SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

CURRENT REPORT

Date of Report: ~~September~~March 3031, ~~2010~~2011

Nerium Biotechnology, Inc.

(Exact name of registrant as specified in its charter)

11467 Huebner Road, Suite 175, Houston, Texas 78230

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (630) 887-2388

Canada	000-54051	14-1987900
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x Form 40-F o

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes o No x

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Sales for the three months ended March 31, 2011 totaled $122,542, an increase of $64,898, or 112.6%, from the $57,644 for the three months ended March 31, 2010. The increase in sales resulted from an increase in the number of Anvirzel units sold. During the quarter-ended March 31, 2011, the company sold 959 vials at an average selling price of $127.91; 248 vials were given away at no cost and 11 vials were used in research, for a total of 1217 vials. This compares with a sale of 228 vials sold at an average selling price of $252.82 for the three months ended March 31, 2010. During the three months ended March 31, 2010, 236 vials were given away at no cost, and 61vials were used in research for a total of 525 vials.

Other income for the three months ended March 31, 2011 totaled $2.243, an increase of $1,488, or 197.1%, from the $755 for the three months ended March 31, 2010. Other income results from medical services provided at the Salud Integral Clinic in Honduras.

As a result of the forgoing, the Company reported revenue for the three months ended March 31, 2011 of $124,785, an increase of $66,386, or 113.7%, from the $58,399 of revenue for the three months ended March 31, 2010.

Cost of Sales for the three months ended March 31, 2011, totaled $38,935, an increase of $11,569, or 42.3%, from the $27,366 for the three months ended March 31, 2010. The increase in cost of sales resulted from an increase in the number of vials used (692 more vials) which was partially offset by the reduced cost of the vials. The average cost on all vials used during the three months ended March 31, 2011 was $31.99 compared to $52.13 for the three months ended March 31, 2010.

As a result of the foregoing, the Company’s gross profit increased to $85,850 for the three months ended March 31, 2011, an increase of $54,817, or 176.6% from the $31,033 for the three months ended March 31, 2010.

General and Administrative Expenses totaled $230,244 for the three months ended March 31, 2011, a decrease of $7,115, or 3.0%, from the $237,359 for the three months ended March 31, 2010. The decrease in general and administrative expenses resulted principally from a reduction in professional fees.

Research and Development Expenses totaled $62,138 for the three months ended March 31, 2011, a decrease of $9,879, or 13.7% from the $72,017 for the three months ended March 31, 2010. This decrease resulted from the ending of the research on the Company’s new skin cream.

Depreciation totaled $10,490 for the three months ended March 31, 2011, an increase of $1,014, or 10.7%, from the $9,476 for the three months ended March 31, 2010. This increase resulted from an increase in depreciation associated with the Company’s research.

Foreign Exchange losses totaled $2,739 for the three months ended march 31, 2011. There were no foreign exchange losses for the corresponding period of the prior year. Foreign exchange losses were incurred because of the decline in value of the US Dollar against the Honduran currency.

As a result of the foregoing, the Company incurred a loss from operations of $219,761 for the three months ended March 31, 2011, a decrease of $68,514, or 23.8%, from the $287,819 for the three months ended March 31, 2010.

Interest earned totaled $571 for the three months ended March 31, 2011, an increase of $456, or 396.5%, from the $115 for the three month ended March 31, 2010. This increase is attributable to maintaining higher cash balances during the three months ended March 31, 2011.

As a result of the foregoing, the Company incurred a net loss of $219,190 for the three months ended March 31, 2011. This compares with a net loss of $287,704 for the three months ended March 31, 2010.

For the three months ended March 31, 2011, the Company had an exchange difference on translating foreign operations of $6,683. This compares with an exchange difference on translating foreign operations of $(1,860) for the three months ended March 31, 2010.

Based on the foregoing, the comprehensive loss for the three months ended March 31, 2011 totaled $212,507, or $(0.01) per share, compared to a comprehensive loss of $289,564, or $(0.01) per share for the three month ended March 31, 2010.

Liquidity and Capital Resources.

As of March 31, 2011, the Company had cash of $672,342 and working capital of $1,126,336. This compares with cash of $186,823 and working capital of $288,230 as of December 31, 2010.

Cash used in operating activities totaled $310,961 for the three months ended March 31, 2011, an increase of $66,310, or 27.1% from the $244,651 for the three months ended March 31, 2010. This increase in cash used in operations resulted from a decrease in the net loss of $68,514 which was more than offset by decreases in non-cash charges of $7,696 and net changes in working capital of $127,128.

Cash used in investing activities totaled $4,124 for the three months ended March 31, 2011, an increase of $2,442, or 145.2%, from the $1,682 for the three months ended March 31, 2010. All of the expenditures for both periods were for the acquisition of equipment and leaseholds.

Cash flows from financing activities totaled $799,374 for the three months ended March 31, 2011, an increase of $582,103, or 267.9%, from the $217,271 for the three months ended March 31, 2010. This increase resulted from an increase in proceeds from the issuance of common shares of $97,103, an increase in proceeds from the sale of preferred stock of $500,000, which was partially offset by a decrease in proceeds from the exercise of stock options of $15,000.

Cash flows were also impacted by the exchange rate changes in cash and cash equivalents. For the three months end March 31, 2011, the exchange rate changes totaled $1,230. For the corresponding period of the prior year they totaled $(295).

As a result of the foregoing, there was a net increase in cash of $485,519 for the three months ended March 31, 2011. This compares with a net decrease in cash of $(29,357) for the three months ended March 31, 2010.

Based upon its current operating activities, the Company has insufficient cash to fund its operations and execute its business plan for the next twelve months. Although the Company continues to be able to sell its shares, it will require additional funding over the course of the next year. Therefore, unless the Company is able to continue selling shares, or substantially increase its sales at reasonable margins, it will be unable to continue as a going concern.

Nerium Biotechnology, Inc.

Unaudited Condensed Interim Consolidated Financial Statements

March 31, 2011

(in U.S. dollars)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed interim consolidated financial statements of Nerium Biotechnology, Inc. for the three months ended March 31, 2011 have been prepared by the management of the Company and approved by the Company’s Audit Committee and the Company’s Board of Directors.

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.

The Company’s independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of the condensed interim consolidated financial statements.

Nerium Biotechnology, Inc.

Table of Contents

March 31, 2011

	Page
Unaudited Condensed Interim Consolidated Financial Statements
Statements of Financial Position	1
Statements of Changes in Equity	2 - 3
Statements of Operations and Comprehensive Loss	4
Statements of Cash Flows	5
Notes to Financial Statements	6 - 26

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Nerium Biotechnology, Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

(in U.S. dollars)

	March 31			December 31			January 1
	2011			2010			2010

Assets
Current assets
Cash and cash equivalents	$	672,342		$	186,823		$	380,800
Accounts receivable		3,496			2,464			7,892
Inventory (note 4)		126,520			123,030			157,118
Prepaid expenses and deposits		156,293			68,085			10,968

		958,651			380,402			556,778
Equipment and leaseholds (note 5)		246,536			251,239			188,908

	$	1,205,187		$	631,641		$	745,686

Liabilities
Current liabilities
Accounts payable and accrued liabilities (notes 8(i))	$	78,851		$	92,172		$	64,171

Equity
Share capital (note 6)		6,613,912			5,814,538			4,793,808
Shares to be issued		-			-			37,594
Reserves		1,413,027			1,406,344			752,008
Deficit		(6,890,318	)		(6,671,273	)		(4,894,501	)


Shares capital and reserves attributable to equity shareholders		1,136,621			549,609			688,909
Non-controlling interests		(10,285	)		(10,140	)		(7,394	)

		1,126,336			539,469			681,515

	$	1,205,187		$	631,641		$	745,686

Going Concern (note 1)

Commitments (note 10)

Subsequent Events (note 14)

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

These unaudited condensed interim consolidated financial statements were authorized for issue by the Board of Directors on June 27, 2011.

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Nerium Biotechnology, Inc.

~~Unaudited~~Condensed Interim Consolidated ~~Financial~~ Statements of Changes in Equity

~~September~~For 30the three month period ended March 31, ~~2010~~2011(Unaudited)

(in U.S. dollars)

(Expressed in U.S. dollars)

	Share Capital												Reserves
	Common Shares					Preference Shares				Shares to be			Equity Settled Share- based			Currency Translation			Non- Controlling
	Number		Amount			Number		Amount		issued			Payments			Adjustments			Interests			Deficit			Total

At January 1, 2010		30,369,568	$	4,793,808			-	$	-	$	37,594		$	752,008		$	-		$	(7,394	)	$	(4,894,501	)	$	681,515

Issued on private placements (note 6(b)(i))		204,465		204,465			-		-		(2,194	)		-			-			-			-			202,271

Options exercised (note 7(i))		150,000		15,000			-		-		-			-			-			-			-			15,000

Fair value of options exercised		-		11,769			-		-		-			(11,769	)		-			-			-			-

Shares to be issued (note 6(b)(iii))		-		-			-		-		12,500			-			-			-			-			12,500

Comprehensive loss for the period		-		-			-		-		-			-			(1,860	)		(475	)		(287,229	)		(289,564	)

At March 31, 2010		30,724,033	$	5,025,042			-		-	$	47,900		$	740,239		$	(1,860	)	$	(7,869	)	$	(5,181,730	)	$	621,722

Issued on private placement (note 6(b)(v))		500,000		500,000			-		-		-			-			-			-			-			500,000
Fair value of warrants (note 6(c))		-		(161,476	)		-		-		-			161,476			-			-			-			-
Shares issued in accordance with consulting agreements (note 6(b)(iii)&(iv))		60,000		60,000			-		-		(47,900	)		-			-			-			-			12,100

Issued on private placements (note 6(b)(vi))		260,648		390,972			-		-		-			-			-			-			-			390,972
Fair value of options granted (note 7 (ii))		-		-			-		-		-			508,500			-			-			-			508,500

Comprehensive loss for the period		-		-			-		-		-			-			(2,011	)		(2,271	)		(1,489,543	)		(1,493,825	)
At December 31, 2010		31,544,681	$	5,814,538			-	$	-	$	-		$	1,410,215		$	(3,871	)	$	(10,140	)	$	(6,671,273	)	$	539,469

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements of Nerium Biotechnology, Inc. (the "Company") have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

Nerium Biotechnology, Inc.

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Nerium Biotechnology, Inc.

Condensed Interim Consolidated Statements of Changes in Equity - continued

For the three month period ended March 31, 2011 (Unaudited)

(in U.S. dollars)

September 30, 2010

	Share Capital										Reserves
	Common Shares				Preference Shares				Shares to be		Equity Settled Share- based		Currency Translation			Non- Controlling
	Number		Amount		Number		Amount		issued		Payments		Adjustments			Interests			Deficit			Total

At December 31, 2010		31,544,681	$	5,814,538		-	$	-	$	-	$	1,410,215	$	(3,871	)	$	(10,140	)	$	(6,671,273	)	$	539,469

Issued on private placements (note 6(b)(viii))		199,583		299,374		-		-		-		-		-			-			-			299,374
Preference shares issued (note 6(b)(vii))		-		-		500,000		500,000		-		-		-			-			-			500,000
Comprehensive loss for the period		-		-		-		-		-		-		6,683			(145	)		(219,045	)		(212,507	)

At March 31, 2011		31,744,264	$	6,113,912		500,000	$	500,000	$	-	$	1,410,215	$	2,812		$	(10,285	)	$	(6,890,318	)	$	1,126,336

	Page
Unaudited Interim Consolidated Financial Statements
Balance Sheets	4
Statements of Changes in Shareholders' Equity	5
Statements of Operations and Comprehensive Loss	6
Statements of Cash Flows	7
Notes to Financial Statements	8

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

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Nerium Biotechnology, Inc.

Nerium Biotechnology, Inc.- Financial Statements
Interim Consolidated Balance Sheets
(Unaudited - expressed in U.S. dollars)
	September 30,			December 31,
	2010			2009
Assets
Current assets
Cash and cash equivalents	$	278,841		$	380,800
Accounts receivable		2,022			7,892
Inventory (notes 2 and 3(i))		155,582			157,118
Prepaid expenses (note 5(b)(iv))		22,148			10,968
		458,593			556,778
Equipment and leaseholds (note 4)		191,375			192,243
	$	649,968		$	749,021
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	46,341		$	64,171
Shareholders' Equity
Share capital (note 5)		5,507,566			4,793,808
Shares to be issued (notes 5(b)(i) and (iii))		-			37,594
Contributed surplus (note 6)		1,410,215			752,008
Deficit		(6,314,154	)		(4,898,560	)
		603,627			684,850
	$	649,968		$	749,021

Condensed Interim Consolidated Statements of Operations and Comprehensive Loss

~~Going~~For ~~Concern (note~~the 1three month period ended March 31(Unaudited)

(in U.S. dollars)

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

		2011			2010

Revenue
Sales	$	122,542		$	57,644
Other income		2,243			755

		124,785			58,399
Cost of sales		38,935			27,366

Gross profit		85,850			31,033

Expenses
General and administrative (notes 6(b)(iii),(iv) and 8(i))		230,244			237,359
Research and development		62,138			72,017
Depreciation		10,490			9,476
Foreign exchange loss		2,739			-

		305,611			318,852

Loss from operations		(219,761	)		(287,819	)
Interest		571			115

Net loss for the period		(219,190	)		(287,704	)
Exchange difference on translating foreign operations		6,683			(1,860	)

Comprehensive loss for the period	$	(212,507	)	$	(289,564	)

Basic and diluted loss per share (note 9)	$	(0.01	)	$	(0.01	)

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

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Nerium Biotechnology, Inc.

Nerium Biotechnology, Inc.
Interim Consolidated Statements of Changes in Shareholders' Equity for the year ended December 31, 2009 and the nine month period ended September 30, 2010 (Unaudited) (expressed in U.S. dollars)
	Shares			Share			Shares to			Contributed
	Outstanding			Capital			be issued			Surplus			Deficit
Balance, December 31, 2008		30,515,156		$	4,100,157		$	-		$	718,407		$	(3,597,377	)
Issued on private placement		545,925			545,925			-			-			-
Cancellation of certain founding shareholders' shares, net		(840,000	)		(761	)		-			761			-
Shares issued in accordance with agreements		148,487			148,487			-			-			-
Shares to be issued		-			-			37,594			-			-
Founding shareholder settlement		-			-			-			32,840			-
Net loss for the year		-			-			-			-			(1,301,183	)
Balance, December 31, 2009		30,369,568		$	4,793,808		$	37,594		$	752,008		$	(4,898,560	)
Issued on private placement (note 5(b)(i))		204,465			204,465			(2,194	)		-			-
Options exercised (note 7)		150,000			15,000			-			-			-
Fair value of options exercised		-			11,769			-			(11,769	)		-
Issued on private placement (note 5(b)(ii))		500,000			500,000			-			-			-
Fair value of warrants (note 5(c))		-			(161,476	)		-			161,476			-
Shares issued in accordance with agreements (note 5(b)(iii) and (iv))		60,000			60,000			(35,400	)		-			-
Issued on private placement (note 5(v))		56,000			84,000			-			-			-
Fair value of options granted (note 7)		-			-			-			508,500			-
Net loss for the period		-			-			-			-			(1,415,594	)
Balance, September 30, 2010		31,340,033		$	5,507,566		$	-		$	1,410,215		$	(6,314,154	)

Condensed Interim Consolidated Statements of Cash Flows

~~The~~For ~~accompanying~~the ~~notes~~three ~~are~~month anperiod ~~integral~~ended ~~part~~March ~~of these interim consolidated financial statements.~~31(Unaudited)

(in U.S. dollars)

		2011		2010

Cash flow from operating activities
Net loss for the period	$	(219,190	)	$	(287,704	)
Items not affecting cash:
Depreciation		10,490			9,476
Depreciation included in research and development		3,790			-
Shares issued in accordance with consulting agreements		-			12,500
Changes in non-cash working capital balances:
Accounts receivable		(1,032	)		5,795
Inventory		(3,490	)		(21,875	)
Prepaid expenses		(88,208	)		560
Accounts payable and accrued liabilities		(13,321	)		36,597
		(310,961	)		(244,651	)


Cash flow from investing activities
Purchase of equipment and leaseholds		(4,124	)		(1,682	)


Cash flow from financing activities
Issuance of common shares		299,374			202,271
Issuance of preference shares		500,000			-
Proceeds from options exercised		-			15,000

		799,374			217,271


Effect of exchange rate changes on cash and cash equivalents		1,230			(295	)
Increase (decrease) in cash and cash equivalents		485,519			(29,357	)
Cash and cash equivalents, beginning of period		186,823			380,800

Cash and cash equivalents, end of period	$	672,342		$	351,443

Included in cash and cash equivalents is:
Cash	$	137,467		$	109,105
Money market instruments		534,875			242,338

	$	672,342		$	351,443

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

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Nerium Biotechnology, Inc.
Interim Consolidated Statements of Operations and Comprehensive Loss
for the three and nine month periods ended September 30 (Unaudited)
(expressed in U.S. dollars)
	Three months ended September 30						Nine months ended September 30
	2010			2009			2010			2009
Revenue
Sales	$	93,103		$	93,937		$	221,550		$	296,771
Medical services		208			-			1,168			-
		93,311			93,937			222,718			296,771
Cost of sales (note 3)		49,344			34,328			89,502			106,915
Gross profit		43,967			59,609			133,216			189,856
Expenses
General and administrative (notes 3, 5(b)(iii))		242,174			244,455			698,127			697,912
Stock-based compensation (note 7)		508,500			-			508,500			-
Research and development		84,025			215,653			313,638			397,816
Loss on foreign exchange		273			409			811			781
Amortization		9,386			10,777			28,043			30,634
		844,358			471,294			1,549,119			1,127,143
Loss from operations		(800,391	)		(411,685	)		(1,415,903	)		(937,287	)
Interest and other income		30			490			309			1,725
Net loss and comprehensive loss for the period	$	(800,361	)	$	(411,195	)	$	(1,415,594	)	$	(935,562	)
Basic and diluted loss per share (note 8)	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.03	)

Nerium Biotechnology, Inc.

~~The~~Notes ~~accompanying~~to ~~notes~~Condensed ~~are~~Interim anConsolidated ~~integral~~Financial ~~part of these interim consolidated financial statements.~~Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

1. Nature of Operations and Going Concern

Nerium Biotechnology, Inc. (the "Company") was incorporated in Canada on June 1, 2006. Effective December 31, 2006, the Company entered into a Share Exchange Agreement (the "Share Agreement") with Phoenix Biotechnology Inc. ("Phoenix US"), whereby the Company acquired a 100% ownership in Phoenix Biotech Ltd. ("Phoenix BVI"), which was incorporated in the British Virgin Islands on June 23, 2006, in exchange for the issuance of 22,610,045 common shares of the Company to Phoenix US shareholders.

Phoenix BVI holds a majority ownership in four Latin American subsidiaries (collectively, "the Latin American Subsidiaries") as follows: 100% ownership of Drogueria Salud Integral S. de R.L. ("DSI"), 99.94% ownership of Salud Integral S.A. de C.V. ("SI"), 99.99% ownership of Farmacia Salud Integral, S. de R.L. ("FSI"), and 91% ownership of Salud Integral de El Salvador LTDA. de. C.V. ("SIES"). The Company also held a 96.26% ownership in Drogueria Commercial Suprema S. de R.L. ("DCS") which was dissolved in 2009.

Prior to the Share Agreement, Phoenix BVI and the Latin American Subsidiaries were majority owned by Phoenix US. Phoenix US and the Company are ultimately controlled by the same shareholders.

The Latin American Subsidiaries were incorporated in Honduras and El Salvador and own the rights in these jurisdictions where they are permitted to market Anvirzel as a therapeutic agent with activity against cancer and as a non-toxic adjuvant agent when used with traditional chemotherapy and radiotherapy. Phoenix BVI is in the process of transitioning from the marketing of Anvirzel as an intramuscular injection to the development and marketing of oleander-based products which are delivered orally.

On September 29, 2010, the Company incorporated a wholly-owned subsidiary Nerium SkinCare, Inc. (“Nerium SkinCare”), a Texas corporation. To date, Nerium SkinCare has not commenced operations.

These condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. During the three months ended March 31, 2011, the Company incurred a net loss of $219,190 (2010 - $287,704). At March 31, 2011 the Company had cash and cash equivalents of $672,342 and working capital of $879,800. In order to meet future expenditures and cover administrative costs, the Company will need to raise additional financing. Although the Company has been successful in raising funds to date, there can be no assurance that adequate funding will be available in the future, or available under terms favourable to the Company. These condensed interim consolidated financial statements do not reflect any adjustments to the carrying values of assets and liabilities that would be necessary if the Company were unable to achieve profitable operations or obtain adequate financing.

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Nerium Biotechnology, Inc.
Interim Consolidated Statements of Cash Flows
for the three and nine month periods ended September 30 (Unaudited)
(expressed in U.S. dollars)
	Three months ended September 30						Nine months ended September 30
	2010			2009			2010			2009
Cash flow from operating activities
Net loss for the period	$	(800,361	)	$	(411,195	)	$	(1,415,594	)	$	(935,562	)
Items not affecting cash:
Amortization		9,386			10,777			28,043			30,634
Stock-based compensation		508,500			-			508,500			-
Common shares issued in accordance with certain agreements (note 5(b)(iii) and (iv))		-			148,487			60,000			148,487
		(282,475	)		(251,931	)		(819,051	)		(756,441	)
Changes in non-cash working capital balances:
Accounts receivable		(1,251	)		241			5,870			(1,327	)
Inventory		15,984			21,918			1,536			28,629
Prepaid expenses		1,719			11,400			(11,180	)		3,694
Accounts payable and accrued liabilities		7,017			1,902			(17,830	)		(103,727	)
		(259,006	)		(216,470	)		(840,655	)		(829,172	)
Cash flow from investing activities
Proceeds from sale of equipment		-			-			-			3,489
Purchase of equipment and leaseholds		-			-			(27,175	)		(8,267	)
		-			-			(27,175	)		(4,778	)
Cash flow from financing activities
Issuance of common shares, net of share issue costs		84,000			202,000			750,871			490,925
Proceeds from exercise of stock options		-			-			15,000			-
Shares to be issued		-			1,000			-			1,194
		84,000			203,000			765,871			492,119
Decrease in cash and cash equivalents		(175,006	)		(13,470	)		(101,959	)		(341,831	)
Cash and cash equivalents, beginning of period		453,847			571,782			380,800			900,143
Cash and cash equivalents, end of period	$	278,841		$	558,312		$	278,841		$	558,312
Included in cash and cash equivalents is:
Cash	$	92,404		$	96,731		$	92,404		$	96,731
Money market investments		186,437			461,581			186,437			461,581
	$	278,841		$	558,312		$	278,841		$	558,312

Nerium Biotechnology, Inc.

~~The~~Notes ~~accompanying~~to ~~notes~~Condensed ~~are~~Interim anConsolidated ~~integral~~Financial ~~part of these interim consolidated financial statements.~~Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

2. Basis of Presentation

The preparation of these condensed interim consolidated financial statements resulted in changes to the accounting policies as compared to the most recent annual financial statements prepared under Canadian generally accepted accounting principles (“Canadian GAAP”). The accounting policies set out below have been applied to all periods presented in these financial statements; and are based on International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretation Committee (“IFRIC”) that the Company expects to be applicable for its annual consolidated financial statements for the year ending December 31, 2011.

The interim results are not necessarily indicative of results for a full year.

Adoption of IFRS

The Company was required to adopt IFRS for interim and annual financial statements relating to fiscal years beginning on January 1, 2011. The Company’s transition date to IFRS was January 1, 2010 (the “Transition Date”). The comparative consolidated statements of financial position as at December 31, 2010; consolidated statements of changes in equity; consolidated statements of operations and comprehensive loss; and consolidated statements of cash flows for the three months ended March 31, 2010, have been restated under IFRS.

The guidance for adoption of IFRS is set out in IFRS 1, First‐Time Adoption of International Financial Reporting Standards (“IFRS 1”). IFRS 1 provides for certain mandatory exceptions and optional exemptions for first‐time adopters of IFRS.

Reconciliations between the Company’s previously reported consolidated statements of financial position and consolidated statements of loss and comprehensive loss are presented in note 15.

Statement of Compliance

These are the Company’s first IFRS condensed interim consolidated financial statements for part of the period covered by the Company’s first IFRS annual consolidated financial statements for the year ending December 31, 2011.

These condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”) using accounting principles consistent with IFRS as published by the IASB and IFRIC.

These condensed interim consolidated financial statements do not include all disclosure required by IFRS for annual consolidated financial statements and accordingly should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2010 presented under Canadian GAAP.

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

2. Basis of Presentation - continued

~~(expressed~~Statement inof ~~U.S.~~Compliance ~~dollars)~~- continued

1.As ~~Basis~~these condensed interim consolidated financial statements are the Company’s first set of ~~Presentation~~financial statements prepared under IFRS, ~~Business~~the ofdisclosures contained therein exceed the minimum requirements under IAS 34. The Company has elected to exceed the minimum requirements in order to present the Company’s accounting policies in accordance with IFRS and ~~Going~~other ~~Concern~~additional disclosures required under IFRS, which also highlight the changes from the Company’s 2010 annual consolidated financial statements prepared in accordance with Canadian GAAP. In 2012 and beyond, the Company may not provide the same amount of disclosure in the Company’s condensed interim consolidated financial statements under IFRS as the readers will be able to refer to the annual consolidated financial statements for the year ending December 31, 2011 which will be prepared in accordance with IFRS.

~~The~~Basis Company was incorporated in Canada on June 1, 2006. Effective December 31, 2006, the Company entered into a Share Exchange Agreement (the "Share Agreement") with Phoenix Biotechnology Inc. ("Phoenix US"), whereby the Company acquired a 100% ownership in Phoenix Biotech Ltd. ("Phoenix BVI"), which was incorporated in the British Virgin Islands on June 23, 2006, in exchange for the issuance of ~~22,610,045 common shares of the Company to Phoenix US shareholders.~~Measurement

~~Phoenix~~These ~~BVI~~condensed ~~holds~~interim aconsolidated ~~majority~~financial ~~ownership~~statements inhave ~~four~~been ~~Latin~~prepared ~~American~~using ~~subsidiaries (collectively,~~ the ~~"Latin~~measurement ~~American~~basis ~~Subsidiaries")~~specified asby ~~follows:~~IFRS ~~100%~~for ~~ownership~~each oftype ~~Drogueria Salud Integral S. de R.L. ("DSI"), 99.94% ownership~~ of ~~Salud Integral S.A. de C.V. ("SI")~~asset, ~~99.99%~~ ~~ownership of Farmacia Salud Integral~~liability, ~~S. de~~revenue ~~R.L. ("FSI")~~ and ~~91%~~expense ~~ownership~~as ofset ~~Salud~~out ~~Integral~~in dethe Elaccounting ~~Salvador~~policies ~~LTDA~~below. ~~de C.V. ("SIES").~~

~~Prior~~Significant toAccounting ~~the Share Agreement~~Judgements, ~~Phoenix~~Estimates ~~BVI~~ and ~~the Latin American Subsidiaries were majority owned by Phoenix US. Phoenix US and the Company are ultimately controlled by the same shareholders.~~Assumptions

AThe ~~minority~~preparation ~~interest~~of the Company’s condensed interim consolidated financial statements in ~~respect~~conformity ofwith ~~the~~IFRS ~~Latin~~requires ~~American~~management ~~Subsidiaries~~to ~~has~~make ~~not~~judgements, ~~been~~estimates ~~recorded~~and asassumptions that affect the ~~losses~~reported ~~applicable~~amounts toof ~~the~~assets ~~non-controlling~~and ~~interests~~liabilities inand disclosure of contingent assets and liabilities at the ~~Latin~~date ~~American~~of ~~Subsidiaries~~the ~~exceed~~condensed interim consolidated financial statements and the ~~non-controlling~~reported ~~interests~~amounts inof revenues and expenses during the ~~capital~~reporting period. Estimates and assumptions are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the ~~Latin~~circumstances. ~~American~~Actual ~~Subsidiaries~~results could differ from those estimates.

~~The~~Significant ~~Latin~~estimates ~~American~~include ~~Subsidiaries were incorporated in Honduras and El Salvador and own~~ the ~~rights~~valuation inof ~~these~~share-based ~~jurisdictions~~compensation where ~~they~~the ~~are~~Black-Scholes ~~permitted~~option tovaluation ~~market~~model ~~Anvirzel~~is asused, athe ~~therapeutic~~estimated ~~agent~~fair ~~with~~value ~~activity~~of ~~against~~shares ~~cancer~~issued ~~and~~in asaccordance ~~a non-toxic adjuvant agent when used~~ with ~~traditional~~certain ~~chemotherapy~~agreements ~~and radiotherapy. Phoenix BVI is~~ in ~~the~~exchange ~~process~~for ofservices, ~~transitioning~~estimating ~~from~~ the ~~marketing~~useful lives of ~~Anvirzel~~equipment asand ~~an intramuscular injection to~~ the ~~development~~valuation ~~and marketing~~ of ~~oleander-based~~future ~~products~~income ~~which~~tax ~~are delivered orally~~assets.

OnThe ~~September~~Black-Scholes ~~29,~~option ~~2010,~~valuation model used by the Company ~~incorporated~~to adetermine ~~wholly-owned~~fair ~~subsidiary~~values ~~Nerium~~was ~~SkinCare,~~developed ~~Inc~~for use in estimating the fair value of freely traded options. This model requires the input of highly subjective assumptions including future stock price volatility and expected time until exercise. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing model does not necessarily provide a ~~Texas~~reliable ~~Corporation~~single measure of the fair value of the Company's stock options granted or vested during the year.

In order to meet future expenditures and cover administrative costs, the Company will need to raise additional financing. Although the Company has been successful in raising funds to date, there can be no assurance that adequate funding will be available in the future, or available under terms favourable to the Company. These unaudited interim consolidated financial statements have been prepared on a going concern basis that assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business. These unaudited interim consolidated financial statements do not reflect any adjustments to the carrying values of assets and liabilities that would be necessary if the Company were unable to achieve profitable operations or obtain adequate financing.

The unaudited interim consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP") for interim financial statements. Accordingly, they do not contain all of the disclosures required by Canadian GAAP for annual financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the Company's audited consolidated annual financial statements for the year ended December 31, 2009, as they follow the same accounting policies and methods of their application as the consolidated annual financial statements for the year ended December 31, 2009.

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

3. Significant Accounting Policies

~~(expressed~~Cash ~~in U.S. dollars)~~equivalents

2The Company considers cash equivalents to include all highly liquid financial instruments with a maturity of 90 days or less when purchased. As ~~Inventory~~at March 31, 2011, December 31, 2010 and January 1, 2010, cash equivalents consisted of money market instruments.

	September 30,		December 31,
	2010		2009
Raw materials and consumables	$	59,022	$	80,896
Supplies		23,903		24,706
Medicine (finished goods)		72,657		51,516
	$	155,582	$	157,118

Inventory

3Inventory is valued at the lower of cost and net realizable value. The ~~Related~~cost ~~Party~~of ~~Transactions~~finished goods comprises direct materials and, ~~Balances~~where applicable, direct labour costs and ~~Commitments~~overhead costs. Cost is determined using the first-in, first-out method. Net realizable value represents the anticipated selling price less all further costs necessary to complete the sale.

~~During~~Equipment ~~the~~and ~~nine month period ended September 30, 2010, the Company entered into the following related party transactions:~~leaseholds

	September 30,		September 30,
	2010		2009
Land lease payments to Phoenix US (i)	$	-	$	39,768
Consulting services (ii)	$	25,000	$	40,000

Equipment and leasehold improvements are recorded at cost less accumulated depreciation. Depreciation is provided over the assets' estimated useful lives using the following methods and annual rates:

(i) The Company paid Phoenix US a total of $Nil (2009 - $39,768) during the nine month period ended September 30, 2010 and $Nil (2009 - $13,256) for the three month period ended September 30, 2010 for access to its leased premises to harvest raw materials. This amount was recorded in raw materials inventory.

Laboratory furniture and equipment	-	20 years	straight-line
Clinic and office furniture and equipment	-	5 years	straight-line
Computer equipment	-	5 years	straight-line
Leasehold improvements	-	5 years	straight-line
Research equipment	-	5 years	straight-line
Vehicles	-	5 years	straight-line

~~(ii)~~Impairment ~~The Company incurred consulting fees~~ of ~~$25,000 (2009~~ Non-Financial $40,000) during the nine month period ended September 30, 2010 and $5,000 (2009 - $10,000) for the three month period ended September 30, 2010 for services provided by a director of the Company. This amount is included in general and administrative expenses.Assets

InThe ~~addition,~~Company ~~during~~assesses at the ~~three~~end ~~and~~of ~~nine~~each ~~month~~reporting ~~periods~~period ~~ended~~the ~~September~~carrying ~~30,~~amounts ~~2010~~of non-financial assets to determine whether there is an indication that those assets have suffered an impairment loss. If such an indication exists, the ~~Company~~recoverable ~~entered~~amount ~~into~~of ~~related~~the ~~party~~asset ~~transactions~~is ~~with~~estimated ~~certain~~in ~~shareholders~~order into ~~accordance~~determine ~~with~~the ~~long~~extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-~~term~~generating ~~commitments~~unit asto ~~follows:~~which the assets belong.

~~(a)~~Recoverable ~~The~~amount ~~Company~~is ~~has~~the ~~entered~~greater ~~into two separate agreements with one~~ of ~~its~~fair ~~minority~~value ~~shareholders.~~less ~~The~~costs ~~first~~to ~~agreement,~~sell aand ~~production~~value ~~and~~in ~~purchasing~~use. In ~~agreement~~assessing ~~effective~~value ~~June~~in ~~2004~~use, ~~entitles~~ the ~~minority~~estimated ~~shareholder~~future tocash ~~receive~~flows ~~$3.25~~are ~~per~~discounted ~~vial of Anvirzel sold~~ to ~~third~~their ~~parties~~present invalue ~~exchange~~using ~~for~~a ~~the~~pre-tax ~~use~~discount ofrate ~~facilities~~that ~~and~~reflects ~~production~~current ~~supervision.~~market ~~The~~assessments ~~second~~for ~~agreement,~~the atime ~~consulting~~value ~~agreement~~of ~~effective~~money ~~January~~and ~~2007,~~risks ~~entitles~~specific ~~the minority shareholder~~ to ~~receive~~the $3asset.25 In ~~per~~determining ~~vial~~fair ofvalue ~~Anvirzel~~less ~~sold~~costs to ~~third~~sell, ~~parties~~recent inmarket ~~exchange~~transactions ~~for~~are ~~consulting~~taken ~~services~~into inaccount, ~~relation~~if ~~to the production of Anvirzel~~available. If ~~Both~~no ~~agreements~~such ~~remain~~transactions incan ~~effect~~be ~~for~~identified, asan ~~long~~appropriate asvaluation ~~Anvirzel~~model is ~~produced in Honduras~~used.

~~The~~If ~~Company~~the ~~paid~~recoverable ~~amounts~~amount ~~totaling~~of ~~$4,861~~an asset (~~2009~~or cash-generating ~~$7,734~~unit) ~~for~~is ~~the~~estimated ~~nine~~to ~~month~~be ~~period~~less ~~ended~~than ~~September~~its 30carrying amount, ~~2010~~the ~~and~~carrying ~~$1,665~~amount of the asset (~~2009~~or cash-generating ~~$2,617~~unit) ~~for~~is reduced to its recoverable amount. An impairment loss is recognized immediately in the ~~three~~statement ~~month~~of ~~period~~operations ~~ended~~and ~~September~~comprehensive 30loss, ~~2010~~unless tothe ~~this~~relevant ~~minority~~asset ~~shareholder~~is incarried ~~accordance~~at ~~with~~a ~~these~~revalued ~~long-term~~amount, ~~agreements. These~~in ~~amounts~~which ~~are~~case ~~included~~the inimpairment ~~cost~~loss ofis ~~sales~~treated as a revaluation decrease.

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

3. Significant Accounting Policies - continued

~~(expressed~~Impairment inof ~~U.S.~~Non-Financial ~~dollars)~~Assets - continued

3.Where ~~Related~~an ~~Party~~impairment ~~Transactions~~loss subsequently reverses, ~~Balances~~the ~~and~~carrying ~~Commitments~~amount of the asset (or cash-generating ~~continued~~unit) is increased to the revised estimate of its recoverable amount so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized.

~~(b)~~Income Prior to 2004, the Company entered into a consulting agreement with one of its minority shareholders. The agreement entitles the minority shareholder to receive $1.00 per vial of Anvirzel sold to third parties in Central America and $2.00 per vial for patients coming from countries other than Central America, to a maximum of $20,000 per month, expiring in 2018.taxes

The Company ~~paid~~uses ~~amounts~~the ~~totaling~~asset ~~$1,483~~and ~~(2009~~liability -method $2of accounting for income taxes. Under this method,~~403)~~ deferred income tax assets and liabilities are recognized for the ~~nine~~future ~~month~~income ~~period~~tax ~~ended~~consequences ~~September~~attributable ~~30,~~to ~~2010~~differences between the financial statement carrying amounts of existing assets and ~~$510~~liabilities ~~(2009~~and -their ~~$830)~~respective ~~for~~tax bases. Income tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to income in the ~~three~~years ~~month~~in ~~period~~which ~~ended~~those ~~September~~temporary ~~30,~~differences ~~2010~~are expected to ~~this~~be ~~minority~~recovered ~~shareholder~~or settled. The effect of a change in ~~accordance~~tax ~~with~~rates on income tax assets and liabilities is reflected in operations in the ~~long-term~~period ~~agreement~~in which the change occurs. ~~These~~Valuation ~~amounts~~allowances are ~~included~~established inwhen ~~cost~~it is not considered more likely than not that the value of ~~sales~~future income tax assets will be realized.

~~The~~Financing transactions with the related parties are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Amounts due to the related parties are non-interest bearing with no specified maturity date.costs

4Costs directly incurred in the course of raising equity financing are netted against the proceeds of the equity raised. Prior ~~Equipment~~to the completion of a corporate transaction, any equity financing costs incurred for which the Company has not realized proceeds are capitalized and ~~Leaseholds~~charged against the equity financing raised at the time the proceeds are received.

					September 30, 2010
			Accumulated		Net Book
	Cost		Amortization		Value
Laboratory furniture and equipment	$	295,644	$	149,657	$	145,987
Vehicles		32,439		32,426		13
Clinic and office furniture and equipment		196,053		175,391		20,662
Computer equipment		48,228		23,515		24,713
Leasehold improvements		122,480		122,480		-
	$	694,844	$	503,469	$	191,375

Revenue recognition

	December 31,
					2009
	Cost		Accumulated Amortization		Net Book Value
Laboratory furniture and equipment	$	268,469	$	130,371	$	138,098
Vehicles		32,439		32,398		41
Clinic and office furniture and equipment		196,053		167,562		28,491
Computer equipment		48,228		22,739		25,489
Leasehold improvements		122,480		122,356		124
	$	667,669	$	475,426	$	192,243

Revenue from sales of Anvirzel is recognized when the product is shipped to or picked up by the customer or patient, all risks and rewards have been transferred to the customer or patient, and when collection of the related receivable is reasonably assured.

Foreign exchange

The Company has adopted the U.S. dollar, its functional currency, as its presentation currency. A majority of the Company's operations are conducted by its Latin American Subsidiaries in the Honduran Lempira, which is the Latin American Subsidiaries' functional currency; with the exception of SIES which uses the U.S. dollar as its functional currency. The Company translates the remaining Latin American Subsidiaries’ assets and liabilities into U.S. dollars using exchange rates prevailing at the end of the reporting period. Revenues and expenses are translated into U.S. dollars at the average exchange rate for the period; otherwise, if it is appropriate the rate at the transaction date is used. Exchange differences are recognised in other comprehensive income and accumulated in a separate component of equity.

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

3. Significant Accounting Policies - continued

~~(expressed~~Research inand ~~U.S.~~development ~~dollars)~~costs

5Research and development costs are expensed as incurred, except that development costs meeting specified criteria under IFRS are deferred and amortized over the estimated useful life of the associated product once commercialization is complete. The ~~Share~~Company ~~Capital~~has not deferred any such development costs to date.

Loss per share

Basic loss per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed using the treasury stock method. Stock options and warrants outstanding are not included in the computation of diluted loss per share if their inclusion would be anti-dilutive.

Share-based compensation

The Company follows the fair value method of accounting for the stock option awards granted to employees, directors, officers and consultants. Stock options issued to consultants are accounted for based on the fair value of the services rendered. If this cannot be reliably measured the stock options are valued using the fair-value-based method over the period of services provided. The fair value of stock options is determined by the Black-Scholes Option Pricing Model with assumptions for risk-free interest rates, dividend yields, volatility of expected market prices and an expected life of the options. The number of stock option awards expected to vest are estimated using a forfeiture rate based on historical experience and future expectations. Share-based compensation is amortized to earnings over the vesting period of the related option. Any consideration received from the participants upon exercise of stock options is credited to share capital.

The Company uses graded or accelerated depreciation which specifies that each vesting tranche must be accounted for as a separate arrangement with a unique fair value measurement. Each vesting tranche is subsequently amortized separately from the grant date.

Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measurement of the fair value of the Company’s stock options.

Table of Contents

Nerium Biotechnology, Inc.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

3. Significant Accounting Policies - continued

Financial instruments

The Company classifies all financial instruments into one of the following four categories: fair value through profit or loss (“FVTPL”), held-to-maturity, loans and receivables and available-for-sale financial assets or other financial liabilities. All financial instruments are initially included on the statement of financial position at fair value and are subsequently measured at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities which are subsequently measured at amortized cost. FVTPL financial instruments are subsequently measured at fair value and all gains and losses are included in net loss in the year which they arise. Available-for-sale financial instruments are subsequently measured at fair value with unrealized gains and losses included in other comprehensive income (loss) until the instrument is derecognized or impaired.

The Company has classified its cash and cash equivalents as FVTPL, accounts receivable as loans and receivables, and accounts payable and accrued liabilities as other financial liabilities.

IFRS 7 requires the disclosure of a three-level hierarchy that reflects the significance of the inputs used in making fair value measurements for financial instruments. The three levels of fair value hierarchy are:

• Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2

Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and

• Level 3

Inputs for assets or liabilities that are not based on observable market data.

The Company estimates that the fair values of its financial instruments approximate the carrying values at March 31, 2011. Cash and cash equivalents are measured at fair value and are classified within Level 1 of the fair value hierarchy.

Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognized in the statement of operations on a straight-line basis over the term of the lease.

Changes in Accounting Standards

Certain new accounting standards, amendments to standards and interpretations have been issued but are not yet effective. The Company has not early adopted any of these standards and is evaluating the impact, if any, that these standards might have on the results and financial position of the Company.

Table of Contents

Nerium Biotechnology, Inc.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

3. Significant Accounting Policies - continued

Accounting Standards Issued and Effective January 1, 2013

IFRS 9, Financial Instruments, replaces the current standard IAS 39, Financial Instruments: Recognition and Measurement, replacing the current classification and measurement criteria for financial assets and liabilities with only two classification categories: amortized cost and fair value.

IFRS 10, Consolidated Financial Statements, establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

IFRS 11, Joint Arrangements, establishes the core principle that a party to a joint arrangement determines the type of joint arrangement in which it is involved by assessing its rights and obligations and accounts for those rights and obligations in accordance with that type of joint arrangement.

IFRS 12, Disclosure of Involvement with Other Entities, requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows.

IFRS 13, Fair Value Measurement, defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements.

IAS 27, Separate Financial Statements, has the objective of setting standards to be applied in accounting for investments in subsidiaries, joint ventures, and associates when an entity elects, or is required by local regulations, to present separate (non‐consolidated) financial statements.

IAS 28, Investments in Associates and Joint Ventures, prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee (associate or joint venture).

4. Inventory

	March 31 2011		December 31 2010		January 1 2010


Raw materials and consumables	$	63,765	$	71,107	$	80,896
Supplies		15,629		20,053		24,706
Medicine (finished goods)		47,126		31,871		51,516

	$	126,520	$	123,030	$	157,118

Table of Contents

Nerium Biotechnology, Inc.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

5. Equipment and Leaseholds

	Laboratory Furniture and Equipment			Clinic and Office Furniture and Equipment			Computer equipment			Leasehold Improvements			Research Equipment		Vehicles			Total

Cost
At January 1, 2010	$	253,622		$	187,121		$	45,503		$	115,560		$	-	$	30,607		$	632,413

Additions		26,574			-			-			-			-		-			26,574.00

Disposals		-			-			-			-			-		-			-

Foreign exchange movement		-			-			-			-			-		-			-

At March 31, 2010	$	280,196		$	187,121		$	45,503		$	115,560		$	-	$	30,607		$	658,987

Additions		3166			-			253			-			75,800		-			79,219

Disposals		-			-			-			-			-		-			-

Foreign exchange movement		1,793			963			295			746			-		199			3,996

At December 31, 2010	$	285,155		$	188,084		$	46,051		$	116,306		$	75,800	$	30,806		$	742,202

Additions		3,022			-			1,102			-			-		-			4,124

Disposals		-			-			-			-			-		-			-

Foreign exchange movement		(7	)		(4	)		-	(1)		(3	)		-		(2	)		(17	)

At March 31, 2011	$	288,170		$	188,080		$	47,152		$	116,303		$	75,800	$	30,804		$	746,309

Accumulated Depreciation

At January 1, 2010	$	121,481		$	156,822		$	21,164		$	113,883		$	-	$	30,155		$	443,505

Depreciation		5,638			3,390			258			124			-		21			9,431

Disposals		-			-			-			-			-		-			-

Foreign exchange movement		448			523			77			409			-		108			1,565

At March 31, 2010	$	127,567		$	160,735		$	21,499		$	114,416		$	-	$	30,284		$	454,501

Depreciation		25,858			6,183			791			-			2,527		20			35,379

Disposals		-			-			-			-			-		-			-

Foreign exchange movement		352			342			52			267			-		70			1,083

At December 31, 2010	$	153,777		$	167,260		$	22,342		$	114,683		$	2,527	$	30,374		$	490,963

Depreciation		7,290			2,918			282			-			3,790		-			14,280

Disposals		-			-			-			-			-		-			-

Foreign exchange movement		(1,829	)		- (1,708	)		- (261	)		(1,322	)		-		- (350	)		- (5,470	)

At March 31, 2011	$	159,238		$	168,470		$	22,363		$	113,361		$	6,317	$	30,024		$	499,773

Net Book Value

At January 1, 2010	$	132,141		$	30,299		$	24,339		$	1,677		$	-	$	452		$	188,908

At March 31, 2010	$	152,629		$	26,386		$	24,004		$	1,144		$	-	$	323		$	204,486

At December 31, 2010	$	131,378		$	20,824		$	23,709		$	1,623		$	73,273	$	432		$	251,239

At March 31, 2011	$	128,932		$	19,610		$	24,789		$	2,942		$	69,483	$	780		$	246,536

Table of Contents

Nerium Biotechnology, Inc.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

6. Share Capital

(a)

Authorized

Unlimited

Common shares

Unlimited

Preference shares, non-voting, issuable in series

(b)

Issued

	Shares		Amount
Common shares	Shares			Amount
As at December 31, 2009		30,369,568	$	4,793,808
As at January 1, 2010 (ii)		30,369,568	$	4,793,808
Private placement (i)		204,465		204,465
Private placements (i)		204,465		204,465
Stock options exercised (note 7)		150,000		15,000
Stock options exercised (note 7(i))		150,000		15,000
Fair value of stock options exercised		-		11,769
Fair value of options exercised		-		11,769
Private placement (ii)		500,000		500,000
Private placement (v)		500,000		500,000
Fair value of warrants (note 5(c))		-		(161,476	)
Fair value of warrants (note 6 (c))		-		(161,476	)
Shares issued in accordance with agreement (iii)		50,000		50,000
Shares issued in accordance with consulting agreements (iii) (iv)		60,000		60,000
Shares issued in accordance with agreement (iv)		10,000		10,000
Private placement (vi)		260,648		390,972
Private placement (v)		56,000		84,000
As at December 31, 2010		31,544,681		5,814,538
As at September 30, 2010		31,340,033	$	5,507,566
Private placement (viii)		199,583		299,374
As at March 31, 2011		31,744,264	$	6,113,912
Preference Shares	Shares			Amount
As at January 1, 2010 and 2011		-	$	-
Issuance of preference shares (vii)		500,000		500,000
As at March 31, 2011		500,000	$	500,000

(i) In December 2007, the Company's Board of Directors approved a private placement of up to 2,000,000 common shares of the Company at a subscription price of $1.00 per common share. The private placement was amended in March 2010 to 2,075,500 common shares under the same terms and conditions in order to accommodate an oversubscription of 75,500 common shares. During the nine month period ended September 30, 2010, the Company issued 204,465 shares for gross proceeds of $204,465 of which $2,194 was received in advance and included in shares to be issued as at December 31, 2009.

~~(ii)~~During Inthe ~~April~~year ~~2010~~ended December 31, 2008, the Company's ~~Board~~issued of1,325,110 ~~Directors~~shares ~~approved~~for agross ~~non-brokered~~proceeds ~~private~~of ~~placement~~$1,325,110. Share ofissue ~~units~~costs of ~~the~~$20,000 ~~Company~~were atincurred arelating ~~subscription~~to ~~price~~the ofprivate $1placement.~~00 per unit.~~ During the ~~nine~~year ~~month period~~ ended ~~September~~December 3031, ~~2010~~2009, the Company issued ~~500~~545,~~000~~925 ~~units~~shares for gross proceeds of $~~500~~545,~~000~~925. ~~Each~~The ~~unit~~private ~~consisted~~placement ofwas ~~one~~amended ~~common~~in ~~share~~March ~~and~~2010 ~~one~~to 2,075,500 common ~~share~~shares ~~purchase~~under ~~warrant.~~the ~~One~~same ~~warrant~~terms ~~entitles~~and ~~the~~conditions ~~holder~~in order to ~~purchase~~accommodate ~~one~~an ~~additional~~oversubscription of 75,500 common ~~share~~shares. During ofthe three month period ended March 31, 2010 and year ended December 31, 2010, the Company atissued a204,465 ~~price~~shares for gross proceeds of $~~1.25~~204,465, ~~per~~of ~~share~~which ~~expiring~~$2,194 ~~May~~was 5received in advance and included in shares to be issued as at December 31, ~~2011~~2009.

(~~iii~~ii) ~~During~~In ~~2009~~November 2008, in connection with the Company's ~~received~~anticipated ~~consulting~~filing ~~services~~of ina ~~exchange~~final ~~for~~non 35offering prospectus,~~400~~ ~~shares~~the to22,610,045 beshares issued ~~subsequent~~pursuant to ~~year-end,~~the ~~with~~Share anAgreement ~~estimated~~(see ~~fair~~note ~~value~~1) ofwere ~~$35,400.~~agreed ~~The Company continued~~ to ~~receive~~be ~~consulting~~deposited ~~services~~into upescrow to ~~the~~be ~~end~~released ofover ~~the~~a ~~consulting~~range ~~term in April 2010. Upon completion~~ of ~~the~~up ~~consulting~~to ~~term~~36 ~~the~~months ~~Company issued 50,000 common shares for the consulting services rendered. These amounts are included~~ in ~~general~~6 ~~and~~month ~~administrative~~tranches ~~expenses~~from ~~for~~ the ~~nine~~date ~~month~~of ~~period~~an ~~ended~~initial ~~September~~public ~~30, 2010~~offering.

(iv) In May 2010, the Company issued 10,000 common shares in accordance with a consulting agreement. This transaction was recorded at the fair value of the common shares of $10,000 resulting in an increase to share capital and a corresponding increase to prepaid expenses for the nine month period ended September 30, 2010.15

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

6. Share Capital - continued

(expressed in U.S. dollars)

5. Share Capital - continued

(b)

Issued - continued

(viii) InDuring ~~April 2010~~2009, the Company's ~~Board~~received ofconsulting ~~Directors~~services ~~approved~~in aexchange ~~non-brokered~~for ~~private~~35,400 ~~placement~~shares ofto ~~common~~be ~~shares~~issued subsequent to year end, with an estimated fair value of $35,400. During the three month period ended March 31, 2010 the Company continued to receive consulting services in exchange for an additional 12,500 shares to be issued at a ~~subscription~~later ~~price~~date, with an estimated value of $112,500.50 ~~per~~This ~~share.~~amount ~~During~~in included in general and administrative expenses for the ~~nine~~three month period ended ~~September~~March 3031, 2010. The amount of shares to be issued as at March 31, 2010 was 47,900 with a total estimated value of $47,900. The Company continued to receive consulting services up to the end of the consulting term in April 2010, with an estimated fair value of $2,100. Upon completion of the consulting term the Company issued 5650,000 common shares for ~~gross~~the ~~proceeds~~consulting ofservices ~~$84,000~~rendered.

(civ) ~~Warrants~~In May 2010, the Company issued 10,000 common shares in accordance with a consulting agreement. This transaction was recorded at the fair value of the common shares of $10,000 resulting in an increase to share capital and a corresponding increase to general and administrative expenses for the year end December 31, 2010.

A(v) ~~summary~~In ofApril 2010, the Company'’s Board of Directors approved a non-brokered private placement of units of the Company at a subscription price of $1.00 per unit. During the year ended December 31, 2010, the Company issued 500,000 units for gross proceeds of $500,000. Each unit consisted of one common share and one common share purchase warrant. ~~activity~~One iswarrant asentitles ~~follows:~~the holder to purchase one additional common share of the Company at a price of $1.25 per share expiring May 5, 2011 (see note 14(c)).

	Number of Warrants				Exercise Price
	2010		2009		2010		2009
Outstanding, beginning of period		-		-	$	-	$	-
Issued (note 5(b)(ii))		500,000		-		1.25		-
Outstanding, end of period		500,000		-	$	1.25	$	-

(vi)

In September 2010, the Company completed its first closing in connection with a Board of Directors approved non-brokered private placement of common shares of the Company at a subscription price of $1.50 per share. During the year ended December 31, 2010, the Company issued 260,648 common shares for gross proceeds of $390,972 in connection with this private placement.

~~The~~(vii) ~~fair~~On ~~value~~March of9, 2011, the Company completed a non-brokered private placement to issue 500,000 ~~warrants~~Series ~~issued~~“A” inConvertible ~~May~~Preference ~~2010~~Shares, isat a subscription price of $~~161,476~~1. ~~The~~00 ~~fair~~per ~~value~~share for a total of ~~the~~$500,000. ~~warrants~~The ~~was~~Convertible ~~estimated~~Preference ~~using~~Shares ~~the~~are ~~Black~~non-~~Scholes~~voting, ~~pricing~~non-redeemable, ~~model~~non-retractable ~~based~~and onare ~~the~~not ~~following~~entitled ~~assumptions:~~to ~~risk-free~~receive ~~interest~~dividends. ofEach ~~1.89%;~~Series ~~volatility~~“A” ofConvertible ~~143%;~~Preference ~~expected~~Share ~~dividend~~may, ~~yield~~at the option of 0%the ~~and~~holder, ~~expected~~be ~~life~~converted ofinto one ~~year~~common share. The ~~warrants~~expiry ~~expire~~date onof ~~May~~the 5conversion is December 31, ~~2011~~2012 (see note 14(a)).

6(viii) On March 29, 2011, the Company completed the second closing of its non-brokered private placement by issuing 199,583 common shares at $1.50 ~~Contributed~~per ~~Surplus~~share for gross proceeds of $299,375.

	September 30,
	2010
Balance, beginning of period	$	752,008
Fair value of stock options exercised		(11,769	)
Stock-based compensation (note 7(i))		508,500
Fair value of warrants (note 5(b)(ii))		161,476
Balance, end of period	$	1,410,215

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

6. Share Capital - continued

(~~expressed in U.S. dollars~~c) Warrants

A summary of the Company’s warrant activity is as follows:

	March 31 2010				December 31 2010				January 1 2010
	Number of		Exercise		Number of		Exercise		Number of		Exercise
	Warrants		Price		Warrants		Price		Warrants		Price

Outstanding, beginning		500,000	$	1.25		-	$	-		-	$	-
Issued (note 6(b)(v))		-		-		500,000		1.25		-		-

Outstanding, ending		500,000	$	1.25		500,000	$	1.25		-	$	-

The fair value of the 500,000 warrants issued in May 2010 was $161,476. The fair value of the warrants was estimated using the Black-Scholes pricing model based on the following assumptions: risk-free interest of 1.89%, volatility of 143%; expected dividend yield of 0% and expected life of one year. The warrants expired on May 5, 2011 (see note 14(c)).

7. Stock-Based Compensation

The Company has reserved and set aside up to 6,256,000 common shares for the granting of options to directors, officers, employees and consultants. The terms of the awards under the Plan are determined by the Board of Directors.

A summary of the status of the Company's outstanding stock options as of ~~September~~March 3031, ~~2010~~2011 and ~~2009~~December 31, 2010, and changes during the ~~nine month~~ periods ~~ending on those dates~~ is presented in the following table.

				2010					2009
	2011					2010
				Weighted-average					Weighted-average
				Weighted-					Weighted-
	Stock options			exercise price		Stock options			exercise price
				average					average
		#		CDN$			#		CDN$
	Stock			exercise		Stock			exercise
Outstanding, beginning		3,030,000		$	0.32		3,030,000		$	0.32
	options			price		options			price
Granted (i)		450,000			1.22		-			-
Outstanding, beginning		3,180,000		$	0.47		3,030,000		$	0.32
Exercised		(150,000	)		0.10		-			-
Exercised (i)		-			-		(150,000	)		0.10
Expired		(150,000	)		0.10		-			-
Granted (ii)		-			-		450,000			1.22
Outstanding, ending		3,180,000		$	0.47		3,030,000		$	0.32
Expired		-			-		(150,000	)		0.10
Outstanding, ending		3,180,000		$	0.47		3,180,000		$	0.47

~~The weighted-average remaining contractual life and weighted-average exercise price of options outstanding and of options exercisable as at September 30, 2010 are as follows:~~17

	Options Outstanding						Options Exercisable
					Weighted-
			Weighted-		Average				Weighted-
			Average		Remaining				Average
Exercise			Exercise		Contractual				Exercise
Prices	Outstanding		Price		Life		Exercisable		Price
CDN$		#	CDN$		Years			#	CDN$
$0.10		1,620,000	$	0.10		1.30		1,620,000	$	0.10
$0.50		800,000	$	0.50		1.78		800,000	$	0.50
$1.22		310,000	$	1.22		2.79		310,000	$	1.22
$1.22		450,000	$	1.22		4.91		450,000	$	1.22
		3,180,000	$	0.47		2.07		3,180,000	$	0.47

(i) The fair value of 450,000 stock options granted to certain directors on August 26, 2010, which vested immediately, was determined to be $508,500 at $1.13 per option, using the Black Scholes model for pricing options. This amount was recorded as an increase to stock-based compensation expense and an increase to contributed surplus. The following assumptions were used: risk free interest rate of return of 2.06%, expected volatility of 156%, dividend yield of 0% and expected life of 5 years.

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Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

7. Stock-Based Compensation - continued

~~(expressed~~The inweighted-average ~~U.S.~~remaining ~~dollars)~~contractual life and weighted-average exercise price of options outstanding and of options exercisable as at March 31, 2011 are as follows:

8. Loss Per Share

Options Outstanding

Options Exercisable

Exercise Prices

Outstanding

Weighted- Average Exercise Price

Weighted- Average Remaining Contractual Life

Exercisable

Weighted- Average Exercise Price

Years

CDN$0.10

1,620,000

CDN$0.10

0.80

1,620,000

CDN$0.10

CDN$0.50

800,000

CDN$0.50

1.28

800,000

CDN$0.50

CDN$1.22

310,000

CDN$1.22

2.29

310,000

CDN$1.22

US$1.22

450,000

US$1.22

4.41

450,000

U$S1.22

3,180,000

CDN$0.47

1.58

3,180,000

CDN$0.47

	Three months ended September 30						Nine months ended September 30
	2010			2009			2010			2009
Numerator:
Net loss attributable to common shareholders - basic and diluted	$	(800,361	)	$	(411,195	)	$	(1,415,594	)	$	(935,562	)
Denominator:
Weighted-average common shares outstanding - basic and diluted		31,288,903			29,821,566			30,970,930			29,988,312
Basic and diluted loss per common share	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.03	)

(i)

1,950,000 stock options with an exercise price of CDN$0.10 were granted to various directors, employees and consultants on January 17, 2007, which vested immediately. The fair value was determined to be $153,000 at $0.08 per option, using the Black-Scholes model for pricing options. This amount was recorded as stock-based compensation expense and an increase to reserves. The following assumptions were used: risk free interest rate of return of 4.3%, expected stock volatility of 105%, dividend yield of 0% and expected life of 5 years. 150,000 of these options were exercised in 2010.

As(ii) a450,000 ~~result~~stock ofoptions ~~the~~granted ~~net~~to ~~losses~~certain ~~for~~directors ~~the~~on ~~three~~August ~~and~~26, ~~nine~~2010 ~~month~~with ~~periods~~an ~~ended~~exercise ~~September~~price 30of US$1.22, ~~2010~~which ~~and~~vested ~~2009~~immediately. The fair value was determined to be $508,500 ~~the~~at ~~potential~~$1.13 ~~effect~~per ofoption, using the ~~exercise~~Black-Scholes ofmodel ~~stock~~for pricing options. This amount was ~~anti-dilutive. Therefore,~~recorded ~~3,180,000~~as ~~(September~~an ~~30,~~increase ~~2009~~to stock-based ~~3,030,000)~~compensation ~~options~~expense and an increase to reserves. The following assumptions were ~~excluded~~used: ~~from~~risk ~~the~~free ~~computation~~interest rate of ~~weighted-average~~return ~~number~~of 2.06%, expected volatility of ~~diluted~~156%, ~~common~~dividend ~~shares~~yield ~~outstanding~~of ~~because~~0% ~~their~~and ~~impact~~expected ~~would~~life beof ~~anti-dilutive~~5 years.

9.(iii) ~~Commitments~~There were no stock options granted during the three month period ended March 31, 2011.

~~At September 30, 2010, the Company was committed to operating lease payments for its various premises in the following amounts:~~18

2010	$	35,447
2011		89,874
2012		72,000
2013		48,000
	$	245,321

Table of Contents

Nerium Biotechnology, Inc.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

8. Related Party Transactions and Balances

During the three month period ended March 31, 2011, the Company entered into the following related party transactions:

	March 31		March 31
	2011		2010


Consulting services (i)	$	15,000	$	15,000

(i)

The Company incurred consulting fees of $15,000 (2010 - $15,000) during the three month period for services provided by a director of the Company. This amount is included in general and administrative expenses. As at March 31, 2011, the amount of $Nil (2010 - $5,000) is included in accounts payable and accrued liabilities in relation to these services.

The transactions with the related parties are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Amounts due to the related parties are non-interest bearing with no specified maturity date.

For the three months ended March 31, 2011, the Company paid salaries and employee benefits to key management personnel totaling $56,228 (2010 - $54,065).

9. Loss Per Share

The following table sets forth the computation of basic and diluted loss per share for the three month period ended March 31, 2011 and 2010:

	2011			2010

Numerator:
Net loss attributable to common shareholders - basic and diluted	$	(219,190	)	$	(287,704	)
Denominator:
Weighted-average common shares outstanding - basic and diluted		31,551,334			30,547,088

Basic loss per common share	$	(0.01	)	$	(0.01	)

Diluted loss per common share	$	(0.01	)	$	(0.01	)

As a result of the net losses for the periods ended March 31, 2011 and 2010, the potential effect of the exercise of stock options and warrants were anti-dilutive. Therefore, the options and warrants were excluded from the computation of weighted average number of diluted common shares outstanding.

Table of Contents

Nerium Biotechnology, Inc.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2011 (Unaudited)

(in U.S. dollars)

10. Commitments

Operating leases

At March 31, 2011, the Company was committed to operating lease payments for its various premises in the following amounts:

2011	$	58,465
2012		35,345
2013		33,928
2014		8,544

	$	136,282

In addition, the Company is commited to the following:

(a)

The Company has entered into two separate agreements with one individual. The first agreement, a production and purchasing agreement effective June 2004, entitles the individual to receive $3.25 per vial of Anvirzel sold to third parties in exchange for the use of facilities and production supervision. The second agreement, a consulting agreement effective January 2007, entitles the individual to receive an additional $3.25 per vial of Anvirzel sold to third parties in exchange for consulting services in relation to the production of Anvirzel. Both agreements remain in effect for as long as Anvirzel is produced in Honduras.

(b)

Prior to 2004, the Company entered into a consulting agreement which entitles the consultant to receive $1.00 per vial of Anvirzel sold to third parties in Central America and $2.00 per vial for patients coming from countries other than Central America, to a maximum of $20,000 per month, expiring in 2018.

(c)

At March 31, 2011, the Company was committed to farm lease payments in the following amounts:

2011	$	55,620
2012		76,385
2013		78,676
2014		81,037
2015		83,468

	$	375,186

Research and Development

As at ~~September~~March 3031, ~~2010~~2011, the Company was committed to outsource certain research and development activities to third parties. ~~Payments~~Estimated payments for future expenditures in accordance with the terms of certain agreements, iswhich ~~estimated~~are todue beupon delivery of research data, are approximately $4531,~~000~~452.

1420

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

11. Financial Instruments

~~(expressed~~Fair ~~in U.S. dollars)~~value

10The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities. The ~~Financial~~carrying ~~Instruments~~value of the financial instruments approximates their fair value because of the short-term maturities of these items.

The Company's ~~financial~~risk ~~instruments~~exposure ~~include cash~~ and ~~cash~~the ~~equivalents,~~impact ~~accounts~~on ~~receivable,~~its ~~accounts payable and accrued liabilities. The carrying value of the~~ financial instruments ~~approximates~~are ~~their~~summarized ~~fair value because of the short-term maturities of these items.~~below:

The Company's risk exposure and the impact on its financial instruments is summarized below:

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its contractual obligations. The Company is exposed to credit risk on its cash and cash equivalents and accounts receivable.

The Company has deposited the cash and cash equivalents with reputable financial institutions, from which management believes the risk of loss is minimal. The Company's cash and cash equivalents are not subject to any external restrictions.

Management believes that credit risk concentration with respect to the financial instruments included in accounts receivable is ~~remote~~not significant.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company does not have any debt other than accounts payable and accrued liabilities. The Company also has commitments discussed in Note 10.

Since inception, the Company has financed its liquidity needs through private placements of common shares. To secure additional capital, the Company will attempt to raise additional funds through the issuance of common shares or similar equity instruments.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.

The Company is exposed to interest rate risk arising from fluctuations in interest rates received on its cash and cash equivalents. Fluctuations in market interest rates do not have a significant impact on the Company's results of operations due to the short-term nature of interest bearing cash and cash equivalents.

Accounts payable and accrued liabilities bear no interest.

~~Currency risk~~21

The Company is exposed to currency fluctuations as a significant amount of its accounts payable and accrued liabilities are denominated in Canadian dollars and Honduran Lempira. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.

As at September 30, 2010, a change in the Canadian dollar of +/- 10% against the U.S. dollar with all other variables held constant, would have an impact on net loss for the period of $1,749.

As at September 30, 2010, a change in the Honduran Lempira of +/- 10% against the U.S. dollar with all other variables held constant, would have an impact on net loss for the period of $1,983.

Table of Contents

Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

11. Financial Instruments - continued

~~(expressed~~Currency ~~in U.S. dollars)~~risk

11The Company is exposed to currency fluctuations as a significant amount of its accounts payable and accrued liabilities are denominated in Canadian dollars and Honduran Lempira. The ~~Capital~~Company ~~Disclosure~~does not use derivative instruments to reduce its exposure to foreign currency risk.

As at March 31, 2011, a change in the Canadian dollar of +/- 10% against the U.S. dollar with all other variables held constant would have an impact on net loss for the year of $4,421.

As at March 31, 2011, a change in the Honduran Lempira of +/- 10% against the U.S. dollar with all other variables held constant would have an impact on net loss for the year of $2,449.

12. Capital Disclosure

The Company's primary objective with respect to its capital management is to ensure that it has sufficient cash resources to maintain its ongoing operations. The Company includes shareholders' equity in the definition of capital.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes to the Company's approach to capital management during the ~~nine~~three month period ended ~~September~~March 3031, ~~2010~~2011. The Company is not subject to externally imposed capital requirements.

13. Segmented Information

12. Segmented Information

The Company has one operating segment, being the production and sale of Anvirzel. The Company's sales and equipment and leaseholds by geographical area are as follows:

Sales

All Company sales originate in Honduras where Anvirzel is produced and shipments originate. ItThe isinformation ~~not practicable~~ to provide geographical information by customer location is not available and the cost to develop it would be excessive.

Equipment and leaseholds
	September 30,		December 31,
	2010		2009
United States	$	23,065	$	29,185
Honduras		168,310		163,058
	$	191,375	$	192,243

Equipment and leaseholds

13. Subsequent Event

	March 31 2011		December 31 2010		January 1 2010

United States	$	88,468	$	94,598	$	29,185
Honduras		158,068		156,941		159,723

	$	246,536	$	251,239	$	188,908

~~The Company entered into the following transaction subsequent to September 30, 2010:~~22

(a) 184,500 common shares at a subscription price of $1.50 per share were issued for gross proceeds of $276,750 in connection with a non-brokered private placement.

14. Comparative Figures

Certain amounts from prior years have been reclassified to conform to the current year's presentation.

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Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

14. Subsequent Events

(~~expressed~~a) inOn ~~U.S.~~May ~~dollars)~~5, 2011 the 500,000 Series “A” Convertible Preference Shares were converted into 500,000 common shares.

~~15.~~(b) ~~Differences~~On ~~Between~~May ~~Canadian~~5, ~~and~~2011, ~~United~~the ~~States~~Company ~~Accounting~~completed ~~Principles~~a third closing of its non-brokered private placement by issuing 29,867 common shares at $1.50 per share for gross proceeds of $44,801.

~~These~~(c) ~~unaudited~~On ~~interim~~May ~~consolidated~~5, ~~financial~~2011 ~~statements of~~ the ~~Company for the period ended September 30~~500,000 ~~2010~~warrants ~~have~~expired; ~~been~~and ~~prepared~~replacement inwarrants ~~accordance~~were ~~with~~issued ~~generally~~on ~~accepted~~May ~~accounting principles as applied in Canada ("Canadian GAAP"). In the following respects~~6, ~~generally~~2011 ~~accepted~~with ~~accounting principles as applied in~~ the ~~United~~same ~~States~~terms ~~("US~~but ~~GAAP")~~with ~~and~~an ~~practices~~expiry ~~prescribed~~date byof ~~the~~May ~~United~~5, ~~States Securities and Exchange Commission differ from those applied in Canada~~2012.

15. Transition to IFRS

~~There~~The ~~would~~Company’s beIFRS noaccounting ~~adjustments~~policies ~~needed~~presented toin ~~arrive~~note at3 ~~net~~have ~~loss~~been ~~for~~applied in preparing the ~~period~~condensed ~~ended~~interim ~~September~~consolidated ~~30,~~statements ~~2010~~of iffinancial USposition ~~GAAP~~at ~~were~~March ~~employed. Similarly~~31, ~~there~~2011, ~~would~~December be2010 noand ~~adjustments required to~~ the ~~balance~~Transition ~~sheet,~~Date; ~~other~~and ~~than~~ the ~~presentation~~statements ~~difference~~of ~~noted~~operation ~~below regarding accounts payable~~ and ~~accrued~~comprehensive ~~liabilities,~~loss ~~including~~for ~~shareholders'~~the ~~equity~~three-month asperiod atending ~~September~~March 3031, ~~2010~~2011 ifand ~~US GAAP were employed~~2010.

~~There~~The isCompany nohas ~~difference~~applied IFRS 1 in preparing these first IFRS consolidated financial statements. The effects of the transition to IFRS on equity, loss and comprehensive loss and reported cash flows are presented ~~under~~in USthis ~~GAAP~~section and are further explained in the tables presented below. There was no significant impact on the consolidated statements of cash flows as a result of adopting IFRS. There were no additional impairments identified by applying IFRS at the Transition Date.

~~Accounts~~First-time ~~payable~~Adoption and ~~accrued~~Exemptions ~~liabilities~~Applied

~~Under~~Upon ~~Canadian GAAP~~transition, ~~accounts~~IFRS ~~payable~~1 ~~and~~permits ~~accrued~~certain ~~liabilities~~exemptions ~~are~~and ~~presented~~imposes incertain ~~the~~mandatory ~~unaudited~~exceptions ~~interim~~from ~~consolidated~~full ~~financial~~retrospective ~~statements on an aggregate basis~~application. USThe ~~GAAP~~Company ~~requires~~has ~~that~~applied the ~~accounts~~mandatory ~~payable~~exceptions and ~~accrued~~elected ~~liabilities~~to beuse ~~presented~~certain inoptional ~~the~~exemptions. Mandatory ~~unaudited~~exceptions ~~interim~~adopted ~~consolidated~~by ~~financial~~the ~~statements~~Company ~~as follows~~include:

	September 30,		December 31,
	2010		2009
Trade accounts payable	$	6,575	$	9,028
Employee related accruals		13,948		3,826
Other accrued liabilities		25,818		51,317
	$	46,341	$	64,171

The Company has used estimates under IFRS that are consistent with those applied under Canadian GAAP (with adjustments for accounting policy differences) unless there is objective evidence those estimates were in error, and there were none at the Transition Date.

~~Income~~Optional ~~taxes~~exemptions elected by the Company include:

~~Under US GAAP, the Financial Accounting Standards Board~~ (~~“FASB”~~a) ~~issued~~Business interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (“FIN 48”), as codified in ASC 740, Income taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance as to derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Under Canadian GAAP, there is no such interpretation; however, there were no significant differences for the reserve related to income tax contingencies for the data presented.Combinations

InIFRS ~~addition~~1 indicates that a first-time adopter may elect not to apply IFRS 3, ~~under~~Business ~~Canadian~~Combinations ~~GAAP~~(“IFRS 3”), ~~income~~retrospectively ~~taxes~~to ~~are~~business ~~measured~~combinations ~~using~~that ~~enacted~~occurred orbefore ~~substantively~~the ~~enacted~~Transition ~~tax~~Date ~~rates,~~to ~~while~~IFRS. ~~under~~The USCompany ~~GAAP;~~takes ~~measurement~~advantage isof ~~based~~this onelection ~~enacted~~and ~~tax~~applies ~~rates~~IFRS 3 to business combinations that occurred after January 1, 2010. There ~~were~~is no ~~significant~~adjustment ~~differences~~required ~~between~~to ~~enacted~~the ~~and~~January ~~substantively~~1, ~~enacted~~2010 ~~rates~~statement ~~for~~of financial position on the ~~data~~Transition ~~presented~~Date.

17(b) Cumulative Translation Differences

In accordance with IFRS 1, the Company has opted to reset cumulative translation differences for all foreign operations to zero at the date of transition to IFRS.

(c)

Share-based payments

IFRS 2, Share-based payment, has not been applied to equity instruments that were granted prior to the Transition Date.

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Nerium Biotechnology, Inc.

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~Condensed ofInterim ~~Cash~~Consolidated ~~Flows~~Financial Statements

March 31, 2011 (Unaudited)

~~for~~(in ~~the~~U.S. ~~three and nine month periods ended September 30 (Unaudited~~dollars)

15. Transition to IFRS - continued

~~(expressed~~Adjustments required in ~~U.S.~~transitioning ~~dollars)~~from Canadian GAAP to IFRS are set out in the following statements:

~~15.~~Reconciliation ~~Differences~~of ~~Between~~consolidated ~~Canadian~~statements ~~and~~of ~~United~~financial ~~States~~position, ~~Accounting~~including ~~Principles - continued~~equity

Stock-based compensation

	As at December 31, 2010									As at March 31, 2010									As at January 1, 2010
				Effect of									Effect of									Effect of
	CDN			Transition						CDN			Transition						CDN			Transition
	GAAP			to IFRS			IFRS			GAAP			to IFRS			IFRS			GAAP			to IFRS			IFRS
Assets
Current assets

Cash and cash equivalents	$	186,823		$	-		$	186,823		$	351,443		$	-		$	351,443		$	380,800		$	-		$	380,800

Accounts receivable		2,464			-			2,464			2,097			-			2,097			7,892			-			7,892

Inventory		123,030			-			123,030			154,056			-			154,056			157,118			-			157,118

Prepaid expenses and deposits		68,085			-			68,085			10,408			-			10,408			10,968			-			10,968

		380,402			-			380,402			518,004			-			518,004			556,778			-			556,778

Equipment and leaseholds		253,226			(1,987	)		251,239			209,386			(4,900	)		204,486			192,243			(3,335	)		188,908

	$	633,628		$	(1,987	)	$	631,641		$	727,390		$	(4,900	)	$	722,490		$	749,021		$	(3,335	)	$	745,686

Liabilities

Current Liabilities

Accounts payable and accrued liabilities	$	92,172			-			92,172		$	100,768		$	-		$	100,768		$	64,171		$	-		$	64,171

Equity

Share Capital		5,814,538			-			5,814,538			5,025,042			-			5,025,042			4,793,808			-			4,793,808

Shares to be Issued		-			-			-			47,900			-			47,900			37,594			-			37,594

Reserves		1,410,215			(3,871	)		1,406,344			740,239			(1,860	)		738,379			752,008			-			752,008
Deficit		( 6,683,297	)		12,024			(6,671,273	)		( 5,186,559	)		4,829			( 5,181,730	)		( 4,898,560	)		4,059			( 4,894,501	)
Share capital and reserves attributable to equity shareholders		541,456			8,153			549,609			626,622			2,969			629,591			684,850			4,059			688,909

Non-controlling interests		-			( 10,140	)		( 10,140	)		-			(7,869	)		( 7,869	)		-			(7,394	)		( 7,394	)

		541,456			(1,987	)		539,469			626,622			(4,900	)		621,722			684,850			(3,335	)		681,515

	$	633,628		$	(1,987	)	$	631,641		$	727,390		$	(4,900	)	$	722,490		$	749,021		$	(3,335	)	$	745,686

For US GAAP purposes, the Company accounts for stock-based compensation associated with stock options as codified in ASC 718, Stock Compensation ("ASC 718"). Consistent with Canadian GAAP, ASC 718 requires that all share based payments to employees, including grants of employee stock options, be recognized based on the fair values of the options as they vest. However, in calculating compensation to be recognized, ASC 718 requires the Company to estimate forfeitures. Under Canadian GAAP the Company accounts for forfeitures as they occur. The effects of forfeitures are immaterial and no adjustments for any periods presented in these unaudited interim consolidated financial statements are required.24

Recent accounting pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the United States Securities and Exchange Commission did not or are not believed to have a material impact on the Company's present or future consolidated financial position.

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~~Management~~Nerium ~~Discussion~~Biotechnology, ~~and Analysis of Financial Condition and Results of Operations~~Inc.

~~Three~~Notes ~~months Ended September 30, 2010 compared~~ to ~~three~~Condensed ~~months~~Interim ~~Ended~~Consolidated ~~September~~Financial ~~30, 2009.~~Statements

March 31, 2011 (Unaudited)

~~Revenues~~(in ~~for the three months ended September 30, 2010 totaled $93,311, a decrease of $626 or~~ U.~~6% from the $93,937 for the corresponding period of the prior year~~S. The decrease is entirely attributable to a decrease in the price per unit sold of $75, and sometimes more, as the economic downturn continues to adversely affect patients seeking alternative cancer therapy.dollars)

~~Cost of goods sold totaled $49,344 for the three months ended September 30, 2010, an increase of $~~15~~,016, or 43~~.~~7%,~~ Transition ~~from~~to ~~the~~IFRS $34,328 for the three months ended September 30, 2009. This increase resulted from a increase in the sales of vials, but at a lower price, during the three months ended September 30, 2010. The gross profit margin was 46.5% for the three-~~months~~ ~~ended September 30, 2010, compared to 63.5% for the three month ended September 30, 2009.~~continued

~~General~~Reconciliation ~~and administrative expenses totaled $242,174 for the three month ended September 30, 2010, an increase~~ of ~~$2,281,~~Loss ~~or .9%, from the $244,455 for the corresponding period of the prior year as there were only minor changes in the various items which comprise general~~ and ~~administrative~~Comprehensive ~~expenses.~~Loss

Stock based compensation expenses totaled $508,500 for the three months ended September 30, 2010 compared to $.0 for the corresponding period of the prior year. All of the stock based compensation expenses for the three months ended September 30, 2010 resulted from the grant of 450,000 stock options to certain directors on August 26, 2010, all of which vested immediately. The fair value of these options was $508,500 or $1.13 per share using the Black-Scholes model for pricing options.

	Year ended December 31, 2010									Three months ended March 31, 2010

				Effect of									Effect of
	CDN			Transition to						CDN			Transition to
	GAAP			IFRS			IFRS			GAAP			IFRS			IFRS

Revenue

Sales	$	309,289		$	-		$	309,289		$	57,644		$	-		$	57,644

Other income		2,209			-			2,209			755			-			755

		311,498			-			311,498			58,399			-			58,399

Cost of Sales		148,756			-			148,756			27,366			-			27,366

Gross Profit		162,742			-			162,742			31,033			-			31,033

Expenses

General and administrative		999,341			-			999,341			237,359			-			237,359

Research and development		392,471			-			392,471			72,017			-			72,017

Share-based compensation		508,500			-			508,500			-			-			-

Loss on foreign exchange		5,219			(5,219	)		-			295			(295	)		-

Depreciation		42,283			-			42,283			9,476			-			9,476

		1,947,814			(5,219	)		1,942,595			319,147			(295	)		318,852

Loss from operations		(1,785,072	)		5,219			(1,779,853	)		(288,114	)		295			(287,819	)

Interest		335			-			335			115			-			115

Net loss for the period		(1,784,737	)		5,219			(1,779,518	)		(287,999	)		295			(287,704	)

Exchange difference on translating foreign operations		-			(3,871	)		(3,871	)		-			(1,860	)		(1,860	)

Comprehensive loss for the period	$	(1,784,737	)	$	1,348		$	(1,783,389	)	$	(287,999	)	$	(1,565	)	$	(289,564	)

Research and development expenses totaled $84,025 for the three-months ended September 30, 2010, a decrease of $131,625, or 61.0%, from the $215,653 for the three-months ended September 30, 2009. This decrease resulted because of a payment of $100,000 for the monkey clinical trial in 2009. Because clinical trial contracts generally require two payments, one a pre-payment and the second at the conclusion of the clinical trial in an unknown amount, prepayments are expensed as paid because it is impossible to predict either the amount due or the length of the clinical trial. However, normal research expenses are expensed as incurred. Because the Company was unable to determine the length of the clinical trial or the amount owing at its conclusion, the pre-payment for the monkey trial was expensed when paid, accounting for the bulk of the change in research and development expenses between the two periods ending September 30, 2009 and 2010, respectively.25

Losses on foreign exchange occur because of changes in the value of the Honduran currency against the U.S. dollar. Foreign currency losses for the three-months ended September 30, 2010 totaled $273, while foreign exchange losses totaled $409 for the three-months ended September 30, 2009, both amounts being insignificant as a percentage of total expenses.

Amortization for the three months ended September 30, 2010 totaled $9,386, a decrease of $1,391, or 12.9%, from the $10,777 for the three months ended September 30, 2009. This decrease resulted from fewer amortizable assets particularly leasehold improvements which are now fully amortized.

As a result of the foregoing, the Company's expenses for the three months ended September 30, 2010 totaled $844,358, an increase of $373,064, or 79.2%, from the $471,294 for the three-months ended September 30, 2009. This produced a loss from operations of $800,391 for the three months ended September 30, 2010, an increase of $388,706, or 94.4%, from the $411,685 loss from operation for the three-months ended September 30, 2009.

For the three months ended September 30, 2010 the company had interest and other income of $30, a decrease of $460, or 93.9% , from the $490 for the three-months period ended September 30, 2009. This decrease resulted from both reduced interest rates and reduced balances on which interest was paid.

Because of the foregoing, the comprehensive loss for the three-months ended September 30, 2010 totaled $800,361, or $.03 per share, an increase of $389,166, or 94.6%, from the $411,195 for the three-months ended September 30, 2009.

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~~Nine~~Nerium ~~months ended September 30~~Biotechnology, ~~2010 compared to the nine months ended September 30, 2009~~Inc.

~~Revenue~~Notes ~~for~~to ~~the~~Condensed ~~nine~~Interim ~~months~~Consolidated ~~ended~~Financial ~~September 30, 2010 totaled $222,718, a decrease of $74,053 or 24.9% from the $296,721 for the nine months ended September 30, 2009. This decrease resulted from a lower sale price per unit sold.~~Statements

March 31, 2011 (Unaudited)

~~Cost~~(in ~~of goods sold for the nine months ended September, 2010 totaled $89,502, a decrease of $17,413, or 16~~U.~~3%, from the $106,915 for the corresponding period of the prior year~~S. ~~This decrease resulted from reduced sales of unit sales.~~dollars)

~~The gross profit margin for the nine months ended September 30, 2010 was 59~~15.8 Transition %to ~~compared~~IFRS ~~with~~- ~~64.0% for the nine months ended September 30, 2009.~~continued

~~General~~ The ~~and~~following ~~administrative~~summarizes ~~expenses for~~ the ~~nine~~significant ~~months~~changes ~~ended~~to ~~September~~the ~~30,~~Company’s ~~2010~~accounting ~~totaled~~policies ~~$698,127,~~on anadoption ~~increase~~ of ~~$225, or virtually unchanged from the corresponding period of the prior year.~~IFRS:

~~Stock~~(a) ~~based~~Exchange ~~compensation~~difference for the nine months ended September 30, 2010 totaled $508,500 compared to $0 for the corresponding period of the prior year. All of the stock based compensation expense for the nine months ended September 30, 2010 resulted from the grant of 450,000 stock options to certain directors on ~~August~~translating ~~26,~~foreign ~~2010, all of which vested immediately. The fair value of these options was $508,500, or $1.13 per share, using the Black -Scholes model for pricing options.~~operations

~~Research and~~Previously, ~~development~~under ~~expenses~~Canadian ~~for~~GAAP, the ~~nine~~subsidiaries ~~months~~functional ~~ended~~currency ~~September~~was ~~30,~~considered ~~2010~~to ~~totaled~~be ~~$313,638,~~the aU.S. ~~decrease~~dollar ofresulting ~~$84,628~~in orall ~~21.3%~~foreign ~~,from~~exchange ~~the~~gains ~~$397,816~~and ~~for~~losses ~~the~~being ~~corresponding~~included ~~period~~in ofnet ~~the prior year~~income. Under ~~This~~IAS ~~decrease~~21, ~~resulted~~The ~~because~~Effects of aChanges ~~payment of $100,000 for the monkey clinical trial~~ in ~~2009.~~Foreign ~~Because~~Exchange ~~clinical trial contracts generally require two payments~~Rates, ~~one a prepayment and~~ the ~~second~~functional atcurrency ~~the conclusion~~ of the ~~clinical~~Honduran ~~trial~~Latin ~~and~~American inSubsidiaries ~~an unknown amount, prepayments are expensed when paid because it~~ is ~~impossible~~considered to ~~predict~~be ~~either~~ the ~~length~~Honduran ofLempira. Since the ~~clinical~~functional ~~trial~~currency orof the ~~amount~~subsidiaries ~~payable~~is atdifferent ~~the~~from ~~conclusion of~~ the ~~clinical~~presentation ~~trial.~~currency ~~However,~~of ~~normal research and development expenses are expensed as incurred. Because~~ the Company; ~~was~~this ~~unable~~difference toshould ~~determine~~be ~~the~~disclosed ~~length~~in ofother ~~the~~comprehensive ~~clinical~~income ~~trial,~~(loss) orand ~~the~~accumulated ~~amount~~in ~~owing~~a atcurrency ~~its~~translation ~~conclusion,~~adjustment ~~the~~reserve ~~prepayment~~in ~~was expensed when paid, accounting for~~ the ~~bulk~~statements of ~~the~~changes ~~change~~ in ~~research and development expenses between the two nine month periods ending September 30, 2009 and 2010, respectively~~equity.

~~Losses~~(b) ~~on foreign exchange occur because of changes in the value of the Honduran currency against the U.S. dollar. Foreign currency losses for the nine~~Non-~~months~~controlling ~~ended September 30, 2010 totaled $811 compared with $781 for the nine-months ended September 30, 2009, both amounts virtually identical and insignificant as a percentage of total expenses.~~interests

~~Amortization~~Previously ~~for~~ the ~~nine~~non-~~months~~controlling ~~ended~~interest ~~September~~in ~~30,~~respect ~~2010~~of ~~totaled~~the ~~$28,043, a~~Latin ~~decrease~~American ofSubsidiaries ~~$2,591, or~~was ~~8.5%,~~not ~~from~~recorded as the ~~$30,634~~losses ~~for~~applicable to the ~~nine~~non-~~months~~controlling ~~ended~~interests ~~September~~in ~~30,~~the ~~2009~~Latin American Subsidiaries exceed all their interests in the capital of the Latin American Subsidiaries. In ~~The~~accordance ~~decrease~~with ~~resulted~~IFRS, ~~from~~IAS ~~fewer~~27, ~~amortizable~~Consolidated ~~assets~~and Separate Statements, ~~particularly leasehold~~non-controlling ~~improvements~~interests ~~which~~is ~~are~~to ~~now~~be ~~fully~~presented ~~amortized~~as a separate component of equity, with no exceptions.

As a result of the foregoing, the Company's expenses for the nine-months ended September 30, 2010 totaled $1,549,119, an increase of $421,876, or 34.7%, from the $1,127,143 for the nine-months ended September 30, 2009. This produced a loss from operations of $1,415,903, an increase of $478,616, or 51.1%, from the $937,287 loss from operation for the nine-months ended September 30, 2009.26

For the nine-months ended September 30, 2010, the company also had interest and other Income of $309, a decrease of $1,416, or 82.1%, from the $1,725 for the nine-months ended September 30, 2009. This decrease resulted from both reduced interest rates and reduced balances on which interest was paid.

Because of the foregoing, the comprehensive loss for the nine-months ended September 30, 2010 totaled $1,415,594, or $.05 per share an increase of 480,032, or 51.3%, from the $935,562, or $.03 per share of comprehensive loss for the nine months ended September 30, 2009.

Liquidity and Capital Resources

As of September 30, 2010, the Company had unrestricted cash of $278,841 and working capital of $412,252. This compares with unrestricted cash of $380,800 and working capital of $492,607 as of September 30, 2009.

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Cash used in operation activities totaled $840,655 for the nine months ended September 30, 2010, an increase of $11,483, or 1 .4%, from the $829,172 used in operation for the nine months ended September 30, 2010. This modest increase resulted from a larger net operating loss, lower amortization and a smaller charge for shares issued in satisfaction of corporate obligations which were partially offset by a charge for stock based compensation and smaller charges in non-cash working capital balances.

Cash used in investing activities for the nine month ended September 30, 2010 totaled $27,175, all from the purchase of equipment. This was an increase of $22,397, or 468.7%, from the $4778 of cash used in investing activities for the nine months ended September 30, 2009. For the nine months ended September 30, 2009, the Company purchased $8267 of equipment which

Filing Compare · NERIUM BIOTECHNOLOGY INC