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The following is an excerpt from a SB-2 SEC Filing, filed by MEDICAL EXCHANGE INC. on 12/2/2004.
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IDO SECURITY INC. - SB-2 - 20041202 - PROPERTIES

DESCRIPTION OF PROPERTY

Our executive and head offices are located at 75 - 103 Cumberland Avenue, Saskatoon, Saskatchewan, Canada S7N 1V6. The offices are provided to us at no charge by Ms. Zhiying Zhao and are located in her residence. This operating facility functions as our main business administration facility. Dr. Chen conducts the majority of our research at Hebei Agriculture University. Dr. Chen is provided with use of these facilities by the

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University free of charge. We believe our current premises are adequate for our current operations and we do not anticipate that we will require any additional premises in the foreseeable future.

DESCRIPTION OF BUSINESS

We were incorporated in the state of Nevada on January 23, 2004 and have commenced research operations.

Our Current Business

We are a company engaging in the research, develop and assembly of transcription factor library. Transcription factors are specific DNA sequences that turn genes function on or off by controlling gene expression, like coaches tell individual players when to scramble onto the field and when to stay on the bench. DNA (deoxyribonucleic acid) is present in all living cells and is responsible for determining the inherited characteristics of all living organism. Transcription factors in all higher organisms consist of two components: the first is a DNA binding domain that recognizes a specific DNA sequence and thereby directs the transcription factor to the proper chromosomal location; and the second is a functional domain that determines whether the gene is active or repressed. Transcription factors prompt particular genes to be active or stay quiet. We intend to engineer these transcription factors so that they can selectively bind to and regulate a target gene and so control gene expression and, as a result, cell function. We intend to improve these transcription factors to make them with more good function and less side effects so that we can sell or license the transcription factors which can be applied in the pharmaceutical industry, human therapeutics, DNA diagnostics and agricultural and industrial biotechnology.

We believe that the transcription factors are widely applicable to pharmaceutical discovery, human therapeutics, DNA diagnostics, plant agriculture and industrial biotechnology. We plan market and sell the transcription factors to business engaged in the pharmaceutical discovery, human therapeutics, DNA diagnostics, plant agriculture and industrial biotechnology.

For example, Plant A in the north has anti-freeze function naturally, Plant B which belong to same category of Plant A from south doesn't have anti-freeze function, so it can't grow in the north, but Plant B can generate big and sweet fruit, people want to grow them in the north, so use specific transcription factor might turn Plant B's anti-freeze gene on since they are in the same category. And we believe some specific transcription factor can also turn human's caducity gene off.

To date, we have been in the progress of generating several basis-leucine zipper transcription ("bZIP") factors. We have been developing and standardizing methods for the assembly of basis-leucine zipper capable of binding to a wide spectrum of DNA sequences. We have also linked basis-leucine zipper to functional domains to create basis-leucine zipper transcription factors and have found in cell-based models their ability to regulate commercially important genes.

We have acquired the following transcription factors at no cost from Mr. Chen Han Xiang, one of our founders and directors:

RNA: ribonucleic acid

TATA : a conserved A-T rich sequence which is contained in promoters of a gene

TAFs : TBP-associated factors

TBP : TATA box-binding protein

TFs : transcription factors

 

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Name of Transcription Factor:

 

Composition:

 

Features:

 

Functions:

bZIPA

bZIPA consists of two sub-TFs in yeast and three in humans and drosophila (although two sub-TFs are derived from a precursor protein).

Both sub-TFs of bZIPA are extremely acidic.

The current wisdom is that bZIPA acts as an anti-repressor, stabilizing bZIPD binding by blocking repressors of transcription that inhibit binding of other transcription factors or that remove TBP from the DNA. Activation of transcription may be dependent on this bZIPA function.

 

bZIPB

Single sub-TF. To date, all bZIPB proteins are between 35 and 40 kilodaltons.

Binds directly to TBP, recruits Type II RNA polymerase, in part through an interaction with the small subunit of bZIPF. Several acidic activators can bind bZIPB in vitro.

 

Stabilizes TBP binding to TATA element. Required for association of RNA polymerase II to the initiation complex. May be a target for regulatory transcription factors.

 

bZIPD/TATA Binding Protein

 

bZIPD is a multi-component (>5 sub-TFs) transcription factor that recognizes and binds to the promoter DNA. bZIPD consists of a DNA binding sub-TF that recognizes the TATA element and is therefore designated TATA-binding protein (or TBP), as well as several TBP-associated factors (or TAFs).

 

TBP consists of a 180 amino acid domain that is sufficient for activity. This domain is made up of an imperfectly repeated sequence, and the repeats are reflected in the symmetry of the molecule The protein resembles a saddle, with the inner surface contacting DNA and the outer surface presumable making protein-protein contacts.

 

bZIPD binding is thought to be the first step in transcription initiation. Some of the TAFs also bind to initiator elements. TBP is also a component of the Type I RNA polymerase and Type III RNA polymerase transcription complexes.

 

 

 

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bZIPE

Two sub-TFs. Probably a tetramer consisting of two molecules of each subunit.

bZIPE modulates the helicase and kinase activities of bZIPH and the two factors show species-specific interactions.

To be determined.

bZIPF

Two sub-TFs (yeast has a third non-essential protein associated).

 

bZIPF binds directly to RNA polymerase II (and was originally isolated as an RNA polymerase II associated protein). bZIPF is necessary for RNA polymerase II to stably associate with the bZIPF- bZIPB-promoter complex. There is a protein interaction between the small sub-FT and bZIPB in vitro and a genetic interaction between the large sub-FT and bZIPB.

 

Helps recruit Type II RNA polymerase to the initiation complex in collaboration with bZIPB. bZIPF is a component of the yeast holoenzyme and mediator complexes. Promotes transcription elongation, may remain associated with the elongating polymerase.

We presently have not commenced any efforts to market and sell any transcription factors to industry. We have not earned any revenues to date.

Marketing

Two of our directors, have developed many business contacts through their past and current employment in the biotech industry in the US, Canada and China and have developed an intimate understanding of business practices and customs. They intend on actively promoting interest in our transcription factors among their business contacts in the biotech industry. In addition, we intend to promote our transcription factors through traditional advertising and promotional media, such as newspaper and trade publications, and advanced media, such as targeted electronic mail, internet banner advertising and internet webpage links, to effect maximum exposure and penetration in the textile products marketplace. We also anticipate joining some biotech conference to introduce our transcription factors and services to the biotech institutions.

 

Strategy

Our goal is for our transcription factor library to become a leading transcription factor library for biotech institutions by low price transcription factors. In order to achieve our goal, we intend to increase the number of biotech institutions using our transcription factors by

  • Attending Biotech Trade Meetings, Promotional Events and Conferences: We intend to attend a number of events attended by biotech institutions in order to further expose our products. These events will include biotech trade meetings and promotional events which are attended by biotech institutions and related seminars and conferences.
  • Developing Direct Marketing Programs to Attract Small to Medium Sized biotech institutions: In addition to marketing through biotech institutions groups and associations, we intend to market directly to smaller biotech institutions. Due to the extreme fragmentation of the biotech industry, we will seek to contact with

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  • biotech companies initially on Saskatoon area. Our marketing will include conducting seminars, and the use of online and traditional advertising media such as newspapers and trade publications.
  • Promoting our Website Through Internet-Based and Traditional Media Advertising: We intend to use Internet-based and traditional media to promote our website directly to biotech institutions. We believe that by increasing our consumer base we will attract additional biotech institutions to use our TF library as a source for leads to biotech products improvement.

We intend to develop a network of qualified representatives who will use our TF library as a source for leads to biotech products improvement. Initially, we hope to include at least one professional in each special trade area. We will build our network through a direct marketing program and through word of mouth. To assure that our customers receive high quality products, we will implement a follow up program to seek feedback from all biotech institutions purchasing our TFs.

 

Gene Recognition Technology

We are currently using basic molecular biology techniques to clone and identify bZIP TFs from various organisms, including yeast, plant, and mammalian, and then characterize their function.

These basic molecular biology techniques, such as DNA and RNA extraction; Polymerase Chain Reaction (PCR), a method to make many copies of DNA; DNA hybridization and transfection; enzymatic assay; etc., are commonly used in biology research area and open to public. There is no license requirement for apply these techniques in our research.

We plan to develop a class of transcription factors called basic-leucine zipper transcription factors, or basis-leucine zipper transcription factors. Basis-leucine zipper transcription factors have two distinct domains: a basis-leucine zipper DNA recognition domain, consisting a basic DNA binding region and an adjacent leucine zipper dimerization region, which directs the transcription factor to the proper chromosomal location by recognizing a specific DNA sequence and a functional domain that regulates the activation or repression of the target gene. This two-domain structure of our engineered basis-leucine zipper transcription factors is modeled on the structure of naturally occurring transcription factors in virtually all higher organisms.

Consistent with this two-domain structure, we take a modular approach to the design of basis-leucine zipper transcription factors, each of which includes a DNA recognition domain and a functional domain. The recognition domain is composed of one or more basis-leucine zippers. Each basis-leucine zipper recognizes and binds to a particular DNA region. Multiple basis-leucine zipper can be linked together to recognize longer stretches of DNA thereby increasing their specificity. By modifying those portions of a basis-leucine zipper that interact with DNA, we believe we can create new basis-leucine zippers capable of recognizing DNA sequences in virtually any gene whose sequence is known.

The basis-leucine zipper DNA recognition domain is coupled to a functional domain, which causes the basis-leucine zipper transcription factor to control or regulate the gene in a desired manner. For instance, an activation domain can cause a target gene to be turned on. Alternatively, a repression domain can cause the gene to be turned off.

Similarly, a detection domain could be used to identify or detect the target DNA sequence in a DNA diagnostic test. It is also possible to link the basis-leucine zipper transcription factor with a molecular switch that permits a target gene to be temporarily activated or repressed. This conditional regulation of a gene allows the effects of gene expression to be controlled in a reversible fashion.

In order to regulate a target gene, the basis-leucine zipper transcription factor must be delivered to a target cell. We are evaluating this and other available delivery technologies for pharmaceutical discovery and other applications.

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Our Planned Research and Development Activities

We plan to take the following research and development activities as part of our plan of operations:

-  we plan to generate further the bZIP TFs and test their DNA target binding affinity and specificity;

-  we plan to assemble TF libraries for the usage in pharmaceutical target discovery;

-   we plan to test the ability of engineered bZIP transcription factors in detecting single-base changes in clinically interesting gene targets;

- we plan to generate bZIP transcription factors for the regulation of target genes in multiple organism

 

the following is our plan of next 12 months: develop more TFs, test and assure their functions and assemble library

Activity

Purpose

Analysis of expression patterns of known transcription factors genes, to assist phenotypic characterization

This action will result in the preparation of a transcription factor gene array, and the generation and analysis of transgenic organism, and the in situ RNA hybridisation analysis transcription factor genes.

Further generate the bZIPs from different organism through the i dentification of mutations at a large number of transcription factor loci, to analyse the phenotypic effects of these mutations and test their DNA target binding affinity and specificity.

Develop computational methods for predicting the interaction of bZIP transcription factors and their target genes, investigate the function of TFs in different cell or tissue.

Ectopic expression of selected bZIP transcription factor genes in mammalian or plant organisms, to gain insights into transcription factors function, their potential to manipulate important traits, their functional conservation, and their target genes.

We will prepare to develop 100 transcription factor constructs which will be used to transform mammalian and crop plants.

Analysis of interactions between transcription factors using a novel iterative two-hybrid screen

This action involves the preparation of a normalised (80% representation) full-size transcription factor ORF two-hybrid library in bait and prey vectors, and the analysis of all possible transcription factors combinations.

Implementation of a bioinformatics infrastructure and the development of "in silico" tools.

We will implant a Web accessible database with navigation tools adequate to the data generated by the consortium, and will also develop algorithms for the analysis of the expression data and for the study of interactions between transcription factors .

Assemble bZIP libraries for the usage in pharmaceutical target discovery.

Transcription factors represent valuable targets for therapeutic interference. The possibility of using transcription factors to regulate the angiogenic therapies is also being actively investigated.

Exam the ability of transcription factor s to regulate mammalian genes in vivo, evaluate the promise and limitations of this approach in basic science and clinical settings

 

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Our future operations will be focused on continuing research, development and assembly for our transcription factor library. In this regard, we intend to:

    • Assemble transcription factor and to sell and license these to companies engaged broadly in pharmaceutical discovery, human therapeutics, DNA diagnostics, plant agriculture and industrial biotechnology;
    • Apply transcription factors to the identification and validation of drug targets;
    • Identify transcription factors that can help determine gene function, and regulate those genes
    • Develop transcription factors as human therapeutics for the direct regulation of disease-related genes.

Multiple Usages of transcription factors

We believe that the unique features of basis-leucine zipper transcription factors will result in important technical advantages, as compared to alternative technologies like gene transplant, when applied to pharmaceutical discovery, human therapeutics, plant agriculture and industrial biotechnology:

  • basis-leucine zipper transcription factors normally and naturally regulate gene expression in the cells of virtually all higher organisms;
  • basis-leucine zipper transcription factors can be designed to recognize unique DNA sequences resulting in the ability to recognize a single gene within the entire genome;
  • basis-leucine zipper transcription factors can activate or repress target genes, enhancing their versatility;
  • basis-leucine zipper transcription factors can be used to regulate gene expression in multiple organisms including humans, animals, plants, microbes and viruses
  • basis-leucine zipper transcription factors can themselves be "turned on" and "turned off" with molecular switches, allowing conditional and reversible regulation of a target gene.

We believe that the technical advantages of our basis-leucine zipper transcription factors will create leverage across multiple applications, products, markets as discussed below:

1)Pharmaceutical Discovery Research

  • DISCOVERY OF NEW GENES AND TARGETS. Basis-leucine zipper transcription factors can be used to change patterns of gene expression in cells, to stimulate clinically interesting changes in these cells, and to determine the genes associated with these changes;
  • VALIDATION OF GENE TARGETS. Basis-leucine zipper transcription factors can be used to target specific genes which is critical to researchers trying to confirm the function and validity of gene targets for drug development;
  • TRANSGENIC ANIMAL MODELS. The conditional expression of basis-leucine zipper transcription factors permits the reversible expression of a target gene, a desirable feature in animal models;

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  • ASSAY DEVELOPMENT. The coordinate regulation of multiple gene targets may be an effective approach to the engineering of proprietary cell lines for the screening and selection of pharmaceutical product candidates from large chemical libraries;
  • SINGLE NUCLEOTIDE POLYMORPHISMS DETECTION. The single-base specificity of basis-leucine zipper permits the detection of single nucleotide polymorphisms, which are single base pair differences in the DNA of different individuals, and the study of their relationship to disease and drug response, also known as pharmacogenomics.

2)Human Therapeutics

  • HUMAN THERAPEUTICS. Regulation of disease-related genes may provide targeted basis-leucine zipper-Therapeutics for the potential treatment of a broad spectrum of diseases;
  • MANUFACTURING OF PROTEIN PHARMACEUTICALS. We believe basis-leucine zipper-engineered human cell lines can be used for production of commercially relevant protein pharmaceuticals;

3)DNA Diagnostics

  • SINGLE NUCLEOTIDE POLYMORPHISMS DETECTION. The single-base specificity of basis-leucine zipper permits the detection of single nucleotide polymorphisms , which we believe are likely to become increasingly important in clinical diagnosis to determine an individual's susceptibility to disease or probable response to drug therapy;
  • AUTOMATION. Unlike conventional DNA detection technologies, basis-leucine zipper recognize double-stranded genomic DNA, which may permit a proprietary and automated approach to the development of DNA diagnostic assays.

4)Agricultural and Industrial Biotechnology

  • AGRICULTURAL BIOTECHNOLOGY. Basis-leucine zipper transcription factors can be used to regulate gene expression in plants, potentially leading to applications in agricultural genomics, agrochemical discovery and the development of new crops with enhanced nutritional properties and enhanced pathogen resistance;
  • INDUSTRIAL BIOTECHNOLOGY. Basis-leucine zipper transcription factors may be used to regulate gene expression in yeast, other microbial production organisms and plants which may permit the expanded use of engineered organisms for the manufacture of industrial chemicals.

Research and Development

To date, Dr. Chen have engineered several of basis-leucine zipper transcription factors and have tested their ability to bind to their target sequences and to function in cell-based models. In similar models, we have also found the ability of basis-leucine zipper transcription factors to regulate a limited number of commercially important genes.

We intend to develop our transcription factor library for application in pharmaceutical discovery, human therapeutics, DNA diagnostics, and agricultural and industrial biotechnology. To make TFs broadly used in these industries, and to fund internal research and development activities, we intend to pursue collaborations with selected pharmaceutical and biotechnology companies.

As at September 30, 2004 we have not spent any money on research and development. Because these work have been provided by Dr. Chen free of charge. Our projected research and development expenses will be around $20,000 in 2004, $30,000 in 2005, $30,000 in 2006 and $40,000 in 2007. Currently, we have two employees dedicated to research and development. Because of the specialized nature of the core technology, our two employees have Ph.D. and Master degrees. We believe that new and timely development of products and

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technologies are important to our competitive position in the market and intend to continue to invest in research and development activities.

BROKERAGE PARTNERS