THE ROSEN LAW FIRM, P.A.Laurence M. Rosen, Esq. (LR 5733)Phillip Kim, Esq. (PK 9384)350 Fifth Avenue, Suite 5508New York, New York 10118Telephone: (212) 686-1060Fax: (212) 202-3827

Attorneys for Plaintiff

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

)JOHN WOLFE, INDIVIDUALLY AND ON )BEHALF OF ALL OTHERS SIMILARLY ) CASE No.:SITUATED, )

)Plaintiff, ) CLASS ACTION COMPLAINT

vs. ) FOR VIOLATIONS OF THE) FEDERAL SECURITIES LAWS

ASPENBIO PHARMA, INC., RICHARD G. )DONNELLY, DAVID J. FAULKER, STEVE )LUNDY, GREGORY PUSEY, JEFFREY G. ) JURY TRIAL DEMANDEDMCGONEGAL, DR. MARK J. RATAIN )DR. ROBERT CASPARI, MARK COLGIN, )GAIL S. SCHOETTLER, )

)Defendants. )

) )

Plaintiff, John Wolfe, individually and on behalf of all other persons similarly situated, by his

undersigned attorneys, for his complaint against Defendants, alleges the following based upon

personal knowledge as to himself and his own acts, and information and belief as to all other matters,

based upon, inter alia, the investigation conducted by and through his attorneys, which included,

among other things, a review of the Defendants’ public documents, conference calls and

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announcements made by Defendants, United States Securities and Exchange Commission (“SEC”)

filings, wire and press releases published by and regarding AspenBio Pharma, Inc., (“AspenBio”,

“APPY”, or the “Company”), securities analysts’ reports and advisories about the Company, and

information readily obtainable on the Internet. Plaintiff believes that substantial evidentiary support

will exist for the allegations set forth herein after a reasonable opportunity for discovery.

NATURE OF THE ACTION

1. This is a federal securities class action on behalf of a class consisting of all persons

other than Defendants who: (1) purchased common stock of AspenBio Pharma, Inc. during the

period between February 22, 2007 and July 19, 2010 (inclusive); (2) are seeking to recover damages

caused by Defendants’ violations of federal securities laws; and (3) wish to pursue remedies under

the Securities Exchange Act of 1934 (the “Exchange Act”).

JURISDICTION AND VENUE

2. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

the Exchange Act, (15 U.S.C. §78j(b) and 78t(a)), and Rule 10b-5 promulgated thereunder (17

C.F.R. §240.10b-5).

3. This Court has jurisdiction over the subject matter of this action pursuant to §27 of

the Exchange Act (15 U.S.C. §78aa) and 28 U.S.C. § 1331.

4. Venue is proper in this Judicial District pursuant to §27 of the Exchange Act, 15

U.S.C. § 78aa and 28 U.S.C. § 1391(b).

5. In connection with the acts, conduct and other wrongs alleged in this Complaint,

Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

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including but not limited to, the United States mails, interstate telephone communications and the

facilities of the NASDAQ Capital Market (“NASDAQ CM”).

PARTIES

6. Plaintiff John Wolfe, as set forth in the accompanying certification, incorporated by

reference herein, purchased AspenBio securities at artificially inflated prices during the Class Period

and has been damaged thereby.

7. Defendant AspenBio Pharma, Inc. is a Colorado Corporation with its principal

executive offices located at 1585 South Perry Street, Castle Rock, CO. As indicated by the

Company’s most recent 10-K Filing, year ended December 31 st, 2009, AspenBio “is an emerging

bio-pharmaceutical company dedicated to the discovery, development, manufacture, and marketing

of novel proprietary products that have large worldwide market potential.” As of August 28, 2007 the

Company’s common stock was actively traded on the NASDAQ CM under ticker “APPY”; prior to

that date, and as of the beginning of the Class Period, the Company’s common stock was actively

traded on the OTC Bulletin Board under ticker “APNB”.

8. Defendant Richard G. Donnelly (“Donnelly”) was, from the beginning of the Class

Period until his resignation on February 10, 2009, the President, Chief Executive Officer (“CEO”),

and Principal Executive Officer of the Company.

9. Defendant Daryl J. Faulkner (“Faulkner”) was appointed as Executive Chairman on

January 26, 2009, and, following Donnelly’s resignation, was subsequently appointed as Interim

CEO of the Company on February 10, 2009. On March 24, 2010, Faulkner relinquished his position

as CEO, but remained as Executive Chairman of the Company.

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10. Defendant Steve Lundy (“Lundy”) was appointed as CEO of the Company on March

24, 2010. As of this writing, Lundy continues in his role as CEO of the Company.

11. Defendant Gregory Pusey (“Pusey”) was, at all relevant times herein, Vice Chairman,

Secretary, and Director of the Company. He has been involved in a number of failed public

companies, and was ordered to stand trial on allegations of securities fraud by the Los Angeles

Superior Court on February 11, 2010.

12. Defendant Jeffrey G. McGonegal (“McGonegal”) was, at all relevant times herein,

Chief Financial Officer of the Company.

13. Defendant Dr. Mark J. Ratain (“Ratain”) was, from his appointment on March 31,

2008, through the end of the Class Period, an Independent Director of the Company.

14. Defendant Dr. Robert Caspari (“Caspari”) was, from his appointment on February 10,

2009, through the end of the Class Period, Chief Operational Officer and Chief Medical Officer of

the Company. On August 20, 2010, the Company announced that Caspari had resigned, effective

August 31, 2010.

15. Defendant Mark Colgin, PhD (“Colgin”) joined the Company in September, 2000,

and was appointed Chief Scientific Officer on February 10, 2009. As of this writing, he remains with

the Company in that role.

16. Gail S. Schoettler (“Schoettler”) joined the Company as a Director in August, 2001.

As of at least October 15, 2009, and through the end of the Class Period, Schoettler served in the role

of Lead Director of the Company.

17. Defendants Donnelly, Faulker, Lundy, Pusey, McGonegal, Ratain, Caspari, Colgin,

and Schoettler are collectively referred to hereinafter as the “Individual Defendants”.

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18. During the Class Period, each of the Individual Defendants, as senior executive

officers, agents, and/or directors of AspenBio and its subsidiaries and affiliates, was privy to non-

public information concerning the Company’s business, finances, products, markets, and present and

future business prospects, via access to internal corporate documents, conversations and connections

with other corporate officers and employees, attendance at management and Board of Directors

meetings and committees thereof, and via reports and other information provided to them in

connection therewith. Because of their possession of such information, the Individual Defendants

knew or recklessly disregarded the fact that the adverse facts specified herein had not been disclosed

to, and were being concealed from, the investing public.

19. Because of the Individual Defendants’ positions with the Company, they had access to

the adverse undisclosed information about the Company’s business, operations, operational trends,

financial statements, markets and present and future business prospects via access to internal

corporate documents (including the Company’s operating plans, budgets, and forecasts and reports of

actual operations compared thereto), conversations and connections with other corporate officers and

employees, attendance at management and Board of Directors meetings and committees thereof, and

via reports and other information provided to them in connection therewith.

20. It is appropriate to treat the Individual Defendants as a group for pleading purposes

and to presume that the disclosure of the false, misleading, and incomplete information conveyed in

the Company’s public filings, press releases, and other publications as alleged herein is the result of

collective actions of the narrowly defined group of Defendants identified above. Each of the above

officers and directors of AspenBio and its subsidiaries and affiliates, by virtue of his or her position

with the Company, directly participated in the management of the Company, was directly involved in

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the day-to-day operations of the Company at the highest levels, and was privy to confidential

proprietary information concerning the Company and its business, operations, growth, financial

statements, and financial condition, as alleged herein. Said Defendants were involved in drafting,

producing, reviewing and/or disseminating the false and misleading statements and information

alleged herein, were aware of, or were in reckless disregard of, the false and misleading statements

being issued regarding the Company, and approved or ratified these statements, in violation of the

federal securities laws.

21. As officers, directors, and controlling persons of a publicly-held company whose

securities were and are registered with the SEC pursuant to the Exchange Act, and that were traded

on both the OTC Bulletin Board and the NASDAQ CM, and governed by the provisions of the

federal securities laws, the Individual Defendants each had a duty to disseminate accurate and

truthful information promptly with respect to the Company’s financial condition and performance,

growth, operations, financial statements, business, markets, management, earnings and present and

future business prospects, and to correct any previously-issued statements that had become materially

misleading or untrue, so that the market price of the Company’s publicly-traded securities would be

based upon truthful and accurate information. The Individual Defendants’ misrepresentations and

omissions during the Class Period violated these specific requirements and obligations.

22. The Individual Defendants participated in the drafting, preparation, and/or approval of

the various public, shareholder, and investor reports and other communications complained of herein

and were aware of, or recklessly disregarded, the misstatements contained therein and omissions

therefrom, and were aware of their materially false and misleading nature. Because of their Board

membership and/or executive and managerial positions with AspenBio, each of the Individual

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Defendants had access to the adverse undisclosed information about the Company’s financial

condition and performance as particularized herein and knew (or were in reckless disregard of the

fact) that these adverse facts rendered materially false and misleading the positive representations

that were made by or about the Company and subsequently issued or adopted by the Company.

23. The Individual Defendants, because of their positions of control and authority as

officers, directors, agents, and/or controlling persons of the Company, were able to and did control

the content of the various SEC filings, press releases and other public statements pertaining to the

Company during the Class Period. Each Individual Defendant was provided with copies of the

documents alleged herein to be misleading prior to or shortly after their issuance and/or had the

ability and/or opportunity to prevent their issuance or to cause them to be corrected. Accordingly,

each of the Individual Defendants is responsible for the accuracy of the public reports and press

releases detailed herein, and is therefore primarily liable for the representations contained therein.

24. Each of the Defendants is liable as a participant in a fraudulent scheme and course of

business that operated as a fraud or deceit on purchasers of AspenBio securities by disseminating

materially false and misleading statements and/or concealing material adverse facts. The scheme (i)

deceived the investing public regarding the Company’s business, operations, management and the

intrinsic value of AspenBio securities; and (ii) caused Plaintiff and other members of the Class to

purchase AspenBio securities at artificially inflated prices.

25. As alleged throughout, each of the Defendants acted with scienter in that each

Defendant knew, or recklessly disregarded, that the public documents and statements issued or

disseminated in the name of the Company were materially false and misleading or omitted to state

facts necessary to prevent them from being materially false and misleading under the circumstances.

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Each Defendant knew that such statements or documents would be issued or disseminated to the

investing public, and knowingly and substantially participated or acquiesced in the making, issuance

or dissemination of such statements or documents as a primary violation of the federal securities

laws.

PLAINTIFF’S CLASS ACTION ALLEGATIONS

26. Plaintiff brings this action as a class action pursuant to Federal Rules of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all persons who purchased common

stock of China Natural Gas, Inc. during the Class Period and who were damaged thereby. Excluded

from the Class are Defendants, the officers and directors of the Company at all relevant times,

members of their immediate families and their legal representatives, heirs, successors or assigns and

any entity in which Defendants have or had a controlling interest.

27. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, the Company’s common stock was actively traded on

either the NASDAQ CM or the OTC Bulletin Board. While the exact number of Class members is

unknown to Plaintiff at this time, and can only be ascertained through appropriate discovery, Plaintiff

believes that there are at least hundreds of members in the proposed Class. Members of the Class

may be identified from records maintained by AspenBio or its transfer agent, and may be notified of

the pendency of this action by mail using a form of notice customarily used in securities class

actions.

28. Plaintiff’s claims are typical of the claims of the members of the Class, as all

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of federal

law that is complained of herein.

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29. Plaintiff will fairly and adequately protect the interests of the members of the Class

and has retained counsel competent and experienced in class and securities litigation.

30. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by Defendants' acts as alleged

herein;

(b) whether statements made by Defendants to the investing public during the Class

Period misrepresented material facts about the business, operations, and management

of AspenBio; and

(c) to what extent the members of the Class have sustained damages, and the proper

measure of damages.

31. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to redress individually the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

SUBSTANTIVE ALLEGATIONS

32. Prior to the Class Period, AspenBio was primarily engaged in the discovery,

development, manufacture, licensing, and marketing of products for animal healthcare. However, in

2006, and possibly as early as 2005, the Company began research and development of a new product

that would purportedly aid Emergency Room medical staff in the diagnosis of appendicitis in

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humans. The product, which the Company would later dub as “AppyScore” (the “Product”), was

intended to be a screen/triage blood test that would detect a “differential marker” for appendicitis,

and thereby quickly confirm or deny a diagnosis of said condition. Its stated purpose was to decrease

the difficulties surrounding the diagnosis of appendicitis – particularly false-positives and

unnecessary surgeries – and to provide a clear, objective indicator of the presence of appendicitis.

33. A prospectus filed by the Company on November 9, 2006 stated, in relevant part, the

following:

Based upon preliminary work we have been performing on the test (patent pending) [i.e., AppyScore],it shows early promise as an excellent indicator of appendicitis. The project is in an advancedresearch and development phase as blood and tissue samples are now being harvested and banked.Testing is ongoing to characterize the markers that could be used to assist in the rule out ofappendicitis or determine the diagnosis of the condition. Significant additional development andtesting over the upcoming months will be required to determine the exact commercial product formthat would be brought to market. Prior to any product introduction into the marketplace — assumingsuccessful commercial development can be achieved — significant clinical trials and FDA approvalwould be required, the successful completion of which cannot be assured. It should be noted that theFDA approval process for a diagnostic test such as this is generally much shorter than for a drug andpotentially may be achievable in as little as 12 months.

Our goal is to create a blood-based test designed to quickly and accurately assist in diagnosing orruling out appendicitis in humans. We have been working for some time in a productive collaborationwith Dr. John Bealer, an experienced pediatric surgeon based in Denver, Colorado, to develop andrefine this technology by discovering diagnostic markers through genomic and proteomic screeningapproaches. Dr. Bealer has been the catalyst in the progress we have made in the development of thistechnology. Our expertise in diagnostic development helped advance this test to the point where weare excited about the possibility of providing a blood test that cost-effectively and accurately assistsemergency room personnel quickly diagnose or rule out appendicitis in patients complaining ofabdominal pain. [emphasis added]

34. On February 22, 2007, AspenBio issued a press release announcing the results from

the then ongoing research and clinical trials of AppyScore:

Based on the data obtained to-date, the company’s AppyScore TM blood test appears able to identifypatients with appendicitis at a very high sensitivity level of 94% to 97%. This compares tosignificantly lower diagnostic success rates for expensive CT scans, which are generally consideredthe best diagnostic method available for appendicitis.

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35. In the same press release, Defendant Donnelly highlighted the importance of

AppyScore to the future success of the Company:

We are very encouraged to see the consistent positive results from expanded clinical testing, especiallyon this first generation assay. To be the first to offer a blood test like this to ER doctors worldwidewill be a major event not only for AspenBio, but for the entire healthcare community. Given thecurrent pace of our clinical testing program, we are still anticipating a 2007 regulatory filing with theFDA. [emphasis added]

36. On May 17, 2007, AspenBio issued a press release that reported comments by

Defendant Donnelly regarding AppyScore, AppyScreen (the former’s sister product), and their

relevance to the success of the Company:

Richard Donnelly, AspenBio’s president and CEO, said, “Given the recent positive events, we believe2007 will prove to be a significant inflection point in AspenBio’s history as we proceed towardsachieving key milestones and delivering on important new products, like our breakthroughappendicitis triage blood tests, AppyScoreTM and AppyScreenTM. The recent conversion of warrantsthat raised our total cash position to more than $11 million puts us in a strong financial position toaccelerate strategic additions to our scientific staff, accelerate our product development timeline —particularly in the diagnostic assay development area — and advance our priority products tocommercialization.” [emphasis added]

37. On September 28, 2007 the Company issued a press release entitled “ Aspen Bio

Reports Strong Results with Appendicitis Triage Blood Test from Large Multiple Hospital Study”. It

stated that a large pre-Food and Drug Administration (the “FDA”) clearance study had provided

positive indications of the success of AppyScore in the emergency room context. It claimed that the

Product showed a sensitivity rate of 98% throughout the study. Moreover, the press release claimed

that the study indicated that 58% of unnecessary appendicitis-related surgeries could have been

avoided – presumably through the broad application of AppyScore. In short, the Company was

stating that not only was the AppyScore blood test successful, but that it would also function to

fulfill the Company’s stated goal of reducing the incidence of appendicitis-related false-positives.

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38. On November 27, 2007, the Company issued a press release indicating that it would

pursue 510(k) regulatory clearance from the Food and Drug Administration (the “FDA”) for

AppyScore. AspenBio claimed that it expected to receive said clearance before the end of 2008.

39. On April 23, 2008, the Company announced that it was having continued success with

AppyScore in pre-clinical trials, which were being conducted in preparation for the formal clinical

trials required for FDA 510(k) clearance. In particular, the Company announced that the AppyScore

blood test was showing signs of improved specificity. Two months later, on June 26, 2008, the

Company announced that it had officially commenced a formal clinical trial in support of its

application for FDA 510(k) clearance.

40. In March, 2008, the United States Patent and Trademark Office (the “USPTO”)

issued a Notice of Allowance for AspenBio’s United States patent application relating to its

appendicitis diagnostic technology (i.e., AppyScore). The technology behind AppyScore was

thereafter patented under the name “Methods and Devices for Diagnosis of Appendicitis”.

41. By way of a 10-K filed with the SEC, year ended December 31, 2008, the Company

provided further assurances of the utility, effectiveness, and positive commercial possibilities of

AppyScore:

A dilemma for surgeons is minimizing the negative appendectomy surgery rate withoutincreasing the incidence of a life threatening perforation among patients referred for suspectedappendicitis. We expect AppyScore will provide the only objective and quantitativeapproach to assist physicians in their diagnostic algorithm and rapidly provide importantnew information as doctors form their initial clinical impression in patients with acuteright lower quadrant abdominal pain. [emphasis added]

***

The Company continues to make progress in the development and testing of its first-generation blood-based human diagnostic tests designed to rapidly aid in the diagnosis ofappendicitis in patients complaining of abdominal pain. Specifically, we have created andoptimized a specialized test to detect a marker in the blood associated with appendicitis and

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have tested this assay in several clinical research trials involving hundreds of humanpatients. [emphasis added]

Preliminary results indicate that our first-generation ELISA triage screen test is highlyeffective in identifying patients with acute appendicitis. This marker demonstrates a strongcorrelation with the severity of appendicitis. As a result of these positive developments, theCompany is advancing its appendicitis triage blood screen test AppyScore, which is based ona blood test result scoring system designed to be used as an initial appendicitis triage orscreening test for patients entering an emergency department or urgent care facilitycomplaining of abdominal pain. We anticipate that our new appendicitis triage screening testwill be incorporated in routine blood testing as a patient’s blood sample is taken in theordinary course of an initial assessment of any patient entering the emergency department.Our appendicitis blood test scoring system is designed to numerically measure the bloodmarker level, which guides the physician in determining not only the presence but also thepotential stage or severity of appendicitis being experienced by the patient. Determining thestage or severity of appendicitis helps the physician assess the level of possible danger and thepotential for the appendix to perforate, potentially causing life-threatening complications.

42. In summary, by the end of 2008, the Company had made a substantial amount of

positive claims regarding AppyScore. In particular, AspenBio claimed that the product was: (1)

highly effective at detecting patients with a wide spectrum of different severities of appendicitis; (2)

utterly unique and unprecedented in its targeted market; (3) extremely helpful in the emergency room

context; and (4) able to reduce the incidence of appendicitis-related false-positives and unnecessary

surgeries. As more thoroughly alleged bellow, each and every one of these claims was either

blatantly false, or purposefully misleading.

The Truth About AppyScore

43. The research and development program that would eventually lead to the creation of

AppyScore was outlined in or before July 2004. The stated goal of this program, at its outset, was to

discern a “differential marker for appendicitis” – in short, a chemical signature whose presence

would quickly and objectively indicate the presence or non-presence of appendicitis. It is unclear

how far AspenBio proceeded in its attempt to achieve this stated goal. What is clear, however, is that

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by the beginning of the class period, and potentially earlier, the research and development program,

as outlined in 2004, had failed.

44. Nevertheless, AspenBio did not publicly admit to this failure. Instead, the Company

embarked on a several year long crusade to mislead its investors about the nature and effectiveness

of AppyScore.

45. After it became clear that the Company would not be able to discern a differential

marker for appendicitis, it decided to select a previously known and thoroughly studied protein as the

basis for its AppyScore appendicitis blood triage test.

46. This protein, which is referred to as MRP 8/14 or Calprotectin, is present in patients

with a very wide spectrum of inflammatory diseases including gingivitis (tooth decay), recent

allograft, septicemia, meningitis, pneumonia, tuberculosis, rheumatoid arthritis, gastrointestinal

cancer, inflammatory bowel disease, skin cancer, periodontitis, preeclampsia, AIDS, and a host of

other conditions.

47. While relatively unknown to the general public, MRP 8/14 was quite familiar to

researchers within the specialized biochemical field. At all relevant times, there existed readily

available commercial means and instruments for the detection of MRP 8/14.

48. AppyScore was, in effect, nothing more than a glorified MRP 8/14 blood-based assay

test. It was not novel, unique, or revolutionary. Moreover, contrary to the Company’s claims,

AppyScore (i.e., MRP 8/14), was close to worthless when it came to diagnosing appendicitis.

49. In order for a physician to utilize AppyScore to diagnose appendicitis, he or she

would first have to rule out the considerable number of conditions that are associated with the

presence of MRP 8/14 (as partially detailed above). Because AppyScore was purportedly designed

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for the resource-constrained emergency-room context, where a relatively high number of patients

could be expected to possess one or more of these conditions, the actual, real-world application of

AppyScore was never feasible.

50. Simply put, pushing AppyScore as an appendicitis-related diagnostic method would

be akin to asking a physician to utilize lethargy as the basis for his or her diagnosis of HIV. While

the two may certainly be associated with one another, the fact that the former is also associated with

a wide array of other conditions, disorders, and diseases renders such a diagnostic method

impractical, ineffective, and prone to false-positives.

51. Furthermore, MRP 8/14 is, as indicated above, associated with septicemia. Thus, the

latter’s presence would first have to be ruled out before AppyScore could be utilized in a diagnosis

of appendicitis. Septicemia, however, is itself present in patients with acute appendicitis. As a result,

AppyScore, by its very nature, was unable to diagnose acute appendicitis because it could not be

applied to individuals with acute appendicitis. For a product designed to aid emergency-room

physicians, where acute cases of appendicitis would be relatively frequent and of high concern, this

was a fatal flaw. In effect, while AppyScore could, in theory, detect appendicitis, it could do so only

so long as that individual did not have acute appendicitis, nor a battery of other diseases and

conditions. This is both nonsensical and, when put in contrast to the public press releases cited

above, highly misleading.

52. In summary, AppyScore was: (1) a gold-wrapped rehash of a widely known and

available diagnostic method; (2) ineffective and impractical when it came to diagnosing appendicitis;

(3) likely to increase the rate of false-positives, and thereby the number of unnecessary surgeries

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associated with the diagnosis of appendicitis; and (4) unable to diagnose a highly dangerous and

relevant stage of the very disease it was purported to detect.

53. As high-level officers and directors of the Company, the truth about AppyScore was

known and/or readily available to each and every one of the Individual Defendants. In its filings with

the USPTO, which eventually led to the issuance of the above-referenced March, 2008 Notice of

Allowance, the Company clearly indicated that AppyScore was based on the MRP 8/14 protein, and

that it could only be applied to patients with no “interfering conditions” – the interfering conditions

being any and all conditions associated with MRP 8/14, including septicemia. In other words,

AspenBio, in its filings with the USPTO, was directly or indirectly admitting to all the allegations

detailed above.

54. In its public press releases and SEC filings, AspenBio never disclosed the truth about

AppyScore. Instead, the Company made a series of false and/or misleading statements and material

omissions in regards to AppyScore. AspenBio, as evidenced above, stated that AppyScore was (1)

novel, (2) effective, (3) highly sensitive, and (4) that, as a result of (2) – (3), it would reduce the

number of false-positives and unnecessary surgeries associated with appendicitis. In reality, as

alleged in detail throughout this section, not one of these claims was unconditionally true, and the

first and last were blatantly false. At very least, in order for them not to be misleading, claims (2) and

(3) needed to be hedged by public statements that clearly indicated that AppyScore was based on the

MRP-14 protein, and that it was effective and highly sensitive for appendicitis only under the

condition that the patient did not have any interfering conditions. AppyScore, however, since it was

wholly based on the widely known MRP-14 protein, for which there were a number of commercially

available screening products, was clearly not novel or unique. Furthermore, since AppyScore, by the

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Company’s own admission, had a sizable number of interfering conditions, it could not have been

realistically hoped that it would reduce the rate of false-positives and unnecessary surgeries

associated with appendicitis.

The Truth is Revealed

55. Throughout 2009, via public press releases and SEC filings, AspenBio continued to

tout the novelty, effectiveness, and high sensitivity of AppyScore.

56. On February 9, 2010, the Company reported that it would enlarge a then ongoing

supplemental clinical trial ( the “Supplemental Trial”) of AppyScore, and that it anticipated

completing said trial in March, 2010.

57. In its most recent 10-K filing, year ended December 31, 2009, the Company stated, in

relevant part, the following:

In March 2010, we expect to complete enrollment for our ongoing clinical trial(approximately 800 patients) of AppyScore. The patients enrolled in this clinical trial were seen in theemergency departments of more than a dozen well-known hospitals across the United States. Giventhe time estimate to complete this current trial and related data analysis, the Company has withdrawnits 510(k) submitted to the FDA in June 2009 and plans to submit, during the second quarter of 2010,a new 510(k) with full results from the ongoing clinical trial. This clinical trial is statistically sized tostand alone and thereby will become the pivotal trial to support the new 510(k) submission.

Based upon post-hoc analyses of the December 2008 trial data, as well as input from a panelof clinical experts assembled by AspenBio’s regulatory consultants, the Statistical Analysis Plan(“SAP”) for the ongoing clinical trial defines a study end point for the AppyScore test alone, andadditionally, adds two alternative end points which evaluate the AppyScore result in combination witheither white blood cell count (“WBC”) or neutrophil count. Applying the parameters of this SAP in aretrospective analysis of the previous clinical trial data on hand, the negative predictive value (“NPV”)of AppyScore was improved to more than 95% in the subset of patients who have negative resultsfor either the combination of AppyScore/WBC or AppyScore/neutrophil count. While there can beno assurance that these results will be repeated in the ongoing clinical trial, we believe such results,if repeated, could substantially enhance the clinical utility and value of AppyScore in theemergency department setting. [emphasis added]

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58. Following these and related statements, as the expected announcement date for the

Supplemental Trial’s results grew near, the price of AspenBio common stock rose substantially to

above $4/share.

59. On March 23, 2010, the Company stated that the Supplemental Trial had been

completed, and that the trial’s results would be furnished in six to eight weeks.

60. Finally, on June 7, 2010, the Company reported that there had been “significant

variability among clinical sites” that had to be reconciled before the full results of the trial could be

produced. Then, on June 19,2010, the Company announced that the clinical trial had shown that

AppyScore possessed considerably lower specificity than predicted. As a result of these two

disclosures, the price of AspenBio stock first fell from $3.50 to $1.50, and then from over $1 to

around $.50.

61. While these adverse disclosures were shocking to investors, they were to be expected

given the true nature of the AppyScore product. The variability and low specificity evidenced by the

Supplemental Trial were a direct and proximate result of the inherent weaknesses of AppyScore as a

means and instrument for the diagnosis of appendicitis. The weaknesses were well known, or could

have readily been well known, by all of the Individual Defendants.

62. By way of false and/or misleading statements and material omissions, however, the

flawed nature of the AppyScore product was not disclosed to the investing public. These statements

and omissions depicted AppyScore as the product that it should have been, but never was, and kept

the price of AspenBio stock artificially inflated. When the truth was finally revealed, the stock price

lurched downward, thereby damaging Plaintiff and the Class.

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Applicability of Presumption of Reliance:Fraud-on-the-Market Doctrine

63. At all relevant times, the market for AspenBio common stock was an efficient market

for the following reasons, among others:

(a) The Company’s stock met the requirements for listing, and was listed and actively

traded on either the OTC Bulletin Board or the NASDAQ CM, both highly efficient

and automated markets;

(b) During the class period, on average, over several hundreds of thousands of shares of

AspenBio stock were traded on a weekly basis, demonstrating a very active and broad

market for the Company’s stock and permitting a very strong presumption of an efficient

market;

(c) AspenBio regularly communicated with public investors via established market

communication mechanisms, including through regular disseminations of press

releases on the national circuits of major newswire services and through other

wide-ranging public disclosures, such as communications with the financial press

and other similar reporting services;

(d) AspenBio was followed by several securities analysts employed by major

brokerage firms who wrote reports that were distributed to the sales force and

certain customers of their respective brokerage firms during the Class Period.

Each of these reports was publicly available and entered the public marketplace;

(e) Numerous NASD member firms were active market-makers in AspenBio stock at

all times during the Class Period; and

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(f) Unexpected material news about AspenBio was rapidly reflected and incorporated

into the Company’s stock price during the Class Period.

64. As a result of the foregoing, the market for the Company’s common stock promptly

digested current information regarding AspenBio from all publicly available sources and reflected

such information in AspenBio’s stock price. Under these circumstances, all purchasers of the

Company’s common stock during the Class Period suffered similar injury through their purchase of

AspenBio’s common stock at artificially inflated prices, and a presumption of reliance applies.

NO SAFE HARBOR

65. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many or all of the specific statements pleaded herein were not identified as “forward-looking

statements” when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements. Alternatively, to the

extent that the statutory safe harbor does apply to any forward-looking statements pleaded herein,

Defendants are liable for those false forward-looking statements because at the time each of those

forward-looking statements was made, the particular speaker knew that the particular forward-

looking statement was false, and/or the forward-looking statement was authorized and/or approved

by an executive officer of the Company who knew that those statements were false when made.

FIRST CLAIMViolation of Section 10(b) of

The Exchange Act and Rule 10b-5Promulgated Thereunder Against All Defendants

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66. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.

67. During the Class Period, Defendants carried out a plan, scheme and course of conduct

which was intended to and, throughout the Class Period, did: (1) deceive the investing public,

including Plaintiff and other Class members, as alleged herein; and (2) cause Plaintiff and other

members of the Class to purchase AspenBio’s securities at artificially inflated prices. In furtherance

of this unlawful scheme, plan and course of conduct, Defendants, and each of them, took the actions

set forth herein.

68. Defendants (a) employed devices, schemes, and artifices to defraud; (b) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statements not

misleading; and (c) engaged in acts, practices, and a course of business that operated as a fraud and

deceit upon the purchasers of the Company’s securities in an effort to maintain artificially high

market prices for AspenBio’s securities in violation of Section 1 0(b) of the Exchange Act and Rule

1 0b-5 thereunder. All Defendants are sued either as primary participants in the wrongful and illegal

conduct charged herein or as controlling persons as alleged below.

69. Defendants, individually and in concert, directly and indirectly, by the use, means or

instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the business, operations

and future prospects of AspenBio as specified herein.

70. These Defendants employed devices, schemes, and artifices to defraud while in

possession of material adverse non-public information, and engaged in acts, practices, and a course

of conduct as alleged herein in an effort to assure investors of AspenBio’s value and performance

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and continued substantial growth, which included the making of, or participation in the making of,

untrue statements of material facts and omitting to state material facts necessary in order to make the

statements made about AspenBio and its business operations and future prospects in the light of the

circumstances under which they were made, not misleading, as set forth more particularly herein, and

engaged in transactions, practices and a course of business that operated as a fraud and deceit upon

the purchasers of AspenBio’s securities during the Class Period.

71. Each of the Individual Defendants’ primary liability, and controlling person liability,

arises from the following facts: (1) the Individual Defendants were high-level executives, directors,

and/or agents at the Company during the Class Period and members of the Company’s management

team or had control thereof; (2) each of these Defendants, by virtue of his responsibilities and

activities as a senior officer and/or director of the Company, was privy to and participated in the

creation, development and reporting of the Company's financial condition; (3) each of these

Defendants enjoyed significant personal contact and familiarity with the other Defendants and was

advised of and had access to other members of the Company’s management team, internal reports

and other data and information about the Company’s finances, operations, and sales at all relevant

times; and (4) each of these Defendants was aware of the Company’s dissemination of information to

the investing public which they knew or recklessly disregarded was materially false and misleading.

72. Defendants had actual knowledge of the misrepresentations and omissions of material

facts set forth herein, or acted with reckless disregard for the truth in that they failed to ascertain and

to disclose such facts, even though such facts were available to them. Such Defendants’ material

misrepresentations and/or omissions were done knowingly or recklessly and for the purpose and

effect of concealing AspenBio’s operating condition and future business prospects from the investing

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public and supporting the artificially inflated price of its securities. As demonstrated by Defendants’

overstatements and misstatements in regards to the Company’s signature product throughout the

Class Period, Defendants, if they did not have actual knowledge of the misrepresentations and

omissions alleged, were reckless in failing to obtain such knowledge by deliberately refraining from

taking those steps necessary to discover whether those statements were false or misleading.

73. As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market price of AspenBio’s securities

was artificially inflated during the Class Period. In ignorance of the fact that market prices of

AspenBio’s publicly-traded securities were artificially inflated, and relying directly or indirectly on

the false and misleading statements made by Defendants, or upon the integrity of the market in which

the common stock trades, and/or on the absence of material adverse information that was known to

or recklessly disregarded by Defendants, but not disclosed in public statements by Defendants during

the Class Period, Plaintiff and the other members of the Class acquired AspenBio common stock

during the Class Period at artificially high prices, and were, or will be, damaged thereby.

74. At the time of said misrepresentations and omissions, Plaintiff and other members of

the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the other

members of the Class and the marketplace known the truth regarding AspenBio’s financial condition,

which was not disclosed by Defendants, Plaintiff and other members of the Class would not have

purchased or otherwise acquired their AspenBio securities, or, if they had acquired such securities

during the Class Period, they would not have done so at the artificially inflated prices that they paid.

75. By virtue of the foregoing, Defendants have violated Section 1 0(b) of the Exchange

Act, and Rule 1 0b-5 promulgated thereunder.

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76. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the

other members of the Class suffered damages in connection with their respective purchases and sales

of the Company’s securities during the Class Period.

77. This action was filed within two years of discovery of the fraud and within five years

of each plaintiff’s purchases of securities giving rise to the cause of action.

SECOND CLAIMViolation of Section 20(a) of

The Exchange Act Against the Individual Defendants

78. Plaintiff repeats and realleges each and every allegation contained above as if fully set

forth herein.

79. The Individual Defendants acted as controlling persons of AspenBio within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, agency, ownership and contractual rights, and participation in and/or awareness of the

Company’s operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had the

power to influence and control, and did influence and control, directly or indirectly, the decision-

making of the Company, including the content and dissemination of the various statements that

plaintiff contends are false and misleading. The Individual Defendants were provided with or had

unlimited access to copies of the Company’s reports, press releases, public filings and other

statements alleged by Plaintiff to have been misleading prior to and/or shortly after these statements

were issued and had the ability to prevent the issuance of the statements or to cause the statements to

be corrected.

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80. In particular, each of these Defendants had direct and supervisory involvement in the

day-to-day operations of the Company and, therefore, is presumed to have had the power to control

or influence the particular transactions giving rise to the securities violations as alleged herein, and

exercised the same.

81. As set forth above, AspenBio and the Individual Defendants each violated Section

1 0(b) and Rule 1 0b-5 by their acts and omissions as alleged in this Complaint.

82. By virtue of their positions as controlling persons, the Individual Defendants are

liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of

Defendants’ wrongful conduct, Plaintiff and other members of the Class suffered damages in

connection with their purchases of the Company’s securities during the Class Period.

83. This action was filed within two years of discovery of the fraud and within five years

of each Plaintiff’s purchases of securities giving rise to the cause of action.

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of Civil

Procedure and Plaintiff’s counsel as Lead Counsel;

(b) Awarding compensatory damages in favor of Plaintiff and the other Class

members against all Defendants, jointly and severally, for all damages sustained as a result of

Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

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JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

Dated: September 3, 2010 Respectfully submitted,

The Rosen Law Firm, P.A.

Laurence M. Rosen, Esq. (LR 5733)Phillip Kim, Esq. (PK 9384)350 Fifth Avenue, Suite 5508New York, NY 10118Phone: (212) 686-1060Fax: (212) 202-3827

Attorneys for Plaintiff

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