BPH ENERGY LTD — Annual Report 2007

Sep 3, 2007

BIOPHARMICA LTD

ABN 41 095 912 002

Appendix 4E Preliminary Final Report For the year ended 30 June 2007

1

Appendix 4E - Preliminary Final Report BioPharmica Ltd For the year ended 30 June 2007

Results for announcement to the market

Results for announcement to the market
	$A'000
Revenues from ordinary activities Loss from ordinary activities after tax attributable to members Net loss for the financial year attributable to members	Up 1,381.07% to 527 Up 29.28 % to (1,276) Up 29.28 % to (1,276)
Dividends (distributions)	Amount per security	Franked amount per security
Final dividend Interim dividend	nil	nil
Previous corresponding period	n/a	n/a

Other notes to the condensed financial statements

Ratios	Current period	Previous corresponding Period
Profit before tax / revenue Consolidated loss from ordinary activities before tax as a percentage of revenue	(242.10)%	(3,962.10) %
Profit after tax / equity interests Consolidated net loss from ordinary activities after tax attributable to members as a percentage of equity (similarly attributable) at the end ofthe period	(19.06)%	(15.83) %
NTA Backing	Current period	Previous corresponding Period
Net tangible asset backing per ordinary security	4.2cps	6.6 cps

The accounts are in the process of being audited or subject to review.

2

Income Statement for the year ended 30 June 2007

BioPharmica Ltd and its controlled entities

Note Revenue 2 Other income 2 Administration expenses Advertising and Promotion expenses Consulting and Legal expenses Research and Development expenses Depreciation and amortisation expense Employee expense Equipment Rental expense Insurance expenses Mailing and Distribution expenses Listing and Prospectus expenses Service Fees Traveling expenses Other expenses from ordinary activities Loss Before Income Tax Income tax expense Loss from continuing operations Loss for the year Loss attributable to members of the parent entity Earnings Per Share – Basic earnings per share (cents per share) Diluted earnings per share (cents per share) 3	Consolidated 2007 $ 2006 $ 578,436 123,381 (51,574) (87,808) (125,293) (85,645) (1,392) (75,941) (338,673) (95,362) (839,071) (222,510) (168,440) (4,800) (59,950) (173,461) (45,514) (12,927) (8,830) (24,924) - (2,500) (2,824) (62,717) (131,040) (131,040) (47,594) (90,733) (33,758) (39,626) (1,275,517) (986,613) - - (1,275,517) (986,613) (1,275,517) (986,613) (1,275,517) (986,613) (2.08) (1.49) (1.89) (1.29)	Parent 2007 $ 2006 $
		568,078 113,309 (51,574) (87,808) (103,101) (84,198) (894) (75,941) (284,511) (95,321) (115,884) (222,416) (3,984) (4,514) (59,950) (173,461) - - (6,067) (23,290) - (2,500) (2,824) (62,717) (131,040) (131,040) (47,579) (90,733) (26,428) (35,761)
		(265,758) (976,391) - -
		(265,758) (976,391)
		(265,758) (976,391)
		(265,758) (976,391)

The accompanying notes form part of these financial statements.

3

Balance Sheet as at 30 June 2007

BioPharmica Ltd and its controlled entities

Note Current Assets Cash and cash equivalents Trade and other receivables Prepayments Total Current Assets Non-Current Assets Other non-current assets-loans Financial assets Investments accounted for using the equity method Intangible assets Property, plant & equipment Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Short-term borrowings Short-term provisions Total Current Liabilities Non Current Liabilities Long-term borrowings Total Non Current Liabilities Total Liabilities Net Assets Equity Issued capital 4 Accumulated losses Total Equity	Consolidated 2007 $ 2006 $	Parent 2007 $ 2006 $
	2,076,725 3,025,624 611,739 29,150 47,718 -	1,814,650 2,702,418 574,897 26,299 29,515 -
	2,736,182 3,054,774 141,555 57,661 182,118 171,972 272,909 555,370 751,697 633,000 368,130 559,265 1,716,409 1,977,268 4,452,591 5,032,042 379,510 68,842 155,129 156,222 19,020 7,277 553,659 232,341 233,442 385,928 233,442 385,928 787,101 618,269 3,665,490 4,413,773 6,691,315 6,297,830 (3,025,825) (1,884,057) 3,665,490 4,413,773	2,419,062 2,728,717
		526,332 65,409 1,391,596 1,059,170 - - 751,697 633,000 11,558 8,883
		2,681,183 1,766,462
		5,100,245 4,495,179
		141,483 63,907 - - 20,687 7,277
		162,170 71,184
		4,435 -
		4,435 -
		166,605 71,184
		4,933,640 4,423,995
		6,691,315 6,297,830 (1,757,675) (1,873,835)
		4,933,640 4,423,995

The accompanying notes form part of the financial statements.

4

Statement of Changes in Equity as at 30 June 2007

BioPharmica Ltd and its controlled entities

Balance at 30 June 2005 Shares Issued during the financial year Loss attributable to members of the consolidated entity Balance at 30 June 2006 Balance at 30 June 2006 Shares Issued during the financial year Loss attributable to members of the consolidated entity Gain on consolidation of DAS Pty Ltd Balance at 30 June 2007 Balance at 30 June 2005 Shares Issued during the financial year Profit attributable to members of parent entity Balance at 30 June 2006 Balance at 30 June 2006 Shares Issued during the financial year Prior year adjustment Profit attributable to members of parent entity Balance at 30 June 2007	Consolidated
	Ordinary Share Capital $ Accumulated losses $ Total $
	3,829,971 (897,444) 2,932,527 2,467,859 - 2,467,859 - (986,613) (986,613)
	6,297,830 (1,884,057) 4,413,773
	6,297,830 (1,884,057) 4,413,773 393,485 - 393,485 - (1,275,517) (1,275,517) 133,749 133,749
	6,691,315 (3,025,825) 3,665,490
	Parent
	Ordinary Share Capital $ Accumulated losses $ Total $
	3,829,971 (897,444) 2,932,527 2,467,859 - 2,467,859 - (976,391) (976,391)
	6,297,830 (1,873,835) 4,423,995
	6,297,830 (1,873,835) 4,423,995 393,485 - 393,485 - 381,918 381,918 - (265,758) (265,758)
	6,691,315 (1,757,675) 4,933,640

The accompanying notes form part of these financial statements.

5

Cash Flow Statement for the year ended 30 June 2007

Biopharmica Ltd and its controlled entities

Note Cash Flows From Operating Activities Receipts from customers Grants received Payments to suppliers and employees Interest received Net cash used in operating activities Cash Flows From Investing Activities Receipt/(payment) to Term Deposit Amounts to/(from) other entities Payment for investments Payment for property, plant and equipment Net cash used in investing activities Cash Flows From Financing Activities Proceeds from capital raising Interest paid Net cash provided by financing activities Net increase (decrease) in Cash Held Cash At the Beginning Of The Financial Year Cash At The End Of The Financial Year	Consolidated 2007 $ 2006 $ 133,853 - 279,404 - (1,740,827) (973,977) 142,254 113,381 (1,185,316) (860,596) 10,146 (171,972) (79,153) 1,478 66,368 (296,543) (154,429) (15,206) (157,068) (482,243) 393,485 2,467,859 - (2) 393,485 2,467,857 (948,899) 1,125,018 3,025,624 1,900,606 2,076,725 3,025,624	Parent 2007 $ 2006 $
		96,274 - 210,501 - (751,955) (966,051) 127,407 113,309
		(317,773) (852,742)
		- - (456,488) (6,270) (500,333) (800,343) (6,659) (6,690)
		(963,480) (813,303)
		393,485 2,467,859 - (2)
		393,485 2,467,857
		(887,768) 801,812 2,702,418 1,900,606 1,814,650 2,702,418

The accompanying notes form part of these financial statements.

6

Additional Stock Exchange Information

BioPharmica Ltd and its controlled entities

1. Statement of Significant Accounting Policies

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers the consolidated group of BioPharmica Limited and controlled entities and BioPharmica Limited as an individual parent entity. BioPharmica Limited is a listed public company, incorporated and domiciled in Australia.

The financial report of BioPharmica Limited and controlled entities, and BioPharmica Limited as an individual parent entity comply with all International Financial Reporting Standards (IFRS) in their entirety.

The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Basis of Preparation

The accounting policies set out below have been consistently applied to all years presented.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting Policies

(a) Principles of Consolidation

A controlled entity is any entity BioPharmica Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

7

Additional Stock Exchange Information

BioPharmica Ltd and its controlled entities

(b) Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

BioPharmica Ltd and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. BioPharmica Ltd is responsible for recognising the current and deferred tax assets and liabilities for the tax consolidated group. The group notified the Australian Taxation Office on 30 June 2006 that it had formed an income tax consolidated group to apply from 30 June 2006. The tax consolidated group has entered a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

(c) Property, Plant & Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads

8

BioPharmica Ltd and its controlled entities

Additional Stock Exchange Information

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in shareholders' equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset's original cost is transferred from the revaluation reserve to retained earnings.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate Computers 33 % Office furniture 13 %

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

(d) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the economic entity are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over their estimated useful lives.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

9

BioPharmica Ltd and its controlled entities

Additional Stock Exchange Information

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

(e) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Held-to-maturity investments

These investments have fixed maturities, and it is the group's intention to hold these investments to maturity. Any held-to-maturity investments held by the group are stated at amortised cost using the effective interest rate method.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Derivative instruments

Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the income statement unless they are designated as hedges.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

10

Additional Stock Exchange Information BioPharmica Ltd and its controlled entities

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement.

(f) Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(g) Investments in Associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognised group’s share of post-acquisition reserves of its associates.

(h) Interests in Joint Ventures

The economic entity's share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated statements of financial performance and financial position.

The economic entity's interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. The parent entity's interests in joint venture entities are brought to account using the cost method.

(i) Intangibles

Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.

Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

11

BioPharmica Ltd and its controlled entities

Additional Stock Exchange Information

Research and Development

Expenditure during the research phase of a project is recognised as an expense when incurred.

Development costs are capitalised only when technically feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

(j) Employee Benefits

Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Equity-settled compensation

The group operates a number of share-based compensation plans. These include both a share option arrangement and an employee share scheme. The bonus element over the exercise price of the employee services rendered in exchange for the grant of shares and options is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares of the options granted.

(k) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(l) Debt Defeasance

Where assets are given up to extinguish the principal repayments and all future interest payments of a debt any differences in the carrying values of assets foregone and the liability extinguished are brought to account in the profit from ordinary activities. Costs incurred in establishing the defeasance are expensed in the period that the defeasance occurs.

Where only part of a debt is extinguished the interest payments and principal repayments are defeased proportionately and a liability recognised for the net present value of the remaining future interest and principal repayments. The discount factor applied is the implicit rate in the original debt.

In all cases where defeasance occurs, it is highly unlikely that the company will again be required to pay any part of the debt or meet any guarantees or indemnities associated with the debt.

12

Additional Stock Exchange Information

BioPharmica Ltd and its controlled entities

(m) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(n) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

(o) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in income in the period in which they are incurred.

(p) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is

recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(q) Government Grants

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

13

Additional Stock Exchange Information

BioPharmica Ltd and its controlled entities

(r) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(s) Rounding of Amounts

The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in the financial report and directors' report have been rounded off to the nearest dollar.

Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates — Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

No impairment has been recognised in respect of goodwill for the year ended 30 June 2007.

14

Additional Stock Exchange Information

BioPharmica Ltd and its controlled entities

Consolidated Parent 2007 $ 2006 $ 2007 $ 2006 $ 2. Revenue Operating activities Funding 381,311 10,000 318,672 - Interest revenue : other entities 142,253 113,381 127,406 113,309 Cost recoveries 54,872 - 122,000 - Total revenue 578,436 123,381 568,078 113,309 Non-operating activities Share of loss of associates (51,574) (87,808) (51,574) (87,808) (51,574) (87,808) (51,574) (87,808) 3. Earnings per share Consolidated 2007 $ 2006 $ (a) Reconciliation of Earnings to Profit or Loss Loss (1,275,517) (986,613) Earnings used to calculate basic EPS (1,275,517) (986,613) Earnings used in the calculation of dilutive EPS (1,275,517) (986,613) (b) Reconciliation of Earnings to Profit or Loss from continuing operations Loss from continuing operations (1,275,517) (986,613) Earnings used to calculate basic EPS from continuing operations (1,275,517) (986,613) Earnings used in the calculation of dilutive EPS from continuing operations (1,275,517) (986,613) (c) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS No. 61,305,992 No. 52,264,027 Weighted average number of options outstanding 24,329,335 24,350,731 Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS 85,635,327 76,614,758	Consolidated 2007 $ 2006 $ 381,311 10,000 142,253 113,381 54,872 -	Parent 2007 $ 2006 $
		318,672 - 127,406 113,309 122,000 -
		568,078 113,309
		(51,574) (87,808)
		(51,574) (87,808)

15

Additional Stock Exchange Information

BioPharmica Ltd and its controlled entities

sued Capital 63,271,485 (2006: 61,304,060) fully paid ordinary shares Options converted to fully paid ordinary shares nil (2006: 24,331,267) fully paid options Less: Capital raising costs Issued Capital (a) Ordinary Shares At the beginning of reporting period Shares Issued during the year At reporting date	Consolidated 2007 $ 2006 $ 6,297,830 6,575,494 393,485 - - 102,851 - (380,515)	Parent 2007 $ 2006 $
		6,297,830 6,575,494 393,485 - - 102,851 - (380,515)
	6,691,315 6,297,830	6,691,315 6,297,830
	No. No.	No. No.
	61,304,060 47,597,508 1,967,425 13,706,552	61,304,060 47,597,508 1,967,425 13,706,552
	63,271,485 61,304,060	63,271,485 61,304,060

4. Issued Capital

Capital Raising

Options were exercised during the year resulting in the issue of 1,967,425 (2006: 33,987) fully paid ordinary shares at 20c each raising $393,485 (2006: $6,797.40).

Fully Paid Ordinary Share Capital

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

(b) Options

The market price of the company's ordinary shares at 29 June 2007 was 22 cents.

22,356,342 listed options exercisable at 20 cents each expired on 30 June 2007.

• 1,250,000 unlisted options exercisable at 20 cents each expired on 1 July 2007.

The holders of options do not have the right, by virtue of the option, to participate in any share issue or interest issue of any other body corporate or registered scheme.

16

BioPharmica Ltd and its controlled entities

Additional Stock Exchange Information

4. Issued Capital – (continued)

The difference between the total market value of options issued during the period, at the date of issue, and the total amount received from executives and employees is not recognised in the financial statements except for the purposes of determining directors' and executives’ remuneration in respect of that period.

17