Exhibit 99.1
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Financial Statements

As of December 31, 2011 and 2010 and
for the years ended December 31, 2011 and 2010 and
for the period from June 13, 2000 (inception) to December 31, 2011

 
F-1

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Newark, NJ
 
We have audited the accompanying consolidated balance sheets of Actinium Pharmaceuticals, Inc. (a Development Stage Company) (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended and for the period from June 13, 2000 (Inception) to December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Actinium Pharmaceuticals, Inc. as of December 31, 2011 and 2010 and the results of their operations and their cash flows for the years then ended and for the period from June 13, 2000 (Inception) to December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has not generated any revenue since its inception, has a history of operating losses, and has an accumulated deficit since its inception. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ GBH CPAs, PC
GBH CPAs, PC
www.gbhcpas.com
Houston, Texas
September 7, 2012

 
F-2

 
 
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
 
             
   
December 31, 2011
   
December 31, 2010
 
ASSETS
           
Current assets:
           
    Cash
  $ 5,703,798     $ 196,135  
    R&D reimbursement receivable
    237,834       279,401  
    Prepaid expenses and other current assets
    5,384       10,151  
    Deferred financing costs
    252,248       -  
    Total current assets
    6,199,264       485,687  
                 
Property and equipment, net
    1,233       1,866  
                 
TOTAL ASSETS
  $ 6,200,497     $ 487,553  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
    Accounts payable and accrued expenses
  $ 644,511     $ 88,492  
    Convertible notes payable, net
    124,363       -  
    Derivative liabilities
    4,439,613       -  
    Total current liabilities
    5,208,487       88,492  
                 
Commitments and contingencies
               
                 
Stockholders’ equity:
               
    Preferred stock-Series A, $0.01 par value; 1,000,000 shares authorized;
               
        1,000,000 shares issued and outstanding
    10,000       10,000  
    Preferred stock-Series B, $0.01 par value; 4,711,247 shares authorized;
               
        4,711,247 shares issued and outstanding
    47,112       47,112  
    Preferred stock-Series C-1, $0.01 par value; 800,000 shares authorized;
               
        800,000 shares issued and outstanding
    8,000       8,000  
    Preferred stock-Series C-2, $0.01 par value; 666,667 shares authorized;
               
        666,667 shares issued and outstanding
    6,667       6,667  
    Preferred stock-Series C-3, $0.01 par value; 502,604 shares authorized;
               
        502,604 shares issued and outstanding
    5,026       5,026  
    Preferred stock-Series C-4, $0.01 par value; 4,250,000 shares authorized;
               
        4,250,000 shares issued and outstanding
    42,500       42,500  
    Preferred stock-Series D, $0.01 par value; 3,000,000 shares authorized;
               
        3,000,000 shares issued and outstanding
    30,000       30,000  
    Preferred stock-Series E, $0.01 par value; 30,000,000 shares authorized;
               
        23,697,119 shares issued and outstanding
    236,971       -  
    Common stock, $0.01 par value, 80,000,000 shares authorized;
               
        2,407,805 shares issued and outstanding
    24,078       24,078  
    Additional paid in capital
    47,963,914       44,163,141  
    Deficit accumulated during development stage
    (47,382,258 )     (43,937,463 )
    Total stockholders' equity
    992,010       399,061  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 6,200,497     $ 487,553  
 
See accompanying summary of accounting policies and notes to consolidated financial statements.
 
 
F-3

 
 
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statements of Operations

               
For the Period
 
   
For the Year Ended
   
from June 13,
 
   
December 31,
   
2000 (Inception) to
 
   
2011
   
2010
   
December 31, 2011
 
                   
Revenues
  $ -     $ -     $ -  
                         
Operating expenses:
                       
    Research and development, net
    323,788       93,117       22,980,034  
    General and administrative
    2,959,246       561,970       19,998,743  
    Depreciation and amortization
    633       72,101       3,261,881  
    Loss on disposition of equipment
    -       -       550,186  
    Total operating expenses
    3,283,667       727,188       46,790,844  
                         
Loss from operations
    (3,283,667 )     (727,188 )     (46,790,844 )
                         
Other (income) expense:
                       
    Interest expense
    175,094       78       865,380  
    Gain on extinguishment of liability
    -       (260,000 )     (260,000 )
    Gain on change in fair value of derivative liabilities
    (13,966 )     -       (13,966 )
    Total other (income) expense
    161,128       (259,922 )     591,414  
                         
Net loss
  $ (3,444,795 )   $ (467,266 )   $ (47,382,258 )
                         
Net loss per common share - basic and diluted
                       
    $ (1.43 )   $ (0.19 )        
Weighted average number of common shares
    outstanding - basic and diluted
    2,407,805       2,407,805          

See accompanying summary of accounting policies and notes to consolidated financial statements.

 
F-4

 
 
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity
For the Period From June 13, 2000 (Inception) to December 31, 2011
 
   
Series A
Preferred Stock
   
Series B
Preferred Stock
   
Series C-1
Preferred Stock
   
Series C-2
Preferred Stock
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
                                                 
Issuance of founder shares
    -     $ -       -     $ -       -     $ -       -     $ -  
Proceeds from issuance of Series A preferred
    437,500       4,375       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2000
    437,500       4,375       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of Series A preferred
    562,500       5,625       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2001
    1,000,000       10,000       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2002
    1,000,000       10,000       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2003
    1,000,000       10,000       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2004
    1,000,000       10,000       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2005
    1,000,000       10,000       -       -       -       -       -       -  

See accompanying summary of accounting policies and notes to consolidated financial statements.

 
F-5

 

Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity
For the Period From June 13, 2000 (Inception) to December 31, 2011
(Continued)
                                               
                                                 
   
Series A
Preferred Stock
   
Series B
Preferred Stock
   
Series C-1
Preferred Stock
   
Series C-2
Preferred Stock
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
                                                 
Balances, December 31, 2005
    1,000,000     $ 10,000       -     $ -       -     $ -       -     $ -  
                                                                 
Conversion of common stock to preferred stock
    -       -       -       -       800,000       8,000       666,667       6,667  
Proceeds from issuance of Series B preferred
    -       -       2,511,247       25,112       -       -       -       -  
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2006
    1,000,000       10,000       2,511,247       25,112       800,000       8,000       666,667       6,667  
                                                                 
Proceeds from issuance of Series B preferred
    -       -       2,200,000       22,000       -       -       -       -  
Common stock issued for services
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2007
    1,000,000       10,000       4,711,247       47,112       800,000       8,000       666,667       6,667  
                                                                 
Proceeds from issuance of Series D preferred
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2008
    1,000,000       10,000       4,711,247       47,112       800,000       8,000       666,667       6,667  
                                                                 
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2009
    1,000,000       10,000       4,711,247       47,112       800,000       8,000       666,667       6,667  
                                                                 
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2010
    1,000,000       10,000       4,711,247       47,112       800,000       8,000       666,667       6,667  

See accompanying summary of accounting policies and notes to consolidated financial statements.

 
F-6

 

Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity
For the Period From June 13, 2000 (Inception) to December 31, 2011
 
(Continued)
                                               
                                                 
   
Series A
Preferred Stock
   
Series B
Preferred Stock
   
Series C-1
Preferred Stock
   
Series C-2
Preferred Stock
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
                                                 
Balances, December 31, 2010
    1,000,000     $ 10,000       4,711,247     $ 47,112       800,000     $ 8,000       666,667     $ 6,667  
                                                                 
Proceeds from issuance of Series E preferred
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Warrant expense
    -       -       -       -       -       -       -       -  
Fair value of derivative warrants
    -       -       -       -       -       -       -       -  
Beneficial conversion feature discount
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2011
    1,000,000     $ 10,000       4,711,247     $ 47,112       800,000     $ 8,000       666,667     $ 6,667  

See accompanying summary of accounting policies and notes to consolidated financial statements.

 
F-7

 
 
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity
For the Period From June 13, 2000 (Inception) to December 31, 2011

(Continued)
                                               
                                                 
   
Series C-3
Preferred Stock
   
Series C-4
Preferred Stock
   
Series D
Preferred Stock
   
Series E
Preferred Stock
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
                                                 
Issuance of founder shares
    -     $ -       -     $ -       -     $ -       -     $ -  
Proceeds from issuance of Series A preferred
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2000
    -       -       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of Series A preferred
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2001
    -       -       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2002
    -       -       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2003
    -       -       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2004
    -       -       -       -       -       -       -       -  
                                                                 
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2005
    -       -       -       -       -       -       -       -  

See accompanying summary of accounting policies and notes to consolidated financial statements.

 
F-8

 
 
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity
For the Period From June 13, 2000 (Inception) to December 31, 2011
                                                 
(Continued)
                                               
                                                 
   
Series C-3
Preferred Stock
   
Series C-4
Preferred Stock
   
Series D
referred Stock
   
Series E
Preferred Stock
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
                                                 
Balances, December 31, 2005
    -     $ -       -     $ -       -     $ -       -     $ -  
                                                                 
Conversion of common stock to preferred stock
    502,604       5,026       4,250,000       42,500       -       -       -       -  
Proceeds from issuance of Series B preferred
    -       -       -       -       -       -       -       -  
Proceeds from issuance of common stock
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2006
    502,604       5,026       4,250,000       42,500       -       -       -       -  
                                                                 
Proceeds from issuance of Series B preferred
    -       -       -       -       -       -       -       -  
Common stock issued for services
    -       -       -       -       -       -       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2007
    502,604       5,026       4,250,000       42,500       -       -       -       -  
                                                                 
Proceeds from issuance of Series D preferred
    -       -       -       -       3,000,000       30,000       -       -  
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2008
    502,604       5,026       4,250,000       42,500       3,000,000       30,000       -       -  
                                                                 
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2009
    502,604       5,026       4,250,000       42,500       3,000,000       30,000       -       -  
                                                                 
Option expense
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -  
                                                                 
Balances, December 31, 2010
    502,604       5,026       4,250,000       42,500       3,000,000       30,000       -       -  

See accompanying summary of accounting policies and notes to consolidated financial statements.

 
F-9

 
 
Actinium Pharmaceuticals, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity
For the Period From June 13, 2000 (Inception) to December 31, 2011
                                                 
(Continued)
                                               
                                                 
   
Series C-3
Preferred Stock
   
Series C-4
Preferred Stock
   
Series D
Preferred Stock
   
Series E
Preferred Stock
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
                                                 
Balances, December 31, 2010
    502,604     $ 5,026       4,250,000     $ 42,500       3,000,000     $ 30,000       -     $ -  
                                                                 
Proceeds from issuance of Series E preferred
    -       -       -       -       -       -       23,697,119       236,971  
Option expense
    -       -       -       -       -       -       -       -  
Warrant expense
    -       -       -       -       -       -       -       -  
Fair value of derivative warrants
    -       -       -       -       -       -       -       -  
Beneficial conversion feature discount
    -       -       -       -       -       -       -       -  
Net loss
    -       -       -       -       -       -       -       -