ASSET PURCHASE AGREEMENT

Execution Copy

This Asset Purchase Agreement (this "Agreement") is made on 5 January, 2010, by and between Regenocell Laboratories Ltd, a company under incorporation under the laws of the state of Israel ("Regenocell", the "Buyer"), and TheraVitae Limited, a company incorporated under the laws of the state of Israel (the "Seller").

RECITALS:

WHEREAS

The Seller has agreed to sell and transfer the Purchased Assets (as such term is further defined) to the Buyer on the terms and conditions of this agreement; and

WHEREAS

The Buyer has agreed to purchase from the Seller the Purchased Assets

NOW THEREFORE in consideration of the premises and mutual agreements herein contained and for other good and valuable consideration, the parties hereto agree as follows:

1.	INTERPRETATION

Definitions. In this agreement, except as otherwise expressly provided, capitalized words or expressions shall have the meanings set out below:

1.1.	“Agreement” means this agreement and all Schedules attached to this agreement, in each case as they may be supplemented or amended from time to time in accordance with the terms hereof;

1.2.	“Assumed Liabilities” means the obligations of the Seller at the Closing Date in relation to creditors of the Seller as listed in Schedule 1.2 to this agreement. Such liabilities shall be borne solely by the Buyer.

1.3.	“Authority” means any governmental or regulatory authority, body, agency or department, whether provincial, municipal or foreign, having jurisdiction over the Seller or any aspect thereof;

1.4.	“Business Day” means every day except Friday and Saturday or a day which is a statutory holiday under the applicable Laws;

1.5.	“Closing” means the completion of the transactions described in this agreement, “Closing Date” or “Date of Closing” means February 4st, 2010 or such earlier or later date as may be agreed by the parties;

1.6.

“Consents” means all consents or approvals from any party to any indenture, mortgage, lease, permit, instrument, license, contract, agreement, arrangement or understanding to which the Seller is a party or by which it or its assets are bound, which is required for the execution of this agreement, the Closing or the performance of any terms hereof;

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1.7.	"Deposit" means a deposit of $ 134,284 deposited by the Company in Bank Hapoalim (the "Bank"), and mortgaged for the benefit of the Bank as a security for a bank guaranty issued by the Bank in favor of Africa Israel Ltd., as required under the Lease.

1.8.	"Disclosed" means fully, accurately, clearly and fairly disclosed or deemed to have been Disclosed (with sufficient explanation and detail to identify clearly the nature, scope and full implications of the matters disclosed) in or under this agreement.

1.9.	“Employees” means the employees employed by the Seller as listed and detailed in Schedule 1.9 to this agreement;

1.10.

“Encumbrance” means any mortgage, charge (fixed or floating), pledge, lien, hypothecation, guarantee, trust, right of set-off or other third party right or interest (legal or equitable) including any assignment by way of security, reservation of title or other security interest of any kind, howsoever created or arising, or any other agreement or arrangement (including a sale and repurchase agreement) having similar effect.

1.11.

“Equipment” means all hardware, software, machines and other equipment and accessories owned by the Seller and including all tangible personal property, Office Equipment and all as more particularly described in Schedule 1.11 to this agreement;

1.12.

“Financial Statements” means collectively, the management prepared financial statements of Seller, for the two years ending 31 December, 2009 and the Audited Financial Statements for the year ended 31 December 2007, each consisting of a balance sheet as of that date, statement of income and retained earnings and statement of changes in financial position, together with the notes thereto, the review of the accountants of the Seller in respect thereof and a cash flow statement, all as included in Schedule 1.12 to this agreement;

1.13.

"Known Liabilities" means the Liabilities to be paid by the Purchaser as stated in Schedule 1.2 to this Agreement minus the Deposit.

1.14.

“Laws” means all applicable federal, provincial, municipal, local or foreign laws, statutes, regulations, ordinances, rules, guidelines, orders, directives or other requirements of any Authority;

1.15.

“Lease” means the lease agreement for the Seller's premises described in Schedule 1.15 to this agreement;

1.16.

“Liabilities” means any direct or indirect indebtedness, liability, guaranty, endorsement, claim, loss, damage, deficiency, cost, expenses, obligation or responsibility, fixed or unfixed, known or unknown, asserted or unasserted, liquidated or un-liquidated, secured or unsecured;

1.17.

“Office Equipment” means all furniture and office equipment, Computer systems and software owned by the Seller;

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1.18.

“Person” includes an individual, corporation, partnership, trustee, trust, unincorporated association, organization, syndicate, executor, administrator or other legal or personal representative and pronouns have a similarly extended meaning;

1.19.

“Purchased Assets” means all the property rights and assets of the Seller including, Equipment, Office Equipment, Lease, and all other assets owned by the Seller;

1.20.

“Purchase Price” means the purchase price for the Purchased Assets under this agreement, as detailed in Schedule 1.20 to this Agreement;

1.21.

“Regulatory Approvals” means all approvals, permits, sanctions, rulings, orders, declarations or consents from any Authority required for the execution of this agreement, the Closing or the performance of any terms hereof and the completion of the transactions contemplated by this agreement.

1.22.

"Warranties" means the warranties and representations set out in clause 3.

1.23.

Construction.

In this agreement:

1.23.1.

words denoting the singular include the plural and vice versa and words denoting any gender include all genders;

1.23.2.

The use of headings is for convenience of reference only and shall not affect the construction of this agreement;

2.	PURCHASE AND SALE OF PURCHASED ASSETS

2.1.

Purchase and Sale. Subject to the terms and conditions of this agreement, on the Closing Date, the Buyer will purchase and the Seller will sell, transfer, convey, assign and deliver all of the Purchased Assets, including all rights, titles, and interests, to the Buyer. The Purchased Assets shall be conveyed free and clear of all Liabilities, obligations and other Encumbrances saved for the Assumed Liabilities. In order to allow easier transfer of the Lease to the Buyer, the Seller shall also transfer the Deposit to the Buyer. Such transfer shall occur also after the Buyer has procured a release of the Seller from Seller's obligations under the Lease, including without limitations the return of the bank guaranty issued by the Bank in favor of the Seller with respect to the Lease.

2.2.	Payment of Purchase Price. The Purchase Price shall be paid to the Seller by the Buyer as detailed in schedule 1.20 to this Agreement. All payments under this agreement are excluding VAT (which will be added), and will be made against dully issued invoice.

2.3.	The Seller warrants to the Buyer to use the proceeds of the Purchase Price in order settle all of Seller's Known Liabilities (other than the Assumed Liabilities, to be settled by the Buyer as provided in section 2.4 below).

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2.4.	Buyer hereby warrants to the Seller, that Seller shall settle the Assumed Liabilities in full.

3.	REPRESENTATION AND WARRANTIES OF THE SELLER

Representations and Warranties. The Seller makes the following representations and warranties:

3.1.	The Seller warrants and represents to the Buyer that each Warranty is true, accurate and not misleading except as Disclosed.

3.2.	All information contained in this agreement and all other information relating to the Purchased Assets given by or on behalf of the Seller to the Buyer, its advisers or agents are true, accurate and complete in every respect and are not misleading.

3.3.	There is no information that has not been Disclosed which, if Disclosed, might reasonably affect the willingness of the Buyer to buy the Purchased Assets.

3.4.	The Seller has all requisite power and authority, and has taken all necessary corporate action, to enable it to enter into and perform this agreement and all agreements and documents entered into, or to be entered into, pursuant to the terms of this agreement.

3.5.	This agreement and all other agreements and documents referred to in it constitute (or shall when executed constitute) valid, legal and binding obligations on the Seller enforceable in accordance with their respective terms.

3.6.

The Seller does not require the consent, approval or authority of any other person to enter into or perform its obligations under this agreement. The Seller's entry into and performance of this agreement will not constitute any breach of or default under any contractual, governmental or public obligation binding on it.

3.7.

The Warranties are deemed to be repeated by reference to the circumstances prevailing at the time of repetition on each day up to and including Closing and any reference made to the date of this agreement (whether express or implied) in relation to any Warranty shall be construed, in relation to any such repetition, as a reference to each such day.

3.8.

Corporate Matters. Seller is a corporation incorporated and organized and validly exists under the Laws of the state of Israel and has not been dissolved. Seller has the requisite corporate power and authority to own or lease its property, to enter into this agreement and to sell or to lease, as applicable, the Purchased Assets to the Buyer and otherwise perform its obligations pursuant to this agreement.

3.9.	Title to Purchased Assets. Except as specifically disclosed in Schedule 3.9, the Seller is the sole legal and beneficial owner of the Purchased Assets, free and clear of any and all Encumbrances.

3.10.

Regulatory Approvals and Consents.

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3.10.1.

No Regulatory Approval or filing or registration with any Authority is required to be made or obtained by the Seller prior to the consummation of the transactions contemplated hereby; and

3.10.2.

No consent is required to be obtained by the Seller from any third party prior to the consummation of the transactions contemplated hereby.

3.11.

General Business Compliance with Laws. The Seller is duly licensed, registered or qualified and duly posses all licenses, permits, consents and approvals (the “Licenses”) to enable its operations to be carried on as now conducted in compliance with the Laws. The Licenses are valid and subsisting and in good standing and there has been no violation in respect thereof by the Seller. The Licenses are transferable to the Buyers pursuant to this agreement.

3.12.

Litigation. There is no suit, action, dispute, civil or criminal litigation, claim, arbitration or legal, administrative or other proceeding or governmental investigation, including appeals and applications for review (collectively, “Claims”), pending against the Seller or any of the Purchased Assets. There is not presently outstanding against the Seller any judgment, execution, order, injunction, decree or rule of any court, administrative agency, governmental authority or arbitrator with respect to the Purchased Assets. Notwithstanding the above, the parties acknowledge that the Seller has executed a Bridging License Agreement with Kwalata Trading Limited and such Agreement (including ancillary agreements) are in dispute (the " Kwalata Dispute"), and such matters have previously been disclosed to the Buyer. Buyer hereby acknowledge the information pertaining to the Kwalata Dispute.

3.13.

Financial Statements. The Financial Statements are true and correct in all respects, are in accordance with the books and records of Seller and have been prepared in accordance with the Israeli GAAP consistently applied, and fairly and accurately present in all respects the financial position of Seller as of their respective dates and the results of their operations for the periods then ended. There is no material liability, contingent or otherwise, not adequately reflected in or reserved against in the aforesaid Financial Statements..

3.14.

Environmental Matters. Seller is not in violation of any applicable statute, law, case law or regulation relating to environment or occupational health and safety with regard to the Purchased Assets, and no material expenditures are required in order to comply with any such existing statute, law or regulation.

3.15.

Brokers. No agent, broker, investment banker, person or firm acting in a similar capacity on behalf of or under the authority of Seller, is or will be entitled to any broker's or finder's fee or any other commission or similar fee, directly or indirectly, on account of any action taken by Seller, in connection with any of the transactions contemplated under this agreement.

3.16.

Disclosure

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3.16.1.

The Seller has provided the Buyer with all information concerning its assets and Liabilities, and in particular, all information with respect to the Purchased Assets and the Assumed Liabilities.

3.16.2.

No representation or warranty by the Seller in this agreement nor any statement, schedule, schedule, list or certificate delivered by the Seller pursuant to this agreement, or in connection with any transaction contemplated hereby, contains any untrue statement, or omits to state a material fact required to be stated herein or therein or necessary to make the statements contained herein or therein not misleading.

3.16.3.

The Seller undertakes to notify the Buyer in writing promptly if it becomes aware of any circumstance arising after the date of this agreement which would cause any warranty become untrue or inaccurate or misleading in a material respect.

4.	REPRESENTATIONS AND WARRANTIES OF THE BUYER

Representations and Warranties. The Buyer hereby makes the following representations and warranties and acknowledges that the Seller is relying on such representations and warranties in entering into this agreement and in selling the Purchased Assets to the Buyer:

4.1.

Organization of Buyer. The Buyer is a corporation incorporated, validly existing and in good standing under the Laws of the state of Israel. The Buyer has the requisite corporate power and authority to enter into this agreement and to purchase the Purchased Assets and otherwise perform its obligations pursuant to this agreement.

4.2.	Authorization of Agreement. This agreement has been duly authorized, executed and delivered by the Buyer.

4.3.	Enforceability of Agreement. This agreement constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

5.	SURVIVAL AND INDEMNIFICATION

5.1.	Indemnification.

The Seller agrees to indemnify and hold Buyer and its respective officers, directors, employees and Affiliates (any, an “Indemnified Party” and collectively, the “Indemnified Parties”) harmless against all claims, losses, liabilities, damages, amounts paid or payable, injuries, decline in value, liabilities, settlements, judgments, awards, fines, penalties, taxes, fees of any nature, regardless of whether or not such damages relate to any third-party claim, deficiencies, costs and expenses, including reasonable attorneys’ fees and expenses of investigation and defense (hereinafter individually a “Loss” and collectively “Losses”) paid, incurred, accrued or sustained by the Indemnified Parties, or any of them, that are incident to, arise out of, in connection with, or relate to

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5.1.1.

any breach or inaccuracy of a representation or warranty of Seller contained in this agreement or in any certificate or other instruments delivered pursuant to this agreement, as of the date of this agreement or on and as of the Closing with the same force and effect as if such representation or warranty was made on and as of the Closing;

5.1.2.

Any failure by the Seller to perform or comply with any covenant or other agreement applicable to it contained in this agreement or in any certificate or other instruments delivered pursuant to this agreement;

5.1.3.

Any claim made by any Person that such Person is or was entitled (by contract or otherwise) to receive any amount or property or other remedy from the Buyer when the cause of such claim is pre-Closing;

CLOSING

6.1.	On the Closing Date, the Seller shall deliver to the Buyer:

6.1.1.

All deeds, conveyances, bills of sale, transfers, assignments, assurances, consents and any other documents as are necessary or reasonably required by Buyer to effectively transfer the Purchased Assets to the Buyer in accordance with this agreement, such documents to be in registrable form to the extent registrable;

6.1.2.

Actual title and possession of the Purchased Assets;

6.2.	The Buyer shall procure (on or before the Closing Date) a written consent for the assignment of the Lease to the Buyer;

6.3.	On the Closing Date, the Buyer deliver to the Seller the payments required by Section 2.2 above.

6.4.	Payments to the Seller shall be made by electronic transfer to the below mentioned bank account:

Theravitae Ltd.

Bank Hapoalim

Branch #636, Xxxx Xxxxx

Rechov Xxxxxxx 0

Xxxx Xxxxx, Xxxxxx

Account #: 668004

Swift: XXXXXXXX

6.5.

The parties acknowledge that the Closing of this Agreement shall occur along with the closing of a certain asset purchase agreement executed at the same signing date, between the Buyer's parent Company, and an affiliate of the Seller with respect to certain patient data (the "Additional Agreement"). The Closing of this Agreement shall not occur unless the closing of the Additional Agreement has occurred.

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7.	EMPLOYMENT MATTERS

7.1.	Schedule 1.9 contains a complete and accurate list of all of the Employees, and their respective employment agreements with Seller and amounts owed or due by the Seller with respect to each such Employee.

7.2.	Dismissal and re-hiring. The Buyer undertakes to execute an employment agreement with the Employees, in the form attached as Schedule 7.2 to this Agreement. Following such execution, the Seller undertakes to provide the employees with a 30 days notice of termination.

7.3.

Pre-Closing Obligations. All Liabilities relating to the Employees, including premium contributions, remittance, employer health tax, income tax, workers’ compensation and any other employment related legislation, arising up to and including the Closing Date, salary, benefits accrued and not paid up to and including the Closing Date, actions, causes of action, claims and demands, and any interest, award, judgment, penalties, costs or expenses relating thereto, that are not conveyed to the Buyer as part of the Assumed Liabilities shall be the Seller’s responsibility.

7.4.

Post-Closing Obligations. All Liabilities relating to the Employees, including premium contributions, remittance, employer health tax, income tax, workers’ compensation and any other employment related legislation, arising as of the Closing Date, actions, causes of action, claims and demands, and any interest, award, judgment, penalties, costs or expenses relating thereto, shall be the Buyer’s responsibility. .

8.	INTERIM PERIOD

8.1.	During the period from the Execution Date to the Closing Date (hereinafter the "Interim Period"), the following terms shall be in effect:

8.1.1.

The Seller shall conduct its operations in the ordinary normal and proper course of business.

8.1.2.

Buyer shall be entitled to all income generated from Seller's activity during the Interim Period. Buyer shall be sole responsible for all Seller's costs and expenses with respect to Seller's activity during the Interim Period, including without limitations, the costs associated with the Employees and the Purchased Assets.

9.	CONFIDENTIALITY

9.1.

The Seller and the Buyer will hold confidential all information (the "Confidential Information") pertaining to this Agreement including, but not limited to, the terms of this Agreement, the Purchase Price, the Parties to this Agreement, and the subject matter of this Agreement as well as any written or oral information obtained about the respective Parties that is not currently in the public domain. Confidential Information will not include the following:

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9.1.1.

Information generally known in the respective industries of the Purchaser and the Seller.

9.1.2.

Information that enters the public domain through no fault of the Purchaser or the Seller.

9.1.3.

Information that is independently created by the Purchaser or the Seller respectively without direct or indirect use of information obtained during the course of negotiations for this Agreement.

9.1.4.

Information that is rightfully obtained by the Purchaser or the Seller from a third party who has the right to transfer or disclose the information.

9.1.5.

Information which is necessary to disclose for compliance with relevant laws and regulations, court rules and/or governmental or regulator rules.

9.2.	The Seller and the Buyer may disclose any Confidential Information relating to this Agreement to any of its employees, agents and advisors where there is a need to know in relation to this Agreement and where the personnel agree to be legally bound by the same burdens of confidentiality.

10.

GENERAL

10.1.

Place of Closing. The Closing shall take place at the offices of Banai Xxxxxx Xxxxx Law Office, 1 Azrieli center Round Tower 19th floor Tel Aviv, Israel, or at such other place as may be agreed upon by the Buyer and the Seller.

10.2.

Governing Law; Jurisdiction. This agreement shall be governed by the laws of the state of Israel, without regard to the conflict of laws provisions thereto. Any controversy or claim arising out of or relating to this agreement, its interpretation, performance, or termination, or the breach thereof, shall submitted exclusively to the competent courts of the Tel Aviv District, and each of the parties hereby submits irrevocably to the exclusive jurisdiction of such courts.

10.3.

Taxes. Subject to the terms and conditions of this agreement each party shall be solely responsible for any income, capital gains, use, service or other tax levied on the said party or incurred by the said party on account of the agreement or the transactions and activities hereunder.

10.4.

Notice. All notices required or permitted by this agreement shall be in writing and delivered by hand or sent by telecopier to:

the Buyer:

RegenoCELL Therapeutics, Inc.

0 Xxxxx Xxxx

Xxxxxx, Xxxxxxxxxxxxx 00000

Xxxxxx Xxxxxx of America

Telecopier: x000-000-0000

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the Seller:

Xxxxxxx Xxx

0000-00 Xxx Xxx Xxxx Xx.

Xxxxx Xxxxx Tai Bldg.

Lai Xxx Xxx, Hong Kong

Phone: 000 0000 0000

or at such other address or fax number of which the addressee may from time to time have notified the addressor. A notice shall be deemed to have been sent and received on the day it is delivered by hand or on the day on which transmission is confirmed, if telecopied. If such day is not a Business Day or if the notice is received after ordinary office hours (time of place of receipt), the notice shall be deemed to have been sent and received on the next Business Day.

10.5.

Amendment. This agreement may be amended only by written agreement of the parties.

10.6.

Waiver. No waiver of any provision of this agreement shall be binding unless it is in writing. No indulgence or forbearance by a party shall constitute a waiver of such party’s right to insist on performance in full and in a timely manner of all covenants in this agreement. Waiver of any provision shall not be deemed to waive the same provision thereafter, or any other provision of this agreement at any time.

10.7.

Entire Agreement. This agreement and the Schedules attached to this agreement constitute the entire agreement among the parties pertaining to all the matters herein and supersede all previous agreements between the Buyer and the Seller.

10.8.

Severability. If any provision of this agreement is invalid or unenforceable, such provision shall be severed and the remainder of this agreement shall be unaffected thereby but shall continue to be valid and enforceable to the fullest extent permitted by law.

10.9.

Counterparts. This agreement may be executed in one or more counterparts (by original or facsimile signature) which, together, shall constitute one and the same agreement.

10.10.

Assignment. Neither this agreement nor any rights or obligations hereunder may be assigned, directly or indirectly, by any party without the prior written consent of the other party. Any assignment without such consent shall be null and void.

10.11.

Enurement and Binding Effect. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors, heirs, executors, administrators, personal representatives and permitted assigns.

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10.12.

Expenses Each party shall bear its own expenses (including its own legal expenses) in connection with this agreement and the transaction contemplated thereby.

IN WITNESS WHEREOF, the parties have executed this agreement as of the date first above written.

/s/ Xxxxx X. Xxxxxxxxx		/s/ Warin Phujantuek
Regenocell Laboratories Ltd.		TheraVitae Limited.
By: Xxxxx X. Xxxxxxxxx		By: Warin Phujantuek
Title: Director		Title:
Date: 5 January 2010		Date:

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Schedule 1.11	Listed of Fixed Assets		Dept		Item#		Description	Date Acquired	Closing Cost		Accum Dep		NBV		NBV$
	1 - Vehicles.
				1		2	Car-Ford Focus	01/08/03		96999		93362	₪	3,637	$	963		Vehicle
				1		3	Radio	30/11/03		839		766	₪	73	$	19		Vehicle
				1		4	Speaker	30/07/03		243		234	₪	9	$	2		Vehicle
Total		1 - Vehicles								98081		94362	₪	3,719	$	985
	2 - Computers & Software.														$	-
				2		28	Computer	25/01/04		26866		26866	₪	-0	$	-		Computers & Software
				2		76	Scanner	05/09/04		231		231	₪	-0	$	-		Computers & Software
				2		75	computer, printer, office	01/09/04		7162		7162	₪	-0	$	-		Computers & Software
				2		62	MS office	15/07/04		1035		1035	₪	-0	$	-		Computers & Software
				2		72	Anti-virus	02/08/04		390		390	₪	-0	$	-		Computers & Software
				2		71	credit	02/08/04		-277		-277	₪	-0	$	-		Computers & Software
				2		107	2 computers	02/02/06		9957		9957	₪	-0	$	-		Computers & Software
				2		1	laptop	25/08/03		3330		3330	₪	-0	$	-		Computers & Software
				2		148	MS office	04/01/07		1186		1171	₪	15	$	4		Computers & Software
				2		86	computer	01/12/04		19232		19232	₪	-0	$	-		Computers & Software
				2		102	software	01/10/05		1103		1103	₪	-0	$	-		Computers & Software
				2		143	Anti-virus	01/11/06		600		600	₪	-0	$	-		Computers & Software
				2		142	software	15/10/06		315		315	₪	-0	$	-		Computers & Software
				2		141	software	08/10/06		2191		2191	₪	-0	$	-		Computers & Software
				2		100	Monitor_anti virus	07/08/05		1265		1265	₪	-0	$	-		Computers & Software
				2		96	computer	01/03/05		9448		9448	₪	-0	$	-		Computers & Software
				2		120	computer locks	10/09/06		4970		4970	₪	-0	$	-		Computers & Software
				2		114	computers, monitors	01/04/06		11176		11176	₪	-0	$	-		Computers & Software
				2		115	monitor	01/06/06		1330		1330	₪	-0	$	-		Computers & Software
				2		116	laptop +office	01/06/06		10300		10300	₪	-0	$	-		Computers & Software
				2		118	laptop	16/07/06		4294		4294	₪	-0	$	-		Computers & Software
				2		77	printer	13/09/04		342		342	₪	-0	$	-		Computers & Software
				2		119	software	03/09/06		2581		2581	₪	-0	$	-		Computers & Software
				2		165	Quantum Simply	06/02/08		3047	1913		₪	1,134	$	300		Computers & Software
				2		121	credit	10/09/06		-80		-80	₪	-0	$	-		Computers & Software
				2		162	computer	12/10/08		2683		1081	₪	1,603	$	425		Computers & Software
				2		161	computer	13/08/08		4071		1860	₪	2,211	$	586		Computers & Software
				2		160	computer	05/07/08		2580		1268	₪	1,312	$	348		Computers & Software
Total		2 - Computers & Software.								131328		125054	₪	6,275	$	1,662
	4 - Infrastructure and Leasehold Improvements.														$	-
				4		180	Seperation Wall	15/10/09		11418		404	₪	11,014	$	2,918		Infrastructure and Leasehold Improvements
				4		60	A.A. (1982) Ltd	30/07/04		15100		5728	₪	9,372	$	2,483		Infrastructure and Leasehold Improvements
				4		63	Precise Eng. (cleanrooms)	02/08/04		84178		75966	₪	8,212	$	2,175		Infrastructure and Leasehold Improvements
				4		123	Rakezet	01/09/06		10760		5979	₪	4,781	$	1,266		Infrastructure and Leasehold Improvements
				4		45	Carpets	01/06/04		3939		3666	₪	273	$	72		Infrastructure and Leasehold Improvements
				4		117	Architect	01/05/06		5400		3301	₪	2,099	$	556		Infrastructure and Leasehold Improvements
				4		35	Precise Eng. (cleanrooms)	01/05/04		229400		213499	₪	15,901	$	4,212		Infrastructure and Leasehold Improvements
				4		98	Damper	01/05/05		1300		910	₪	390	$	103		Infrastructure and Leasehold Improvements
				4		59	Shelving	01/07/04		5000	1925		₪	3,075	$	815		Infrastructure and Leasehold Improvements
				4		7	Contractor AIS	21/03/04		82600		76874	₪	5,726	$	1,517		Infrastructure and Leasehold Improvements
				4		11	Contractor AIS	01/04/04		17822		16587	₪	1,235	$	327		Infrastructure and Leasehold Improvements
				4		144	Drywall	01/12/06		2250		1157	₪	1,094	$	290		Infrastructure and Leasehold Improvements
				4		10	Electric work	31/03/04		13837		12878	₪	959	$	254		Infrastructure and Leasehold Improvements
				4		34	Precise Eng. (cleanrooms)	30/05/04		91300		84972	₪	6,328	$	1,676		Infrastructure and Leasehold Improvements
				4		46	Precise Eng. (cleanrooms)	01/07/04		78627		72086	₪	6,541	$	1,733		Infrastructure and Leasehold Improvements
				4		8	Precise Eng. (cleanrooms)	29/03/04		248655		231419	₪	17,236	$	4,566		Infrastructure and Leasehold Improvements
				4		31	Electric work	01/05/04		500		466	₪	34	$	9		Infrastructure and Leasehold Improvements
				4		57	Furniture-cleanroom	01/07/04		28491		26120	₪	2,371	$	628		Infrastructure and Leasehold Improvements
				4		6	QLC electric	29/02/04		2660		2589	₪	71	$	19		Infrastructure and Leasehold Improvements
				4		32	Firealarm	01/05/04		2120	1973		₪	147	$	39		Infrastructure and Leasehold Improvements
				4		5	Precise Eng. (cleanrooms)	29/02/04		155697		144905	₪	10,793	$	2,859		Infrastructure and Leasehold Improvements
				4		33	Firealarm	05/05/04		3120		2903	₪	216	$	57		Infrastructure and Leasehold Improvements
				4		9	Contractor AIS	30/03/04		22355		20806	₪	1,549	$	410		Infrastructure and Leasehold Improvements
Total	Total	4 - Infrastructure and Leasehold Improvements.								1116529		1007113	₪	109,417	$	28,985
	5 - Equipment & Machinery.														$	-
				5		69	MAS 100 ECO Airsample	17/08/04		13430		10822	₪	2,608	$	691		Equipment & Machinery
				5		80	Dor Marketing LTD	01/10/04		1500		1181	₪	319	$	85		Equipment & Machinery
				5		79	Xxxxxxxx-portable	01/10/04		1053		830	₪	224	$	59		Equipment & Machinery
				5		78	Lumitron LTD for Adapter	01/10/04		7411		5836	₪	1,575	$	417		Equipment & Machinery
				5		73	MAS 100 ECO Airsa' credit	01/09/04		-244		-195	₪	-49	$	(13	)	Equipment & Machinery
				5		64	hemacyometer+cover	01/08/04		876		712	₪	164	$	43		Equipment & Machinery
				5		65	power supply	01/08/04		5394		4383	₪	1,011	$	268		Equipment & Machinery
				5		66	fridge	01/08/04		4000		3250	₪	750	$	199		Equipment & Machinery
				5		67	hemacytometer	09/08/04		800		647	₪	153	$	41		Equipment & Machinery
				5		68	boxes	15/08/04		348		281	₪	67	$	18		Equipment & Machinery
				5		74	pipettes	01/09/04		2903		2322	₪	581	$	154		Equipment & Machinery
				5		36	centrifuge	01/05/04		63898		54313	₪	9,585	$	2,539		Equipment & Machinery
				5		12	lab equipment	21/01/04		1529		1363	₪	166	$	44		Equipment & Machinery
				5		13	lab equipment	21/01/04		3676		3278	₪	398	$	105		Equipment & Machinery
				5		14	lab equipment	23/01/04		29437		26224	₪	3,214	$	851		Equipment & Machinery
				5		15	microscope-Agentech	26/01/04		6255		5564	₪	691	$	183		Equipment & Machinery
				5		16	lab equipment	26/01/04		14885		13241	₪	1,644	$	435		Equipment & Machinery
				5		17	microscope	28/01/04		13256		11781	₪	1,475	$	391		Equipment & Machinery
				5		18	lab equipment	04/02/04		62055		54996	₪	7,059	$	1,870		Equipment & Machinery
				5		19	lab equipment	08/02/04		11170		9881	₪	1,289	$	341		Equipment & Machinery
				5		20	autoclav	09/02/04		16576		14656	₪	1,920	$	509		Equipment & Machinery
				5		21	lab equipment	10/02/04		1269		1122	₪	148	$	39		Equipment & Machinery
				5		22	lab equipment	10/02/04		1095		968	₪	127	$	34		Equipment & Machinery
				5		23	lumitron	26/02/04		78173		68564	₪	9,609	$	2,545		Equipment & Machinery
				5		48	Gas infrastructure	01/07/04		11928		9841	₪	2,087	$	553		Equipment & Machinery
				5		25	Revco freezer ULT1686 mod	14/04/04		17100		14656	₪	2,444	$	647		Equipment & Machinery
				5		56	Inner door credit	26/07/04		-2946		-2399	₪	-546	$	(145	)	Equipment & Machinery
				5		37	Zalion	01/05/04		3603		3063	₪	541	$	143		Equipment & Machinery
				5		42	water jacket	01/06/04		38809		32503	₪	6,307	$	1,671		Equipment & Machinery
				5		43	water jacket - זיכוי	01/06/04		-1812		-1518	₪	-295	$	(78	)	Equipment & Machinery
				5		89	Adapter 180-250 ML	01/12/04		778		594	₪	185	$	49		Equipment & Machinery
				5		47	Main Bodi	01/07/04		22506		18567	₪	3,939	$	1,043		Equipment & Machinery
				5		81	Palbam -refregiator	01/10/04		7000		5513	₪	1,488	$	394		Equipment & Machinery
				5		49	Biological safety cabinet	01/07/04		59644		49206	₪	10,438	$	2,765		Equipment & Machinery
				5		50	Water jacket	01/07/04		47467		39161	₪	8,307	$	2,201		Equipment & Machinery
				5		51	Portable Pipet	01/07/04		1055		870	₪	185	$	49		Equipment & Machinery
				5		52	ice machine	01/07/04	2000			1650	₪	350	$	93		Equipment & Machinery
				5		53	TV adapter +relay lens	01/07/04		3354		2767	₪	587	$	155		Equipment & Machinery
				5		54	Palbam מקרר	01/07/04		5466		4509	₪	957	$	254		Equipment & Machinery
				5		55	scales	01/07/04		1350		1114	₪	236	$	63		Equipment & Machinery
				5		24	diagnostic equipment	08/03/04		360298		209473	₪	150,825	$	39,954		Equipment & Machinery

Schedule 1.11	Listed of Fixed Assets		Dept		Item#		Description	Date Acquired	Closing Cost		Accum Dep		NBV		NBV$
				5		126	equipment	01/10/06		940		458	₪	482	$	128		Equipment & Machinery
				5		157	Fixed Angle Rotor 6*85	17/10/07		8538		2827	₪	5,712	$	1,513		Equipment & Machinery
				5		156	Portable Pipet Aid XP	21/10/07	2089			688	₪	1,401	$	371		Equipment & Machinery
				5		151	Digital Camera Unit DSU2	01/04/07		114192		-0	₪	114,192	$	30,250		Equipment & Machinery
				5		152	filter	01/05/07		2850		1140	₪	1,710	$	453		Equipment & Machinery
				5		153	xxxxx calibration	02/05/07		850		340	₪	510	$	135		Equipment & Machinery
				5		147	equipment from D-pharm	07/01/07		32555		14571	₪	17,984	$	4,764		Equipment & Machinery
				5		164	incubator	31/12/08		12309		1851	₪	10,458	$	2,770		Equipment & Machinery
				5		150	masks	01/04/07		535		221	₪	314	$	83		Equipment & Machinery
				5		125	leasehold-lab	07/03/05		30310		21901	₪	8,409	$	2,228		Equipment & Machinery
				5		149	mafil	01/02/07		2330		1019	₪	1,311	$	347		Equipment & Machinery
				5		128	equipment from D-pharm	11/10/06		33929		16403	₪	17,525	$	4,642		Equipment & Machinery
				5		129	equipment from D-pharm	16/10/06		828		399	₪	429	$	114		Equipment & Machinery
				5		130	lab equipment	01/11/06		1040		494	₪	546	$	145		Equipment & Machinery
				5		131	autoclav	01/12/06		26752		12373	₪	14,379	$	3,809		Equipment & Machinery
				5		155	Western Digital	25/10/07		1406		461	₪	945	$	250		Equipment & Machinery
				5		159	plastic materials	09/07/08		7605		1687	₪	5,918	$	1,568		Equipment & Machinery
				5		158	mitkan	06/07/08		4050		903	₪	3,147	$	834		Equipment & Machinery
				5		82	levant tec adapter 1pl	01/12/04		403		307	₪	96	$	25		Equipment & Machinery
				5		124	SOFRIGAM עבור ציוד	01/09/06		1457		728	₪	728	$	193		Equipment & Machinery
				5		177	D-pharm LTD-עבור רכישת ציוד חלוקה נ146	07/01/07		-0		-0	₪	-0	$	-		Equipment & Machinery
				5		97	Xx.Xxxxxxxxx מכשיר נוזלים	01/03/05		1000		725	₪	275	$	73		Equipment & Machinery
				5		83	lumitron adapter 7-18ML	01/12/04		897		684	₪	213	$	56		Equipment & Machinery
				5		84	lumitron adapter 50ML	01/12/04		772		588	₪	183	$	48		Equipment & Machinery
				5		85	agentek' main body	19/12/04		18195		13737	₪	4,458	$	1,181		Equipment & Machinery
				5		88	Dalite C-R	29/12/04		400		300	₪	100	$	26		Equipment & Machinery
				5		178	equipment from D-pharm	07/01/07		332		149	₪	183	$	48		Equipment & Machinery
				5		90	Acrylic pipette rack	01/01/05		324		243	₪	81	$	21		Equipment & Machinery
				5		91	wagon	01/01/05	2000			1500	₪	500	$	132		Equipment & Machinery
				5		109	medical equipment XTL	27/03/06		14724		8312	₪	6,412	$	1,699		Equipment & Machinery
				5		93	medical equipment Enterpharm	26/01/05		11029		8157	₪	2,872	$	761		Equipment & Machinery
				5		127	equipment from D-pharm	11/10/06		33568		16229	₪	17,339	$	4,593		Equipment & Machinery
				5		95	equipment from DeltaT	01/02/05		3143		2318	₪	825	$	219		Equipment & Machinery
				5		99	equipment from DeltaT	01/05/05		4661		3263	₪	1,398	$	370		Equipment & Machinery
				5		145	equipment from D-pharm	02/11/06		32826		15579	₪	17,247	$	4,569		Equipment & Machinery
				5		103	fridge	01/11/05		5528		3455	₪	2,073	$	549		Equipment & Machinery
				5		104	MULTISKAN	08/11/05		19387		12060	₪	7,327	$	1,941		Equipment & Machinery
				5		105	leasehold-lab	10/02/05		59332		43519	₪	15,813	$	4,189		Equipment & Machinery
				5		92	equipment-Getter	01/01/05		1872		1404	₪	468	$	124		Equipment & Machinery
Total		5 - Equipment & Machinery. .								1413303		896583	₪	516,726	$	136,881
	6 - Furnitureי.														$	-
				6		27	Cellphone	15/03/00		0000	0000		₪	296	$	78		Computers & Software
				6		154	din gavoha	16/01/07		1410		292	₪	1,118	$	296		Furniture
				6		26	Tami4 water bar	29/02/04		2200	1927		₪	273	$	72		Furniture
				6		174	Cellphone-credit	12/08/09		-3332		-90	₪	-3,241	$	(859	)	Computers & Software
				6		167	Cellphone	07/06/00		0000		00	₪	1,054	$	279		Computers & Software
				6		134	lock	01/10/06		849		193	₪	656	$	174		Furniture
				6		168	Cellphone	07/06/00		0000		000	₪	2,509	$	665		Computers & Software
				6		169	Cellphone	07/06/00		0000		000	₪	2,509	$	665		Computers & Software
				6		170	modem	07/06/09		719		29	₪	691	$	183		Computers & Software
				6		171	Cellphone	23/09/00		0000		000	₪	2,394	$	634		Computers & Software
				6		172	Cellphone	09/09/00		0000		00	₪	1,152	$	305		Computers & Software
				6		173	Cellphone	09/09/00		0000		000	₪	1,373	$	364		Computers & Software
				6		175	furniture-office	01/06/04		-0		-0	₪	-0	$	-		Furniture
				6		176	furniture-office	01/06/04		12729		4975	₪	7,754	$	2,054		Furniture
				6		166	Cellphone	07/06/00		0000		00	₪	1,054	$	279		Computers & Software
				6		179	furniture-office	17/11/09		36300		311	₪	35,990	$	9,534		Furniture
				6		94	Cellphone	09/01/00		000		000	₪	162	$	43		Computers & Software
				6		70	laptop	02/08/04		6536		6536	₪	-0	$	-		Computers & Software
				6		101	shredder	01/10/05		1000		297	₪	703	$	186		Furniture
				6		106	copier machine	01/12/05		1450		414	₪	1,035	$	274		Furniture
				6		108	cellphone	06/03/00		000		000	₪	306	$	81		Computers & Software
				6		61	Ram Salomon computers	01/07/04		3718		3718	₪	-0	$	-		Computers & Software
				6		110	shredder	11/06/06		350		87	₪	263	$	70		Furniture
				6		58	Waxman- chairs	01/07/04		7000		2695	₪	4,305	$	1,140		Furniture
				6		111	printer	12/06/06		712		177	₪	535	$	142		Computers & Software
				6		112	timeclock	14/06/06		1255		312	₪	943	$	250		Computers & Software
				6		113	office equipment	15/06/06		1452		360	₪	1,092	$	289		Furniture
				6		40	8 chairs	17/05/04		1500		590	₪	910	$	241		Furniture
				6		132	alarm	01/10/06		9210	2095		₪	7,115	$	1,885		Computers & Software
				6		29	fax	28/01/00	0000			0000	₪	223	$	59		Computers & Software
				6		133	printer	01/10/06		778		177	₪	601	$	159		Computers & Software
				6		41	telephone system	24/05/04		2500		2101	₪	399	$	106		Computers & Software
				6		87	cellphone	05/08/00		000		000	₪	93	$	25		Computers & Software
				6		39	safe	01/05/04	1900			754	₪	1,146	$	304		Computers & Software
				6		38	telephone system	01/05/04		3251		2764	₪	488	$	129		Furniture
				6		135	office equipment	19/10/06		1000		224	₪	776	$	206		Furniture
				6		136	office equipment	19/10/06		3230		724	₪	2,506	$	664		Furniture
				6		137	office equipment	24/10/06		779		174	₪	605	$	160		Furniture
				6		138	office equipment	01/11/06		1500		332	₪	1,167	$	309		Furniture
				6		139	lock	01/12/06		1049		226	₪	823	$	218		Furniture
				6		140	door	01/12/06		3000		648	₪	2,353	$	623		Furniture
				6		30	computer	20/02/04		7288		7288	₪	-0	$	-		Computers & Software
				6		122	adapters	01/07/06		2654		650	₪	2,004	$	531		Computers & Software
Total		6 - Furniture.								132515		46385	₪	86,135	$	22,817
															$	-
Grand Total										2,891,756		2,169,497	₪	722,272	$	191,330

		Closing Cost		Accum Dep		NBV		NBV$		Replacement Value
Summary	Vehicle	₪	98,081	₪	94,362	₪	3,719	$	985	$	6,500
	Computers & Software	₪	183,794	₪	154,206	₪	29,588	$	7,838	$	18,000
	Infrastructure and Leasehold Improvements	₪	1,116,529	₪	1,007,113	₪	109,416	$	28,984	$	350,000
	Equipment & Machinery	₪	1,413,303	₪	896,583	₪	516,720	$	136,879	$	250,000
	Furniture	₪	80,049	₪	17,233	₪	62,816	$	16,640	$	30,000
		₪	2,891,756	₪	2,169,497	₪	722,259	$	191,330	$	654,500

		$	766,028	$	574,701			$	191,330	$	654,500

Schedule 1.20 Asset Purchase Agreement

Upon execution of this Agreement, seventy-five thousand United States dollars ($75,000) by wire transfer.

THERAVITAE LTD. (ISRAEL)

Financial Statements

For the Year Ended December 31, 2009

(Unaudited)

prepared by Management

THERAVITAE LTD.

Balance Sheet (unaudited)

as at December 31, 2009

in New Israeli Shekel and USD

	NIS		USD

ASSETS

CURRENT
Cash & Cash Equivalents	₪	34,102	$	9,034
Short Term Deposits (Restricted)	₪	508,948	$	134,821
Other Assets and Amounts Due	₪	857,824	$	227,238
	₪	1,400,874	$	371,092

CAPITAL ASSETS	₪	722,272	$	191,330


	₪	2,123,146	$	562,423

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT
Bank Indebtedness	₪	-	$	-
Accounts payable	₪	445,611	$	118,043
Other Liabilities and Amounts Owed	₪	1,049,091	$	277,905

	₪	1,494,702	$	395,948

NET SEVERANCE PAYABLE	₪	64,396	$	17,059

CONTINGIENT LIABILITIES	₪	-	$	-


SHAREHOLDERS' DEFICIENCY
Share capital	₪	200	$	53
Share Premium	₪	1,999,801	$	529,749
Deficit	₪	-1,435,953	$	(380,385	)
	₪	564,048	$	149,417
	₪	2,123,146	$	562,423

THERAVITAE LTD.

Statement of Income and Loss (unaudited)

For the Year Ended December 31, 2009

in New Israeli Shekel and USD

	NIS		USD

REVENUE	₪	7,301,685	$	1,934,221

COST OF SALES	₪	5,617,513	$	1,488,083

GROSS PROFIT	₪	1,684,172	$	446,138

SALES AND ADMINISTRATIVE EXPENSES	₪	844,721	$	223,767

GENERAL EXPENSES ALLOCATED	₪	-	$	-

INCOME (LOSS) FROM OPERATIONS	₪	839,451	$	222,371

GAIN ON SALE OF ASSETS	₪	4,480	$	1,187

FINANCE (GAIN) EXPENSES, NET	₪	-108,463	$	(28,732	)

NET INCOME	₪	952,394	$	252,290

THERAVITAE LTD.

Statement in Chanages in Equity

as at

in New Israeli Shekel

	Share		Share		Net Income
	Capital		Premium		(Loss)		Total

Balance, January 1, 2007	₪	200	₪	1,999,801	₪	-1,797,477	₪	202,524
Net Loss for the year	₪	-	₪	-	₪	-632,083	₪	-632,083
Balance, December 31, 2007	₪	200	₪	1,999,801	₪	-2,429,560	₪	-429,559

Net Income for the year	₪	-	₪	-	₪	41,213	₪	41,213
Balance, December 31, 2008	₪	200	₪	1,999,801	₪	-2,388,347	₪	-388,346

Net Income for the year	₪	-	₪	-	₪	952,394	₪	952,394
Balance, December 31, 2009	₪	200	₪	1,999,801	₪	-1,435,953	₪	564,048

Schedule 1.15	Lease

Lessor:	Africa-Israel Properties Ltd.

Start of Lease	9/1/2009
End of Lease	8/31/2011
Deposit of $135k (12 mo's)

Total Metres	580 (1,903 sq ft)

Renewal	9/1/2011 (2 year option, with 15% increase)	Today's Rate	3.775

	Cost		Real Cost (based on $1=NIS 4.38)
Cost/m2	$	12.10	$	14.04
Maint/m2	₪	9.91	$	2.63
			$	16.66

Cost, Sep1,09	$	9,665
Parking	$	517
Prop Tax	$	1,536
Total	$	11,718

Annual	$	140,620

(VAT not included)

Three months payable at start of quarter ($36k incl VAT)

Confidential

employment agreement

This Employment Agreement (this "Agreement") is entered as of ______________ by and between _____________ Ltd., a company organized under the laws of the State of Israel, (the "Company") and ____________ (Israeli I.D. No. _______________) (the "Employee").

WHEREAS,

the Company desires to engage the Employee and the Employee represents that he has the requisite skill and knowledge to perform his/her duties hereunder, and desires to be employed by the Company; and

WHEREAS,

the parties desire to state the terms and conditions of the Employee's engagement by the Company.

NOW THEREFORE, in consideration of the mutual promises contained herein, and intending to be legally bound, the parties hereto hereby declare and agree as follows:

1.	The Employee will be employed by the company, as a __________________.

2.	The anticipated start date will be _____________________.

3.	As part of her employment by the Company, the employee shall be required to perform the following duties:

To manufacture the cellular therapies for patients;

To be part of the team developing new cellular therapies;

Any other duties, activities and projects assigned by his direct manager.

Gross Salary and benefits

4.	As a Company employee, the Employee will receive a monthly gross salary of ______ NIS (The Employee’s Gross Salary).

5.	At the conclusion of the earlier of (a) completion of 6 months of work; or (b) completion of the training period, the monthly gross salary will be updated to _______ NIS.

6.	The employee shall be entitled to a monthly payment of _____ NIS as traveling expenses.

7.	Shall the employee continue to work for the Company after 3 months, the Employee shall be entitled to a Managers Insurance Policy, as will be determined by the Company (The Policy”), Payment will be made retroactively since first day of employment.

Payments towards the Policy shall be as follows: the Company shall pay an amount equal to 5% of the Employee's Gross Salary towards the Policy and shall deduct 5% from the Employee's Gross Salary and pay such amounts towards the Policy. The Company shall pay an amount equal to 8% and 1/3% of the Employee's Gross Salary towards a fund for severance compensation, at the Company’s sole discretion.

Shall the employee continue to work for the Company after 3 months, the Company and the Employee shall open and maintain an Educational Fund (Keren Hishtalmut). The Educational Fund will be chosen by the employee .The Company shall contribute to such Educational Fund an amount equal to 7.5% of the Employee's Gross Salary and the Employee shall contribute to such Educational Fund an amount equal to 2.5% of Employee's Gross Salary. Payment will be made retroactively since first day of employment.

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10.

The Payments towards the Policy and Education Fund shall be up to the highest amount recognized by the Israeli Tax Authorities for income tax exemption regarding such managers’ insurance payments and Education Fund. Upon termination of the Employee’s employment by the Company, Ownership of the Policy will be transferred to the employee, unless such termination was under circumstances that do not entitle the employee to severance pay, according to applicable law.

11.

The Company shall legally deduct and withhold income tax payments and any other obligatory payments, such as social security and health insurance, from all the payments, which shall be paid to the Employee in accordance with this agreement and as required by law, and as shall be updated from time to time. The Employee hereby instructs the Company to deduct such payments towards the Policy, from his/her Gross Salary.

12.

The employee acknowledges and agrees that his/her employment with the Company is of a personal nature and requires a special degree of personal trust, and that the law known as “Hok Sheot Avoda Vemenucha” shall not apply to his/her relationship with the Company. Accordingly, the employee will be expected to work additional hours as required by his/her assignments without any additional consideration. The employee agrees if “Hok Sheot Avoda Vemenucha” shall be applied on his/her relationship with the Company, 20% of his/her Gross Monthly Salary will be considered a global payment for overtime work.

Vacation

13.

The employee shall be entitled to ____ working days of paid vacation annually (prorated for any calendar year during which he/she is employed hereunder) (“Annual Vacation”). Such Annual Vacation shall be updated as required by applicable law. The employee shall be entitled to accumulate up to once his/her Annual Vacation days, subject to the Company’s prior written approval. In any case, the employee shall be obliged to consume at least 7 vacation days each year.

14.	The employee shall be entitled to a paid sick leave pursuant to applicable law.

Recreation Pay

15.	The employee shall be entitled to receive Recreation Pay (Dmei Havraa) pursuant to applicable law.

Shabbat

16.	It is understood that the Employee will not work on Shabbat or any Jewish Holiday where work is not permitted.

Term and Termination

17.

The employee’s employment with the Company is for no specified period . As a result, the employee is free to resign at any time, after giving the Company a prior written notice as required by applicable law (for each of the first 6 months of employment, 1 day’s notice; for the next 6 months of employment, 1.5 additional days for each working month; As of the 2nd year of employment, 30 days notice). Such resignation shall be for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with the employee at any time, with or without cause, after giving the employee a similar prior notice, unless otherwise provided by law.

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18.

Notwithstanding the provisions of Section ‎17 above, during the notice period, the Employee shall continue to work unless the Company specifically informs the employee that his/her employment is no longer required. Without derogating from the above, during the notice period the Employee shall cooperate with the Company and use his/her best efforts to assist the integration into the Company's organization of the person or persons who will assume the Employee's responsibilities.

19.

Upon termination of the employee’s employment with the Company, for whatever reason, the employee will deliver to the Company all the property of the Company that was provided to the Employee by the Company and any and all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material (including soft copy) containing or disclosing any Company Inventions, Third Party Information or Proprietary Information of the Company (all as defined in Exhibit A - Employee proprietary information and inventions agreement), and discard any soft copy thereof.

Confidentiality, Non-competition, Assignment of rights and Proprietary information

20.

During the term of the employee’s employment with the Company, the employee will not engage in any other employment, occupation, consulting or other business and will dedicate all of his/her working time in favor of his/her employment with the Company, nor will the employee engage in any other activities that conflict with his/her obligations to the Company.

21.	As a Company employee, the employee will be expected to abide by Company rules and regulations, as defined and approved by the Company.

22.

The Employee acknowledges and agrees that the Employee will have access to, or become acquainted with, Confidential Information of ___________. For the purposes of this Agreement, "Confidential Information" shall mean any information of __________ , whether or not developed by the Employee, including but not limited to, information which relates to all ideas, designs, methods, discoveries, improvements, products or other results of the Employee’s work, trade secrets, product data and specifications, proprietary rights, business affairs, product developments customer information or employee information. Confidential Information does not include any information that: (i) the Employee can prove was known to The Employee prior to the date of this Agreement and any other agreement between the parties hereto, without obligation to keep it confidential; (ii) the Employee can prove was lawfully obtained from a third party without any obligation of confidentiality; or (iii) is or becomes part of the public domain through no act or violation of any obligation of the Consultant. The Employee acknowledges and agrees that the confidential information constitutes valuable trade secrets of _______________________ . The Employee shall keep all Confidential Information in confidence and shall not, at any time during or after the term of this Agreement, without the Company’s prior written consent, disclose or otherwise make available, directly or indirectly, any item of Confidential Information to anyone. The Employee shall use the Confidential Information only in connection with the performance of his/her work hereunder and for no other purpose.

23.

All documents including, but not limited to, notebooks, notes, memoranda, records, diagrams, blueprints, bulletins, formulas, reports, computer programs and other data of any kind coming into the Employee’s possession or prepared by the Employee in connection with the services provided under this Agreement are the exclusive property of _______________________ . The Employee agrees to return to the Company all such documents upon termination of this Agreement unless specific written consent is obtained from the Company to release any such record.

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24.	The Employee agrees to keep all the terms and conditions of this Agreement in the strictest confidence and not to disclose the contents thereof to any person without the prior written consent of the Company.

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General Provisions

25.

In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

26.	This Agreement is personal to the Employee, and the Employee shall not assign or delegate his/her rights or duties to a third party, whether by contract, will or operation of law, without the Company's prior written consent.

27.	This Agreement shall inure to the benefit of the Company's successors and assigns.

28.

Each notice and/or demand given by one party pursuant to this Agreement shall be given in writing and shall be sent by registered mail to the other party at the address appearing in the caption of this Agreement, and such notice and/or demand shall be deemed given at the expiration of seven (7) days from the date of mailing by registered mail or immediately if delivered by hand. Such address shall be effective unless notice of a change in address is provided by registered mail to the other party.

29.	It is hereby agreed between the parties that the laws of the State of Israel shall apply to this Agreement.


Employee			Ltd.

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Exhibit 1

EMPLOYEE PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

I, ____________(Israeli I.D. ______________), acknowledge that as a result of my employment by _____________ Ltd. (the "Company"), I may develop, receive, or otherwise have access to confidential or proprietary information that is of value to the Company, or any affiliate thereof. I therefore agree, as a condition of my employment, as follows:

1.	Nondisclosure.

1.1.

Recognition of Company's Rights; Nondisclosure. At all times during my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company's Proprietary Information (defined below), except as such disclosure, use or publication may be required in connection with my work for the Company, or unless an authorized officer of the Company expressly authorizes such in writing. I will obtain the Company's written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to my work at the Company and/or incorporates any Proprietary Information. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information and recognize that all Proprietary Information shall be the sole property of the Company and its assigns.

1.2.	Company for the purpose of this Agreement the term “Company” shall mean ____________ Ltd., it’s subsidiaries, affiliates and it’s parent company.

1.3.

Proprietary Information. The term "Proprietary Information" shall mean any and all confidential and/or proprietary knowledge, data or information of the Company. By way of illustration but not limitation, "Proprietary Information" includes (i) any and all information concerning the business of the Company, product specifications, data, know-how, processes, formulas, methods, inventions and ideas, past, current and planned development or experimental work and customer lists, price lists, market studies, business plans, systems and structures of the Company, and any other information, however documented of the Company (collectively referred to as "Inventions"); (ii) any and all information concerning the business of the Companies (which includes financial statements and projections, forecasts, plans, and information about key personnel, training, techniques and materials), however documented; and (iii) all derivatives, improvements and enhancements to the Company’s know how which are created or developed by me during the term of my employment; and (iv) information of third parties as to which the Company has an obligation of confidentiality; and (v) any and all notes, analysis, studies, summaries, and other material prepared by or for the Company containing or based, in whole or in part, on any information included in the foregoing. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use information which is generally known in the trade or industry, which is not gained as result of a breach of any obligation I have towards the Company, to whatever extent and in whichever way I wish.

1.4.

Third Party Information. I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information ("Third Party Information") subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection with my work for the Company, Third Party Information unless expressly authorized by an authorized officer of the Company in writing.

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1.5.

No Improper Use of Information of Prior Employers and Others. During my employment by the Company, I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.

2.	Assignment of Inventions.

2.1.	Proprietary Rights. The term "Proprietary Rights" shall mean all trade secret, patent, copyright, mask work and other intellectual property rights throughout the world.

2.2.

Assignment of Inventions. Subject to Sections ‎2.3 and ‎2.4, I hereby assign and agree to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company. Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this Section ‎2, are hereinafter referred to as "Company Inventions."

2.3.

Non-assignable Inventions. This Agreement will not be deemed to require assignment of any invention which was developed entirely on my own time without using the Company's equipment, supplies, facilities, or Proprietary Information and neither related to the Company's actual or anticipated business, research or development, nor resulted from work performed by me for the Company.

2.4.	Third Party. I also agree to assign all my right, title and interest in and to any particular Company Invention to any third party as directed by the Company.

2.5.

Enforcement of Proprietary Rights. I will assist the Company in every proper way to obtain, and from time to time enforce, any Proprietary Rights relating to Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee. My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after my termination for the time actually spent by me at the Company's request on such assistance.

Records. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Proprietary Information developed by me and all Inventions made by me during the period of my employment at the Company, which records shall be available to and remain the sole property of the Company at all times.

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I agree that, without derogating from any other obligation I have toward the Company, during the period of my employment by the Company and for a period of one (1) year thereafter, I will not, directly or indirectly, engage in any employment or business activity, which (i) shall require or create circumstances in which I shall be induced to disclose any Confidential Information of the Company; (ii) shall interfere with the Company’s relationship or business with any customer, supplier or a third party doing business with the Company, or,(iii) deprive the Company from any present or future right it may. I agree further that for the period of my employment by the Company and for a period of two (2) years thereafter, I will not induce any employee, consultant, customer, supplier or other party to leave his/her employ, cease the provision of service or stop other relationship with the Company, or harm such relationship in any manner. Furthermore, I agree that during the referenced period I shall not engage in any activity which competes with the business of the Company.

No Conflicting Obligation. I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement relating to my prior employment, counseling, shareholding or sale of such shares. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith.

6.	Notification of New Employer. In the event that I leave the employ of the Company, I hereby consent to the notification of my new employer of my rights and obligations under this Agreement.

7.	General Provisions.

7.1.

Severability. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

7.2.	Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

7.3.	Survival. The provisions of this Agreement shall survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.

7.4.

Waiver. No waiver by the Company of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

7.5.

Entire Agreement. The obligations set in this Agreement shall apply to any time during which I was previously employed, or am in the future employed, by the Company as a consultant if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions or agreements between us with respect to the subject matter hereof. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the party to be charged.

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7.6.	Governing Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of Israel, without giving effect to the rules respecting conflict-of-law.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.


		By:
Address:		Title:
		Dated:
Dated:

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Employment Agreement

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this __ day of ____ 2009 (the "Effective Date"), by and between Regenocell Laboratories Ltd., (the "Company"), C.N_________ and Mr. [_______], holder of Israeli identity card number [________] , of [________], Israel (the "Employee").

WHEREAS,	The employee was employed by Thera Vita Ltd. an Israeli Company ("TVIL") as of ______ under certain employment agreement dated _________ (the" Previous Employment Agreement") and;

WHEREAS,	On _________ the Company has signed an agreement for the purchase of all of the assets of TVIL and;

WHEREAS,	The Employee wishes to be employed by the Company, and the Company desires to engage the Employee; and

NOW THEREFORE, the parties hereto hereby declare and agree as follows:

Contents of Agreement/Definitions

1.	The preamble and the exhibits to this Agreement constitute an integral part thereof and are hereby incorporated by reference.

2.	The headings in this Agreement are for the purpose of convenience only and shall not be used for the purposes of interpretation.

Terms of employment

3.	As of February 1st 2010, the employee shall be employed by the Company, under the same terms stipulated in the Previous Employment Agreement attached hereto as Annex A.


Regenocell Laboratories LTD.			Employee

THERA-VITAE LTD

FINANCIAL STATEMENTS

AS AT DECEMBER 31, 2007 AND 2006

THERA-VITAE LTD

CONTENTS

		Page

Auditors’ Report		2

Financial Statements:

Balance Sheets	- As at December 31, 2007 and 2006	3

Statements of Profit and Loss	- Years Ended December 31, 2007 and 2006	5

Statements of Cash Flow	- Years Ended December 31, 2007 and 2006	6

Statements of changes in shareholders equity	- Years Ended December 31, 2007 and 2006	7

Notes to the Financial Statements		8-15

Schedules to Statements of Profit and Loss

Schedule a	- Cost of goods sold	16

Schedule b	- Selling, administrative and general expenses	16

Schedule c	- Allocated costes	17

Appendix to Statements of Cash Flows	- Adjustments to non cash items for operating activities	18

XXXX-A07

AUDITORS’ REPORT

TO THE SHAREHOLDERS

THERA-VITAE LTD

We have audited the accompanying balance sheets of thera - vitae ltd (“the Company”) as at December 31, 2007 and the related statements of profit and loss, cash flow and changes in shareholders equity for year ended on this date. These financial statements are the responsibility of the Company’s board of directors and management. Our responsibility is to express an opinion on these financial statements based on our audits.

We have not audited the financial statements of the company as of December 31, 2006, and for the year then ended. The financial statements of the company for that period were audited by other independent public accountants that this report include unqualified opinion as at September 4, 2007, with reference to note 1 c regarding negative capital and the uncertainty of the parent company in raising capital successfully.

We have conducted our audit in accordance with generally accepted auditing standards, including those prescribed by the Auditors’ Regulations (Auditor’s Mode of Performance) - 1973. 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. An audit also includes assessing the accounting principles used and significant estimates made by the board of directors and management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The aforementioned financial statements have been prepared on the basis of historical cost, and not on the basis of reported sums. Disclosure of the effect of the changes in the general purchasing power of the Israeli currency, which is in accordance with pronouncements of the Institute of Certified Public Accountants in Israel and standards of the Israel Accounting Standards Board, has not been included in the aforementioned financial statements.

In our opinion, except for the omission of the information stated in the above paragraph, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2007, and the results of its operations, and the changes in its cash flow and the changes in the shareholders equity for the year ended in accordance with generally accepted accounting principles - on the historical cost basis.

Without qualifying our opinion we refer to note 1 c regarding the Company’s retained loss of 2,430 thousend NIS and 1,797 thousand NIS over the years 2007 - 2006, respectively, and to note 2e regarding the adjustment of Restatement over the year 2006 for re - presenting Restatement’s effect regarding a past mistake in calculation of revenues and net financing expenses.

Zitnitski Xxxxxxxxx & Co.
	May 12, 2008
Certified Public Accountants

- 2 -

THERA-VITAE LTD

BALANCE SHEETS

(N.I.S.)

		DECEMBER 31
	Note	2007		2006		*

CURRENT ASSETS
Cash and cash equivalents	(3)		846,530		1,130,325
Basis inventory			-		110,918
Accounts receivable	(4)		157,820		298,803
			1,004,350		1,540,046

LONG TERM ASSETS
Long term deposit			-		96,021

FIXED ASSETS	(5)
Cost			2,854,419		2,649,576
Less, accumulated depreciation			1,391,699		979,289
			1,462,720		1,670,287

			2,467,070		3,306,354

The accompanying notes are an integral part of these financial statements

- 3 -

AS AT DECEMBER 31, 2007 AND 2006

		DECEMBER 31
	Note	2007			2006		*

CURRENT LIABILITIES
Bank credit			21,576			67,154
Trade and post - dated cheques			503,786			297,405
Accounts payable	(6)		1,596,303			577,226
			2,121,665			941,785

Related Companies loans	(7)		646,187			2,078,041

Reserve for severance pay	(8)		128,777			84,004

CAPITAL (DEFICIT)
Share capital	(9)		200			200
Additional paid - in capital			1,999,801			1,999,801
Retained Loss			(2,429,560	)		(1,797,477	)
			(429,559	)		202,524

DIRECTORS:

			2,467,070			3,306,354

* Restatement- note 2 e.

Tel Aviv, May 12, 2008

- 4 -

THERA-VITAE LTD

STATEMENTS OF PROFIT & LOSS

YEARS ENDED DECEMBER 31, 2007 AND 2006

(N.I.S.)

		2007		2006		*

Revenues			8,018,824		7,803,576

Cost of goods sold	(schedule a)		6,784,202		6,556,252

Gross profit			1,234,622		1,247,324

Selling administrative and general expenses	(schedule b)		1,794,821		1,784,402

Allocated costs	(schedule c)		-		-

Operating loss before financing expenses			560,199		537,078

Net financing expenses			71,884		2,974

Net loss for the year			632,083		540,052

Retained loss, beginning of year			1,797,477		1,257,425

Retained loss, end of year			2,429,560		1,797,477

* Restatement- note 2 e.

The accompanying notes are an integral part of these financial statements

- 5 -

THERA-VITAE LTD

STATEMENTS OF CASH FLOW

YEARS ENDED DECEMBER 31, 2007 AND 2006

(N.I.S.)

	2007			2006
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

Net loss for the year		(632,083	)		(540,052	)

Adjustments to non - cash items for Operating activities (see appendix)		1,934,542			1,095,682

Net cash provided by operating activities		1,302,459			555,630

CASH FLOWS USED IN INVESTING ACTIVITIES

Long term deposit repayment		96,021			-

Purchase of fixed assets		(204,843	)		(240,349	)

Net cash used in investing activities		(108,822	)		(240,349	)

CASH FLOWS USED IN FINANCING ACTIVITIES

Capital issue		-			2,000,000

Bank credit received (repayment)		(45,578	)		67,154

Net related Companies loans repayment		(1,431,854	)		(1,846,881	)

Net cash provided by (used in) operating activities		(1,477,432	)		220,273

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(283,795	)		535,554

BALANCE OF CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		1,130,325			594,771

BALANCE OF CASH AND CASH EQUIVALENTS - END OF YEAR		846,530			1,130,325

The accompanying notes are an integral part of these financial statements

- 6 -

THERA-VITAE LTD

STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31, 2007 AND 2006

(N.I.S.)

	ORDINARY SHARES 0.1 NIS PAR VALUE		ADDITIONAL PAID-IN CAPITAL		LOSS			TOTAL

Balance as of January 1, 2006		1		-		(1,257,425	)		(1,257,424	)

Share issuance		199		1,999,801		-			2,000,000

Net loss 2006		-		-		(540,052	)		(540,052	)

Balance as of December 31, 2006		200		1,999,801		(1,797,477	)		202,524

Net loss 2007		-		-		(632,083	)		(632,083	)

Balance as of December 31, 2007		200		1,999,801		(2,429,560	)		(429,559	)

The accompanying notes are an integral part of these financial statements

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THERA-VITAE LTD

NOTES TO THE FINANCIAL STATEMENTS

Note 1 - General

The financial statements have been prepared in accordance with generally accepted accounting principles, on the historical cost basis, without giving expression to the effect of the changes in the general purchasing power of the Israeli currency on the financial statements. The increase in the general purchasing power of the Israeli currency during the year, as was indicated by the Israeli Consumer Price Index, is 3.4 % (prior year: decrease 0.1%).

During the year 2001 the Israel Accounting Standards Board published standard no. 12 which was updated during the year 2002 by standard no. 17, about the termination of adjusting of the financial statements, starting from January 1, 2004. According to this standard, the financial statements must be stated in reported sums, namely in historical values, which was adjusted to December 31, 0000 Xxxxxxx Consumer Price Index (hereinafter - passing day), in addition of nominal historic values, which was added after the passing day and in reduction of sums which was deducted after the passing day.

The financial statements are stated in nominal historic values, because the statements in reported sums, above mentioned, does not contribute meaningful information.

The Company has retained loss of 2,430 thousand NIS and 1,797 thousand NIS over the years 2007 - 2006 respectively. In order to fund its activities the Company is fully depended on the funding of its parent Company.

Note 2 - Significant accounting policies

The significant accounting policies, that were taken in the preparation of the financial statements in accordance with prior year, are as follows:

Fixed assets

Fixed assets are recorded at cost price and are depreciated over their estimated useful life time, on the straight - line method, at comparable rates which are used for income tax purpose.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles, requires the management to make estimates and assumptions that effects the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

- 8 -

THERA-VITAE LTD

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note 2 - Significant accounting policies (continue)

Foreign currency balances

Balances in foreign currency or linked to them are translated at the exchange rates in effect as at the end of the year, as was advertised by the Bank of Israel:

	Exchange rate		Exchange rate		Exchange rate
Date	of 1 U.S.D. in N.I.S.		of 1 EURO. in N.I.S.		of 1 CHF. in N.I.S.

31. 12. 07		3.846		5.659		3.420
31. 12. 06		4.225		5.564		3.465

Income and expenses in foreign currencies were included in the profit and loss statements according to the exchange rates in effect at the time of the transactions.

CASH AND CASH EQUIVALENTS

The above term includes Israeli shekel and foreign currency, as well as short term bank deposits, not exceeding three months from the deposit date.

RESTATEMENT

The Financial Statements as at December 31, 2006 and for year ended on this date including Restatement regarding a past mistake in calculation of revenues and net financing expenses.

The Restatement effects of the Financial Statements are:

BALANCE SHEETS

	DECEMBER 31, 2006

Related Companies loans - as was reported		2,305,167
Restatement’s effect		(227,126	)
Related Companies loans - after Restatement		2,078,041

Retainted loss - as was reported		2,024,603
Restatement’s effect		(227,126	)
Retainted loss - after Restatement		1,797,477

- 9 -

THERA-VITAE LTD

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note 2 - Significant accounting policies (continue)

RESTATEMENT (continue)

STATEMENT OF PROFIT & LOSS

	FOR YEAR ENDED
	DECEMBER 31, 2006

Revenues - as was reported		7,439,902
Restatement’s effect		363,674
Revenues - after Restatement		7,803,576

Cost of goods sold - as was reported		6,240,014
Restatement’s effect		316,238
Cost of goods sold - as after Restatement		6,556,252

Selling administrative and general expenses - as was reported		2,100,640
Restatement’s effect		(316,238	)
Selling administrative and general expenses - after Restatement		1,784,402

Net financing (expenses) income - as was reported		406,933
Restatement’s effect		(409,907	)
Net financing (expenses) income - after Restatement		(2,974	)

Net loss for the year - as was reported		493,819
Restatement’s effect		46,233
Net loss for the year - after Restatement		540,052

Retained loss, beginning of year - as was reported		1,530,784
Restatement’s effect		(273,359	)
Retained loss, beginning of year - after Restatement		1,257,425

Note 3 - Cash and cash equivalents

	DECEMBER 31
	2007		2006

Israeli Currency - NIS		9,372		256,846
Foreign Currency		837,158		873,479
		846,530		1,130,325

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THERA-VITAE LTD

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

(N.I.S.)

Note 4 - Accounts receivable

	DECEMBER 31
	2007		2006

Tax authorities		90,793		115,268
Prepaid expenses and others		67,027		183,535
		157,820		298,803

Note 5 - Fixed assets

a. Composition

	DECEMBER 3 1
	Vehicles			New equipment			Improvement in rental			Other equipment			System in building			Supervision in building			Total

Cost
Balance at January 1, 2007		98,081			1,341,426			157,254			104,958			930,035			17,822			2,649,576
Additions in 2007		-			203,433			-			1,410			-			-			204,843
Balance at December 31, 2007		98,081			1,544,859			157,254			106,368			930,035			17,822			2,854,419

Accumulated depreciation
Balance at January 1, 2007		(50,225	)		(439,977	)		(58,355	)		(29,150	)		(393,908	)		(7,674	)		(979,289	)
Depreciation in 2007		(14,712	)		(205,779	)		(26,214	)		( 9,662	)		(153,072	)		(2,971	)		(412,410	)
Balance at December 31, 2007		(64,937	)		(645,756	)		(84,569	)		(38,812	)		(546,980	)		(10,645	)		(1,391,699	)

Depreciated cost at December 31, 2007		33,144			899,103			72,685			67,556			383,055			7,177			1,462,720

b. Depreciation rates:

	%
Vehicles		15
New equipment		15 - 33
Improvement in rental		17
Other equipment		7 - 15
System in building		17
Supervision in building		17

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THERA-VITAE LTD

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(N.I.S.)

Note 6 - Accounts payable

	DECEMBER 31
	2007		2006

Tax authorities		23,981		80,496
Employees and payroll accruals		187,947		363,494
Accrued expenses		1,384,375		133,236
		1,596,303		577,226

Note 7 - Related companies loans

Received from related companies, linked to foreign currency, non interest bearing, and without specific date of repayment.

Note 8 - Reserve for severance pay

Composition:

	DECEMBER 31
	2007		2006

Accrued severance pay		410,938		366,000
Less, deposits in funds		282,161		281,996
		128,777		84,004

The accrued severance pay reflects the Company liability to its employees. The amounts in funds include the profits accrued to year-end in management insurance policies (including severance pay element).

Note 9 - Share capital

Composition as at December 31, 2007 and 2006:

	authorized		Issued and outstanding

Ordinary shares 0.01 NIS par value		100,000		20,010

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THERA-VITAE LTD

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(N.I.S.)

Note 10 - Revenues

	2007		2006	*

Revenues from Related Companies (*)		7,801,833	7,565,805
Other Revenues (**)		216,991	237,771
		8,018,824	7,803,576

Restatement- note 2 e.

(*)

The Company had revenues from related companies resulting from a reimbursement of cost + 15%, from cost of goods sold ..

(**)

Grant received from the Israeli ALS study association.

Note 11 - Related parties transaction

Related parties balance as of balance sheet date:

	DECEMBER 31
	2007		2006	*

Related companies loans		646,187	2,078,041

* Restatement- note 2 e.

Transactions with related parties as reflected in the profit and loss for the period:

	2007		2006	*

Revenues From Related Companies		7,801,833	7,565,805

Rate differentials income From Related Companies		26,404	95,269

* Restatement- note 2 e.

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THERA-VITAE LTD

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(N.I.S.)

Note 12 - Commitments and contingent liabilities

a. Ruhrberg Science Center

On April 19, 2007 Rurberg Construction and Investmtent (1963) Ltd (“Ruhrberg”) has filed a lawsuit against the company for unpaid lease of a proprerty located in Ruhrberg Science Center in Rehovot (the “Property”). The property was leased by the company but was never occupied by it.

On January 22, 2008 the parties have reached a settlement according to which the company has to pay to Rurberg a total sum of 508,104 NIS (inclusive of VAT). The company wrote a provision in the same amount.

b. Rehovot Municipality

The company has filed an appeal to the Rehovot Appeal Committee following a decision by the Rehovot’s Municipality not to exempt the company from payment of municipal property tax for the Property. The company is currently awaiting the decision of the appeal Committee.

The company wrote provision in the sum of 247,364 NIS for it.

c. Xxxx Xxxxxxxxxx Xxxxxx

In a letter prof. Battler is claiming an alleged breach of a consulting agreement Theravitae Holdings Limited in the sum of 151,500 US$ plus VAT. According to the Companys legal advisors they cannot foresee, at this stage, legal proceedings directed at the company with respect to prof. Battler’s claims, but this cannot be overruled.

According to the Companies Management, the Companys’ share in the debt is about 36,000 US$, and therfore wrote a provision in the same amount.

d. Africa Israel Assets Ltd

On 19.1.08 Africa Israel assets ltd. (the lessor of the premises in which the Company is located), has provided the Company with an evacuation letter following miss payment of rent by the Company. Although the Company has made efforts to reach a settlement with Africa Israel, such settlement was never concluded as the Company continues to fall behind rent payments.

The Company arrears in rent and maintenance payment from October 2007. The Company wrote a provision in the sum of 207,700 NIS.

Note 13 - Guarantee

The Company had given a bank guarantee at the amount of 460 K NIS (prior year 540 K NIS) in favor of the lessors.

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THERA-VITAE LTD

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(N.I.S.)

Note 14 - Lien

In order to secure any debts, a Bank Leumi placed a first fixed charge on the Companys unpaid capital stock, good will and first floating lien on the companys’ plant and all other assets.

Note 15 - Income taxes

Final notice of assessments have been issued up to and including the year 2003.

In the current year, as in last year, the Company was subject to the Income Tax (inflationary adjustment) Law - 1985. The law was fundamentally established in order to give protection to the invested capital of the Company. As a result of the execution of this law, the company’s adjusted loss , increased by the sum of 30,185 N.I.S (Prior year: sum of 9,753 N.I.S).

On May 17, 2004, the Company’s facilities were granted the status of “Approved Enterprise” under the aforementioned law. According to its plan the company had to conclude the investments until May 31, 2006. On July 28, 2006 the company was granted an extension until May 31, 2007. The approved plan entitles the company to tax benefits according to section 51 of the law. Another extension for the plan execution term was not received yet.

Carry forward tax losses of the company as of December 31, 2007 aggregate approximately 2,167 thousand N.I.S. Under the Inflationary Adjustments law, carry forward tax losses are linked to the Israeli CPI, and are utilizable.

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THERA-VITAE LTD

Schedule a to

Statements of profit & loss

COST OF GOODS SOLD

YEARS ENDED DECEMBER 31, 2007 and 2006

(N.I.S.)

	2007		2006	*

Salaries and related		2,409,922	2,632,926
Travels abroad		41,422	137,463
Medical consulting		810,109	1,022,988
Transportation and delivery		155,931	212,694
Subcontractors		429,125	545,942
Perishable equipment		558,439	630,740
Laboratory maintenance		49,526	49,358
Allocated costs (Schedule c)		2,242,096	1,194,382
Product insurance		87,632	129,759
Total cost of goods sold		6,784,202	6,556,252

* Restatement- note 2 e.

Schedule b to

Statements of profit & loss

SELLING, ADMINISTRATIVE AND GENERAL EXPENSES

YEARS ENDED DECEMBER 31, 2007 and 2006

(N.I.S.)

	2007		2006	*

Salaries and salary related		939,808	785,694
Professional services		456,378	238,499
Insurance		12,335	10,218
Literature and seminars		11,282	525
Taxes and fees		8,893	43,131
Computer maintenance		11,942	15,395
Travels abroad		76,974	378,197
Transportation and delivery		7,751	11,046
Car maintenance (including 14,712 nis depreciation)		159,094	73,692
Meals, gifts and donation		40,152	49,459
Allocated costs (Schedule c)		70,212	178,546
Total selling, administative and general expreses		1,794,821	1,784,402

* Restatement- note 2 e.

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THERA-VITAE LTD

Schedule c to

Statements of profit & loss

ALLOCATED COSTS

YEARS ENDED DECEMBER 31, 2007 and 2006

(N.I.S.)

	2007			2006

Rental fee		1,180,869			607,151

Office maintenance and property tax		662,936			301,139

Office supply		25,036			18,020

Telephone and communications		42,153			51,259

Telephone calls abroad		1,779			6,710

Mail		1,837			638

Depreciation		397,698			388,011

		2,312,308			1,372,928

Allocated costs to Cost of goods sold		(2,242,096	)		(1,194,382	)

Allocated costs to S and A and G		(70,212	)		(178,546	)

Total		-			-

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THERA-VITAE LTD

Appendix No. 1

Statements of Cash Flow

ADJUSTMENTS TO NON - CASH ITEMS FROM

OPERATING ACTIVITIES

YEARS ENDED DECEMBER 31, 2007 and 2006

(N.I.S.)

	2007		2006

Items not affecting cash flow

Depreciation		412,410		388,011

Increase in reserve for severance pay, net		44,773		79,259

		457,183		467,270

Changes in working capital items

Decrease in basis inventory		110,918		-

Decrease in trade receivable		-		217,772

Decrease (increase) in accounts receivable		140,983		(130,956	)

Increase in trade and post dated cheques		206,381		212,819

Increase in accounts payable		1,019,077		328,777

		1,477,359		628,412
Total adjustments to non - cash items from operating activities		1,934,542		1,095,682

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THERAVITAE LTD.

Balance Sheet

as at

in New Israeli Shekel

		December 31,			December 31,
	Note	2008			2007

ASSETS

CURRENT
Cash & Cash Equivalents	3		138,385			846,530
Short Term Deposits			554,940			-
Other Assets and Amounts Due	4		5,854,150			8,183,753
			6,547,475			9,030,283

CAPITAL ASSETS	5		1,095,913			1,462,720

			7,643,388			10,493,003

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT
Bank Indebtedness			-			21,576
Accounts payable	6		318,598			503,786
Other Liabilities and Amounts Owed	7		7,576,250			10,268,423
			7,894,848			10,793,785

NET SEVERANCE PAYABLE	8		136,886			128,777

CONTINGIENT LIABILITIES	16		-			-

SHAREHOLDERS' DEFICIENCY
Share capital	9		200			200
Share Premium			1,999,801			1,999,801
Deficit			(2,388,347	)		(2,429,560	)
			(388,346	)		(429,559	)
			7,643,388			10,493,003

See the accompanying notes

THERAVITAE LTD.

Statement of Loss and Deficit

For the Period Ended

in New Israeli Shekel

		December 31,		December 31,
	Note	2008		2007
REVENUE	10		7,611,470		8,018,824
COST OF SALES	11		6,618,667		6,784,202
GROSS PROFIT			992,803		1,234,622
SALES AND ADMINISTRATIVE EXPENSES	12		851,421		1,794,821
GENERAL EXPENSES ALLOCATED	13		-		-
LOSS FROM OPERATIONS			141,382		(560,199	)
FINANCE EXPENSES, NET	14		100,169		71,884
NET LOSS			41,213		(632,083	)

See the accompanying notes

THERAVITAE LTD.

Statement in Chanages in Equity

as at

in New Israeli Shekel

	Share		Share		Net Income
	Capital		Premium		(Loss)			Total

Balance, January 1, 2007		200		1,999,801		(1,797,477	)		202,524
Net Loss for the year		-		-		(632,083	)		(632,083	)
Balance, December 31, 2007		200		1,999,801		(2,429,560	)		(429,559	)
Net Income for the year		-		-		41,213			41,213
Balance, December 31, 2008		200		1,999,801		(2,388,347	)		(388,346	)

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