UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2010

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

For the transition period from ________ to ________

COMMISSION FILE NUMBER 000-51261

CALECO PHARMA CORP.
(Exact name of registrant as specified in its charter)

NEVADA	20-1147435
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

59 East Mill Road, Building 4, Suite 201
Long Valley, NJ	07853
(Address of principal executive officers)	(Zip Code)

(360) 306-1133
(Registrant's telephone number, including area code)

103 East Holly Street, #410, National Bank Building,
Bellingham, WA 98225
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ]	(Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of June 10, 2010, the Issuer had 88,926,340 shares of common stock outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and six months ended April 30, 2010 are not necessarily indicative of the results that can be expected for the year ending October 31, 2010.

As used in this Quarterly Report on Form 10-Q, the terms "we,” "us,” "our,” “Caleco” and the “Company” mean Caleco Pharma Corp. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010
(Unaudited)

CALECO PHARMA CORP.
(formerly Blackstone Lake Minerals Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
(Unaudited)

		April 30,			October 31,
		2010			2009

ASSETS

Current Assets
Cash and cash equivalents	$	101,579		$	271,106
Deferred tax asset, less valuation allowance of $2,030,555 (2009 -$1,806,741)		-			-
Total Current Assets		101,579			271,106

Investment (Note 4)		491			-
Intangibles (Note 6)		691,331			691,331
Total Assets	$	793,401		$	962,437

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)

Current Liabilities
Accounts payable and accrued liabilities	$	348,440		$	447,488
Accounts payable and accrued liabilities –related parties (Note 8)		123,510			149,987
Loans Payable (Note 7)		432,045			326,210

Total Current Liabilities		903,995			923,685

Commitments and Contractual Obligations (Note 10, 11, 12)

Stockholders’ Equity (Deficiency)
Common stock (Note 9)
Authorized 975,000,000 common shares, par value $0.001
Issued and outstanding April 30, 2010 -88,259,674 October 31, 2009 -83,073,744		88,260			83,074
Additional paid-in capital		6,121,483			5,557,076
Subscriptions received		100,000			160,663
Accumulated other comprehensive loss:
Foreign currency cumulative translation adjustment		(174,074	)		(174,074	)
Deficit		(718,605	)		(718,605	)
Deficit accumulated during the development stage		(5,527,658	)		(4,869,382	)
Total Stockholders’ Equity (Deficiency)		(110,594	)		38,752

Total Liabilities and Stockholders’ Equity (Deficiency)	$	793,401		$	962,437

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

F-2

CALECO PHARMA CORP.
(formerly Blackstone Lake Minerals Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in U.S. Dollars)
(Unaudited)

		Cumulative
		Amounts
		From October 19,			Six			Six			Three			Three
		2007 (start of the			Months			Months			Months			Months
		development stage),			Ended			Ended			Ended			Ended
		to April 30,			April 30,			to April 30,			April 30,			April 30,
		2010			2010			2009			2010			2009

EXPENSES

Management fees	$	102,502		$	21,000		$	15,000		$	10,500		$	7,500
Mineral exploration costs		13,710			-			-			-			-
Professional fees		926,128			523,446			97,845			423,400			29,003
Other operating expenses		403,211			135,846			179,436			63,790			2,885
Foreign currency loss (gain)		46,610			(27,544	)		11,202			(12,893	)		18,977

LOSS BEFORE OTHER ITEMS AND INCOME TAXES		1,492,161			652,748			303,483			484,797			58,365

Interest expense		100,626			6,019			28,540			3,214			15,807
Write off of mineral property		200,000			-			-			-			-
Write off of account payable		(45,743	)		-			-			-			-
Grant of license		(491	)		(491	)		-			-			-

LOSS BEFORE INCOME TAXES		1,746,553			658,276			332,023			488,011			74,172

Provision for income taxes		-			-			-			-			-

LOSS FROM CONTINUING OPERATIONS		1,746,553			658,276			332,023			488,011			74,172

Discontinued operations		3,781,105			-			-			-			-

NET LOSS		5,527,658			658,276			332,023			488,011			74,172

OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment		151,900			-			-			-			-

COMPREHENSIVE LOSS	$	5,679,558		$	658,276		$	332,023		$	488,011		$	74,172

BASIC AND DILUTED NET LOSS FROM CONTINUING OPERATIONS PER SHARE				$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING					86,589,115			70,200,000			88,106,977			70,200,000

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

F-3

CALECO PHARMA CORP.
(formerly Blackstone Lake Minerals Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(Unaudited)

		Cumulative
		Amounts
		From October 19,			Six			Six
		2007(start of the			Months			Months
		development stage)			Ended			Ended
		to April 30,			April 30,			April 30,
		2010			2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations		(1,746,553	)	$	(658,276	)	$	(332,023	)
Adjustments to reconcile net loss to cash used in operating activities:
Write off of mineral property		200,000			-			-
Write off of accounts payable		(45,743	)		-			-
Issuance of capital stock for services		91,800			81,000			-
Grant of license		(491	)		(491	)		-
Change in operating assets and liabilities:
Increase (decrease) in accounts payable and accrued liabilities,		5,209			(78,048	)		801,805
Increase (decrease) in accounts payable and accrued liabilities –related parties		118,155			(26,477	)		13,016
Increase (decrease) in accrued interest payable		44,542			(29,335	)		26,040
Net cash used in operating activities of discontinued operations		(103,029	)		-			-

Net cash used in (provided by) operating activities		(1,436,110	)		(711,627	)		508,838

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of mineral property		(200,000	)		-			-
Acquisition of intangibles		(22,500	)		-			(697,331	)

Net cash used in investing activities		(222,500	)		-			(697,331	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans payable, net		144,200			150,170			87,700
Issuance of capital stock for cash		1,192,243			391,930			-
Subscriptions received		100,000			-			102,000
Net cash provided by financing activities of discontinued operations		74,379			-			-

Net cash provided by financing activities		1,510,822			542,100			189,700

EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH DURING THE PERIOD		3,755			-			-

NET INCREASE (DECREASE) IN CASH		(144,033	)		(169,527	)		1,207

CASH, BEGINNING OF PERIOD		245,612			271,106			52

CASH, END OF PERIOD	$	101,579		$	101,579		$	1,259

CASH –DISCONTINUED OPERATIONS	$	-		$	-		$	-
CASH –CONTINUING OPERATIONS	$	101,579		$	101,579		$	1.259

Supplemental Disclosure with Respect to Cash Flows (Note 13)

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

F-4

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

1.	HISTORY AND ORGANIZATION OF THE COMPANY

	Caleco Pharma Corp. (formerly Blackstone Lake Minerals Inc.) (the “Company”) was incorporated on May 18, 2004, under the laws of the State of Nevada and was in the business of exploring mineral properties. Effective April 19, 2006, the Company acquired 100% of the issued and outstanding shares of Skyflyer Technology GmbH (“Skyflyer Technology”), a company engaged in the development and commercialization of a one or two person, recreation flying device. On October 18, 2007, the Company acquired a 100% interest in a mineral claim (the “Blackstone Lake Property”) in Saskatchewan, Canada. The Company was focusing its resources on the development and exploration of the Blackstone Lake Property and on April 11, 2008, the Company sold its interest in Skyflyer Technology. On January 27, 2009, pursuant to a technology purchase agreement with NY Financial (International) Corp. (“NY Financial”), the Company’s former wholly-owned subsidiary, Caleco Pharma Corp. (“Caleco-Sub”), acquired a proprietary technology and the intellectual property related thereto for the treatment of liver disease and other ailments, particularly resulting from viral infections such as the Hepatitis C virus infection (the “Technology”) (Note 11). The Company has also developed or is in the process of developing food supplements, hair and dermatological products, energy drinks and chewing gum that derive their formulations from the Technology. These products are being developed to provide enhancement to an individual’s immune system. On March 12, 2010, the Company entered into an exclusive license agreement with Natac Biotech S.L. (“Natac”), a Spanish biotechnology corporation engaged in the research and development of health related products, whereby Natac has granted the Company the exclusive right to develop, commercialize, market and distribute five compounds (AOF, AH- FLO, JHF, HGF, NB-VAL40) derived from plant extracts throughout North and South America (Note 12). On November 22, 2009, the Company allowed the Blackstone Lake Property to lapse and as a result, the Company wrote down the mineral property to $Nil at October 31, 2009. The Company is considered to be a development stage company, as it has not generated significant revenues from operations.

	The consolidated financial statements of the Company from up until July 31, 2009 included the accounts of the Company and its former wholly-owned subsidiary, Caleco-Sub. All inter-company balances and transactions were eliminated on consolidation. Effective August 31, 2009, the Company changed its name to Caleco Pharma Corp. To effect the name change, the Company completed a merger of Caleco-Sub, with and into the company, with the Company continuing as the sole surviving entity.

	These unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America for interim financial information. The accompanying unaudited financial statements do not include all information and footnote disclosures required for an annual set of financial statements prepared under United States of America generally accepted accounting principles. In the opinion of management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows as at April 30, 2010 and for all periods presented, have been included. Interim results for the period ended April 30, 2010 are not necessarily indicative of the results that may be expected for the fiscal year as a whole.

F-5

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

2.	GOING CONCERN

	These financial statements have been prepared with the on-going assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

	The operations of the Company have primarily been funded by the sale of common stock and loans received. Continued operations of the Company are dependent on the Company’s ability to complete equity financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity financings. Such financings may not be available or may not be available on reasonable terms to the Company.

3.	SIGNIFICANT ACCOUNTING POLICIES

	The financial statements of the Company have been prepared in conformity with generally accepted accounting principles in the United States of America and are stated in U.S. dollars. The significant accounting policies adopted by the Company are as follows:

	(a) Use of estimates

	The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

	(b) Foreign currency translation

	The functional currency of the Company is the U.S. dollar. The Company’s former subsidiary, Caleco-Sub,

	used the U.S. dollar as its functional currency. The Company’s former subsidiary, Skyflyer Technology, used the Euro as its functional currency. Accordingly, monetary assets and liabilities denominated in a foreign currency were translated at the exchange rate in effect at the balance sheet date while non-monetary assets and liabilities were translated at historical rates. Revenue and expense items denominated in a foreign currency were translated at exchange rates prevailing when such items are recognized in the statement of operations. Exchange gains and losses arising on translation of foreign currency items are included in the statement of operations.

	The Company followed the current rate method of translation to U.S. dollars with respect to its former foreign subsidiary. Accordingly, assets and liabilities were translated into U.S. dollars at the year-end exchange rates while revenue and expenses were translated at the average exchange rates during the year. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive loss.

F-6

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

3.	SIGNIFICANT ACCOUNTING POLICIES (continued)

	(c) Cash and cash equivalents

	The Company considers cash held at banks and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At April 30, 2010 and October 31, 2009, the Company had no cash equivalents.

	(d) Investments

	The Company accounts for investments in companies subject to significant influence (generally those companies in which interests ranging from 20% to 50% are held) on the equity basis. Investments in companies that the Company is unable to significantly influence are carried at cost.

	Investments in which the Company holds a 51% or greater interest are consolidated, unless control does not exist due to the Company’s inability to determine the investees strategic operating, financing and investing policies.

	(e) Intangibles

	Intangibles are recorded at cost. Capitalized amounts relate to purchase costs and legal, consulting and advisory costs incurred in registration of the patents and intellectual property. Depreciation is calculated using the straight-line method over the useful lives of the assets. No depreciation is provided for as the patents have not yet been awarded and/or begun to generate revenues. No depreciation is provided for the intellectual property as they have indefinite lives.

	(f) Accounting for the impairment of long-lived assets and long-lived assets to be disposed of

	The Company reviews all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

	(g) Income taxes

	A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expenses (benefit) result from the net change during the period of deferred tax assets and liabilities.

	Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

F-7

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

3.	SIGNIFICANT ACCOUNTING POLICIES (continued)

	(h) Fair value of financial instruments

	The Company's financial instruments consist of cash and cash equivalents, investment, accounts payable and accrued liabilities, accounts payable and accrued liabilities –related parties, and loans payable. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.

	(i) Stock-based compensation

	The Company accounts for share-based compensation under the provisions of ASC 718, “Compensation-Stock Compensation”. Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date for all stock-based awards to employees and directors and is recognized as an expense over the requisite service period, which is generally the vesting period. The Black-Scholes option valuation model is used to calculate fair value.

	The Company accounts for stock compensation arrangements with non-employees in accordance with ASC 718 which require that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest. Non-employee stock-based compensation charges are amortized over the vesting period on a straight-line basis. For stock options granted to non-employees, the fair value of the stock options is estimated using a Black-Scholes valuation model.

	(j) Net loss per share

	Basic net loss per share is computed by dividing the net loss for the year by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share takes into consideration shares of common stock outstanding (computed under basic earnings per share) and potentially dilutive shares of common stock. As of April 30, 2010 and 2009, there were no potentially dilutive securities outstanding.

	(k) Comprehensive loss

	The Company has adopted Accounting Standards Codificiation (“ASC”) 220-10 formerly SFAS 130, “Reporting of Comprehensive Income,” which establishes guidelines for the reporting and display of comprehensive loss/and its components in financial statements. Comprehensive loss includes foreign currency translation adjustments.

F-8

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

3.	SIGNIFICANT ACCOUNTING POLICIES (continued)

	(l) Development stage

	The Company is a development stage company as defined by ASC 205-915-20 formerly SFAS 7, “Accounting and Reporting by Development Stage Enterprises,” as it is devoting substantially all of its efforts to establish a new business and planned principal operations have not commenced.

	(m) Concentration of credit risk

	Cash is the only financial instrument that potentially subjects the Company to concentration of credit risk. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

	(n) Recent accounting pronouncements

	During the third quarter of 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles in accordance with FASB ASC Topic 105,”Generally Accepted Accounting Principles”(the Codification). The Codification has become the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Effective with the Company’s adoption on July 1, 2009, the Codification has superseded all prior non-SEC accounting and reporting standards. All other non- grandfathered non-SEC accounting literature not included in the Codification has become non-authoritative. As the adoption of the Codification only affected how specific references to GAAP literature have been disclosed in the notes to the Company’s financial statements, it did not result in any impact on the Company’s results of operations, financial condition, or cash flows.

	In September 2009, the FASB issued authoritative guidance regarding multiple-deliverable revenue arrangements. This guidance addresses how to separate deliverables and how to measure and allocate consideration to one or more units of accounting. Specifically, the guidance requires that consideration be allocated among multiple deliverables based on relative selling prices. The guidance establishes a selling price hierarchy of (1) vendor-specific objective evidence, (2) third-party evidence and (3) estimated selling price. This guidance is effective for annual periods beginning after June 15, 2010 but may be early adopted as of the beginning of an annual period. The Company is currently evaluating the effect that this guidance will have on its financial position and results of operations.

F-9

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

3.	SIGNIFICANT ACCOUNTING POLICIES (continued)

	(n) Recent accounting pronouncements (continued)

	In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements, amending ASC 820. ASU 2010-06 requires entities to provide new disclosures and clarify existing disclosures relating to fair value measurements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2010-06, but does not expect its adoption to have a material impact on the Company’s financial position or results of operations.

	In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855), amending ASC 855. ASU 2010-09 removes the requirement for an SEC filer to disclose a date relating to its subsequent events in both issued and revised financial statements. ASU 2010-09 also eliminates potential conflicts with the SEC’s literature. Most of ASU 2010-09 is effective upon issuance of the update. The Company adopted ASU 2010- 09 in February 2010, and its adoption did not have a material impact on the Company’s financial reporting and disclosures.

	(o) Reclassifications

	Certain amounts reported in the prior period have been reclassified to conform to the current period’s presentation.

F-10

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

4.	INVESTMENT

	On November 1, 2009 the Company acquired 334 shares, representing a 10% interest, in Caleco Pharma Europe S.L. (“SL), a Spanish Corporation, pursuant to a license agreement (see Note 12) for consideration of Euro 334 (US $491).

5.	MINERAL PROPERTY

	On October 18, 2007, the Company completed the acquisition of a mineral property (the “Blackstone Lake Property”) under the terms of a purchase agreement entered into by the Company on October 3, 2007. The Blackstone Lake Property consisted of two mineral claims located in Saskatchewan, Canada. The mineral claims were in good standing until August 22, 2009 and as of November 22, 2009, the claims officially lapsed. Accordingly, the Company wrote off all associated costs to operations during the year ended October 31, 2009.

6.	INTANGIBLES

		January 31,		October 31,
		2010		2009

Patents (Note 11)	$	80,000	$	80,000
Intellectual property (Note 11)		611,331		611,331
		691,331		691,331
Accumulated amortization		-		-

Net book value	$	691,331	$	691,331

During the period ended April 30, 2010, the Company did not amortize $80,000 and $611,311 of its patents and intellectual property as the patents have not yet been awarded and/or they have not begun to generate revenues and the intellectual property has an indefinite life. Capitalized amounts relate to purchase costs and legal, consulting and advisory costs incurred in registration of the patents and intellectual property.

F-11

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

7.	LOANS PAYABLE

	During the six months ended April 30, 2010, a loan was granted from Natac for Euro130,000 (US $174,919) pursuant to a proposed lab facilities and service agreement (Note 10 -vii). The loan is non-interest bearing and was due March 19, 2010. The loan has been extended to September 10, 2010.

	During the year ended October 31, 2009, Euro 112,000 (US $150,700) in accounts payable was reclassified to loans payable. The loans are non-interest bearing. One loan of Euro 56,000 (US $75,350) was due February 1, 2010 and has not been paid. The second loan of Euro 56,000 (US $75,350) was due June 1, 2010 and has not been paid.

	During the year ended October 31, 2009, a loan was granted from a third party totaling $15,000. The loan is non-interest bearing and is due on demand. On January 15, 2010, the loan of $15,000 was settled for shares of the Company’s common stock.

	During the year ended October 31, 2009, a loan was granted from a third party company for $1,200. The loan bore interest at 10% per annum and was due on demand. On October 5, 2009, the loan of $1,200 was settled for shares of the Company’s common stock. Interest included in the statement of operations for the six and three months ended April 30, 2009 totaled $0 and $0, respectively.

	During the year ended October 31, 2009, a loan was granted from NY Financial totaling $77,500 of which $74,159 was repaid in the same period. The loan bears interest at 10% per annum, compounded monthly, beginning January 31, 2009 and is due on demand (Note 11). Interest expense included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $172 and $1,858, respectively. Interest expense included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $86 and $1,858, respectively.

	During the year ended October 31, 2008, several loans were granted from a third party company totaling $47,000. The loans bore interest at 10% per annum and were due on demand. On October 5, 2009, the loans and accrued interest totaling $53,907 was settled for shares of the Company’s common stock. Interest expense included in the statement of operations for the six and three months ended April 30, 2009 totaled $2,857 and $1,870, respectively.

	During the year ended October 31, 2008, several loans were granted from a third party company totaling $28,000. The loans bore interest at 10% per annum and were due on demand. On October 5, 2009, the loans and accrued interest totaling $32,339 was settled for shares of the Company’s common stock. Interest expense included in the statement of operations for the six and three months ended April 30, 2009 totaled $1,825 and $1,261.

	During the year ended October 31, 2008, several loans were granted from a third party company totaling $18,100. The loans bear interest at 10% per annum and are due on demand. On October 5, 2009, the loans and accrued interest totaling $21,203 was settled for shares of the Company’s common stock. Interest expense included in the statement of operations for the six and three months ended April 30, 2009 totaled $898 and $442, respectively.

F-12

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

7.	LOANS PAYABLE (continued)

	During the year ended October 31, 2007, several loans were granted from a third party company totaling $290,000. Loans totaling $280,000 bear interest at 8% per annum, are compounded annually, and were due April 30, 2009. The loans were verbally extended with the same terms and were due on demand. A loan of $10,000 was non-interest bearing and had no specific terms of repayment. On October 1, 2007, the Company agreed to begin paying interest on this loan at 8% per annum and agreed to repay the loan on demand. On October 5, 2009, the loans and accrued interest totaling $335,114 was settled for shares of the Company’s common stock. Interest expense included in the statement of operations for the six and three months ended April 30, 2009 totaled $12,426 and $6,110, respectively.

	During the year ended October 31, 2006, two loans were granted from a third party company for $50,000 and $100,000. The loans bear interest at 8% per annum, are compounded annually, and were due May 16, 2008 and June 19, 2008 respectively. On each of the loan’s due dates, the loans were verbally extended with the same terms and are due on demand. During the year ended October 31, 2009, $41,111 of principal and $16,389 of accrued interest was paid. During the six months ended April 30, 2010, $9,646 of principal and $35,354 of accrued interest was paid. Interest expense included in the statement of operation for the six months ended April 30, 2010 and 2009 totaled $5,848 and $8,676, respectively. Interest expense included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $3,128 and $4,266, respectively.

8.	RELATED PARTY TRANSACTIONS

	At April 30, 2010 and October 31, 2009, included in accounts payable and accrued liabilities –related parties is $20,758 owed to a former director and officer of the Company for management fees and reimbursement of expenses. Amounts due to and from officers and directors are unsecured, non-interest bearing and due on demand. Management fees included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $0 and $0. Management fees included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $0 and $0.

	At April 30, 2010 and October 31, 2009, included in accounts payable and accrued liabilities –related parties is Euro 5,000 (US $6,728) and Euro 5,000 (US $7,380), respectively, owed to a company owned by a former officer and director of the Company for management fees. Amounts due to and from officers and directors are unsecured, non-interest bearing and due on demand. Management fees included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $0 and $0. Management fees included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $0 and $0.

	At April 30, 2010 and October 31, 2009, included in accounts payable and accrued liabilities –related parties is $39,024 and $64,849, respectively, owed to officers and/or directors of the Company for management fees and reimbursement of expenses. Consulting fees paid to officers and/or directors of the Company for the six months ended April 30, 2010 and 2009 totaled $10,500 and $15,000, respectively. Consulting fees paid to officers and/or directors of the Company for the three months ended April 30, 2010 and 2009 totaled $10,500 and $7,500, respectively. Amounts due to and from officers and directors are unsecured, non-interest bearing and due on demand. The consulting fees are included in management fees on the statement of operations.

F-13

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

8.	RELATED PARTY TRANSACTIONS (continued)

	At April 30, 2010 and October 31, 2009 included in accounts payable and accrued liabilities –related parties is $57,000 owed to a company owned by a director of the Company for consulting fees. . Amounts due to and from officers and directors are unsecured, non-interest bearing and due on demand. Consulting fees included in the statement of operations for the six months ended April 30, 2010 and 2009 totaled $0 and $0. Consulting fees included in the statement of operations for the three months ended April 30, 2010 and 2009 totaled $0 and $0.

9.	COMMON STOCK

	The Company’s articles of incorporation allow it to issue up to 975,000,000 shares of common stock, par value $0.001. Effective September 30, 2005, the Company effected a stock split of its common stock by issuing thirteen new shares for each old share. Except as otherwise stated to the contrary in these financial statements, all references to shares and prices per shares have been adjusted to give retroactive effect to the stock split.

	On June 14, 2004, the Company issued 39,000,000 shares of its common stock at $0.001 per share in a private placement transaction.

	On July 4, 2004, the Company issued 16,250,000 shares of its common stock at $0.01 per share in a private placement transaction.

	On October 25, 2004, the Company issued 14,950,000 shares of its common stock at $0.05 per share in a private placement transaction.

	On April 19, 2006, the Company acquired all the issued and outstanding stock of Skyflyer Technology, which was accounted for as a recapitalization of the Company (Note 1) in exchange for 33,000,000 shares of common stock. The issued number of shares of common stock was that of the Company with adjustments made for differences in par value between the Company and Skyflyer Technology. On April 11, 2008, the Company completed a share exchange agreement with Inventa and Skyflyer Technology, whereby the Company sold to Inventa all of the issued and outstanding shares of Skyflyer Technology in exchange for the surrender of 33,000,000 shares of the Company’s common stock for cancellation. On April 11, 2008, the Company cancelled the 33,000,000 shares of its common stock.

	On September 21, 2009, the Company issued 5,936,500 shares of its common stock at $0.10 per share for total proceeds of $593,651 in a private placement transaction. The Company also issued 5,117,244 shares of its common stock at $0.10 per share for settlement of accounts payable and loans payable with an aggregate value totaling $511,724.

	On October 5, 2009, the Company issued 750,000 shares of its common stock at $0.10 per share for total proceeds of $75,000 in a private placement transaction. The Company also issued 300,000 shares of its common stock at $0.10 per share for settlement of accounts payable with an aggregate value totaling $30,000.

	On October 5, 2009, the Company issued 710,000 shares of its common stock at $0.10 per share for total proceeds of $71,000 in a private placement transaction.

F-14

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

9.	COMMON STOCK (continued)

	On October 6, 2009, the Company issued 60,000 shares of its common stock at $0.18 per share for consulting services with an aggregate value of $10,800. The consulting services are included in professional fees on the statement of operations.

	On November 10, 2009, the Company issued 1,338,630 shares of its common stock at $0.10 per share for total proceeds of $133,863 in a private placement transaction.

	On December 22, 2009, the Company issued 1,145,000 shares of its common stock at $0.10 per share for total proceeds of $114,500 in a private placement transaction. The Company also issued 100,000 shares of its common stock at $0.10 per share for settlement of accounts payable with an aggregate value totaling $10,000.

	On January 15, 2010, the Company issued 337,300 shares of its common stock at $0.10 per share for total proceeds of $33,730.

	On January 15, 2010, the Company issued 200,000 shares of its common stock at $0.10 per share for total proceeds of $20,000 in a private placement transaction. The Company also issued 260,000 shares of its common stock at $0.10 per share for settlement of accounts payable with an aggregate value totaling $11,000 and loans payable with an aggregate value totaling $15,000.

	On January 19, 2010, the Company issued 1,000,000 shares of its common stock at $0.10 per share for total proceeds of $100,000 in a private placement transaction.

	On February 15, 2010, the Company issued 300,000 shares of its common stock at $0.27 per share for consulting services with an aggregate value of $81,000. The consulting services are included in professional fees on the statement of operations.

	On February 18, 2010, the Company issued 365,000 shares of its common stock at $0.10 per share for total proceeds of $36,500 in a private placement transaction.

	On February 18, 2010, the Company issued 140,000 shares of its common stock at $0.10 per share for total proceeds of $14,000 in a private placement transaction.

10.	COMMITMENTS

	i)	On October 1, 2008, the Company entered into a management consulting agreement with a director and officer of the Company with an effective date of October 1, 2008 to pay monthly consulting fees of $2,500 per month. The agreement may be cancelled by either party with 60 days notice, in writing.

	ii)	On October 27, 2009, the Company entered into a consulting agreement with an effective date of November 1, 2009 to pay monthly consulting fees of $1,000 per month and $600 per hour for any additional services provided. The agreement is for a period of one year and automatically renews for an additional year unless notice of termination is provided by either party with 60 days notice, in writing.

	iii)	On December 17, 2009, the Company entered into a consulting agreement to pay monthly consulting fees of $5,000 per month. The Company terminated the agreement February 15, 2010.

F-15

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

10.	COMMITMENTS (continued)

	iv)	On February 9, 2010, the Company entered into an agreement (the “Sponsorship Agreement”) with ICF Kursmakler AG (“ICF Kursmakler”), a German investment bank that is a designated sponsor on Frankfurt Stock Exchange’s Xetra trading platform, whereby ICF Kursmakler will act as the Company’s sponsor on the Frankfurt Stock Exchange. In consideration of these services, the Company has agreed to pay an annual fee of Euro 30,000 (US $42,254) to ICF Kursmakler. The term of the Sponsorship Agreement commences on March 1, 2010. Either party may terminate the Sponsorship Agreement without cause at the end of each quarter with six weeks notice in writing. Neither party may terminate the Sponsorship Agreement prior to March 1, 2011.

	v)	On February 9, 2010, the Company entered into a consulting agreement, effective February 1, 2010, with BlueWater Advisory Group, LLC (“BlueWater”) whereby BlueWater agreed to provide the Company with investor relations services. In consideration of these services, the Company agreed to pay BlueWater $3,500 per month, reimburse BlueWater for all out-of-pocket expenses incurred in connection with the agreement and issue to BlueWater 300,000 shares of the Company’s common stock (issued February 15, 2010). Either party may terminate the consulting agreement upon five days written notice.

	vi)	On February 10, 2010, the Company entered into a share purchase agreement (the “Share Purchase Agreement”) with Natac Biotech S.L. (“Natac”), a Spanish biotechnology corporation engaged in the research and development of health related products, and the principal stockholders of Natac (the “Principal Stockholders”). Under the terms of the Share Purchase Agreement, the Company has agreed to acquire eighteen percent (18%) of the share capital of Natac from the Principal Stockholders (the “Natac Shares”). In consideration of the Natac Shares, the Company has agreed to issue an aggregate of 4,300,000 shares of its common stock to the Principal Stockholders.

		The closing of the Share Purchase Agreement was expected to occur on or before March 19, 2010. The closing date has been extended to July 19, 2010.

		The closing of the Share Purchase Agreement is subject to a number of customary conditions, including:

		(a)	the closing of a research and licensing agreement whereby the Company will acquire an exclusive license to certain probiotic strains for the countries located in North and South America;

		(b)	the closing of an exclusive licensing agreement whereby the Company will acquire an exclusive license to certain health related products for the countries located in North and South America (closed March 12, 2010); and

		(c)	the closing of a lab facilities and services agreement whereby Natac shall provide certain services and laboratory access to the Company.

F-16

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

10.

COMMITMENTS (continued)

vii)	On February 18, 2010, the Company entered into a lab facilities and service agreement (the “Lab Facilities and Service Agreement”) with Natac whereby the Company will have access to Natac’s laboratory facility and procure certain laboratory services from Natac in consideration of the following:

	(a)	Euro 20,000 (US $27,716) (paid on February 10, 2010);

	(b)	issuance of a promissory note in the amount of Euro 130,000 (US $174,919) payable on or before September 10, 2010 (which promissory note has been issued on February 10, 2010 and amended June 11, 2010);

	(c)	Euro 100,000 (US $134,553) on or before each of September 30, 2010, December 31, 2010, March 31, 2011 and June 30, 2011; and

	(d)	Euro 125,000 (US $168,192) on or before each of:

		(i)	September 30, 2011, December 31, 2011, March 31, 2012 and June 30, 2012; and

		(ii)	September 30, 2012, December 31, 2012, March 31, 2013 and June 30, 2013.

The closing of the Lab Facilities and Service Agreement was expected to occur on or before March 19, 2010. The closing date has been extended to September 10, 2010.

The closing of the Lab Facilities and Service Agreement is subject to a number of customary conditions, including:

	(a)	the closing of a research and licensing agreement whereby the Company will acquire an exclusive license to certain probiotic strains for the countries located in North and South America; and

	(b)	the closing of an exclusive licensing agreement whereby the Company will acquire an exclusive license to certain health related products for the countries located in North and South America. (closed March 12, 2010)

Upon closing, the term of the Lab Facilities and Service Agreement will be until September 30, 2013 and either party may terminate the Lab Facilities and Service Agreement if there is a material breach of the Lab Facilities and Service Agreement by the other party.

F-17

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

11.	TECHNOLOGY PURCHASE AGREEMENT

	On January 27, 2009, pursuant to a technology purchase agreement, the Company’s former subsidiary, Caleco- Sub, acquired a proprietary technology and the intellectual property related thereto for the treatment of liver disease and other ailments, particularly resulting from viral infections such as the Hepatitis C virus infection (the “Technology”) from NY Financial.

	As consideration for the Technology, the Company and Caleco-Sub agreed to:

	(1)	pay $22,500 to NY Financial (paid); and

	(2)	issue a non-interest bearing promissory note in the amount of $77,500 to NY Financial at closing. This amount was payable on January 31, 2009. On January 31, 2009, the Company became in default of the promissory note as it was unable to pay the $77,500. Under the terms of the promissory note, the unpaid portion of the promissory note, being $71,500, will bear interest at 10% per annum commencing on January 31, 2009. During the year ended October 31, 2009, an additional $68,159 was repaid.

	As further consideration, an officer and director of the Company transferred 32,000,000 shares of the Company’s common stock to NY Financial on closing.

	Caleco-Sub has also agreed to reimburse the documented costs related to the Technology totaling Euro 432,000 (US $581,270) and $66,500. As at April 30, 2010, the Company has paid Euro 265,311 (US $356,985) and $18,250 in cash, has issued promissory notes for accounts payable totaling Euro 112,000 (US $150,700) and has issued 300,000 shares of its common stock at $0.10 per share for settlement of accounts payable with an aggregate value totaling $30,000. One loan of Euro 56,000 (US $75,350) was due February 1, 2010 and has not been paid. The second loan of Euro 56,000 (US $75,350) was due June 1, 2010 and has not been paid.

12.	LICENSE AGREEMENTS

	Europe License Agreement

	On November 1, 2009, the Company entered into a license agreement (the “Europe License Agreement”) with Caleco Pharma Europe S.L. (“SL”), a Spanish Corporation, whereby the Company granted SL an exclusive license in the European Continent to market and exploit certain products the Company has developed or is developing.

	In consideration of the grant of the exclusive license, SL has agreed to pay and issue the following:

(a)

issue to the Company such number of shares of SL that equals 10% of SL’s outstanding share capital (the “SL Shares”). The Company’s 10% interest in the share capital of SL is non-dilutive as long as SL’s outstanding share capital is 1,000,000 Euros or less. If SL’s share capital is above 1,000,000 Euros and it offers to issue additional shares, the Company will have a right to purchase 10% of the offered shares.

F-18

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

12.	LICENSE AGREEMENTS (continued)

	(b)	pay a royalty of five percent (5%) of its gross sales of the Products (Food supplements (Lamiridosin), Hair and Dermatological Products (LamiriShampoo, LamiriHair Conditioner, LamiriHair Tonic, LamiriGel and LamiriCreme), Energy Drinks (KTKin) and Chewing Gum (KTK Chewing Gum and KTKids Children Chewing Gum) to the Company.

The term of the exclusive license is for a period of twenty years. The Company may terminate the Europe License Agreement if SL does not achieve the following annual gross revenues: (i) $3,000,000 from the sale of the Products during the period of July 31, 2012 to July 30, 2013; (ii) $5,000,000 from the sale of the Products during the period of July 31, 2013 to July 30, 2014; and (iii) $12,000,000 from the sale of the Products during the period of July 31, 2014 to July 30, 2015.

Natac License Agreement

On March 12, 2010, the Company entered into an exclusive license agreement (the “License Agreement”) with Natac whereby Natac has granted the Company the exclusive right to develop, commercialize, market and distribute five compounds (AOF, AH-FLO, JHF, HGF, NBVAL40) derived from plant extracts throughout North and South America.

In consideration of the exclusive license, the Company has agreed to pay a royalty of five percent (5%) of the net sales of the compounds in North and South America. Under the terms of the License Agreement, the Company is also required to:

	(a)	purchase the products from Natac in accordance with the terms of the License Agreement;

	(b)	complete its first commercial sale of the products by March 31, 2011;

	(c)	purchase a minimum of 300,000 units, each unit being 10 grams, of the products from Natac by December 31, 2011; and

	(d)	within one year of entering into the License Agreement, complete a clinical trial(s) for the purpose of supporting the effectiveness of the products.

The Company has the right to sub-license the five compounds in North and South America and the right to assign the entire interest in the License Agreement subject to the following:

	(a)	if the assignment is for cash consideration only, the Company will be entitled to retain 90% of the cash payment and Natac will be entitled to 10% of the cash payment; and

	(b)	if the assignment is for a combination of a cash payment and royalties, the Company will be entitled to retain 90% of the cash payment and royalty with 10% of the cash payment and royalty being paid to Natac.

The term of the License Agreement is for a period of twenty years.

F-19

CALECO PHARMA CORP.

(formerly Blackstone Lake Minerals Inc.)

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

April 30, 2010

(Unaudited)

13.

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

		Cumulative
		Amounts from
		October 19, 2007		Six		Six
		(start of the		Months		Months
		development stage)		Ended		Ended
		to April 30,		April 30,		April 30,
		2010		2010		2009

Cash paid for:
Interest	$	59,064	$	35,354	$	-
Income taxes	$	-	$	-	$	-

	Non-cash Transactions

	Investing and financing activities that do not have an impact on current cash flows are excluded from the statement of cash flows.

	During the six months ended April 30, 2010, $21,000 in accounts payable was settled by the issuance of 210,000 shares of the Company’s common stock.

	During the six months ended April 30, 2010, $15,000 in loans payable was settled by the issuance of 150,000 shares of the Company’s common stock.

14.	SUBSEQUENT EVENTS

	On May 4, 2010, the Company issued 666,666 shares of its common stock at $0.15 per share for total proceeds of $100,000 in a private placement transaction.

	On June 11, 2010, the Company entered into a management consulting agreement with an officer of the Company whereby the Company agreed to issue 300,000 shares of the Company’s common stock.

F-20

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II – Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and Current Reports, that we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

CORPORATE OVERVIEW

We were incorporated on May 18, 2004 under the laws of the State of Nevada.

We are a company engaged in the acquisition and development of over-the-counter medication and Food and Drug Administration (“FDA”) approved pharmaceuticals. We currently own a proprietary technology designed to benefit people suffering from moderate to severe liver maladies, such as elevated liver enzymes and Hepatitis C viral infection, by lowering liver enzymes and reducing viral loads (the “Liver Health Formula”). We have developed or are in the process of developing food supplements, hair and dermatological products, energy drinks and chewing gum that derive their formulations from our Liver Health Formula. These products are being developed to provide enhancement to an individual's immune system. The details of our Liver Health Formula and our products are set out below under the heading “Principal Products."

On March 12, 2010, we entered into an exclusive license agreement with Natac Biotech S.L. (“Natac”), a Spanish biotechnology corporation engaged in the research and development of health related products, whereby Natac has granted us the exclusive right to develop, commercialize, market and distribute five compounds (AOF, AH-FLO, JHF, HGF, NB-VAL40) derived from plant extracts throughout North and South America. The details of the License Agreement are set out below under the heading “Principal Products – Natac and Health Related Products”.

RECENT CORPORATE DEVELOPMENTS

We experienced the following corporate developments since the filing of our Form 10-Q for the fiscal quarter ended January 31, 2010 on March 17, 2010:

1.	On March 19, 2010, we entered into an amendment agreement with Natac (the “Share Purchase Amendment Agreement”) to amend Share Purchase Agreement dated Feb 10, 2010 between the Company and Natac (the “Share Purchase Agreement”). Under the terms of the Share Purchase Amendment Agreement, the closing date of the Share Purchase Agreement was extended from March 19, 2010 to April 19, 2010.

2.	On March 19, 2010, we entered into an amendment agreement (the “Lab Facilities and Services Amendment Agreement”) to amend the terms of the Lab Facilities and Services Agreement dated February 18, 2010 (the “Lab Facilities and Services Agreement”) between Caleco and Natac. Under the terms of the Lab Facilities and Services Amendment Agreement, the parties agreed to extend the closing date to April 19, 2010 and extend all payment dates.

3.	On April 26, 2010, we entered into a second amendment agreement with Natac (the “Second Amendment to the Share Purchase Agreement”) to amend Share Purchase Agreement. Under the terms of the Second Amendment to the Share Purchase Agreement, the closing date of the Share Purchase Agreement was further extended from April 19, 2010 to July 19, 2010.

4.	On April 26, 2010, we entered into a second amendment agreement (the “Second Amendment Agreement to the Lab Facilities and Services Agreement”) to amend the terms of the Lab Facilities and Services Agreement. Under the terms of the Second Amendment Agreement to the Lab Facilities and Services Agreement, the parties agreed to extend the closing date to May 19, 2010 and extend all payment dates.

5.	On May 4, 2010, we completed a private placement offering of 666,666 shares of our common stock at a price of $0.15 per share pursuant to Rule 506 of Regulation D of the Securities Act. The investor represented that it is an accredited investor in accordance with Regulation D of the Securities Act.

6.	On June 11, 2010, we entered into a third amendment agreement (the “Third Amendment to the Lab Facilities and Services Agreement”) to amend the terms of the Lab Facilities and Services Agreement. Under the terms of the Third Amendment Agreement to the Lab Facilities and Services Agreement, the parties agreement to extend the closing date to September 10, 2010 and to extend all payment dates.

7.	On June 11, 2010, John Boschert resigned as our Chief Financial Officer. There were no disagreements between Mr. Boschert and us regarding any matters relating to our operations, policies or practices.

8.	Also on June 11, 2010, we appointed Luc Vanhal as our Chief Financial Officer in place of Mr. Boschert and entered into a management consulting agreement dated June 11, 2010 (the “Management Consultant Agreement”) with Mr. Vanhal. Under the terms Management Consulting Agreement, Mr. Vanhal agreed to act as our Chief Financial Officer in consideration of which we agreed to issue to Mr. Vanhal 300,000 shares of our common stock. The issuance of shares was completed pursuant to Rule 506 of Regulation D and Mr. Vanhal represented that he is an accredited investor as defined in Regulation D.

PRINCIPAL PRODUCTS

Liver Heath Formula

We acquired the Liver Health Formula pursuant to the terms and conditions of a technology purchase agreement dated December 19, 2008 (the “Technology Purchase Agreement”) among NY Financial (International) Corp. (“NY Financial”), the Company, Caleco Pharma Corp., formerly our wholly owned subsidiary, and John Boschert, our sole executive officer and a director. Under the terms of the Technology Purchase Agreement, NY Financial assigned and transferred the Liver Health Formula to us in consideration of which we:

(a)	paid $22,500 in cash to NY Financial; and

(b)	issued a non-interest bearing promissory note in the amount of $77,500 to NY Financial at closing. This amount was payable on January 31, 2009. On January 31, 2009, we became in default of the promissory note as we was unable to pay the $77,500. Under the terms of the promissory note, the unpaid portion of the promissory note, being $71,500, would bear interest at 10% per annum commencing on January 31, 2009. During the year ended October 31, 2009, an additional $68,159 was repaid.

As further consideration, Mr. Boschert transferred 32,000,000 shares of our common stock held by him to NY Financial, which resulted in a change in control. We also appointed F. Javier Benedi Garcia, the sole director of NY Financial, to our Board of Directors.

Following closing, we agreed to reimburse the documented costs related to the recording of the patent applications and the filing of the European Drug Master File applications, which amount is not to exceed 590,000 EUR. Subsequent to the entry into the Technology Purchase Agreement, we determined that the reimbursable expenses amounted to Euro 432,000 (US $581,270) and $66,500. As at April 30, 2010, the Company has paid Euro 265,311 (US $356,985) and $18,250 in cash, has issued promissory notes for accounts payable totaling Euro 112,000 (US $150,700) and has issued 300,000 shares of its common stock at $0.10 per share for settlement of accounts payable with an aggregate value totaling $30,000. One loan of Euro 56,000 (US $75,350) was due February 1, 2010 and has not been paid. The second loan of Euro 56,000 (US $75,350) was due June 1, 2010 and has not been paid. In addition, the parties also agreed that:

(a)	we will use our best efforts to raise financing of $2,500,000. In connection with this financing, we have agreed that we will not issue more than 20,000,000 shares of our common stock unless we obtain NY Financial’s consent; and

(b)	we are restricted from assigning or transferring the Liver Health Formula until January 1, 2011. Notwithstanding this restriction, we will have the right to license the Liver Health Formula.

Our Liver Health Formula is designed to benefit people suffering from moderate to severe liver maladies, such as elevated liver enzymes and Hepatitis C viral infection, by lowering liver enzymes and reducing viral loads (which are a measure of the severity of a viral infection). To date, we have filed patent applications in the United States, Canada and Europe and obtained four European Drug Master File applications which will allow us to market our Liver Health Formula in Europe, while protecting the confidential material of our intellectual property. Our ability to further develop, market and manufacture our Liver Health Formula as an over-the-counter product or an FDA approved pharmaceutical is subject to our obtaining substantial financing, of which there is no assurance.

Using the formulations of our Liver Health Formula, we have developed or are in the process of developing food supplements, hair and dermatological products, energy drinks and chewing gum. These products are being designed to provide enhancement to an individual's immune system. A description of the products are set out below.

Product Group	Name of Products	Description of Products
Food Supplements	Lamiridosin	A dietary supplement that we are in the process of developing and designed to enhance an individual's immune system.
Natural Hair Care Products	Lamiri Shampoo, LamiriHair Conditioner and Lamiri Hair Tonic	Hair care products that promote healthy scalp and hair.
Natural Skin Care Products	LamiriGel and LamiriCreme	Skincare products that promote healthy skin.
Energy Drinks	KTKin	An energy drink designed to enhance an individual's immune system.
Chewing Gum	KTK Chewing Gum and KTKids Children Chewing Gum	Chewing gum designed to enhance an individual's immune system.

Engagement of Cosmetic Project Management

In connection with the development of our products, we engaged Cosmetic Project Management, a Spanish corporation engaged in the business of the formulating, developing and commercializing cosmetic products, to assist us in formulating, developing and commercializing our Natural Hair Care Products and Natural Skin Care Products. In particular, Cosmetic Project Management has agreed to do the following:

(a)	produce samples for each of our Natural Hair Care Products and Natural Skin Care Products;

(b)	provide us with a feasibility study on our Natural Hair Care Products and Natural Skin Care Products;

(c)	design product packaging and develop an advertising plan for our Natural Hair Care Products and Natural Skin Care Products;

(d)	assist us in selecting a manufacturer in order to ensure good manufacturing practice guidelines are met; and

(e)	assist us in preparing and filing a product dossier for each of our Natural Hair Care Products and Natural Skin Care Products.

In consideration for these services, we agreed to pay EUR 20,100 (approximately $27,050) to Cosmetic Project Management (which amount has been paid).

We anticipate that we will use the samples of our Natural Hair Care Products and Natural Skin Care Products for clinical studies purposes. These clinical studies will assist us in determining whether there are any dermatological health benefits for hair and skin through the use of our Natural Hair Care Products and Natural Skin Care Products.

Grant of European License to Caleco Pharma Europe S.L.

On November 1, 2009, we entered into a license agreement (the “Europe License Agreement”) with Caleco Pharma Europe S.L. (“SL”), a Spanish corporation, whereby we granted SL an exclusive license to market and exploit in the European continent certain products we have developed or are developing. These products include Lamiridosin, LamiriShampoo, LamiriHair Conditioner, LarimiHair Tonic, LamiriGel, LamiriCreme, KTKin, KTK Chewing Gum and KTKids Children Chewing Gum (collectively, the “Licensed Products”). In consideration of the grant of the exclusive license, SL issued and granted to us:

(a)	such number of shares of SL that equals 10% of SL’s outstanding share capital (the “SL Shares”). Our 10% interest in the share capital of SL is non-dilutive as long as SL’s outstanding share capital is 1,000,000 Euros or less. If SL’s share capital is above 1,000,000 Euros and it offers to issue additional shares, we will have a right to purchase 10% of the offered shares; and

(b)	a royalty of five percent (5%) of its gross sales of the Licensed Products.

In addition to SL’s exclusive license, SL will have the right to sub-license the Licensed Products in the European continent. Each party will also have the right to assign its entire interest in the Europe License Agreement subject to the mutual agreement of the parties. Any refusal by the parties will not be considered reasonable if the transaction that is the subject of the refusal is in accordance with internationally accepted standards for the licensing of products.

Under the Europe License Agreement, we have the right to select the manufacturer to manufacture the Licensed Products in the European continent. Once a manufacturer has been selected by us, SL will be responsible for all payments to the manufacturer.

The term of the exclusive license is for a period of twenty (20) years. We may terminate the Europe License Agreement if SL does not achieve the following annual gross revenues from the sale of the Licensed Products:

(a)	$3,000,000 during the period of July 31, 2012 to July 30, 2013;
(b)	$5,000,000 during the period of July 31, 2013 to July 30, 2014; and
(c)	$12,000,000 during the period of July 31, 2014 to July 30, 2015.

Under the Europe License Agreement, SL was required to provide a development plan for the development of the Licensed Products. As of the date of this Quarterly Report, we have yet to receive an acceptable development plan and are currently in discussions with SL to resolve this matter.

Natac and Health Related Products

License Agreement – Health Related Compounds

On March 12, 2010, we entered into an exclusive license agreement (the “License Agreement”) with Natac whereby Natac has granted us the exclusive right to develop, commercialize, market and distribute five compounds (AOF, AH-FLO, JHF, HGF, NBVAL40) derived from plant extracts throughout North and South America.

In consideration of the exclusive license, we have agreed to pay a royalty of five percent (5%) of the net sales of the compounds in North and South America. Under the terms of the License Agreement, we are also required to:

(a)	purchase the products from Natac in accordance with the terms of the License Agreement;

(b)	complete our first commercial sale of the products by March 31, 2011;

(c)	purchase a minimum of 300,000 units, each unit being 10 grams, of the products from Natac by December 31, 2011; and

(d)	within one year of entering into the License Agreement, complete a clinical trial(s) for the purpose of supporting the effectiveness of the products.

The License Agreement also provides that we will have the right to sub-license the five compounds in North and South America. We will also have the right to assign our entire interest in the License Agreement subject to the following:

(a)	if the assignment is for cash consideration only, we will be entitled to retain 90% of the cash payment and Natac will be entitled to 10% of the cash payment; and

(b)	if the assignment is for a combination of a cash payment and royalties, we will be entitled to retain 90% of the cash payment and royalty with 10% of the cash payment and royalty being paid to Natac.

The term of the License Agreement is for a period of twenty years.

Share Purchase Agreement

On February 10, 2010, we entered into a share purchase agreement, as amended on March 19, 2010 and April 26, 2010, (the “Share Purchase Agreement”) with Natac and the Principal Stockholders. Under the terms of the Share Purchase Agreement, we agreed to acquire eighteen percent (18%) of the share capital of Natac from the Principal Stockholders (the “Natac Shares”). In consideration of the Natac Shares, we agreed to issue an aggregate of 4,300,000 shares of our common stock to the Principal Stockholders.

The closing of the Share Purchase Agreement was expected to occur on or before July 19, 2010 and is subject to a number of customary conditions, including:

(a)	the closing of a research and licensing agreement whereby we will acquire an exclusive license to certain probiotic strains for the countries located in North and South America;

(b)	the closing of an exclusive licensing agreement whereby we will acquire an exclusive license to certain health related products for the countries located in North and South America; and

(c)	the closing of a lab facilities and services agreement whereby Natac shall provide certain services and laboratory access to us.

Following closing of the Share Purchase Agreement, Natac has agreed to appoint a nominee of the Company to the Board of Directors of Natac. In addition, we have also agreed to appoint a nominee of Natac to our Board of Directors.

There is no assurance that we will complete our acquisition of the Natac Shares.

Lab Facilities and Service Agreement

On February 18, 2010, we entered into a lab facilities and service agreement, as amended on March 19, 2010, April 26, 2010 and June 11, 2010 (the “Lab Facilities and Service Agreement”) with Natac whereby we will have access to Natac’s laboratory facility and procure certain laboratory services from Natac in consideration of the following:

(a)	20,000 Euros (approximately $27,716) (which amount has been paid on February 10, 2010);

(b)	issuance of a promissory note in the amount of 130,000 Euros (approximately $174,919) which is payable on or before September 30, 2010.

(c)	100,000 Euros (approximately $134,553) on or before each of September 30, 2010, December 31, 2010, March 31, 2011 and June 30, 2011; and

(d)	125,000 Euros (approximately $168,192) on or before each of:
	(i)	September 30, 2011, December 31, 2011, March 31, 2012 and June 30, 2012; and
	(ii)	September 30, 2012, December 31, 2012, March 31, 2013 and June 30, 2013.

The closing of the Lab Facilities and Service Agreement is expected to occur on or before September 10, 2010 and is subject to a number of customary conditions, including:

(a)	the closing of a research and licensing agreement whereby we will acquire an exclusive license to certain probiotic strains for the countries located in North and South America; and

(b)	the closing of an exclusive licensing agreement whereby we will acquire an exclusive license to certain health related products for the countries located in North and South America (which exclusive license agreement has closed).

The term of the Lab Facilities and Service agreement is until September 30, 2013.

PLAN OF OPERATION

Over the next twelve months, our plan is to continue to develop our over-the-counter pipeline of products and, if warranted, develop our Liver Health Formula as an FDA approved pharmaceutical. We also plan to continue to acquire and license additional products and technology to add to our current product pipeline. In order to complete our plan of operation we will require substantial financing of which there is no assurance.

a)	Over-the-Counter Medication Development

	Oral Supplement: We plan to develop, market and manufacture a formulation of our Liver Health Formula as an over-the-counter oral supplement. In developing the formulation of our Liver Health Formula, we plan to conduct a clinical trial in the second half of 2010. We anticipate that this formulation will be derived from our proprietary compound called HP-201. The HP-201 compound is designed to support liver health and provide general immune status benefits. We anticipate that the costs related to the development and marketing of the oral supplement will be $700,000 in 2010.

	Dermatologic Application: We also plan to initiate research, development and pre-commercial activities related to the HP-201 over-the-counter franchise line extension formulations, including dermatologic applications. We anticipate that the costs related to the dermatological line will be $450,000 in 2010.

b)	Pharmaceutical Development

	HP-201 Compound: We plan to continue pre-clinical work related to the HP-201 prescription pharmaceutical pathway. Pre-clinical work will include the identification and synthetic structural modification of compounds derived from HP-201. We anticipate that the costs related to the HP-201 New Drug Application pathway will be $300,000 in 2010.

	HP-202 Compound: We also plan to initiate pre-clinical work related to discover a second antiviral New Drug Application pipeline product referred to as HP-202. This pre-clinical work will include anti-viral and cytotoxicity assays. We anticipate that the costs related to the HP-202 New Drug Application pathway will be $200,000 in 2010.

c)	Product Pipeline

	We plan to accelerate our in-licensing activities targeted at identifying new, over-the-counter and prescription product development candidates that are synergistic with our current product pipelines as well as our research, development and commercialization skill sets and overall business model. There is no assurance that we will identify and secure rights to license additional products in 2010. We anticipate that the costs related to identifying new product development opportunities will be $250,000 in 2010.

In addition to the amounts described above, we anticipate that we will require an additional $800,000 for general and administrative purposes, including consulting fees in connection with the operation of our business and legal and accounting fees in connection with meeting our ongoing reporting obligations under the Exchange Act. As a result, we anticipate that the costs of implementing our plan of operation and meeting our ongoing operating costs will be $2,700,000. Accordingly, we will require substantial financing in order to carry out our plan of operation and to meet our operating costs over the next twelve months. There is no assurance that we will be able to obtain financing in the amounts required to implement our plan of operation or to meet our ongoing operating costs. If we are not successful in raising sufficient financing, our business may fail and our shareholders may lose all or part of their investment

RESULTS OF OPERATIONS

Three and Six Months Summary

		Six Months Ended April 30,							Three Months Ended April 30,
							Percentage							Percentage
							Increase /							Increase /
		2010			2009		(Decrease)		2010			2009		(Decrease)
Revenue	$	-		$	-		n/a	$	-		$	-		n/a
Expenses		(652,748	)		(303,483	)	115.1%		(484,797	)		(58,365	)	730.6%
Other Expenses		(5,528	)		(28,540	)	(80.6)%		(3,214	)		(15,807	)	79.7%
Net Loss	$	(658,276	)	$	(332,023	)	98.3%	$	(488,011	)	$	(74,172	)	557.9%

Revenues

We have not earned any revenues since our inception and we do not anticipate earning revenues in the foreseeable future. Our ability to earn revenues in the future is dependent upon: (i) the development and manufacturing of our Liver Health Formula as an over-the-counter medication; and (ii) the development and manufacture of our naturally sourced products. There is no assurance that we will be able to develop and manufacture our Liver Health Formula as an over-the-counter medication, that we will be able to manufacture and develop our naturally sourced products.

Expenses
		Six Months Ended April 30,						Three Months Ended April 30,
						Percentage						Percentage
						Increase /						Increase /
		2010			2009	(Decrease)		2010			2009	(Decrease)
Management fees	$	21,000		$	15,000	40.0%	$	10,500		$	7,500	40.0%
Professional fees		523,446			97,845	435.0%		423,400			29,003	1359.8%
Other operating expenses		135,846			179,436	(24.3)%		63,790			2,885	2111.1%
Foreign currency loss (gain)		(27,544	)		11,202	(345.9)%		(12,893	)		18,977	(167.9)%
Total Expenses	$	652,748		$	303,483	115.1%	$	484,797		$	58,365	730.6%

Our expenses increased from $58,365, during the three months ended April 30, 2009, to $484,797, during the three months ended April 30, 2010. The increase in our expenses is primarily attributable to substantial increases in professional fees and other operating expenses. These amounts were partially offset by an increase in a foreign currency gain.

Our expenses increased from $303,483, during the six months ended April 30, 2010, to $652,748, during the six months ended April 30, 2009. The increase in our expenses during the first half of 2010 is primarily attributable to an increase in management fees and professional fees. These amounts were partially offset by a decrease in other operating expenses and an increase in foreign currency gain.

Management fees include amounts paid as compensation to our officers and directors. During the three and six months ended April 30, 2010, we incurred management fees of $2,500 per month to our sole executive officer and $1,000 to a member of our Board of Directors.

Professional fees consisted of: (i) legal fees related to our proposed transactions with Natac and meeting our reporting requirements under the Exchange Act; (ii) accounting and audit fees related to meeting our reporting requirements under the Exchange Act; and (iii) consulting fees related to payments to consultants regarding product development and investor relations activities. The additional professional fees during three and six months ended April 30, 2010 are primarily a result of our proposed transactions with Natac and consulting fees related to product development.

Other operating expenses primarily consisted of travel, office and website development expenses.

The increase in foreign currency gain primarily relates to favorable exchange rates in connection with our outstanding accounts payable and loans payable.

If we are able to obtain sufficient financing to undertake our proposed business plan for our over-the-counter and pharmaceutical business, our expenses are anticipated to increase significantly.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
							Percentage
		At April 30, 2010			At October 31, 2009		Increase / (Decrease)
Current Assets	$	101,579		$	271,106		(62.5)%
Current Liabilities		(903,995	)		(923,685	)	(2.1)%
Working Capital Deficit	$	(802,376	)	$	(652,579	)	23.0%

Cash Flows
		Six Months Ended			Six Months Ended
		April 30, 2010			April 30, 2009
Cash Flows used in (provided by) Operating Activities	$	(711,627	)	$	508,838
Cash Flows used in Investing Activities		-			(697,331	)
Cash Flows from Financing Activities		542,100			189,700
Effect of Foreign Currency Translations		-			-
Net Increase (Decrease) in Cash During Period	$	(169,527	)	$	1,207

Our working capital deficit increased from $652,579, as at October 31, 2009, to $802,416, as at April 30, 2010. The increase in our working capital deficit is due to: (i) a decrease in cash as a result of repayments of a portion of our accounts payable; and (ii) the fact that we recorded a payable of EUR 130,000 to Natac pursuant to the Lab Facilities and Services Agreement.

During the six months ended April 30, 2010, we completed the following equity financings:

	(a)	we issued 4,235,930 shares of our common stock for cash proceeds of $413,593 and to settle outstanding indebtedness of $10,000 under our Foreign Private Placement;

	(b)	we issued 650,000 shares of our common stock for cash proceeds of $39,000 and to settle outstanding indebtedness of $26,000 under our U.S. Private Placement; and

	(c)	we issued 300,000 shares of our common stock at a deemed price of $81,000 in exchange for consulting services.

Subsequent to our quarter ended April 30, 2010, we issued 666,666 shares of our common stock for cash proceeds of $100,000 pursuant to Rule 506 of Regulation D of the Securities Act. The subscriber represented that it was an accredited investor as defined in Regulation D.

Future Financings

As at April 30, 2010, we had cash on hand of $101,579. Currently, we do not have sufficient financial resources to complete our plan of operation for the next twelve months. We have not earned any revenues to date and we do not anticipate earning revenues in the near future. As such, our ability to complete our plan of operation is dependent upon our ability to obtain substantial financing in the near term. Any future financing that we obtain is expected to be in the form of sales of our equity securities. If we are successful in completing any equity financings, of which there is no assurance, our existing shareholders will experience a dilution of their interest in our company. There is a substantial doubt that we will be able to obtain financing in an amount that is sufficient to enable us to complete our proposed plan of operation. If we are not successful in raising sufficient financing, we will not be able to complete our plan of operation. We do not have any specific alternatives to our current plan of operation and have not planned for any such contingency. If we are not successful in raising sufficient financing, our business may fail and our shareholders may lose all or part of their investment.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

Our significant accounting policies are described in Note 3 to our interim financial statements for the period ended April 30, 2010 included in this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of April 30, 2010 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed in our Annual Report on Form 10-K for our year ended October 31, 2009 (the “2009 Annual Report”).

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in our 2009 Annual Report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2010 fairly present our financial condition, results of operations and cash flows in all material respects.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended April 30, 2010 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

We require additional financing.

To date our operations have not been profitable. We have not earned any revenues to date and there is no assurance that we will be able to do so in the near future. In addition, there is no assurance that our ongoing expenditures will exceed our estimates over the next twelve months. We may never be able to achieve profitability.

We do not currently have the financial resources to complete our plan of operation for the next twelve months. We anticipate that we will require substantial financing over the next twelve months in order to complete our business plan. However, there is no assurance that we will be able to obtain additional financing. If further financing is not available or obtainable, our ability to meet our financial obligations and pursue our plan of operation will be substantially limited and investors may lose a substantial portion or all of their investment.

Our inability to complete our product development activities successfully may severely limit our ability to operate and finance operations.

The development of our technology as an over-the-counter medication and a FDA approved pharmaceutical will require significant financing and additional research and development as well as substantial clinical trials. We believe that the United States, Europe and Canada will be the principal markets for our technology, as will any country in the world where the need for the treatment of liver diseases, including the Hepatitis C virus, exists. We may not be able to successfully complete development of our technology, or successfully market our technology. We, and any of our potential collaborators, may encounter problems and delays relating to research and development, regulatory approval and intellectual property rights of our technology. Our research and development programs may not be successful. Our technology may not prove to be safe and efficacious in clinical trials, and we may not obtain the intended regulatory approvals for our technology. Whether or not any of these events occur, we may not have adequate resources to continue operations for the period required to resolve the issue delaying development and we may not be able to raise capital to finance our operation during the period required for resolution of that issue.

We may lose our competitiveness if we are not able to protect our proprietary technology and intellectual property rights against infringement, and any related litigation may be time-consuming and costly.

Our success and ability to compete depends to a significant degree on our proprietary technology. If any of our competitors copy or otherwise gain access to our proprietary technology or develop similar technologies independently, we may not be able to compete as effectively. The measures we have implemented to protect our proprietary technology and other intellectual property rights are currently based upon patent applications filed in the United States, Europe and Canada and European Drug Master File applications. This, however, may not be adequate to prevent the unauthorized use of our proprietary technology and our other intellectual property rights. Further, the laws of foreign countries may provide inadequate protection of such intellectual property rights. We may need to bring legal claims to enforce or protect such intellectual property rights. Any litigation, whether successful or unsuccessful, may result in substantial costs and a diversion of our company's resources. In addition, notwithstanding our rights to our intellectual property, other persons may bring claims against us alleging that we have infringed on their intellectual property rights or claims that our intellectual property rights are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our attention and resources, result in the loss of goodwill associated with our business or require us to make changes to our technology.

We may become subject to intellectual property litigation which may harm our business.

Our success depends in part on our ability to develop commercially viable products without infringing the proprietary rights of others. Although we have not been subject to any filed infringement claims, other patents or patent applications could exist or could be filed which may prohibit or limit our ability to market our products or maintain a competitive position. In the event of an intellectual property dispute, we may be forced to litigate. Intellectual property litigation may divert management's attention from developing our technology and may force us to incur substantial costs regardless of whether we are successful. An adverse outcome could subject us to significant liabilities to third parties, and force us to curtail or cease the development and commercialization of our technology.

If we commercialize or test our technology, we will be subject to potential product liability claims which may affect our financial condition.

We face an inherent business risk of exposure to product liability claims in the event that the use of our technology during research and development efforts, including clinical trials, or after commercialization, results in adverse affects. As a result, we may incur significant product liability exposure, which may exceed any insurance coverage that we obtain in the future. Even if we elect to purchase such issuance in the future, we may not be able to maintain adequate levels of insurance at reasonable cost and/or reasonable terms. Excessive insurance costs or uninsured claims may increase our operating loss and affect our financial condition.

If we fail to effectively manage the growth of our company and the commercialization or licensing of our technology, our future business results could be harmed and our managerial and operational resources may be strained.

As we proceed with the development of our technology and the expansion of our marketing and commercialization efforts, we expect to experience significant growth in the scope and complexity of our business. We will need to add staff to manage operations, handle business development efforts and perform finance and accounting functions. We anticipate that we will be required to hire a broad range of additional personnel in order to successfully advance our operations. This growth is likely to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential business, or the failure to manage growth effectively, could have a material adverse effect on our business and financial condition.

Failure to obtain and maintain required regulatory approvals will severely limit our ability to commercialize our technology.

We will need to obtain the approval of the FDA before we commence commercialization of our technology as a pharmaceutical in the United States. We may also be required to obtain additional approvals from foreign regulatory authorities to apply for any sales activities we may carry out in those jurisdictions. If we cannot demonstrate the safety, reliability and efficacy of our technology, the FDA or other regulatory authorities could delay or withhold regulatory approval of our technology.

Even if we obtain regulatory approval of our technology, that approval may be subject to limitations on the indicated uses for which it may be marketed. Even after granting regulatory approval, the FDA and other regulatory agencies and governments in other countries will continue to review and inspect any future marketed products as well as any manufacturing facilities that we may establish in the future. Later discovery of previously unknown problems with a product or facility may result in restrictions on the product, including a withdrawal of the product from the market. Further, governmental regulatory agencies may establish additional regulations which could prevent or delay regulatory approval of our technology.

Even if we obtain regulatory approval to commercialize our products, lack of commercial acceptance may impair our business.

Our product development efforts are primarily directed toward obtaining regulatory approval for our liver disease product treatments. Our products may not be employed in all potential applications being investigated, and any reduction in applications may limit the market acceptance of our products and our potential revenues. As a result, even if our products are developed into marketable products and we obtain all required regulatory approvals, we cannot be certain that our products will be adopted at a level that would allow us to operate profitably.

If we do not keep pace with our competitors, technological advancements and market changes, our technology may become obsolete and our business may suffer.

The market for our technology is very competitive, is subject to rapid technological changes and varies for different individual products. We believe that there are potentially many competitive approaches being pursued that compete with our technology, including some by private companies for which information is difficult to obtain.

Many of our competitors have significantly greater resources and have developed products and processes that directly compete with our technology. Our competitors may develop, or may in the future develop, new technologies that directly compete with our technology or even render our technology obsolete. Our technology is designed to benefit people suffering from moderate to severe liver maladies, such as elevated liver enzymes and the Hepatitis C viral infection. Even if we are able to demonstrate improved or equivalent results from our technology, researchers and practitioners may not use our technology and we may suffer a competitive disadvantage. Finally, to the extent that others develop new technologies that address the targeted application for our current technology, our business will suffer.

If we are unable to hire and retain key personnel, then we may not be able to implement our business plan.

We depend on the services of our senior management and key technical personnel. In particular, our future success will depend on the continued efforts of John Boschert, an executive officer and a member of our Board of Directors, Luc Vanhal, our Chief Financial Officer, James Sandino, a member of our Board of Directors, and F. Javier Benedi Garcia, a member of our Board of Directors. We also rely on consulting from Professor Harry H.S. Fong and Jim Metropoulos. The loss of the services of any of the gentlemen mentioned above and the further erosion of staff could have an adverse effect on our business, financial condition and results of operations.

The quotation price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor.

Our common shares are quoted on the OTC Bulletin Board. Companies quoted on the OTC Bulletin Board have traditionally experienced extreme price and volume fluctuations. In addition, our stock price may be adversely affected by factors that are unrelated or disproportionate to our operating performance. Market fluctuations, as well as general economic, political and market conditions such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. In addition, to date, the trading volume for our shares on the OTC Bulletin Board has been limited. As a result of this potential volatility and potential lack of a trading market, an investor may not be able to sell any of our common stock that they acquire that a price equal or greater than the price paid by the investor.

We may conduct further offerings of our equity securities in the future, in which case your shareholdings will be diluted.

Since our inception, we have been reliant upon sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, investors' percentage interest in us will be diluted.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit
Number	Description of Exhibits
2.1	Agreement and Plan of Merger dated July 24, 2009 between the Company (as parent surviving company) and Caleco Pharma Corp. (as subsidiary merging entity).⁽²⁰⁾
3.1	Articles of Incorporation.⁽¹⁾
3.2	Certificate of Change – 13-for-1 Stock Split effective September 30, 2005.⁽⁷⁾
3.3	Certificate of Amendment to Articles – Name Change from Triton Resources, Inc. to Skyflyer Inc. effective October 17, 2006.⁽⁷⁾
3.4	Certificate of Amendment to Articles of Incorporation – Name Change from Skyflyer Inc. to Blackstone Lake Minerals Inc. effective January 23, 2008.⁽¹⁰⁾
3.5	Certificate of Merger.⁽²⁰⁾
3.6	Articles of Merger between the Company (as surviving entity) and Caleco Pharma Corp. (as merging entity), with surviving entity changing its name to Caleco Pharma Corp.⁽²⁰⁾
3.7	Bylaws.⁽¹⁾
10.1	Share Purchase Agreement among the Company, Inventa Holding GmbH, Skyflyer Technology GmbH and Perry Augustson, dated for reference the 31^stday of March, 2006.⁽³⁾
10.2	Agreement and Deed of Transfer between Inventa Holding GmbH and the Company dated for reference as of the 19^thday of April, 2006.⁽⁴⁾
10.3	Patent Transfer Agreement between Dieter Wagels and Skyflyer Technology GmbH, dated effective as of April 17, 2006.⁽⁴⁾
10.4	Loan Agreement between Dast GmbH and Skyflyer Technology GmbH dated December 8, 2006.⁽⁵⁾
10.5	Employment contract between Skyflyer Technology GmbH and Dr. Manfred Sappok, dated for reference as of June 1, 2005 (translated from German to English).⁽⁶⁾
10.6	Employment contract between Skyflyer Technology GmbH and Dieter Wagels, dated for reference as of January 1, 2006 (translated from German to English).⁽⁶⁾
10.7	Purchase Agreement dated October 3, 2007 between American Yellowcake Resources Inc. and Skyflyer Inc.⁽⁸⁾
10.8	Loan Agreement dated October 17, 2007 between the Company and Black Pointe Holdings Inc.⁽⁹⁾
10.9	Extension to Loan Agreement between Dast GmbH and Skyflyer Technology GmbH, dated July 30, 2007 (translated from German to English).⁽¹²⁾
10.10	Second Extension to Loan Agreement between Dast GmbH and Skyflyer Technology GmbH, dated December 31, 2007 (translated from German to English).⁽¹²⁾
10.11	Loan Agreement between Dast GmbH and Skyflyer Technology GmbH dated November 28, 2007 (translated from German to English).⁽¹²⁾

Exhibit
Number	Description of Exhibits
10.12	Loan Agreement between Dast GmbH and Skyflyer Technology GmbH dated December 6, 2007 (translated from German to English).⁽¹²⁾
10.13	Loan Agreement between Dast GmbH and Skyflyer Technology GmbH dated December 7, 2007 (translated from German to English).⁽¹²⁾
10.14	Management Consultant Agreement dated March 1, 2008 between the Company and Dr. Rudolf Mauer.⁽¹¹⁾
10.15	Share Exchange Agreement dated for reference as of March 31, 2008 among Blackstone Lake Minerals Inc., Inventa Holding GmbH and Skyflyer Technology GmbH.⁽¹³⁾
10.16	Management Consultant Agreement dated October 1, 2008 between the Company and John Boschert.⁽¹⁴⁾
10.17	Technology Purchase Agreement dated October 16, 2008 among the Company, NY Financial (International) Corp., Caleco Pharma Corp. (our former wholly owned subsidiary) and John Boschert.⁽¹⁵⁾
10.18	Amendment Agreement to Technology Purchase Agreement dated October 16, 2008 among the Company, NY Financial (International) Corp., Caleco Pharma Corp. (our former wholly owned subsidiary) and John Boschert.⁽¹⁶⁾
10.19	Technology Purchase Agreement dated December 19, 2008 among the Company, NY Financial (International) Corp., Caleco Pharma Corp. (our former wholly owned subsidiary) and John Boschert.⁽¹⁷⁾
10.20	Promissory Note between Caleco Pharma Corp. (our former wholly owned subsidiary) and NY Financial (International) Inc.⁽¹⁸⁾
10.21	Investor Relations Service Agreement between the Company and Evergreen Marketing, Inc. dated October 6, 2009.⁽²¹⁾
10.22	Consulting Agreement dated October 27, 2009 between the Company and Professor Harry H.S. Fong.⁽²²⁾
10.23	License Agreement dated November 1, 2009 between the Company and Caleco Pharma S.L.⁽²³⁾
10.24	Consulting Agreement dated December 17, 2009 between the Company and Peter Kitzinski.⁽²⁴⁾
10.25	Consulting Agreement dated for reference February 1, 2010 between the Company and BlueWater Advisory Group, LLC.⁽²⁵⁾
10.26	Designated Sponsor Agreement dated February 9, 2010 between the Company and ICF Kursmackler AG.⁽²⁵⁾
10.27	Share Purchase Agreement dated February 10, 2010 among the Company, Natac Biotech S.L., and the principal shareholders of Natac Biotech S.L.⁽²⁵⁾
10.28	Letter Agreement dated February 10, 2010 between the Company and Natac Biotech S.L.⁽²⁵⁾
10.29	Promissory Note dated February 10, 2010 between the Company and Natac Biotech S.L.⁽²⁵⁾
10.30	Lab Facilities and Service Agreement dated for reference February 18, 2010 between the Company and Natac Biotech S.L.⁽²⁶⁾
10.31	License Agreement dated March 12, 2010 between the Company and Natac Biotech S.L.⁽²⁷⁾
10.32	Amendment Agreement to Share Purchase Agreement dated March 19, 2010 among the Company, Natac Biotech, S.L. and the principal shareholders of Natac Biotech S.L.⁽²⁸⁾
10.33	Amendment Agreement to Lab Facilities and Services Agreement dated March 19, 2010 between the Company and Natac Biotech, S.L. ⁽²⁸⁾
10.34	Second Amendment Agreement to Share Purchase Agreement dated for reference April 19, 2010 among the Company, Natac Biotech, S.L. and the principal shareholders of Natac Biotech S.L. ⁽²⁹⁾
10.35	Second Amendment Agreement to Lab Facilities and Services Agreement dated for reference April 19, 2010 between the Company and Natac Biotech, S.L. ⁽²⁹⁾
10.36	Management Consulting Agreement dated June 11, 2010 between the Company and Luc Vanhal⁽³⁰⁾
10.37	Third Amendment Agreement to Lab Facilities and Services Agreement dated for reference May 19, 2010 between the Company and Natac Biotech, S.L.⁽³⁰⁾

Exhibit
Number	Description of Exhibits
14.1	Code of Ethics.⁽²⁾
31.1	Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
31.2	Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
32.1	Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2	Certification of Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

Notes:
(1)	Filed as an exhibit to our Registration Statement on Form SB-2 originally filed on January 14, 2005, as amended.
(2)	Filed as an exhibit to our Annual Report on Form 10-KSB filed on January 30, 2006.
(3)	Filed as an exhibit to our Current Report on Form 8-K filed on April 10, 2006.
(4)	Filed as an exhibit to our Current Report on Form 8-K filed on April 26, 2006.
(5)	Filed as an exhibit to our Current Report on Form 8-K filed on December 15, 2006.
(6)	Filed as an exhibit to our Annual Report on Form 10-KSB filed on January 30, 2007.
(7)	Filed as an exhibit to our Quarterly Report on Form 10-QSB filed on September 19, 2007.
(8)	Filed as an exhibit to our Current Report on Form 8-K filed on October 11, 2007.
(9)	Filed as an exhibit to our Current Report on Form 8-K filed on October 23, 2007.
(10)	Filed as an exhibit to our Current Report on Form 8-K filed on January 25, 2008.
(11)	Filed as an exhibit to our Current Report on Form 8-K filed on March 13, 2008.
(12)	Filed as an exhibit to our Quarterly Report on Form 10-QSB filed on March 21, 2008.
(13)	Filed as an exhibit to our Current Report on Form 8-K filed on April 8, 2008.
(14)	Filed as an exhibit to our Current Report on Form 8-K filed on October 7, 2008.
(15)	Filed as an exhibit to our Current Report on Form 8-K filed on October 22, 2008.
(16)	Filed as an exhibit to our Current Report on Form 8-K filed on December 2, 2008.
(17)	Filed as an exhibit to our Current Report on Form 8-K filed on December 29, 2008.
(18)	Filed as an exhibit to our Current Report on Form 8-K filed on January 27, 2009.
(19)	Filed as an exhibit to our Annual Report on Form 10-K filed on February 13, 2009.
(20)	Filed as an exhibit to our Current Report on Form 8-K filed on September 4, 2009.
(21)	Filed as an exhibit to our Current Report on Form 8-K filed on October 9, 2009.
(22)	Filed as an exhibit to our Current Report on Form 8-K filed on November 2, 2009.
(23)	Filed as an exhibit to our Current Report on Form 8-K filed on November 5, 2009.
(24)	Filed as an exhibit to our Current Report on Form 8-K filed on December 23, 2009.
(25)	Filed as an exhibit to our Current Report on Form 8-K filed on February 16, 2010.
(26)	Filed as an exhibit to our Current Report on Form 8-K filed on February 22, 2010.
(27)	Filed as an exhibit to our Quarterly Report on Form 10-Q filed on March 17, 2010.
(28)	Filed as an exhibit to our Current Report on Form 8-K filed on February 22, 2010.
(29)	Filed as an exhibit to our Current Report on Form 8-K filed on April 27, 2010
(30)	Filed as an exhibit to our Current Report on Form 8-K filed on June 11, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			CALECO PHARMA CORP.


Date:	June 14, 2010	By:
			/s/ John Boschert
			JOHN BOSCHERT
			Chief Executive Officer, President, Secretary & Treasurer
			(Principal Executive Officer)


Date:	June 14, 2010	By:
			/s/ Luc Vanhal
			LUC VANHAL
			Chief Financial Officer
			(Principal Financial Officer)

CALECO PHARMA CORP. 10-Q