of assets and
liabilities at the date of the financial statements, the 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. On an
on-going basis, we evaluate our estimates and judgments, including those related
to revenue recognition, valuation allowances for accounts receivable, research
and development costs, deferred income taxes and the carrying value of
long-lived assets. We base our estimates and judgments on historical experience
and on various other factors that are believed to be reasonable under the
circumstances. The result of these estimates and judgments form the basis for
making conclusions about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions; changes in these estimates
as a result of future events may have a material effect on the Company's
financial condition. The SEC suggests that all registrants list their most
"critical accounting policies" in MD&A. A critical accounting policy is one
which is both important to the portrayal of the Company's financial condition
and results of operations and requires management's most difficult, subjective
or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain. Management believes the
following critical accounting policies affect its more significant judgments and
estimates in the preparation of its consolidated financial statements: The
carrying value of long-lived assets and reserves related to accounts receivable,
deferred income taxes, pending or threatening litigation and the allocation of
assets acquired and liabilities assumed in the acquisition of JDA.

GENERAL DISCUSSION

Medical Device Business

On July 26, 2006, we entered into the medical device business, which is
in the pre-clinical testing phase. We anticipate a total expenditure of
approximately $22,000,000 over the next three year period for the activities we
believe will be necessary to enable us to develop and market our proposed
Oncosphere product to the public. These expenditures are expected to include
approximately $4,000,000 through feasibility approval, an additional $1,000,000
to pivotal approval and an additional $17,000,000 to commercialization. Since we
anticipate no funds from operations, we will be required to raise all necessary
funds from equity investors or lenders. The form and availability of the
financing will depend on capital markets and industry conditions at the time.
There is, of course, no assurance that funding will be available as required, or
on terms acceptable to us.

Telephone Business

As previously discussed herein we disposed of our telephone business
during the second quarter of fiscal 2007. The historical operations of the
telephone business have accordingly been reported as discontinued operations
within the accompanying financial statements for all periods presented.

PLAN OF OPERATION

Through our wholly owned subsidiary, Oncologix Corporation, based in
Atlanta Georgia, we are engaged in research and product development in the field
of liver cancer. We are developing a brachytherapy (radiation therapy) device
being developed for the advanced medical treatment of soft tissue cancers called
the Oncosphere System. This is based on a radioactive micro-particle designed to
deliver therapeutic radiation directly to a tumor site by introducing the
micro-particles into the artery that feeds the tumor tissue.

In effecting the change in our business described above, we have become
a development stage entity and substantially all of our efforts are now directed
towards the funding of our medical device business.

Satisfaction of our cash obligations for the next 12 months.

Our operating losses to date have been covered by equity and debt
financing obtained from private investors, including certain present members of
our Board of Directors. We never achieved positive cash flow or profitability in
our telephone business because we did not generate a volume of business
sufficient to cover our overhead costs and have, as described above,
discontinued it and sold most of its assets. On July 26, 2006, we acquired the
assets of a development stage medical device company and are now in the process
of continuing product development and obtaining government approval for the use
of our medical device. This change in business line will require substantial
additional funding to support the development and approval of this new device.

As of May 31, 2007, under our current plan of operation, we will be
required to raise a net amount of at least $2,850,000 (minimal cash requirement)
to continue in operation for the next 12 months, without regard to repaying any
short-term convertible or non-convertible notes payable. The additional funding
will allow us to complete the Development Phases of our Oncosphere System and
take us through a Feasibility Study. Consequently, we will be required to seek
additional capital in the future to fund growth and expansion through additional
equity or debt financing. The financing could have a negative impact on our
financial condition and our shareholders.

Summary of any product research and development that we will perform for the
term of our plan of operation.

Our medical device business is in the development stage. Our present
activities consist of conducting the studies and tests necessary to obtain data
in support of an application to the FDA for authorization (an "IDE") to conduct
a clinical study of the Oncosphere feasibility clinical study of the Oncosphere.
To do so, we must first conduct a number of engineering and animal clinical
studies and evaluations to collect information to support our IDE application to
the FDA. This effort is now expected to be completed in the third quarter of
fiscal 2008. We expect the $4,000,000 we have agreed to commit to this effort
will be sufficient, but we cannot be certain that costs will not exceed this
amount. An additional $1,000,000 will be required to achieve the pivotal
clinical trial approval.

Based on the previous experience of Oncologix management in the
development of radiation medical devices and in obtaining FDA and radiation
regulatory approvals, we believe that we have or can readily obtain all of the
resources necessary to complete the required studies and evaluations. We have
contracts with outside contractors to perform various tasks and studies. While
the required expertise is highly specialized, it is available from a number of
sources and no difficulty is expected in identifying a number of qualified
contractors. We have secured contracts with key contractors to provide test
materials in sufficient quantities and acceptable quality levels to complete the
testing requirements. Suppliers of the materials used in the manufacture of the
radioactive microspheres have been identified and are able to provide materials
in sufficient quantities to support ongoing development activities. We
anticipate no difficulties in finding alternative sources of supply should that
become necessary or advisable.

The work necessary to support an application to the FDA for an IDE is
generally divided into the three phases described in the following paragraphs.

Development. This phase involves the definition of the design and the
feasibility of manufacturing the product. It will be complete when

(A) A microsphere specification and design have been defined that meet
the user requirements as defined in the Product Requirements Document;

(B) It has been demonstrated that lots can be manufactured at pilot
plant scale (i.e. in quantities large enough to support an animal study and a
pivotal clinical study); and

(C) A preliminary manufacturing plan, based on reasonable assumptions,
has been completed based on data that support a commercially acceptable cost
basis for commercial quantities.

Pre-Clinical Testing. In this phase, animal experimentation is
conducted to generate test results to verify the design against its "product
(user) requirements" and to identify the hazards of its use in a risk analysis.
This testing is required by the FDA standards and European Standards governing
the initiation of a clinical trial for medical devices and is a necessary part
of good engineering development and safety. These results must be included in
the submission to the FDA requesting IDE submission to the FDA. The trial design
and final specifications are planned to be based on discussions with and
preliminary advice from the FDA.

The animal study will be the last pre-clinical test performed before
the submission of the request for an IDE to the FDA. The purpose of the animal
study will be to:

(A) Confirm that radiation effects from the microspheres result in the
expected local effect in the liver, without adversely affecting other tissues or
organs;

(B) Document and describe any acute and chronic adverse events;

(C) Document and describe the feasibility of the delivery of
microspheres to the liver without "spilling over" or "drifting" to other places
in the body where their effect would be harmful. This study is done by examining
each organ of an animal that has been used to test the product; and

(D) Document and describe any potential liver toxicity.

This phase will conclude with the completion of a report of an animal
study that meets industry and scientific standards to support the submission of
an IDE to the FDA requesting approval for a "pivotal clinical trial". Efforts to
complete this phase are currently underway. Completion of this phase is expected
to occur by the third quarter of fiscal 2008.

Clinical Approval. In this phase, the IDE submission is prepared and
submitted to the FDA, and an approval to initiate a human clinical study is
granted. The IDE can be compiled and submitted when the design verification
activities are completed in the Pre-Clinical Testing Phase. The FDA has usually
responded to IDE submissions within 30 days with an approval, conditional
approval, or disapproval. An approval or conditional approval would allow us to
begin the treatment of patients in a human clinical study.

We have revised our original clinical study plan to include a
feasibility clinical study prior to the initiation of a "pivotal clinical
trial". The feasibility clinical study will be limited to 10-20 patients at 2-4
clinical centers to evaluate the safety of the Oncosphere product. Upon
completion of the enrollment of this limited number of patients and subsequent
follow-up, we plan to submit an additional IDE requesting the initiation of a
"pivotal clinical trial" to the FDA. This Phase will be completed when the FDA
issues a letter granting approval or conditional approval for a Pivotal Clinical
Trial. Management estimates that this will occur in the third quarter of fiscal
2008. Such a letter will constitute FDA consent to treat a group of patients on
an experimental basis and if successful in that effort, we will then be able to
request FDA approval to market the Oncosphere to all patients with specified
diseases under a PMA.

Our other activities during that time are expected to include
participation by Dr. Andrew S. Kennedy, a member of our Board of Directors and
Chief Science and Medical Officer, in scientific presentations and papers
informing the medical community of the benefits of microarterial brachytherapy
in general and in training physicians in its application. As progress is made,
we will begin to develop manufacturing and marketing plans for the Oncosphere
and will plan to obtain financing for the necessary personnel, facilities and
other requirements for the conduct of a commercial business.

The headquarters for our medical device business, are located in
approximately 2,000 square feet of leased office space at 3725
Lawrenceville-Suwannee Road, Suwanee, Georgia, 30024. The lease requires a
monthly rent of $1,372 and expires on July 31, 2008. In addition, we occupy
approximately 150 square feet of office space in North Carolina for use by Dr.
Kennedy under a lease that expires on July 31, 2007 and requires a monthly rent
of $1,050. Our corporate headquarters are located in approximately 1,000 square
feet of leased office space at 2850 Thornhills Ave., Grand Rapids, MI 49546.
This lease requires monthly rent of $1,465 and expires October 31, 2007.

Expected purchase or sale of plant and significant equipment.

We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time, other than
laboratory equipment that is necessary to produce the product that will be used
in pre-clinical testing and the human clinical studies. We will continue to use
contracted laboratory and manufacturing facilities through the remainder of the
pre-clinical testing phase.

Significant changes in the number of employees.

We currently employ seven full time employees, our Chief Financial
Officer, who is located at our corporate headquarters in Michigan, four who are
employed by our subsidiary in Georgia, including its President, Chief Operating
Officer, Project Director, Director of Radiation Operations and Radiation
Safety, our Chief Scientific and Medical Officer who is located in Cary, North
Carolina, and our Chief Executive Officer, who is located in Scottsdale,
Arizona. We anticipate hiring five new employees as we complete the Pre-Clinical
Testing Phase and approach the commencement of the pivotal clinical trials of
our Oncosphere System.

Results of Operations

General and Administrative Expense

Our General and Administrative expenses decreased to approximately
$468,000 during fiscal 2006 from approximately $520,000 during fiscal 2005, a
decrease of approximately $52,000 or 10%. The decline from fiscal 2005 to fiscal
2006 is due to lower marketing/consulting fees of approximately $98,000 or 19%;
reduced insurance expense of approximately $23,000 or 4%; and reduced legal fees
of approximately $25,000 or 5%. Offsetting those reductions was an increase in
executive compensation of approximately $41,000 or 8%; an increase in travel and
meal expenses of approximately $13,000 or 3%; an increase in accounting fees of
approximately $32,000 or 6%; and an increase in outside services and other
general and administrative expense of approximately $8,000 or 1%.

General and administrative expense from the period of inception
(acquisition of JDA on July 26, 2006) to August 31, 2006 was approximagely
$183,000 primarily consistng of executive payroll, legal, accounting, travel and
consulting expenses.

Research and Development Expense

Research and development expense was approximately $5,334,000 for
fiscal 2006 and for the period from inception (acquisition of JDA on July 26,
2006) to August 31, 2006 and nil for fiscal 2005. Research and development
expense relates to our medical device business, which was acquired during July
2006. Of the $5,334,000 research and development expense noted above,
approximately $5,266,000 was derived from the value of our stock issued in
consideration of our acquisition of JDA for acquired in-process research and
development.

Depreciation and Amortization

The increase in depreciation and amortization from fiscal 2005 to
fiscal 2006 and from the period from inception (acquisition of JDA on July 26,
2006) to August 31, 2006 was the result of assets being purchased for our new
medical device segment.

Interest Income

Interest income increased by more than 100% from fiscal 2005 to fiscal
2006 because of higher invested balances during fiscal 2006. Interest income for
the period from inception (acquisition of JDA on July 26, 2006) to August 31,
2006 was de minimis.

Interest and Finance Charges

A summary of interest and finance charges is as follows:

Period From
Inception
(Acquisition
of JDA) to
August 31,
2006 2005 2006
---- ---- ----

Interest expense on non-convertible notes $ 3,836 $ 10,975 $ 2,105
Interest expense on convertible notes payable 27,409 4,371 6,459
Amortization of discounts relative to beneficial conversion feature 19,018 18,920 3,448
Other interest expense 2,978 98 2,999
----------- ----------- -----------
Total $ 53,241 $ 34,364 $ 15,011
=========== =========== ===========

We had outstanding convertible notes payable during both fiscal 2006
and fiscal 2005. A discount to those notes was recorded due to the beneficial
conversion terms inherent to these convertible notes. The amortization of these
discounts is recorded as interest and finance charge expense over the life of
the notes. See Note 9 of Notes to Consolidated Financial Statements included
elsewhere in this Report. Cash paid for interest and finance charges decreased
by approximately 20% from fiscal 2005 to fiscal 2006 because of decreased
interest relating to the financing of directors and officers insurance. The
overall 53% increase in interest expense resulted from increases in the balances
of outstanding convertible notes payable.

Income Taxes

At August 31, 2006, the Company had federal net operating loss
carryforwards totaling approximately $31,400,000 and state net operating loss
carryforwards of approximately $18,900,000. The federal net operating loss
carryforwards expire in various amounts beginning in 2006 and ending in 2026.
Due to our history of incurring losses from operations, we have provided a
valuation allowance for our net operating loss carryforwards.

Discontinued Operations

Loss from discontinued operations increased to $243,680 for the fiscal
year ended August 31, 2006, compared to $242,854 for fiscal 2005, a decrease of
less than 1%, or $826 from the comparable period in the prior-year. Operating
results of our telephone business are summarized as follows:

Period From
Inception
For the Years Ended (Acquisition
August 31, of JDA) to
----------------------------- August 31,
2006 2005 2006
------------ ------------ ------------

Revenue................................. $ 1,174,073 $ 1,546,302 $ 77,860
Cost of Revenue......................... 720,403 975,805 49,313
------------ ------------ ------------
Gross margin........................ 453,670 570,497 28,547
General and administration expenses..... 557,777 626,194 93,092
Depreciation and amortization........... 134,055 176,940 11,156
Other perating expenses................. 5,518 10,217 3,482
------------ ------------ ------------
Loss from discontinued operations... $ (243,680) $ (242,854) $ (79,183)
============ ============ ============

Revenue from discontinued operations decreased during the fiscal years
ended August 31, 2006 and 2005, primarily as a direct result of a decrease in
minutes used by customers on our network and a shift of call volumes to less
expensive routes. Cost of revenue decreased during the fiscal years ended August
31, 2006 and 2005, primarily as a direct result of a decrease in minutes used by
customers on our network and a shift of call volumes to less expensive routes
resulting in an improved margin. Cost of revenue included payments to wholesale
carriers.

The decreases above were the reasoning behind the disposal of the
telephone business segment.

Pending Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
which defines fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Earlier adoption is encouraged.
We do not expect the adoption of SFAS No. 157 to have a material effect on our
financial condition or results of operation.

In March 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 156, "Accounting for Servicing
of Financial Assets--an Amendment of FASB Statement No. 140." This statement
requires an entity to recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
servicing contract in any of the following situations: a transfer of the
servicer's financial assets that meets the requirements for sale accounting; a
transfer of the servicer's financial assets to a qualifying special-purpose
entity in a guaranteed mortgage securitization in which the transferor retains
all of the resulting securities and classifies them as either available-for-sale
securities or trading securities in accordance with FASB Statement No. 115; or
an acquisition or assumption of an obligation to service a financial asset that
does not relate to financial assets of the servicer or its consolidated
affiliates. The statement also requires all separately recognized servicing
assets and servicing liabilities to be initially measured at fair value, if
practicable and permits an entity to choose either the amortization or fair
value method for subsequent measurement of each class of servicing assets and
liabilities. This statement is effective for fiscal years beginning after
September 15, 2006, with early adoption permitted as of the beginning of an
entity's fiscal year. We do not expect the adoption of this statement to have a
material effect on our financial condition or results of operations.

In February 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 155, "Accounting for Certain
Hybrid Financial Instruments, an Amendment of FASB Standards No. 133 and 140."
This statement established the accounting for certain derivatives embedded in
other instruments. It simplifies accounting for certain hybrid financial
instruments by permitting fair value remeasurement for any hybrid instrument
that contains an embedded derivative that otherwise would require bifurcation
under SFAS No. 133 as well as eliminating a restriction on the passive
derivative instruments that a qualifying special-purpose entity may hold under
SFAS No. 140. This statement allows a public entity to irrevocably elect to
initially and subsequently measure a hybrid instrument that would be required to
be separated into a host contract and derivative in its entirety at fair value

(with changes in fair value recognized in earnings) so long as that instrument
is not designated as a hedging instrument pursuant to the statement. SFAS No.
140 previously prohibited a qualifying special-purpose entity from holding a
derivative financial instrument that pertains to a beneficial interest other
than another derivative financial instrument. This statement is effective for
fiscal years beginning after September 15, 2006, with early adoption permitted
as of the beginning of an entity's fiscal year. We do not expect the adoption of
this statement to have a material effect on our financial condition or results
of operations.

Statement of Accounting Standards No. 154 "Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3" was
issued in May 2005, effective for fiscal years beginning after December 15,
2005. We will comply with the provisions of SFAS 154 for any accounting changes
or error corrections that may occur in fiscal year 2007 and thereafter.

In December 2004, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (Revised 2004) "Share-Based
Payment". SFAS 123R requires companies to measure all employee stock-based
compensation awards using a fair value method and record such expense in its
financial statements. SFAS 123R will be effective for the Company at the
beginning of fiscal 2007. The Company is in the final stage of evaluating the
impact that the adoption of SFAS 123R will have on our financial statements. In
the Notes to Financial Statements we have added disclosure related to using the
fair value method to evaluate stock-based employee compensation.

In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109", which prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48 also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. FIN 48 is
effective for fiscal years beginning after December 15, 2006. We do not expect
the adoption of FIN 48 to have a material effect on our financial condition, and
we are currently evaluating the impact, if any, the adoption of FIN 48 will have
on our disclosure requirements.

On September 13, 2006, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 108, which provides interpretive guidance on how
the effects of the carryover or reversal of prior year misstatements should be
considered in quantifying a current year misstatement. SAB 108 is effective for
the first fiscal year ending after November 15, 2006, which will be our fiscal
year 2007. The adoption of this statement is not expected to have a material
impact on our financial condition or results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Our operating losses to date have been covered by equity and debt
financing obtained from private investors, including certain present members of
our Board of Directors.

We never achieved positive cash flow or profitability in our telephone
business because we did not generate a volume of business sufficient to cover
our overhead costs. Our financial statements contain explanatory language
related to our ability to continue as a going concern and our auditors have
qualified their opinion on our financial statements reflecting uncertainty as to
our ability to continue in business as a going concern.

On July 26, 2006, we acquired the assets of a development stage medical
device company and are now in the process of continuing product development and
obtaining government approval for the use of our device. This change in business
line will require additional funding to support the development and approval of
our this new device. We estimate that we will need approximately $22,000,000 to
take our medical device to commercialization.

In fiscal 2006, we raised approximately $1,263,000 in proceeds from the
sale of debt and equity securities and the exercise of stock options, (compared
with approximately $471,000 in fiscal 2005), primarily through the following
transactions:

On September 26, 2005, we temporarily reduced the exercise price on our
publicly traded warrants which were issued in connection with the Unit offering
issued in fiscal 2003. The original exercise price of these warrants was $0.30
For the period from September 26, 2005 through October 14, 2005, the exercise
price on these warrants was reduced to $0.22. During this time period, 930,400
warrants were exercised and 930,400 shares of common stock were thereupon issued
to the warrant holders. The exercise of these warrants resulted in gross
proceeds to the Company of approximately $205,000.

On February 17, 2006, 5,000 warrants were exercised at an exercise
price of $0.30. The exercise of these warrants resulted in gross proceeds to the
Company of $1,000.

Effective March 31, 2006, warrants underlying the March 2003 Unit
offering expired. Accordingly, from March 9, 2006 to March 31, 2006, in exchange
for $0.30 per Unit, the Company's Board of Directors offered Unit holders the
right to exercise the underlying warrants, for their original exercise price of
$0.30 per warrant, and exchange the Unit certificate for one share of common
stock and a new modified unit ("Modified Unit"). Each Modified Unit consists of
the following underlying securities: (a) three shares of the Company's common
stock; and (b) one share of Series A Convertible Preferred Stock, par value
$.001 per share. Each share of Series A Convertible Preferred Stock is
convertible into two shares of the Company's common stock in exchange for $0.10
per common share ($.20 for each Series A Convertible Preferred share converted).
As of March 9, 2006, there were 443,162 Units outstanding from the March 2003
Unit offering. During this period, Unit holders elected to exercise 239,550
underlying warrants and exchange 239,550 Units for Modified Units, resulting in
proceeds to the Company of approximately $72,000.

Effective March 31, 2006, warrants previously underlying a March 2003
Unit offering expired. Our Company's Board of Directors authorized the
separating of the Units into their component securities twice, once in July 2004
and then again in February 2005. As of March 9, 2006, there were 1,186,825
warrants outstanding from previously separated Units. Between March 9, 2006 and
March 31, 2006, warrant holders elected to exercise 730,349 underlying warrants
for proceeds of approximately $219,000.

On March 13, 2006, the Company issued a Convertible Subordinated
Promissory Note in the principal amount of $350,000 to an accredited investor.
The note is payable at the end of fourteen months following the date of issue,
accrues interest at the rate of 8% and is convertible into the Company's common
stock at a conversion price of $1.00 per common share. In further consideration
of the loan, the Company issued a two-year warrant for the purchase of 200,000
shares of its common stock at an exercise price of $0.35 per share. The Company
recognized a discount on this Convertible Subordinated Promissory Note of
$47,379 related to the fair value of the warrants issued in connection with the
note. During fiscal 2006, $19,018 was expensed as interest and finance charges,
as a result of amortization of the note discount. The note was subsequently
extended to July 15, 2007. Accrued interest in the amount of $32,679 was
converted into 130,718 shares of common stock at a rate of $0.25 per share.

On July 7, 2006, the Company issued, Convertible Promissory Notes in
the principal amounts of $145,000 and $55,000 respectively to two accredited
investors. The notes are payable at the end of 90 days following the date of
issue, accrue interest at the rate of 10% per annum and are convertible into the
Company's common stock at a conversion price of $0.30 per common share. The
closing price of the Company's common stock on July 7, 2006 was $0.31 per share.
As of August 31, 2006, the unpaid principal and accrued interest balance on
these note was $203,123. On October 4, 2006, this note was extended until
December 4, 2006.

On July 7, 2006, the Company issued to Anthony Silverman, a member of
our Board of Directors, a Convertible Promissory Note in the principal amount of
$200,000. The note is payable at the end of 90 days following the date of issue,
accrues interest at the rate of 10% per annum and is convertible into the
Company's common stock at a conversion price of $0.30 per common share. The
closing price of the Company's common stock on July 7, 2006 was $0.31 per share.
As of August 31, 2006, the unpaid principal and accrued interest balance on this
note is $203,123. On October 4, 2006, this note was extended until December 4,
2006.

During the fiscal 2006, 78,000 employee stock options were exercised.
25,000 of these options were exercised at an exercise price of $0.165 per shares
and 53,000 were exercised at an exercise price of $0.23 per share. The exercise
of these options resulted in proceeds to the Company of approximately $16,000.

Additionally, subsequent to fiscal 2006, we raised additional funds
through the following transactions:

On September 7, 2006, the Company entered into a 60-day promissory note
with Stanley Schloz, a member of the Company's Board of Directors, for bridge
financing in the amount of $200,000. This note bears interest at a rate of 10%
and is due in full, including accrued interest on November 6, 2006. On November
6, 2006, Mr. Schloz agreed to extend this note until November 30, 2006, then
subsequently until December 15, 2006. We anticipate this note will be further
extended.

On September 7, 2006, the Company entered into a 60-day promissory note
with Anthony Silverman, a member of the Company's Board of Directors, for bridge
financing in the amount of $50,000. This note bears interest at a rate of 10%
and is due in full, including accrued interest on November 6, 2006. On November
6, 2006, Mr. Silverman agreed to extend this note until November 30, 2006, then
subsequently until December 15, 2006. We anticipate this note will be further
extended.

On September 30, 2006, the Company entered into a note purchase
agreement and convertible promissory note with Anthony Silverman, a member of
the Company's Board of Directors, for financing in the amount of $175,000. The
note is payable on January 31, 2007, accrues interest at the rate of 10% per
annum and is convertible into the Company's common stock at a conversion price
of $0.20 per common share.

On September 30, 2006, the Company entered into a note purchase
agreement and convertible promissory note with an accredited investor for
financing in the amount of $100,000. The note is payable on January 31, 2007,
accrues interest at the rate of 10% per annum and is convertible into the
Company's common stock at a conversion price of $0.20 per common share.

On October 1, 2006, the Company issued a note to finance $20,756 of
directors and officer's insurance premiums. The note bears interest at a rate of
10.50% per annum and is due in nine monthly installments of $2,408, including
principal and interest, beginning on November 1, 2006.

On October 25, 2006, the Company entered into note purchase agreements
and convertible promissory notes with three accredited investors for financing
in the amount of $125,000. These notes are payable on March 15, 2007, accrue
interest at the rate of 10% per annum and are convertible into the Company's
common stock at a conversion price of $0.20 per common share.

On October 26, 2006, the Company entered into note purchase agreements
and convertible promissory notes with two accredited investors for financing in
the amount of $125,000. These notes are payable on March 15, 2007, accrue
interest at the rate of 10% per annum and are convertible into the Company's
common stock at a conversion price of $0.20 per common share.

On November 2, 2006, the Company entered into a note purchase agreement
and convertible promissory note with an accredited investor for financing in the
amount of $200,000. This note is payable on March 15, 2007, accrues interest at
the rate of 10% per annum and is convertible into the Company's common stock at
a conversion price of $0.20 per common share.

We agreed, in our Merger Agreement with JDA, and separately with the
University of Maryland to provide $4,000,000 to fund the operations of Oncologix
through the Development Phases (which are described above in this Report). This
amount has been or will be advanced in installments as follows:

o $350,000 was advanced prior to the Merger, in March 2006

o $400,000 was advanced upon the Closing of the Merger.

o $1,250,000 to be advanced in five payments of $250,000 each at
the end of each of the five successive months commencing with
August 2006, and

o $2,000,000 to be advanced at the end of January 2007.

The $350,000 and $400,000 advances as well as the monthly payments for
August, September and October (a total of $1,500,000) were made out of funds
borrowed for the purpose by the Company. As agreed with the other parties to the
Merger Agreement, we have delayed the November payment until December 2006.

We are presently seeking to raise $2,300,000 from "accredited
investors" in a private offering of Units, each consisting of a two-year
interest-bearing promissory note ("Note"), convertible after one year into
shares of our common stock at a conversion price of $0.30 per share, and a
warrant to purchase shares of common stock in an amount equal to one-half the
number of shares issuable upon the conversion of the Note included in the same
Unit. The exercise price under the warrants is $0.50 per share.

If we succeed in raising $2,300,000, we plan to continue to seek an
additional $2,700,000 in investor financing. Such a continued offering may be
made under different terms; may consist of other forms of security (for example,
we may offer common stock only) and any conversion or issue price for shares of
common stock may be higher than $0.30.

We believe that if we are successful in raising a total of $5,000,000,
the proceeds will be sufficient to meet operating expenses, including those of
Oncologix, for a period of twelve months.

If we are unable to obtain additional financing, our operations in the
short term will be materially affected and we may not be able to remain in
business. These circumstances raise substantial doubt as to the ability of the
Company to continue as a going concern. Neither the information provided, nor
the FINANCIAL STATEMENTS included as elsewhere in this Report include any
adjustments that may be necessary as a result of this uncertainty.

CODE OF ETHICS

The company has adopted and attached an exhibit of this Report its Code
of Ethics consistent with disclosure required (2) by section 406 of the
Sarbanes-Oxley Act of 2002.