SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K
(Mark One)
(X)      ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934 (FEE  REQUIRED) For The Fiscal Year Ended December
         31, 1996.

(  )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE TRANSITION PERIOD FROM
         _______________ TO ___________________.


Commission File No. 0-14691
                                   SENETEK PLC
             (Exact name of registrant as specified in its charter)

     England                                           77-0039728
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                    Identification No.)

     23 Palace Street,                                 SW1E 5HW
     London, United Kingdom                            (Zip Code)
     (Address of principal executive offices)

Registrant's telephone number, including area code: (011) 44-171-828-4800

Securities registered pursuant to Section 12(b) of the Act:
                                                  None.

Securities registered pursuant to Section 12(g) of the Act:
                                                  None.

                           AMERICAN DEPOSITARY SHARES
                   (each American Depositary Share represents
                    1 Ordinary share, (pound)0.05 par value)
                    ----------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

YES   X           NO
(see page 20)

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K  [X].

As of February 28, 1997,  Registrant had 45,962,959 Ordinary shares outstanding,
including  43,623,554  represented by American  Depositary Shares. The aggregate
market  value of voting  stock held by  nonaffiliates  of the  Registrant  as of
February 28, 1997 was $125,057,717  based on the average bid and asked prices as
quoted on the Nasdaq Stock Market.  This sum excludes  shares held by directors,
officers, and stockholders whose ownership exceeded 5% of the outstanding shares
at February  28,  1997,  in that such  persons may be deemed  affiliates  of the
Registrant.  This  calculation  does not reflect a  determination  that  certain
persons are affiliates of the Registrant for any other purposes.

                       Documents Incorporated by Reference
                       -----------------------------------
Part III of this Report on Form 10-K incorporates  information by reference from
the   Registrant's   definitive  Proxy  Statement  for  the  Annual  Meeting  of
Shareholders, to be held on May 16, 1997.


<PAGE>


                                      INDEX

                                                                            Page



                                     PART I

   Item 1 - Business.........................................................3

   Item 2 - Properties.......................................................9

   Item 3 - Legal Proceedings................................................10

   Item 4 - Submission of Matters to a Vote of Security Holders..............10


                                     PART II

   Item 5 - Market for Registrant's Common Equity and Related Stockholders
            Matters..........................................................10

   Item 6 - Selected Financial Data..........................................18

   Item 7 - Management's Discussion and Analysis of Financial Condition an
            Results of Operations............................................19

   Item 8 - Financial Statements and Supplementary Data......................26

   Item 9 - Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure.............................................26


                                    PART III

   Item 10 - Directors and Executive Officers of Registrant..................27

   Item 11 - Executive Compensation..........................................28

   Item 12 - Security Ownership of Certain Beneficial Owners and Management..28

   Item 13 - Certain Relationships and Related Transactions..................28


                                     PART IV

   Item 14 - Exhibits, Financial Statement Schedules and Reports
             on Form 8-K.....................................................29


   Signatures................................................................38




<PAGE>


                                     PART I


ITEM 1 - BUSINESS

Senetek PLC ("Senetek" or "the Company") is a public limited company  registered
in England  in  October,  1983 with the number  1759068  with the  objective  of
sponsoring  research  in  the  life  sciences  and  biotechnology  fields,  with
particular  emphasis on research  relating to the  diagnosis  and  treatment  of
diseases related to senescence or aging, and the subsequent  exploitation of the
results of such research.

The main areas in which the Company is involved are the treatment of male sexual
dysfunction ("MSD"),  which includes the development,  manufacture and sale of a
patented  self-administered  automatic injector syringe as a delivery system. In
December,  1993, the Company formed a wholly owned subsidiary,  MEIS Corporation
(a Delaware  Corporation)  based in St.  Louis,  Missouri,  for the  purposes of
designing,  manufacturing  and exploiting  the syringe,  initially as a delivery
system for its MSD product.  Subsequently,  possible other  applications for the
syringe have been investigated,  notably in the case of Epinephrine, an antidote
against anaphylactic shock.

In September, 1995, the Company extended its interests by forming another wholly
owned subsidiary,  Carme International Inc ("CII"), a Delaware Corporation based
in Novato, California, for the acquisition,  through CII, of the majority of the
assets of Carme Inc., an organisation based in Novato,  that had concentrated on
the manufacture and  distribution of a wide range of health and beauty products.
This  acquisition was designed to promote the Company's  interest in the area of
skin care,  with  particular  reference to  potential  anti-aging  aspects,  and
specifically  to provide a vehicle for the  manufacture  and  distribution  of a
product  featuring  the Kinetin  compound  (formerly  referred to as Factor X or
Vivakin) in a cosmetic format.  CII has extended the  manufacturing  capacity at
the existing premises,  has revised marketing  strategy and procedures,  and has
commenced the commercialization of additional products.

In addition, the sales of monoclonal antibodies,  derived from Company sponsored
research into diagnostic procedures for Alzheimer's disease and other cell lines
are  effected on a continuing  basis to the  scientific  community  for research
purposes.

Aspects of the business are discussed  under "Product  Research &  Development",
"Manufacturing  and  Marketing",  and  "Management's  Discussion and Analysis of
Financial Condition and Results of Operations", below.





                                       1
<PAGE>



PRODUCT RESEARCH AND DEVELOPMENT

General
-------

A  significant  proportion  of the  Company's  historic  and  current  operating
expenses have related to the discovery and  development of biomedical  products,
for which purpose the Company has established  clinical research agreements with
consultants and research scientists.  Under these agreements,  the Company funds
agreed programs of the  consultants',  clinicians' or research  scientists' work
and retains  exclusive  rights to manufacture and market  worldwide any products
arising from such research. Currently no products, except for CII's sales of its
Mill Creek range of products  incorporating the Company's Kinetin compound,  and
the sale of  monoclonal  antibodies,  have  reached the  marketing  stage but if
products  arise from such  research,  certain  of the  researchers  will  become
entitled to a royalty under the terms of their individual agreements.

Typically,  the research agreements referred to above oblige the Company to fund
research in amounts to be determined  between the parties.  The  researchers are
responsible for filing progress reports with the Company.  Currently,  Senetek's
research  and  development  efforts  consist of the work being done under  these
agreements,  and through  liaison with the  research  teams  involved,  and with
specialised consultants on matters such as formulation, stability and regulatory
matters covering the products involved in such research.

Male Sexual Dysfunction
-----------------------

The Company has continued to liaise with  research  groups  associated  with the
University  of  Copenhagen  and in various  hospitals  in Denmark,  and at other
research  centers,  and with  clinicians and  consultants in the United Kingdom,
Europe and in the US for assessment of the role of  neurotransmitters  in sexual
response and their  potential use in the treatment of sexual  dysfunction.  Test
data is being  accumulated for regulatory  approval purposes under the Company's
current Phase III clinical trials in the United Kingdom and the Company plans to
file a Product  Licence  Application  ("PLA") with the UK  authorities  in April
1997.  Pending the grant of a Product  Licence for the  Company's  MSD  product,
sales are being  restricted  to  clinicians  who are  requesting  the product in
increasing  numbers  for use on a  named-patient  basis  only.  The  Company has
submitted for  Investigational  New Drug Application  ("IND") status with the US
Food and Drug Administration ("FDA") and awaits the outcome of the FDA review.

Self-Administered Auto-Injector Syringe
---------------------------------------

The Company's patented  self-administered  auto-injector syringe ("the Syringe")
has now  been  fully  developed  by  MEIS,  and is  currently  being  used  with
considerable  success as the delivery  system for the MSD product by clinicians.
The possible  delivery of drugs,  in addition to the  Company's MSD compound and
Epinephrine, referred to below, being utilised through the Syringe is also under
review, and investigations into such other potential  applications are currently
being undertaken.

                                       2
<PAGE>


Epinephrine
-----------

The Company has filed an Abbreviated New Drug Application  ("ANDA") with the FDA
for the proposed application of Epinephrine by subcutaneous  injection delivered
through its Syringe and is also planning to file for U.K.  approval during 1997.
Epinephrine is designed as an antidote against anaphylactic shock,  triggered by
allergic  reaction  against food poisoning and insect  stings.  It is hoped that
approval for marketing may be obtained during the last quarter of 1997, in which
event it may be possible to commence  commercial sales of one of the dose ranges
during the current  fiscal year. In addition,  the Company plans to file an ANDA
with the FDA for a pediatric application for this product.

Skin Aging
----------

Research activity relating to the Company's  anti-aging compound continues to be
carried out through research groups in the US.

With regard to the commercial  exploitation of products  incorporating  Kinetin,
the Company has, through its subsidiary CII, commenced the successful  marketing
of its Mill  Creek  line of  products  as an "Age  defiant"  "over the  counter"
consumer product,  and is planning an advertising  campaign in the current year.
Evidence to date,  suggests  that the Kinetin  product  could  represent a major
breakthrough  in the  prevention  or  delay of  aging  characteristics  in human
fibroblasts.

Any  pharmaceutical  application  of Kinetin would require a separate  approach,
entailing  detailed  testing and regulatory  considerations  and will inevitably
entail considerable expenditure and will have to cover an extended period before
being made available as a pharmaceutical product.


MANUFACTURING AND MARKETING

The  Company's  subsidiary,  MEIS,  has  installed  plant and  machinery for the
manufacture  and  assembly  of the  components  for  the  Syringe  on a  limited
production basis and has now entered into the necessary  capital  commitments to
provide high volume  manufacturing  facilities.  MEIS has also  arranged for the
filling of the  delivery  system for the MSD and  Epinephrine  compounds  with a
specialist  sub-contractor and is planning a management structure for subsequent
marketing and back-up facilities.





                                       3
<PAGE>




In  connection  with  the  proposed  MSD   commercialization,   discussions  and
preliminary  negotiations have been entered into regarding possible  territorial
distribution  rights for the Company's product in a number of European countries
and  although   considerable  interest  has  been  expressed  by  the  potential
distributors,  it is not  possible  to  state  at  this  stage,  whether  formal
agreements will result. In the meantime,  the Company is considering  whether to
effect  its own  distribution  agreements,  initially  at least,  for the United
Kingdom.

In the case of CII,  the  manufacture,  filling,  labeling  and  storage  of its
products are carried out using CII's processing plant and warehousing facilities
located in Novato,  California,  the only  exception  being in the case of South
Africa and the United  Kingdom where a license to  manufacture  has been granted
for  the  Mill  Creek  line  of  products.   CII's   products  are   distributed
internationally,  with the majority of the products  being sold within the North
American Free Trade Area through its marketing  organization covering three main
sectors,  natural products,  specialty mass markets and private label customers.
Distribution  agreements have been signed with important  distributors in the US
and abroad. There is no significant  reliance on main or specialised  suppliers,
and it is not  anticipated  that problems will arise over the question of access
to raw  materials  that are  generally  available  and that will be required for
CII's manufacturing processes.

In accordance  with an agreement  entered into with the Research  Foundation for
Mental Hygiene Inc. ("the Foundation"),  the Company, which has been granted the
exclusive rights to certain of the Foundation's  cell lines capable of producing
certain  monoclonal  antibodies,   including  those  applicable  to  Alzheimer's
disease,  continues  to  effect  sales  of  such  antibodies  to the  scientific
community for research  purposes in consideration  for a royalty  entitlement in
favor of the Foundation.

In the  case  of  any  emerging  products,  the  Company  anticipates  that  any
manufacturing  and marketing  activities may be arranged through  co-development
and  marketing  agreements  with  companies  which have  already  established  a
majority  presence in  specialised  fields.  In this event,  any  revenues to be
generated will arise  primarily  through third party  distribution  or licensing
arrangements  or  co-ventures  whereby  the  Company  will  seek  to  receive  a
percentage of sales,  licence fees and/or  front-end and interim stage  payments
for specified  marketing  rights to its products,  or by a profit  participation
through a third party equity investment,  or joint venture.  Currently, save for
an agreement  covering the cosmetic form of the Kinetin  product for certain Far
East territories,  the Company is not a party to any co-development or marketing
agreements.






                                       4
<PAGE>


COMPETITION

The biomedical  industry is highly  competitive  and the Company's  business and
research efforts compete with drug discovery programs at biotechnology companies
as well as with internal drug  discovery  efforts of  pharmaceutical  companies,
acting   independently  or  in  collaboration   with  other   pharmaceutical  or
biotechnology   companies.   Furthermore,   academic  institutions,   government
agencies,  and other public and private  organizations  conducting  research may
seek patent protection,  discover competing products, or establish collaborative
arrangements  in the  Company's  area of  research.  The  vast  majority  of the
Company's  existing  or  potential   competitors  have   substantially   greater
financial,  technical, and human resources and name recognition than the Company
and are  better  equipped  to  develop,  manufacture,  and market  products.  In
addition,  many of these  companies  have  extensive  experience in  preclinical
testing and human  clinical  trials.  These  companies may develop and introduce
products competitive with or superior to those of the Company. The timing of the
market  introduction  of  competitors'  products  will be important  competitive
factors.  Accordingly,  the  relative  speed with which the  Company can develop
products,  complete  preclinical  testing and clinical  trials and the necessary
regulatory approval processes,  and supply commercial quantities of the products
to the market will be critical to the Company's success. Once products have been
approved for sale, the Company believes that  competition  will be based,  among
other  things,  on  product  efficacy,  safety,  reliability,  price and  patent
position.  The Company's  competitive  position also depends upon its ability to
attract  and retain  qualified  personnel  to develop  proprietary  products  or
processes and the degree of patent  protection  obtainable.  The Company expects
competition  to  intensify in all fields in which it is involved as new products
in these areas are developed and become more widely known.  Moreover, the patent
situation in this field is complex,  and the  protection  afforded by patents in
any particular jurisdiction can be limited.

The Company cannot predict the extent to which any of the products in the course
of development may become  commercially  viable.  However,  Senetek expects that
Epinephrine  by syringe  delivery  will be the first to reach the market and, on
the assumption that the Product License  Approval is granted for the MSD product
within a  reasonable  time,  it is hoped that  subsequently  this product may be
available  for  marketing in the UK early in 1998.  In the case of MSD,  certain
competing  products  have  been  or  are  being  developed  for  the  particular
application  being  undertaken by the Company,  and in particular,  two other US
companies - Pharmacia Upjohn and Vivus Inc. - have developed,  and are marketing
internationally,  products that compete directly with MSD. There are indications
that there should be a substantial  potential demand for a product in this field
but there can be no assurance that the Company will be successful in penetrating
this potential market. With regard to the Syringe, there are already a number of
syringes on the market and there



                                       5
<PAGE>




are two direct competitors whose products are being used extensively,  mainly in
the US, but also in other areas. For regulatory approval purposes, syringes have
to be identified  with the medical  compound which they are designed to deliver.
In the opinion of the  Company,  based upon  extensive UK clinical  trials,  its
Syringe  (which  utilizes  a dental  cartridge  and a 29 gauge  needle)  for MSD
delivery is of an extremely high standard, is capable of competing  successfully
with products  currently on the market and is one which can, after  instruction,
be utilized by the patient without medical supervision.

In the case of CII,  bearing in mind that the vast health and beauty care market
is  dominated  by large  multi-national  organizations,  who  have  far  greater
resources and market exposure than the Company and CII, CII's non-animal  tested
products are designed to address  specific  sectors  selected  from that market.
CII's  products  include  the Mill Creek  line,  where the  Kinetin  compound is
featured,  Sleepy Hollow  Botanicals and Biotene H-24. The specialty mass market
lines are  Silver  Fox - a  product  for gray  hair,  the  Allercreme  range for
sensitive skins,  often recommended by dermatologists,  and DuBarry,  which is a
long established  cosmetic line. The Mill Creek range,  including  Kinetin,  has
been  launched as a next  generation of skin care  products,  and is designed to
replace alpha hydroxy acid lines, marketed by other organizations,  as a product
of choice.  However,  major companies may introduce competitive lines of similar
or superior  quality and may be able to effect a greater  marketing  impact than
the Company can achieve.


GOVERNMENT REGULATION

The  Company's   research  and   development   activities   and  future  product
manufacturing and marketing  activities are subject to extensive  regulation for
safety and efficacy by numerous  governmental  authorities  in the United States
and other  countries.  In the United States,  drugs are subject to rigorous Food
and Drug Administration ("FDA") regulation.  The Federal Food, Drug and Cosmetic
Act and the Public Health Service Act govern the testing,  manufacture,  safety,
efficacy,   labeling,  storage,  record  keeping,  approval,   advertising,  and
promotion of the Company's  products.  Product  development  and approval within
this regulatory  framework take a number of years and involve the expenditure of
substantial resources.  Many products ultimately do not reach the market because
of toxicity or lack of  effectiveness  as demonstrated by required  testing.  In
addition,  there can be no assurance  that this  regulatory  framework  will not
change  or that  additional  regulation  will  not  arise  at any  stage  of the
Company's product development that may affect approval, delay an application, or
require  additional  expenditures  by the Company.  After  approval is obtained,
failure  to comply  with  present  or  future  regulatory  requirements,  or new
information  regarding the safety or effectiveness of an approved drug, can lead
to FDA withdrawal of approval to market the product.

                                       6
<PAGE>



The steps required before a pharmaceutical product may be marketed in the United
States include (i) preclinical laboratory testing, (ii) submission to the FDA of
an  Investigational  New Drug ("IND")  application,  which must become effective
before human  clinical  trials may be  commenced  in the US, (iii)  adequate and
well-controlled  human  clinical  trials to establish the safety and efficacy of
the drug, (iv) submission of a New Drug  Application  ("NDA") to the FDA and (v)
FDA approval of the NDA prior to any commercial sale or shipment of the drug. To
date,  the  Company  has  submitted  for IND status for its MSD  product  and an
Abbreviated New Drug Application ("ANDA") for Epinephrine.

Clinical testing of new compounds in humans is designed to establish both safety
and efficacy in treating a particular  disease or  condition.  These studies are
usually  conducted  in three  phases of testing.  In Phase I, a small  number of
volunteers  are given  the new  compound  in order to  identify  toxicities  and
characterize  the compound's  behavior in humans.  In Phase II, small numbers of
patients  with the targeted  disease are given the compound to test its efficacy
in treating the targeted disease and to establish  effective dose levels.  Phase
III studies are large-scale  studies  designed to confirm a compound's  efficacy
for the targeted  disease and identify  toxicities that might not have been seen
in smaller studies.  Once adequate data has been obtained in clinical testing to
demonstrate  that the compound is both safe and  effective for the intended use,
all  available  data  will need to be  submitted  to the FDA as part of the NDA.
Review of this application by the FDA can cover an extended period.

Marketing of products outside of the United States requires  regulatory approval
similar to that required in the United States.  No action can be taken to market
any product in a country until an appropriate  application  has been approved by
the regulatory  authorities in that country. The current approval process varies
from country to country, and the time spent in gaining approval varies from that
required for FDA approval.  The Company believes that review of clinical studies
by regulatory  agencies in other  jurisdictions may not prove to be as lengthy a
process  as in the  United  States  and,  accordingly,  will  first  be  seeking
regulatory  approval  within the UK, followed by an application for approval for
countries within the European Community.

In  certain  European  countries,  the  sales  price of a  product  must also be
approved.  The pricing  review  period often  begins  after  market  approval is
granted.  No  assurance  can be given  that,  even if a product is approved by a
regulatory authority, satisfactory prices will be approved for such product.



                                       7
<PAGE>


Under  current   regulations,   the  market  introduction  of  the  majority  of
non-medicated  cosmetics  and skin care  products  do not require  prior  formal
registration  or approval by the FDA,  although this could change in the future.
The Cosmetics  Division of the FDA monitors matters of safety and  adulteration.
Kinetin is a plant hormone and CII's initial  product  covers a skin care system
consisting of a cleanser,  night cream and lotion.  Management believes that the
ingredients  are  not  harmful  and  on  that  basis  the US  government's  only
requirement would be that no medical claims be made.

Import Restrictions and Duties
------------------------------

Because the Company may be importing  certain of its initial products or product
ingredients into the United States, the Company could be subject to any quantity
limitations,  duties and tariffs  imposed by a country within which the products
are to be sold. The United States does not have quantity  restrictions for goods
such as the  Company's  proposed  products but does impose  tariffs based on the
value of the products imported.  Other countries may have different restrictions
and duties.


PATENTS

The Company believes that patents and other proprietary  rights are an essential
element  of its  business  and as  part of its  grant  agreements  with  various
researchers,  has received exclusive license rights to any commercially valuable
products  developed  by the  contracted  researchers  within  the  scope  of the
respective agreements in exchange for royalty entitlements. The Company's policy
is to file patent  applications to protect  inventions and improvements that are
considered  important to the  development  of its business.  Typically,  patents
expire 19 years  after the grant  date.  The  Company  also  relies  upon  trade
secrets,   know-how,   continuing   technological   innovations   and  licensing
opportunities to develop and maintain its competitive position.  The Company has
filed patent  applications  for its products in most major  countries  including
those that are signatories to the Patent  Conference  Treaty ("PCT").  Thus far,
the  Syringe is patented  in most PCT  countries  and in major areas in Asia and
South  America,  and  additionally  the Company has  received  patent  approvals
covering its technology for the treatment of the effects of aging on skin in the
US,  and for the  treatment  of  psoriasis  and other  hyper-proliferative  skin
diseases in the US, Canada and Australia, female sexual dysfunction in Australia
and Taiwan, and male sexual dysfunction in the US, Taiwan, Australia and certain
European territories.

Patent  positions  generally,  including  those for  pharmaceutical  and  health
service  organizations  such as the Company,  are uncertain and involve  complex
legal and factual  questions for which  important  legal  principles are largely
unresolved.  In addition,  the coverage  claimed in a patent  application can be

                                       8
<PAGE>



significantly  reduced  before a patent is  issued.  Consequently,  the  Company
cannot be sure  that any  patents  that are or may be issued to it will  provide
significant  proprietary  protection or will not be circumvented or invalidated.
Because patent applications in the United States are maintained in secrecy until
patents  issue,  and  publication  of  discoveries  in the  scientific or patent
literature often lags behind actual  discoveries,  the Company cannot be certain
that it or any licensor was the first creator of  inventions  covered by pending
patent  applications  or that it or such  licensor  was the first to file patent
applications  for  such  inventions.   Moreover,   the  Company  might  have  to
participate  in  interference  proceedings  declared  by  the  U.S.  Patent  and
Trademark  Office to  determine  priority of  inventions,  which could result in
substantial  cost to the  Company,  whether  or not the  eventual  outcome  were
favorable to the Company.  There can be no assurance that the Company's patents,
if issued,  would be held valid by a court or that a competitor's  technology or
product would be found to infringe such patents.

A number of  pharmaceutical  and health  services  companies  and  research  and
academic institutions have developed technologies, filed patent applications, or
received patents in areas that may be related to the Company's business. Some of
these  technologies,  applications,  or patents may conflict  with the Company's
development efforts or patent applications.

CII has  acquired the numerous  trademarks  formerly  owned by Carme Inc. To the
best of  CII's  knowledge,  there  has  been no  indication  to date  that  such
trademarks are invalid or are subject to challenge.

Typically,  the  Company  requires  its  employees,  consultants  and  sponsored
researchers to execute  confidentiality  agreements as part of their employment,
consulting  or  research  arrangements  with  the  Company.   There  can  be  no
assurances,  however,  that these agreements will produce meaningful or adequate
protection for the Company's trade secrets.


EMPLOYEES

As of December 31, 1996  Senetek,  together with its two  subsidiaries  MEIS and
CII, employed 65 full-time employees;  including 5 persons in the United Kingdom
of whom 4 are employed at the Company's scientific center at Kettering, and 4 in
the U.S., 1 of whom is the Chief Scientific Advisor. MEIS Corporation employed 4
persons in the U.S., of whom 3 concentrated on the  scientific,  engineering and
production aspects of the Company's  syringe.  CII has 52 employees covering the
production , marketing, advertising and distribution of CII's products, together
with a team covering the management and financial aspects of CII's business.




                                     9
<PAGE>


ITEM 2 - PROPERTIES
-------------------

The Company  occupies  office space at its  registered  office in London for the
Finance  Director and Corporate  Secretary and his financial and  administrative
staff.  These  premises are held under a 3 year lease  terminating in March 1999
and comprise 1,144 square feet at an annual rental of (pound)15,444 ($25,000).

In 1996,  the Company also acquired  additional UK premises at a Science Park at
Kettering,   Northamptonshire,  for  its  scientific  activities,  concentrating
initially on the  development  and approval  procedures  for the  Company's  MSD
product.  These premises were acquired under a 15 year lease,  terminable by the
Company after 5 years and subject to a rent free period of 6 months, in order to
provide  accommodation for the Company's scientific staff and for the storage of
syringes  and  ampoules  containing  its  MSD  compound  prior  to  delivery  to
clinicians.  The  premises  cover  2,595  square  feet at an  annual  rental  of
(pound)28,800  ($46,000).  The acquisition of additional premises at the Science
Park is currently in the course of negotiation.

Through  its  subsidiary  MEIS,  the  Company  occupies  12,412  square  feet of
manufacturing,  warehousing,  design  and  office  space  in  Maryland  Heights,
Missouri,  for use by MEIS for the  development  and production of the Company's
syringe, pursuant to a lease terminating on May 31, 2000, at a rental of $81,545
per annum.

Through its  subsidiary  CII, the Company  occupies  8,825 square feet of office
space,  10,800  square  feet of  production  space  and  25,950  square  feet of
warehouse  space in Novato,  California,  for the  manufacture  and marketing of
CII's cosmetic  products,  pursuant to two three-year leases at an annual rental
of $397,629 terminating in October and November 1998.


ITEM 3 - LEGAL PROCEEDINGS
--------------------------

A former employee,  Dr. Nicholas Coppard, filed suit for summary judgment in the
UK High Court alleging wrongful  dismissal and a claim for royalty  entitlements
relating to the  Company's  MSD product and the  retention of his former  option
entitlement. Judgment in favor of the Plaintiff was given in January 1997 on the
wrongful  dismissal  claim, but no figure  representing  alleged damages has yet
been quantified.  The judgment is not expected to have a material adverse effect
on the Company's  financial  position,  results of operations or liquidity.  The
last two issues of the claim were deferred for a full High Court hearing at some
unspecified  and probably  extended period in the future.  The Company  strongly
contests these claims and has prepared a vigorous  defense in the event that the
matters come to trial.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------


Not applicable.



                                     10
<PAGE>



                                     PART II



ITEM 5 -MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
------------------------------------------------------------------------------

a)       GENERAL DISCUSSION

         Since  November  1983,  shares of the  Company  had been  traded on the
         over-the-counter   market  in  the  United   Kingdom  at  an  extremely
         restricted level of activity.  The Company was  subsequently  unable to
         retain  the  services  of a  market  maker  and  currently  there is no
         established  public  trading  market  for the  Company's  shares in the
         United Kingdom. American Depositary Shares of the Company (representing
         Ordinary  Shares and evidenced by American  Depositary  Receipts)  were
         traded  on the  over-the-counter  market  in  the  United  States  from
         November  1984 and have been  traded  through the Nasdaq  Stock  Market
         system since the Company's public offering in the US in May 1986.

         The  following  table  sets out the range of high and low  closing  bid
         prices for the Company's American Depositary Shares during each quarter
         of the Company's two most recent fiscal years based upon the reports of
         the Nasdaq Stock Market.

         Fiscal Year Ended December 31, 1995

           Quarter Ended:                     High              Low
                                              ----              ---
           March 31                      $    2.38         $    1.53
           June 30                            2.22              1.88
           September 30                       2.28              1.31
           December 31                        1.78              1.06

         Fiscal Year Ended December 31, 1996

           Quarter Ended:                      High              Low
                                               ----              ---
           March 31                       $    2.41              1.72
           June 30                             2.16              1.56
           September 30                        1.81              1.19
           December 31                         1.91              1.19

         As of February  28, 1997,  there were  approximately  1,618  holders of
         record of the Company's Shares,  including  approximately 1,398 holders
         of record of the American Depositary Shares.

         The Company has not paid, nor does it presently contemplate the payment
         of, any cash dividends on its Ordinary shares.



                                     11
<PAGE>




         The decision whether to pay, and the amount of such dividends,  will be
         based upon, among other things, the earnings,  capital requirements and
         financial condition of the Company. Any dividend by the Company, either
         cash or  stock,  must be  recommended  by the  Board of  Directors  and
         approved by the  Company's  shareholders.  The Board of  Directors  is,
         however,  empowered  to declare  interim  dividends.  Under the English
         Companies  Act of 1985,  a limited  company may not declare or pay cash
         dividends  while it has an  accumulated  deficit.  The  Company  had an
         accumulate  deficit of $30,217,000  at December 31, 1996.  Accordingly,
         the  Company  will not be in a position  to  consider  the  question of
         dividends until the accumulated deficit has been absorbed by profits or
         by  the   application   against  the  deficit   with  the  approval  of
         stockholders  and the UK  Companies'  Court,  which  forms  part of the
         Chancery  Division of the High Court,  of an equivalent  figure forming
         part of the Share Premium on the Company's Balance Sheet.

b)       SALES OF UNREGISTERED SECURITIES

         During the last quarter of 1996,  the Company  raised funds through the
         following  offerings  under the terms and conditions of Regulation S of
         the Securities Act of 1933:--

         1.       Date of Transaction
                           October 11, 1996
                  Securities Sold
                           $2,500,000 3 year Unsecured  Debentures,  convertible
                           into shares at the lower of (a) the  average  closing
                           bid price of the Company's ADR's for 5 days preceding
                           the closing  date or (b) 70% of the  average  closing
                           bid price for the 5 days prior to conversion.
                  Names of subscribers
                           Lionhart Global Appreciation Fund
                           Nelson Fernandes
                           Rajan Bhasin
                  Names of warrantholders
                           GEM Ltd
                           Investment Perspectives Ltd
                           Cavendish Ltd
                           Settendown Capital Investments Ltd
                           2 Year  Warrants  to the  total  value of  $2,700,000
                           entitling  the holder to convert  into  shares of the
                           Company at a price of $1.70 per share.
         2.       Date of Transaction
                           December 5, 1996
                  Securities sold
                           1,185,185 5p Ordinary shares
                  Consideration received
                           $1,000,000
                  Name of subscriber and warrantholder
                           Brentwood Financial Limited




                                       12
<PAGE>




                           $1,000,000 2 year  Unsecured  Debentures  convertible
                           into shares at $0.84375 per share. 2 Year Warrants to
                           the value of $1,733,333  entitling the  warrantholder
                           to convert  into  shares of the Company at a price of
                           $1.4625 per share.
         Name of warrantholder
                           HIG Securities Investments Ltd
                           2 Year  Warrants to the value of $1 00,000  entitling
                           the  warrantholder  to  convert  into  shares  of the
                           Company at a price of $1.125 per share.

(c)      TAXATION

         General
         -------

         The following is a summary of the principal  U.S.  federal and U.K. tax
         consequences  applicable  to  the  ownership  of  Ordinary  shares  and
         American Depositary Shares, by a beneficial holder that is a citizen or
         resident of the United States, a corporation or partnership  created or
         organized  under the laws of the United  States or any state thereof or
         that  otherwise is subject to U.S.  Federal  income tax on a net income
         basis in respect of the Ordinary shares or American  Depositary  Shares
         (a "U.S.  Holder").  This summary is not exhaustive of all possible tax
         considerations,  and U.S.  Holders are advised to consult their own tax
         advisers as to the overall tax consequences, including specifically the
         consequences under state and local laws, of the purchase, ownership and
         disposition of Ordinary shares or American Depositary Shares.

         This  summary  does not address  the U.K.  tax  consequences  to a U.S.
         Holder who is  resident  or (in the case of an  individual)  ordinarily
         resident in the United Kingdom or who carries on business there through
         a branch or  agency.  A  disposition  of  Ordinary  shares or  American
         Depositary Shares, by such a person may be subject to U.K. tax.

         This summary also does not address the U.S. tax  consequences to a U.S.
         Holder  (i)   controlling,   directly  or  indirectly,   together  with
         associates,  10% or more of the voting shares of the Company,  (ii) who
         does not hold the  Ordinary  shares or  American  Depositary  Shares as
         capital  assets,  (iii)  who does not use the U.S.  dollar  as the U.S.
         Holder's  functional  currency or (iv) who holds the Ordinary shares or
         American  Depositary  Shares as part of a larger  integrated  financial
         transaction or straddle.

         The statements  regarding U.S.  Federal and U.K. tax laws set out below
         are based on those laws as in force on the date of this Form 10-K.





                                       13
<PAGE>




         For the purposes of the current  U.S.U.K.  double taxation  conventions
         (the "Income Tax Convention") and for the purposes of the U.S. Internal
         Revenue Code of 1986, as amended (the "Code"), U.S. Holders of American
         Depositary Shares will be treated as owners of the underlying  Ordinary
         shares.

         Taxation of Dividends.
         ----------------------

         No tax will be withheld from dividend payments by the Company,  but the
         Company is generally required, when paying a dividend in respect of its
         Ordinary shares or American  Depositary  Shares, to account to the U.K.
         Inland Revenue for advance  corporation  tax ("ACT") at the rate of one
         quarter of the dividend  (which is  equivalent to 20% of the sum of the
         cash  dividend  and the  ACT).  This  rate is  subject  to  change.  An
         individual  shareholder  resident in the United  Kingdom is treated for
         U.K.  tax  purposes as having  taxable  income  equal to the sum of the
         dividend plus a tax credit equal to 20% of the sum of the dividend plus
         the tax credit (such aggregate sum being hereinafter referred to as the
         "Gross Dividend").  The tax credit is available as a tax credit against
         the  individual's  tax  liability on the relevant  dividend and may, in
         appropriate cases, be refunded to such individual.

         The Income Tax Convention  provides that, in general,  a U.S.  resident
         shareholder  will  normally  be  entitled  to  a  repayment  (the  "ACT
         Repayment")  by the U.K.  Inland  Revenue of an amount equal to the tax
         credit to which a U.K. resident shareholder is entitled, subject to the
         deduction  of an amount  equal to 15% of the Gross  Dividend.  Thus,  a
         payment of a dividend of  (pound)8.00  to a U.S.  resident  shareholder
         would result in the shareholder becoming entitled to a net repayment of
         50 pence,  i.e.,  (pound)2.00 (25% of (pound)8.00)  less a deduction of
         (pound)1.50  (15%  of  (pound)10,  being  the  sum of  (pound)8.00  and
         (pound)2.00).

         In the event that the Company  expects to make a dividend  payment,  it
         intends  to enter into  arrangements  with the U.K.  Inland  Revenue so
         that, subject to certain  exceptions,  any ACT Repayment due in respect
         of  Shares  in  American  Depositary  Share  form may be paid to a U.S.
         resident  holder of an  American  Depositary  Share  provided  that the
         holder  completes the  declaration of U.S.  residency on the reverse of
         the  dividend  check and  presents  the check for payment  within three
         months from the date of issue of the check.  These arrangements are not
         available,  among other cases,  where the beneficial owners of American
         Depositary Shares are certain  investment or holding companies or where
         the American  Depositary  Shares comprise  property  subject to certain
         estates or trusts.  These arrangements can be terminated without notice
         by the U.K. Inland Revenue.





                                       14
<PAGE>




         Shareholders not holding American Depositary Shares or not eligible for
         the special  arrangements  described in the preceding paragraph wishing
         to make a claim for ACT  Repayment  should  obtain claim forms from the
         Internal Revenue Service, Assistant Commissioner  (International),  950
         L'Enfant  Plaza  South,  S.W.,  Washington,   D.C.,  29924,  Attention:
         Taxpayers'  Services.  The first claim by a shareholder  should be sent
         with the dividend  counterfoils to the Director of the Internal Revenue
         Service Center to which the shareholder's  last U.S. Federal income tax
         return was filed.  The  Service  Center  will then  transmit  the claim
         directly to the U.K. Inland Revenue Financial Intermediaries and Claims
         Office.  Subsequent  claims  by the same  shareholder  should  be filed
         directly with the U.K.  Inland  Revenue  Financial  Intermediaries  and
         Claims  Office,  Fitz Roy  House,  P.O.  Box 46,  Nottingham  NG2 1 BD,
         England.  Claims for an ACT Repayment  must be made within six years of
         the U.K. year of assessment  (12 months ending on April 5 in each year)
         in which the dividend is paid.

         Because a claim is not considered  made until the U.K. tax  authorities
         receive the appropriate  form from the Internal  Revenue  Service,  the
         claim forms should be sent to the Internal  Revenue Service well before
         the end of the applicable limitations period.

         The amount of any Gross Dividend paid to a holder who is a U.S.  Holder
         (i.e.,  (pound)10  in the above  example)  will be treated as  dividend
         income to such U.S. Holder for U.S.  Federal income tax purposes to the
         extent paid out of current or  accumulated  earnings and profits of the
         Company,  as determined under U.S. Federal income tax principles.  Such
         amount  will  not be  eligible  for the  dividends  received  deduction
         otherwise allowed to U.S.  corporations.  The amount included in income
         with respect to a dividend on an Ordinary share or American  Depositary
         Shares will be the U.S. dollar value of the payment  (determined at the
         spot  rate on the  date of such  payment)  regardless  of  whether  the
         payment is in fact converted into U.S. dollars.  Generally, any gain or
         loss resulting from currency exchange fluctuation between the date of a
         dividend  payment  and the date such  payment  is  converted  into U.S.
         dollars will be U.S. source ordinary income or loss. Subject to certain
         limitations,  the  15%  U.K.  deduction  from  the  Gross  Dividend  as
         described above will be treated,  for U.S.  Federal income tax purpose,
         as a foreign  income tax eligible for credit against such holder's U.S.
         Federal income tax.

         The U.K.  Treasury has power to deny the payment of ACT  Repayments  to
         certain corporations if they or an associated company have a qualifying
         presence  in a state  which  operates  a unitary  system  of  corporate
         taxation. Such provisions will only come into force if appropriate U.K.
         statutory instruments are introduced. None have so far been



                                       15
<PAGE>




         introduced.  However,  it has been indicated that such provisions could
         be introduced  retrospectively,  thus applying to dividends  paid on or
         before the date of implementation.

         UK legislation provides that when paying a dividend a Company may elect
         for it to be classified  as a foreign  income  dividend  ("FID") and in
         such a case  may  obtain  a  repayment  of ACT to the  extent  that the
         dividend can be shown to have been paid out of foreign source  profits.
         It should be noted that the tax  consequences  of the  payment of a FID
         are different to those set out in this section,  in particular that the
         recipients of a FID are unable to claim a tax credit.

         Taxation of Capital Gains
         -------------------------

         In general,  holders of Ordinary shares or American  Depositary  Shares
         who are U.S. Holders and who are not residents or ordinarily  residents
         in the United Kingdom will not normally be liable for U.K.  taxation of
         capital  gains  realized or accrued on the  disposal of their  Ordinary
         shares or American Depositary Shares.  However, for U.S. Federal income
         tax purposes, gain or loss, if any, on the sale or other disposition of
         Ordinary  shares or American  Depositary  Shares by a U.S.  Holder will
         generally  result  in  capital  gain  or  loss  to  such  U.S.  Holder.
         Generally,  a U.S.  Holder's  capital  gain or loss will be a long-term
         capital  gain or loss if the  Ordinary  shares or  American  Depositary
         Shares have been held for more than one year. Capital gains realized or
         accrued on the  disposition  of shares  will be U.S.  source  gains for
         purposes of the U.S.  foreign tax credit  limitation,  while there is a
         substantial  risk  that  capital  losses  will  be  foreign  source  by
         reference to the dividends  received in respect of the Ordinary  shares
         and American Depositary Shares.

         Estate and Gift Taxation
         ------------------------

         The current  Estate and Gift Tax  Convention  between the United States
         and the United Kingdom  generally  relieves from U.K.  inheritance  tax
         (generally  the  equivalent  of U.S.  Federal  estate and gift tax) the
         transfer of Ordinary shares or ADRs provided the shareholder making the
         transfer  is, for the  purposes  of the  Convention,  domiciled  in the
         United  States and is not a national  of the  United  Kingdom,  and the
         applicable  U.S.  tax is paid.  A holder  who is a U.S.  citizen  or is
         domiciled in the United States will be subject to U.S.  Federal  estate
         and gift tax on such a transfer.

         


                                       16
<PAGE>



         Inheritance Tax
         ---------------

         An ADR held by an individual U.S. Holder who is domiciled in the United
         States for the purposes of the  Convention  relating to estate and gift
         taxes (the "Estate and Gift Tax  Convention")  and is not a national of
         the United Kingdom for such purposes is not subject to U.K. Inheritance
         Tax on the  individual's  death  or on a gift  made  by the  individual
         during  his  lifetime  except  where  the ADR is  part of the  business
         property  of a U.K.  "permanent  establishment"  of the  individual  or
         pertains  to a  U.K.  "fixed  base"  of  an  individual  used  for  the
         performance of independent  personal services.  The Estate and Gift Tax
         Convention  generally provides for tax paid in the United Kingdom to be
         credited  against tax payable in the United  States and for tax paid in
         the United States to be credited  against any tax payable in the United
         Kingdom,  based on priority rules set forth in that Convention in cases
         where  an ADR is  subject  both  to  U.K.  Inheritance  Tax and to U.S.
         Federal gift or estate tax. There are special individual rules applying
         to trusts.  ADRs held in trust  created by a U.S.  holder will normally
         fall outside the scope of U.K. Inheritance Tax.

         U.K. Stamp Duty and Stamp Duty Reserve Tax
         ------------------------------------------

         The  statements  below relate to what is  understood  to be the current
         practice of the U.K. Inland Revenue under existing law.

         Provided that the instrument of transfer of American  Depositary Shares
         is not executed in the United  Kingdom and remains at all times outside
         of the United Kingdom, no U.K. stamp duty is payable on the acquisition
         or transfer of ADRs.  Neither will an arrangement to transfer  American
         Depositary  Shares  in the form of ADRs give  rise to a  liability  for
         stamp duty reserve tax.

         Purchase of Ordinary shares, as opposed to American  Depositary Shares,
         will normally  give rise to a charge to U.K.  stamp duty at the rate of
         50 pence  per  (pound)100  (or  part) of the  price.  An  agreement  to
         transfer  Ordinary  shares  gives  rise to a charge to U.K.  stamp duty
         reserve tax at the rate of 0.5% of the price  unless an  instrument  of
         transfer is duly stamped under the stamp duty  legislation.  Stamp duty
         reserve tax is generally  the liability of the purchaser and stamp duty
         is also usually paid by the purchaser.  Where such Ordinary  shares are
         later transferred to the Depositary's nominee,  further stamp duty will
         normally be payable at the rate of (pound)1.50 per (pound)l00 (or part)
         of the price paid for or the value of the  Ordinary  shares at the time
         of the transfer. In accordance with the terms of the Deposit Agreement,
         any tax or duty payable by the  Depositary or the Custodian on deposits
         of Ordinary  shares will be charged by the  Depositary  to the party to
         whom American Depositary Shares are delivered against such deposits.  A
         transfer of



                                       17
<PAGE>




         the underlying  Ordinary shares to an American  Depositary Share holder
         upon cancellation of the American Depositary Shares without transfer of
         beneficial  ownership  will give rise to U.K. stamp duty at the rate of
         50 pence per transfer.

ITEM 6 - Selected Financial Data
--------------------------------

The selected consolidated  statement of operations data presented below for each
of the years in the 3 year  period  ended  December  31,  1996 and the  selected
consolidated  balance  sheet data as of  December  31,  1995 and 1996,  has been
derived from and should be read in conjunction with the financial  statements of
the Company included in Part IV of this Report on Form 10K.

The selected  consolidated  statements  of  operations  data for the years ended
December 31, 1992 and 1993 and the selected  consolidated  balance sheet data as
of December 31, 1992, 1993 and 1994 has been derived from the audited  financial
statements contained in the Company's annual report to shareholders.

<TABLE>
<CAPTION>

                                                                   YEARS ENDED DECEMBER 31,
                                                            ($ in thousands, except per share data)
                                                                          (unaudited)

                                             1992           1993          1994          1995          1996
          CONSOLIDATED STATEMENT OF
          OPERATIONS DATA:
<S>                                         <C>             <C>           <C>           <C>           <C>
             Revenues                      $    10            508           212         1,956         6,486
             Loss from Operations           (2,362)        (2,584)       (3,476)       (3,879)       (4,066)
             Net Loss                       (2,347)        (2,338)       (2,982)       (3,721)       (4,020)
                                             =======        =======       =======       =======       =======
             Net Loss per Ordinary share
               outstanding                 $ (0.12)         (0.07)        (0.08)        (0.09)        (0.10)
                                             ======         ======        ======        ======        ======
</TABLE>

<TABLE>
<CAPTION>

                                                                    YEARS ENDED DECEMBER 31,
                                                                        ($ in thousands)
                                                                          (unaudited)
                                                  1992          1993          1994          1995          1996
          CONSOLIDATED STATEMENT OF
          OPERATIONS DATA:
          Assets:
<S>                                            <C>               <C>            <C>           <C>           <C>  
             Cash and cash equivalents         $    2,080         6,313         5,088         2,237         2,975
             Government Bonds at Fair Value            --         4,220         3,128            --            --
             Inventory at Cost                         --            --            42         1,231         1,657
             Trade Receivables and Other
               Current Assets                          53           157           401           959           997
                                               ----------    ----------    ----------    ----------    ----------
             
             Total Current Assets                   2,133        10,690         8,659         4,427         5,629
             Property & Equipment net                  39           393           749         1,087         1,182
             Deferred Financing costs                  --            --            --            --           902
             Goodwill and Other Intangible
               Assets net                             603           476           349           2,391         2,128
             Other Assets                               4             4             4            --            --
                                               ----------    ----------    ----------    ----------    ----------
             Total Assets                           2,779        11,563         9,761         7,905         9,841
                                               ----------    ----------    ----------    ----------    ----------
          Accumulated Deficit                     (20,876)      (23,214)      (26,196)      (29,917)      (33,897)
          Stockholders' Equity                 $    1,816        10,991         9,203         6,745         6,263
                                               ==========    ==========    ==========    ==========    ==========
</TABLE>




                                       18
<PAGE>






ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


GENERAL

The Company  received  its initial  funding  from a public  issuance of Ordinary
shares in the United Kingdom in November  1983. In May 1986, a public  financing
was completed in the United States resulting in the issuance of 1,322,500 Units,
each  consisting  of one  Ordinary  share,  one 'A' and one 'B'  warrant for the
purchase of Ordinary  shares.  The expiry date of the "A" and "B"  warrants  has
been  extended on a number of occasions  and it is now proposed  that the latest
date for conversion  shall be not later than May 15, 1997.  The Ordinary  shares
were issued as American  Depositary  Shares,  evidenced  by American  Depositary
Receipts,  and  together,  with the 'A' and 'B'  'warrants  are traded under the
Nasdaq Automated  Quotations  system.  Since May 1986, the Company has relied on
private placements of Ordinary shares to add to its capital base.

The  accounts  of the  Company  set  forth in Part IV of this  Report  have been
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles (US GAAP). The Company's financial  information included in this Form
10-K is presented in U.S. dollars.


MATERIAL CHANGES IN FINANCIAL CONDITION

During  the year  ended  December  31,  1996,  the  Company's  liquid  position,
represented by cash and deposits at banks and liquid  investments,  increased by
$738,000 to $2,975,000.  This increase is  attributable to the excess of the net
proceeds  of  private  placements  amounting  to  $4,450,000,  as  discussed  in
"Liquidity  and  Capital  Resources"  below,  over  the  cost  of the  Company's
operational losses and the net movements in working capital.


RESULTS OF OPERATIONS

The Company's operations are carried out through research and development in the
life  science and  biotechnology  fields  ("pharmaceuticals")  and,  through its
wholly-owned  subsidiary,  CII, the manufacture  and  distribution of health and
beauty aids ("cosmetics"). CII commenced operations on September 26, 1995.





                                       19
<PAGE>



                                        1994            1995           1996
                                        ----            ----           ----
                                              (in thousands of dollars)
Loss From Operations:
Pharmaceuticals:
   Revenues                              212            160            499
   Gross Profit                          201             35            317
   Operating Expenses                 (3,677)        (3,931)        (4,427)
                                     --------        -------        -------

   Loss from Operations               (3,476)        (3,896)        (4,110)
                                     --------        -------        -------
Cosmetics:
   Revenues                               --          1,771          5,987
                                     -------         ------         ------
   Gross Profit                           --            704          2,530
   Operating Expenses                     --           (712)        (2,486)
                                     -------         -------        -------

   Profit/(Loss) from Operations          --             (8)            44
                                     -------         -------        ------
Total Loss from Operations            (3,476)        (3,904)        (4,066)
                                     --------        -------        -------






                                       20
<PAGE>




                                          1994           1995            1996
                                          ----           ----            ----
                                               (in thousands of dollars)
Overall Loss Before Taxation:
Pharmaceuticals:
   Loss from Operations                 (3,476)        (3,896)        (4,110)
   Interest Income/(Expense)               534            419            (21)
   Loss on Sale of Investments             (40)          (273)            --
   Other Income/(Expense)                   --             25             (4)
                                        (2,982)        (3,725)        (4,135)
                                        -------        -------        -------
Cosmetics:
   Profit/(Loss) from Operations            --             (8)            44
   Other Income                             --             12             74
   Interest Expense                         --                            (3)
                                        -------        -------        -------
   Profit                                   --              4            115
                                        -------        -------        -------
Total Overall Loss Before Taxation      (2,982)        (3,721)        (4,020)
                                        -------        -------        -------


The  increase of $410,000 in the overall  loss of the  Company's  pharmaceutical
division  for 1996  compared  with 1995  represents  a net increase in operating
expenses of $495,000 as discussed in the following  sub-sections and a reduction
of $440,000 in net interest income. These increases are offset by an increase in
net  revenues  of  $282,000  and  the  non-recurrence  of the  loss  on  sale of
investments of $273,000.





                                       21
<PAGE>




The  increase of $743,000 in the overall  loss of the  Company's  pharmaceutical
division  for 1995  compared  with 1994  represents  a net increase in operating
expenses of $254,000 as discussed in the following sub-sections,  a reduction in
net  revenues of  $166,000,  a reduction  of $115,000 in interest  income and an
increase of $233,000 in the loss on the sale of investments. These increases are
partially offset by other income received of $25,000.

The  profit of  $115,000  in the  cosmetics  division  in the  twelve  months to
December  31,  1996  is  an  increase  of  $111,000  over  the  results  of  the
newly-formed,  wholly-owned  subsidiary  CII or  the  trading  period  September
26,1995 to December 31, 1995. The full year produced  revenues of $5,987,000 and
an operating  profit of $44,000,  a $52,000  increase over the 3 month period in
1995. Other income increased by $62,000, mainly as a result of one-off royalties
and fees.


Revenues
--------

The Company's  product sales revenues of $6,486,000 for the year to December 31,
1996 comprised $84,000 from the sale of its  pharmaceutical  products,  $415,000
representing the sale of monoclonal antibodies,  and $5,987,000 from the sale of
health and cosmetic beauty aids by CII.

The  Company's  product  sales  revenues  of  $1,931,000  to  December  31, 1995
comprised $160,000 from the sale of its pharmaceutical  products,  and sales for
three months from  September 26, 1995 to December 31, 1995,  of $1,771,000  from
the sale of health and cosmetic beauty aids following the Company's  acquisition
of a majority of the assets of Carme Inc.


Research and Development
------------------------

   Pharmaceutical Division
   -----------------------

Research  and  development  expenses  in the year ended  December  31, 1996 were
$2,040,000   compared  with   $1,900,000   and  $1,626,000  in  1995  and  1994,
respectively.

The increase of $140,000 in 1996  compared  with 1995 was  primarily  due to (i)
increases in the payments to research  institutes  carrying out clinical  trials
and  stability  tests,  and  (ii)  additional  research  costs  relating  to the
availability  to  the  Company  of  the  monoclonal  antibodies  referred  to in
"Manufacturing  and Marketing"  above. The increase of $274,000 in 1995 compared
with  1994 was due to (i)  increases  in the  payments  to  research  institutes
carrying  out  clinical  trials and  stability  tests,  and the  purchase of the
requisite  materials relating to the MSD compound,  and (ii) additional research
costs on the cellular aging project.





                                       22
<PAGE>


    Cosmetics Division
    ------------------

Research and  development  expenditure  in the year ended  December 31, 1996 was
$147,000 compared with $25,000 in 1995.

The  increase is mainly  represented  by the  expenditure  covering  the full 12
months in 1996 as opposed to a 3 months charge in 1995.


General and Administrative
--------------------------

    Pharmaceutical Division
    -----------------------

General and administrative  expenses totaled $1,627,000 for 1996,  compared with
$1,275,000 and $1,383,000 for 1995 and 1994, respectively.

The  increase of $352,000 in these costs for 1996  compared  with 1995 is mainly
due to (i) an increase in legal and  professional  charges,  (ii) an increase in
liability  insurance  charges and (iii) an increase in salaries,  rent,  travel,
utilities,  and general overheads under this heading associated with an increase
in the numbers of the management  team.  These costs were partially  offset by a
decrease in consultancy fees.

The  decrease of $108,000 in these costs for 1995  compared  with 1994 is mainly
due to (i) a reduction  in legal and  professional  charges and (ii)  savings in
patent charges relating to additional protection for the Company's auto-injector
syringe.  These  decreases were  partially  offset by an increase in the cost of
producing the Company's re-designed Annual Report and Accounts.

    Cosmetics Division
    ------------------

General  and  administrative  costs for the year ended  December  31,  1996 were
$962,000 compared with $320,000 in 1995.

The increase is accounted  for by the effect of a full 12 months charge for 1996
compared with 3 months in 1995,  partially  offset by a decrease in professional
fees.


Marketing and Promotion
-----------------------

    Pharmaceutical Division
    -----------------------

Marketing  and  promotion  expenses  totaled  $760,000 for 1996,  compared  with
$756,000 and $668,000 for 1995 and 1994, respectively.


                                       23
<PAGE>

The net increase of $4,000 in these costs for 1996  compared with 1995 is mainly
due to a re-allocation of Directors and Officers costs, offset by a reduction in
consultancy fees in the area of investor relations,  and in a non-recurring cost
for producing the Company's corporate brochure in 1995.

The increase of $88,000 in these costs for 1995 compared with 1994 is mainly due
to (i) the cost of producing the  Company's  Corporate  Capabilities  brochures,
(ii)  additional  consultancy  services in the area of investor  relations,  and
(iii) a proportion of the salary costs and associated expenses allocated to this
heading of an Executive Vice President  appointed in June 1994.  These increases
are partially  offset by (i) a reduction in the additional  compensation  to the
Company's  then  President  and  (ii)  savings  made  upon the  expiration  of a
consultancy agreement in March 1995.

     Cosmetics Division
     ------------------

The marketing and promotion expenses incurred by CII for the year ended December
31, 1996 were $459,000  compared with $91,000 in 1995. In 1995, the  expenditure
covered the period from the  commencement  of trading on  September  26, 1995 to
December  31,1995,  compared  with 1996 where the  charges  covered  the full 12
months.


Selling Expenses
----------------

    Cosmetics Division
    ------------------

Selling  expenses  incurred  by CII during  fiscal  1996  totaled  $918,000  and
includes  the  allocation  to this  heading of CII's  sales  personnel,  selling
commission paid to brokers together with the cost of overheads allocated to this
heading.  The increase  reflects a full charge for the 12 months to December 31,
1996 compared with $276,000 for the 3 month period to December 31, 1995.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents  increased by $738,000 during 1996, from $2,237,000 to
$2,975,000.  This  increase  is due to the  excess of the  proceeds  of  private
placements of shares and 8%  convertible  debentures,  providing net receipts of
$4,450,000 over the costs  attributable to the Company's  operational losses for
the period, to capital  expenditure and to net movements in working capital.  To
date, the Company has realized only modest revenues from its operations and has,
in the past,  had to depend upon raising  equity funds from private  placements.
The objective of the  Company's  major  investment in CII was to facilitate  the
development,  manufacture  and marketing of cosmetic  compounds  containing  the
Company's  Kinetin product together with the prospect,  through the installation
of a new  management  team, of utilizing  the assets and certain  members of the
personnel of Carme Inc. for the purpose of making a positive contribution to the
Company's consolidated results. However, in the event of the



                                       24
<PAGE>




use of Kinetin as a pharmaceutical product,  considerable expenditure would have
to be  committed  to this  project  and the  speed  at  which  this  work can be
undertaken will depend upon the Company's financial resources.

The  Company's  most  significant  revenue  commitments  are its research  grant
agreements,  consulting  agreements,  employment  agreements  and  its  property
leases.  In  addition,  capital  expenditure  of  approximately  $2  million  is
envisaged  during 1997 in connection  with the purchase of additional  plant and
machinery in order to achieve capacity at a substantial level for the production
of the Company's syringe components.

The Company  anticipates  spending  approximately $5 million through 1997 on the
development of its pharmaceutical products,  including syringe applications,  on
its administrative and marketing structure  generally,  and expenditure of up to
$1 million on an  advertising  campaign  on behalf of CII.  Although  management
believes that revenues  from CII's  trading  activities,  the sale of monoclonal
antibodies, from Epinephrine,  and from the sale of the Company's MSD product to
named  patients will be  generated,  these will not be sufficient to address the
Company's projected financial  requirements.  The Company therefore is currently
planning to procure  additional funds through  financing  arrangements that will
include the further issuance of new equity securities  pending the generation of
a  positive  cash flow from  revenues.  In this  connection,  negotiations  have
reached an advanced  stage , and  management  believes  that  agreements  may be
finalized  in  the  near  future.  Additionally,  certain  of the  holders  of a
substantial  number of warrants of the Company have notified their  intention to
exercise  their right to convert their  warrants into shares upon payment to the
Company of the conversion price.  Moreover, the Company is considering the grant
of  licensing  rights for  certain of its  products,  and,  if  negotiated,  any
resulting  agreements could represent an additional source of funding - although
no assurance can be given that any such  agreements  will be concluded in fiscal
year 1997. In the meantime, the renewal of an unsecured bank loan facility of $1
million is in the course of negotiation  and, if granted,  may be utilized,  but
only if this  proves to be  necessary.  Although  management  believes  that the
Company can adequately  address its financial  needs through 1997, no assurances
can be given that the Company  will be  successful  in obtaining  the  necessary
revenues or capital funding.

Upon the  acquisition  of the assets of Carme  Inc.,  the Company  incurred  the
obligation  of including 3 prior years  audited  financial  statements  for that
Organisation  when filing Form 8-K with the Securities  and Exchange  Commission
("SEC").  Carme Inc.  was the subject of a Chapter 11  bankruptcy  suit and as a
result of this, together with other administration  problems, the parent company
of Carme Inc.,  International  Research and  Development  Corporation,  had been
unable to procure audited financial



                                       25
<PAGE>




statements for the 3 years in question.  Senetek  having  received a "no action"
letter from the SEC in connection with this omission,  was subsequently  able to
reach an agreement with the former auditors of Carme Inc. to undertake a special
project for the provision of audited financial  statements,  for the period from
January 1, 1995 to September 25, 1995. The effect of the non-availability of the
3  years'  audited  financial  statements  has  been to  preclude  Senetek  from
effecting  registration  statements  under the Securities Act of 1933 covering a
public  issuance of  securities  until the Company has filed  audited  financial
statements,  incorporating  CII,  for a period of 3 years.  A recent SEC release
indicated that some relaxation of the 3 year restricted period may be possible.


FUTURE PROSPECTS

The   Company    proposes   to   expedite   the   development   and   subsequent
commercialization  of the MSD treatment  either  through its own resources or in
co-operation  with one or more  licensees.  The  Company is  continuing  to seek
agreements  with  parties who have  expressed  interest in  acquiring  licensing
rights for certain major territories and although negotiations regarding license
rights  for  certain  geographical  segments  are in  progress,  there can be no
assurance that  agreements on acceptable  terms will ultimately be effected with
the  parties  concerned  and at  present,  the  Company is not party to any such
agreement.

The  pre-marketing  costs of these  activities are likely to be of a substantial
nature.  The  Company's   immediate  objective  is  to  achieve  the  successful
completion of Phase III clinical  trials in the UK, leading to a Product License
Application in April 1997 and the subsequent  granting of a Product  License for
its MSD treatment product.  Pending these  developments,  it is anticipated that
sales,   which  at  present  are   restricted  to   clinicians   for  use  on  a
"named-patient"  basis,  will  continue  to  increase  although  such  income is
unlikely  to make a  material  contribution  to the  Company's  revenues  in the
current fiscal year.

The Syringe has been fully developed and is available for  commercialization and
for testing purposes as a delivery system for the MSD product. It is anticipated
that  it  may  be  possible  to  commence  effecting  sales  of  Epinephrine  in
conjunction with the Syringe,  dependent upon FDA approval, in the final quarter
of 1997.

With regard to the  development  and  marketing of CII's Mill Creek line and its
potential  associated  products  featuring  Kinetin,  the acquisition of CII has
provided the necessary production and marketing facilities for its incorporation
into  cosmetic  products  which,  it is  anticipated,  in  conjunction  with the
projected  advertising campaign should commence to make a positive  contribution
to the Company's revenue during the latter part of



                                       26
<PAGE>




1997,  although no assurance can be given as to the successful  consummation  of
this objective.  Management believes that existing inventory levels will suffice
for the support of the expected increase in sales as a result of the advertising
campaign.

In the  case of  monoclonal  antibodies  derived  from the  Company's  sponsored
research into Alzheimer's disease,  and from other sources,  sales to scientific
institutions are being achieved at an encouraging volume in 1997, and whilst the
amounts  involved  are unlikely to be  substantial,  it is  anticipated  that it
should be possible to achieve a flow of revenue at a reasonable level.

It is not  practicable  at the present  time to  indicate  the  probable  future
operating  results and equity capital  requirements,  but it is anticipated that
growing  revenues may be generated by the Company  during fiscal year 1997,  and
subsequently,  from the  trading  results  of CII  including  sales of  cosmetic
products which utilize the Kinetin compound,  from monoclonal  antibodies,  from
sales of  Epinephrine,  and from sales or  possible  licensing  of the  Syringe.
However, no assurances can be given that this course of events will transpire.


GOVERNMENT POLICY

It is the  opinion  of the  Board of  Directors  that  there are no  aspects  of
Government  policy  which,  as far as can be  foreseen,  are  likely  to  have a
material  effect on the conduct of the  Company's  business  except as generally
described  in Part 1, Item 1, of this Form 10-K  under the  heading  "Government
Regulation".


IMPACT OF INFLATION

The Company  believes  that  inflation  has not made any material  effect on the
results of its operations to date, and, as far as can be  ascertained,  will not
do so in the foreseeable future.

ITEM 8 - Financial Statements and Supplementary Data
----------------------------------------------------

See Item 14(a)(1) and 14(a)(2) of Part IV of this Report on Form 10-K.

ITEM 9 - Changes in and Disagreements with Accountants
         on Accounting and Financial Disclosure
         ----------------------------------------------
None.





                                       27
<PAGE>





                                    PART III


Item 10 - Directors and Executive Officers of Registrant
--------------------------------------------------------

The Company  incorporates by reference the information  regarding  Directors and
Executive  Officers set forth under the caption  "Election of  Directors" in the
Company's  Proxy  Statement  ("the Proxy  Statement")  for its Annual Meeting of
Shareholders  to be held on May 16,  1997 (to be filed with the  Securities  and
Exchange Commission ("the Commission").

In September  1996,  Dr. Gerlof  Homan,  the Company's  former  Chairman,  Chief
Executive  Officer and Chief Scientific  Officer,  decided that it was no longer
practicable to undertake the responsibility for combining these three roles with
particular  reference to allocating  sufficient time for the requirements of the
investment community, and invited Mr. Anthony Cataldo to undertake the two first
mentioned  positions.  Mr.  Cataldo was  thereupon  appointed  as the  Company's
Chairman  and Chief  Executive  Officer and  subsequently  appointed  his former
colleague Mr. Cliff Brune as the Company's Chief Financial Officer. In February,
1997, Mr. Steven  Georgiev,  a Director and Chief  Executive  Officer of Palomar
Medical  Technologies  Inc. of Beverly,  Massachusetts,  and a Director of other
publicly  quoted  companies,  was appointed as a  non-Executive  Director of the
Company.

The  following  provides  information  with  respect  to  employees  who are not
Directors  or  Executive  Officers  of the  Company  but may be expected to make
significant contributions to the business of the Company:

Edward  Curley,  age 58,  holds a  Bachelor  of  Science  degree  in  Mechanical
Engineering from the State University of New York. Before joining the Company in
December  1993, Mr. Curley had been Director of the  Pharmaceutical  Division of
Survival   Technology  Inc.   ("STI")  an  organization   concentrating  on  the
manufacture  and  world-wide  sales of automatic  injectors.  In 1990, he became
Director of National Sales covering the marketing of STI's  automatic  injectors
for  self-administration,  and pre-filled  syringes for clinical use. Mr. Curley
heads MEIS  Corporation,  which is  Senetek's  auto-injector  division  and also
undertakes  responsibility  for the  marketing  of  monoclonal  antibodies  made
available  to the  Company  from the  Institute  of Basic  Research  and  Mental
Retardation and Developmental Disabilities.

Alan  Hofstein,  age 57, joined the Company in June 1994. He obtained a Bachelor
of Science degree in Mechanical  Engineering at the New York University  College
of Engineering,  and an MBA at the City University of New York. Mr. Hofstein has
considerable experience in senior positions in manufacturing and marketing,



                                       28
<PAGE>




including  holding a number at President and Chief Executive Officer level. From
1991 until he joined the Company,  Mr.  Hofstein was President,  Chief Executive
Officer and a Director  of Rotoflex  Inc.,  a rotary seal  manufacturer  for the
paper  and  chemical  industries.  Mr.  Hofstein  heads  CII  and  will  also be
concentrating on establishing  distributor  outlets for the Company's Mill Creek
range of cosmetic products featuring Kinetin.

Item 11 - Executive Compensation
--------------------------------

The  Company  incorporates  by  reference  the  information  set forth under the
caption "Executive Compensation" of the Proxy Statement.

Item 12 - Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

The Company  incorporates  by reference  information set forth under the caption
"Securities  Ownership of Certain Beneficial Owners and Management" of the Proxy
Statement.

Item 13 - Certain Relationships and Related Transactions
--------------------------------------------------------

The  Company  incorporates  by  reference  the  information  set forth under the
caption "Certain Transactions" of the Proxy Statement.





                                       29
<PAGE>





                                     PART IV


Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
-------------------------------------------------------------------------

(a)(1) The following  consolidated  financial statements are included in Item 8:

                                                                            Page

     Report   of  ndependent Accountants....................................F-1

     Consolidated Balance Sheet as of December 31, 1995 and 1996............F-2

     Consolidated Statement of Operations for the Years Ended:

     December 31, 1994, 1995 and 1996.......................................F-3

     Consolidated Statement of Stockholders' Equity (Deficit) for the

     Years Ended: December 31, 1994, 1995 and 1996..........................F-4

     Consolidated Statement of Cash Flows for the Years Ended:

     December 31, 1994, 1995, and 1996......................................F-5

     Notes to Consolidated Financial Statements.............................F-6

(a)(2) The following financial statement schedules are submitted herewith:

       All  Schedules  are omitted  because  they are not required or the
       information  required is not  applicable or not present in amounts
       sufficient  to require  submission of the schedule or the required
       information is shown in the financial statements or notes thereto.

(a)(3) The following Exhibits are filed or incorporated by reference as part of
       this Report on Form 10-K;

3.1    Certificate of Incorporation of the Company dated October 5, 1983.

       Filed as an Exhibit with corresponding Exhibit Number to Registrant's
       Registration Statement on Form F-1, Registration No: 33-3535 and
       incorporated herein by reference.





                                       30
<PAGE>




3.2    Memorandum  and  Articles of  Association  of the Company  (defining  the
       rights of security holders, subject to the provisions of the UK Companies
       Act 1985).

       Filed as an Exhibit with  corresponding  Exhibit  Number to  Registrant's
       Registration   Statement  on  Form  F-1,  Registration  No:  33-3535  and
       incorporated herein by reference.

10.3   Senetek No. 1 Share Option Scheme for Employees.

       Filed as an Exhibit with  corresponding  Exhibit  Number to  Registrant's
       Report on Form S-8 on October  8, 1993,  Registration  No.  33-70136  and
       incorporated herein by reference.

10.4   Asset  Purchase  Agreement  dated  as of July  31,  1995,  between  Carme
       International,  Inc. a  wholly-owned  subsidiary of the Company and Carme
       Inc.

       Filed as an Exhibit on Form 8-K,  dated October 10, 1995 (as amended) and
       incorporated herein by reference.

10.18  Senetek No. 2 Executive Share Option Scheme for  non-Executive  Directors
       and Consultants.

       Filed as an Exhibit with  corresponding  Exhibit  Number to  Registrant's
       Report on Form S-8 on October  8, 1993,  Registration  No.  33-70136  and
       incorporated herein by reference.

10.29. Amended and restated Deposit Agreement dated November 6, 1992 between the
       Company and The Bank of New York.

       Form of such  Agreement  was  filed  as an  Exhibit  on Form F-6 with the
       Securities and Exchange  Commission on March 19, 1992,  Registration  No.
       33-46638 and incorporated herein by reference.

10.32  Consulting  Agreement  dated May 1, 1994 between the Company and Dr. G.D.
       Frentz.

       Filed as an exhibit with  corresponding  Exhibit  Number to  Registrant's
       annual  Report  on Form 10-K for the year  ended  December  31,  1994 and
       incorporated herein by reference.

10.33  Service  Agreement  dated  August 11, 1995 between the Company and Dr. G.
       Homan.

       Filed as an exhibit with  corresponding  Exhibit  Number to  Registrant's
       annual  Report  on Form 10-K for the year  ended  December  31,  1995 and
       incorporated herein by reference.





                                       31
<PAGE>

       An  Agreement  dated July 3, 1996  between  the  Company and Dr. G. Homan
       supplemental to the Service Agreement dated August 11, 1995.

10.34  Service  Agreement dated August 11, 1995 between the Company and Mr. P.A.
       Logan.

       Filed as an exhibit with  corresponding  Exhibit  Number to  Registrant's
       annual  Report  on Form 10-K for the year  ended  December  31,  1995 and
       incorporated herein by reference.

       An Agreement  dated July 3, 1996  between the Company and Mr. P.A.  Logan
       supplemental to the Service Agreement dated August 11, 1995.

10.35  Service  Agreement  dated  September  1, 1996 between the Company and Mr.
       A.J. Cataldo

10.36  Service Agreement dated October 1, 1996 between the Company and Mr. C. D.
       Brune

21     Subsidiaries of the Company.

       Filed as an exhibit with  corresponding  Exhibit  Number to  Registrant's
       annual  report  on Form 10-K for the year  ended  December  31,  1995 and
       incorporated herein by reference.

24     Power of Attorney

       Reference is made to page 29 hereof.

(b)    Reports on Form 8-K.

       Since October 1, 1995 the Company has filed the following reports on Form
       8-K,  each of which  relates to the  acquisition  of the assets of Carme,
       Inc. by Carme  International,  Inc.,  a wholly  owned  subsidiary  of the
       Company:

       Form 8-K filed on October 10,1995.

       Form 8-K/A - Amendment No. 1 filed on November 22, 1995.

       Form 8-K/A - Amendment No. 2 filed on March 1, 1996.

(c)    Exhibits

       The Company has filed as part of this Report on Form 10-K the exhibits in
       Item 14(a)(3) as set forth above.

(d)    Financial Statement Schedules

       See Item 14(a)(2) of this Report on Form 10-K.



                                       32
<PAGE>





                                  EXHIBIT INDEX

Exhibit No.    Exhibit
-----------    -------

10.33          An  Agreement  dated July 3, 1996  between the Company and Dr. G.
               Homan supplemental to the Service Agreement dated August 11, 1995

10.34          An Agreement  dated July 3, 1996 between the Company and Mr. P.A.
               Logan supplemental to the Service Agreement dated August 11, 1995

10.35          Service Agreement dated September 1, 1996 between the Company and
               Mr. A.J. Cataldo

10.36          Service  Agreement  dated October 1, 1996 between the Company and
               Mr. C. D. Brune





                                       33
<PAGE>






                               S I G N A T U R E S




Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                    SENETEK PLC



                                     By:    /S/ A.J. Cataldo
                                            Anthony J. Cataldo
                                            Chairman of the Board,
                                            and Chief Executive Officer



Date: March 27, 1997



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>


              Signature                                 Title                                  Date
<S>                                        <C>                                            <C>  

/S/A.J. Cataldo                            Chairman of the Board, and Chief               March 27, 1997
Anthony J. Cataldo                         Executive Officer

/S/P.A. Logan                              Company Secretary and Director                 March 27, 1997
P.A. Logan

/S/C.D. Brune                              Chief Financial Officer                        March 27, 1997
C. D. Brune
</TABLE>





                                       34
<PAGE>








                      POWER OF ATTORNEY TO SIGN AMENDMENTS



KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
does hereby  constitute  and appoint  Anthony J. Cataldo and Paul A. Logan,  and
each of them,  with full power of  substitute  and full power to act without the
other, his true and lawful attorney-in-fact and agent to act for him in his name
place and stead, in any and all capacities to sign any or all amendments to this
Annual Report on Form 10-K and to file the same, with all exhibits  hereto,  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  granting unto said  attorneys-in-fact  and each of them, full power
and  authority  to do and  perform  each and every act and thing  requisite  and
necessary  to all  intents  and  purposes,  as they or he  might  or could do in
person,  hereby  ratifying and  confirming all that said  attorneys-in-fact  and
agents, or any of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been  signed by the  following  persons in the  capacities  and on the dates
indicated.
<TABLE>
<CAPTION>


              Signature                                 Title                                  Date
              ---------                                 -----                                  ----
<S>                                        <C>                                           <C> 
/S/A.J. Cataldo                            Chairman of the Board, and Chief               March 27, 1997
(Anthony J. Cataldo)                       Executive Officer

/S/P.A. Logan                              Company Secretary, and Director                March 27, 1997
(P.A. Logan)

/S/G.D. Frentz                             Director                                       March 27, 1997
(G.D. Frentz)

/S/R.A. Oakes                              Director                                       March 27, 1997
(R.A. Oakes)

/S/S. Georgiev                             Director                                       March 27, 1997
(S. Georgiev)

</TABLE>




                                       35

<PAGE>
                     Southwark Towers                Telephone: 0171-939 3000
                     32 London Bridge Street         Telex: 884657 PRIWAT G 
                     London SEI 9SY                  Facsimile: 0171-378 0647






REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of Senetek Plc

We have audited the accompanying  consolidated balance sheets of Senetek PLC and
its subsidiaries as of December 31, 1996 and 1995, and the related  consolidated
statements of operations and  stockholders  equity and of cash flows for each of
the  three  years  in the  period  ended  December  31,  1996.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the 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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  The Company has suffered  recurring
losses from its  pharmaceutical  operations  and, as  described  in Note 18, its
ability to continue  research  activities to a stage where it has a product able
to be commercialised is dependent upon securing additional sources of financing,
which  raises  substantial  doubt about the  Company's  ability to continue as a
going concern. Management's plans in regard to this matter are also described in
Note 18. The  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.

In our opinion,  the  consolidated  financial  statements  audited by us present
fairly, in all material respects,  the financial position of Senetek PLC and its
subsidiaries at December 31, 1996 and 1995, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 1996, in conformity with  accounting  principles  generally  accepted in the
United States.



PRICE WATERHOUSE
32 London Bridge Street
LONDON SE1 9SY
England                                                           27 March 1997




                                      F-1
<PAGE>

<TABLE>
<CAPTION>


                                   SENETEK PLC

                           CONSOLIDATED BALANCE SHEET

                                                                             December 31,
                                                                             ------------
                                                                         1995             1996
                                                                         ----             ----
                                                                           (in $ thousands,
                                                                         except share amounts)
<S>                                                                  <C>               <C> 
Assets
   Current Assets:
     Cash and Cash Equivalents                                       $       2,237     $       2,975
     Inventory                                                               1,231             1,657
     Trade Receivables                                                         800               771
     (net of provisions of $78,000 in 1995 & $31,000 in 1996)
     Non-trade Receivables                                                      41                88
     Prepaids and Deposits                                                     118               138
                                                                     -------------     -------------
   Total Current Assets                                                      4,427             5,629

   Property and Equipment, net                                               1,087             1,182
   Goodwill and Other Intangible Assets - net                                2,391             2,128
   Deferred Financing Costs                                                     --               902
                                                                     -------------     -------------
   Total Assets                                                              7,905             9,841
                                                                     =============     =============

Liabilities & Stockholders' Equity
   Current Liabilities
     Bank Overdraft                                                             --               230
     Accounts Payable                                                          955             1,236
     Accrued Liabilities                                                       205               412
     8% Convertible Debentures 1999                                             --             1,700
                                                                     -------------     -------------
                                                                             1,160             3,578
                                                                     =============     =============

   Commitments and Contingencies (Note 17)                                      --                --

   Stockholders' Equity
     Ordinary Shares
       Authorized Shares: 58,000,000,
       $0.08 (5 pence) par value:
       Issued and Outstanding Shares: 43,899,205
       (1995: 40,606,123)                                                    3,266             3,533
     Share Premium                                                          33,310            36,607
     Accumulated Deficit                                                   (29,917)          (33,937)
     Equity Adjustment from Foreign Currency Translation                        86                60

   Total Stockholders' Equity                                                6,745             6,263
                                                                     =============     =============

   Total Liabilities and Stockholders' Equity                        $       7,905     $       9,841
                                                                      ------------     -------------


See accompanying notes to consolidated financial statements.
</TABLE>




                                      F-2
<PAGE>


<TABLE>
<CAPTION>




                                   SENETEK PLC
                      CONSOLIDATED STATEMENT OF OPERATIONS

                                                                                Years Ended December 31,
                                                                                ------------------------
                                                                         1994             1995              1996
                                                                         ----             ----              ----
                                                                                    (in $ thousands,
                                                                               except for per share data)
<S>                                                                <C>                      <C>              <C>  
Revenues:
   Product Sales                                                   $        192             1,931            6,486
   Development Stage Payments                                                20                --               --
                                                                           ----            ------           ------
   Total Revenues                                                           212             1,931            6,486

Cost of Sales:
   Product                                                                  (11)           (1,192)          (3,640)
   Gross Profit                                                             201               739            2,846

Operating Expenses:
   Research & Development                                                (1,626)           (1,925)          (2,187)
   General & Administrative                                              (1,383)           (1,595)          (2,588)
   Marketing & Promotion                                                   (668)             (847)          (1,219)
   Selling Expenses                                                          --              (276)            (918)
                                                                         ------            ------           ------

Total Operating Expenses                                                 (3,677)           (4,643)          (6,912)

Loss From Operations                                                     (3,476)           (3,904)          (4,066)

Interest Income                                                             534               419               34
Other Income                                                                 --                37               69
Loss on Sale of Investments                                                 (40)             (273)              --
Interest Expense                                                            ---                --              (57)
                                                                           ----              ----               --

Loss Before Taxation                                                     (2,982)           (3,721)          (4,020)

Taxation                                                                     --                --               --
                                                                         ------            ------           ------

Net Loss                                                           $     (2,982)           (3,721)          (4,020)
                                                                         ======            ======           ======

Net Loss per Ordinary Share Outstanding                            $     (0.08)             (0.09)           (0.10)
                                                                        ------            -------          -------

Weighted Average Ordinary Shares Outstanding                             39,062            40,490           41,235
                                                                         ------            ------           ------
</TABLE>


See accompanying notes to consolidated financial statements.




                                      F-3
<PAGE>

<TABLE>
<CAPTION>

                                                                          SENETEK PLC
                                                   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                                     For The Years Ended December 31, 1994, 1995, and 1996

                                                                                                                                    
                                                                                                                     
                                                                                                       Accumulated   
                                               Shares             Amount          Share Premium         Deficit      
                                                                                                         
<S>                                         <C>                     <C>               <C>                <C>         
Balances, December 31, 1993:                38,677,198              3,124             31,344             (23,214)    
   Shares subscribed for but awaiting                                 (10)               (10)
     issue
   Issuance of Ordinary shares in              300,000                 24                345                         
     Private Placement
   Warrant conversions                         328,925                 24                448                         
   Options exercised                           600,000                 48                402                         
   Net Loss                                                                                               (2,982)    
   Translation adjustment:                                                                                           
   Unrealized holding (loss) on
     investments available for sale                                                                                  
                                                                                                                  

                                            ----------         ----------         ----------         -----------     
Balances, December 31, 1994:                39,906,123              3,210             32,539             (26,196)    

   Issuance of Ordinary Shares in              700,000                 56                771                  --     
     Private Placements
   Net Loss                                         --                 --                 --              (3,721)    
   Translation Adjustment:                          --                 --                 --                  --     
   Transfer of unrealized holding loss
     on sale of short-term investments                                                                               
                
                                            ----------         ----------         ----------         -----------     
Balances, December 31, 1995:                40,606,123              3,266             33,310             (29,917)    

   Issuance of Ordinary Shares in            1,000,000                 78                972                         
     Private Placements
   Conversion of Debentures                  2,093,000                172                604                         
   Options Exercised                           200,000                 17                133                         
   Warrants Issued in Connection With
   Convertible Debentures                           --                 --              1,588                         
   Net Loss                                                                                               (4,020)    
   Translation Adjustment                                                                                            
                                            ----------         ----------         ----------         -----------     
Balances, December 31, 1996                 43,899,205              3,533             36,607             (33,937)        
                                            ----------         ----------         ----------         -----------     
                                                                              

<CAPTION>




                                                                       Equity                          
                                                                   Adjustment From          Net        
                                               Unrealized Gains   Foreign Currency     Stockholders'   
                                                  (Losses)          Translation           Equity       
                                                                                                       
<S>                                                    <C>                <C>              <C>         
Balances, December 31, 1993:                                              (263)            10,991      
   Shares subscribed for but awaiting                                                                  
     issue                                                                                             
   Issuance of Ordinary shares in                                                             369      
     Private Placement                                                                                 
   Warrant conversions                                                                        472      
   Options exercised                                                                          450      
   Net Loss                                                                                (2,982)     
   Translation adjustment:                                                 382                382      
   Unrealized holding (loss) on                                                                        
     investments available for sale                    (469)                                 (469)     
                                                                                                       
                                                                                                       
                                                 ----------         ----------         ----------      
Balances, December 31, 1994:                           (469)               119              9,203      
                                                                                                       
   Issuance of Ordinary Shares in                        --                 --                827      
     Private Placements                                                                                
   Net Loss                                              --                 --             (3,721)     
   Translation Adjustment:                               --                (33)               (33)     
   Transfer of unrealized holding loss                                                                 
     on sale of short-term investments                  469                                   469      
                                                                                                       
                                                 ----------         ----------         ----------      
Balances, December 31, 1995:                             --                 86              6,745      
                                                                                                       
   Issuance of Ordinary Shares in                                                           1,050      
     Private Placements                                                                                
   Conversion of Debentures                                                                   776      
   Options Exercised                                                                          150      
   Warrants Issued in Connection With                                                                  
   Convertible Debentures                                                                   1,588      
   Net Loss                                                                                (4,020)     
   Translation Adjustment                                                  (26)               (26)     
                                                 ----------         ----------         ----------      
Balances, December 31, 1996                              --                 60              6,263      
                                                 ----------         ----------         ----------      
                                                                                                       
                                             
See accompanying notes to consolidated financial statements.

</TABLE>

                                                                 F-4
<PAGE>



<TABLE>



                                                                          SENETEK PLC

                                                             CONSOLIDATED STATEMENT OF CASH FLOWS

<CAPTION>
                                                                   Years Ended December 31,
                                                           1994              1995              1996
                                                           ----              ----              ----
                                                                       (in $ thousands)
   CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                       <C>              <C>               <C>    
Net Loss                                                  (2,982)          (3,721 )          (4,020)
Adjustments to reconcile net
Loss to net cash:
   Depreciation and amortization                             175              260               450
   Write-off of assets                                        --               --                31
   Gain/Loss on Sale of Equipment                             --               (5)               --
   Loss on sale of investments                                40              273                --

Changes in Assets and Liabilities:
   Trade Receivables (increase)/ decrease                   (153)            (114)               25
   Non-trade Receivables
   (increase)/decrease                                       (57)              88               (47)
   Inventory increase                                        (42)             (97)             (432)
   Prepaids and deposits increase                            (31)             (46)              (21)

Accounts payable and accrued liabilities
increase/(decrease)                                          (18)             597               420
Other Assets decrease                                         --                4                --

Net Cash Used By Operating Activities                     (3,068)          (2,761)          (3,594)
                                                         -------           -------          ------- 


   CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of Property and Equipment                         (400)            (218)            ( 318)
Purchase of Certain Assets of Carme Inc.                      --           (4,002)               --
Purchase of Short-term Investments                           (92)             (54)               --
Proceeds from sale of short-term investments
                                                             800            3,378                 -
Proceeds from disposals of Property & Equipment
                                                              --                5                 4
                                                         -------           -------          ------- 
Net Cash Used By Investing Activities                        308             (891)             (314)
                                                         -------           -------          ------- 

</TABLE>





                                      F-5
<PAGE>




                                   SENETEK PLC
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                 Years Ended December 31,
                                                1994      1995        1996
                                                ----      ----        ----
                                                    (in $ thousands)

   CASH FLOWS FROM
     FINANCING ACTIVITIES:

Proceeds of Issuance of Ordinary
  Shares and Class A Warrants                   1,282         827     1,200
Issue of 8% Convertible Debentures                 --          --     3,500
Costs of Financing                                 --          --      (250)
Short term loans and overdrafts                    --          --       230
                                                -----       -----     -----
                                             

Net Cash Provided By Financing Activities       1,282         827     4,680
                                                -----       -----     -----

   NET INCREASE (DECREASE) IN
     CASH AND CASH EQUIVALENTS                 (1,478)     (2,825)      772

Cash and Cash Equivalents at  
  the Beginning of Period                       6,313       5,088     2,237     
                                                -----       -----     -----     
                                                  
Effect of Exchange Rate Changes on Cash           253         (26)      (34)

Cash and Cash Equivalents at the
   End of Period                               $5,088       2,237     2,975
                                               ======       =====     =====

Supplemental disclosures of cash flow information are as follows:

                                                                     Amounts 
                                                                      Paid
                                                                      (in $ 
                                                                    thousands)
                                                1994      1995        1996
                                                ----      ----        ----
Interest                                       $   --          --        57
Income Taxes                                   $   --          --        --
                                                
See accompanying notes to consolidated financial statements.




                                      F-5(ii)
<PAGE>




                                   SENETEK PLC

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   ACTIVITIES

     The Company  was  incorporated  in England on October 5, 1983,  as a public
     company with limited  liability under the Companies Acts of 1948 to 1985 to
     exploit  commercially  the products  which may arise as a result of Company
     sponsored  research in the fields of life  science and  biotechnology  with
     particular reference to the diagnoses and treatment of diseases relating to
     senescence or aging.

     Since  incorporation,  the Company has  concentrated  on its  research  and
     development  activities  together  with  the  concomitant   requirement  of
     procuring the necessary supportive equity financing.

     In  September  1995,  the  Company  extended  its  range  of  interests  by
     acquiring,  through its newly formed subsidiary Carme  International,  Inc.
     ("CII"), a Delaware Corporation,  the majority of the assets of Carme Inc.,
     an organization  based in Novato,  California that had  concentrated on the
     manufacture  and   distribution  of  health  and  beauty   products.   This
     acquisition  was designed to extend the  Company's  interest in the area of
     skin-care and to provide a vehicle for the development and  distribution of
     a product featuring the Kinetin compound  (formerly referred to as Factor X
     or  Vivakin)  in  a  cosmetic  format.  CII  is  currently   extending  the
     manufacturing  capacity at the existing  premises  and  revising  marketing
     strategy  and  procedures.  It plans to achieve  the  commercialization  of
     additional products incorporating Kinetin at the earliest practicable date.

2.   PRINCIPAL ACCOUNTING POLICIES

     (a)  Basis of Consolidation

          The  consolidated  financial  statements  incorporate  the accounts of
          Senetek  PLC  and  its  wholly  owned   subsidiaries,   CII  and  MEIS
          Corporation  for the year ended  December  31, 1996.  All  significant
          intercompany   balances  and  transactions  have  been  eliminated  in
          consolidation.  The accounts have been prepared in accordance  with US
          generally accepted accounting principles (US GAAP). Certain prior year
          balances have been  re-classified  in order to conform to current year
          presentation.

     (b)  Revenues

          Product  sales,  recognized  at the  time  of  shipment  (or  time  of
          rendering  in the case of  services)  are  stated at the net  invoiced
          value of goods and services  supplied to customers  after deduction of
          value added tax where  applicable.  Development stage payment revenues
          recognized   represent   initial  payments  received  under  licensing
          agreements.  Future development stage revenues will be recognized upon
          the receipt of initial payments and subsequently  upon the achievement
          of agreed significant development milestones.

     (c)  Inventories

          Inventories,  constituting finished goods,  components,  raw materials
          and  work-in-progress are stated at the lower of cost or market value.
          Cost is determined using the first in first out method.

     (d)  Property and Equipment

          Property and equipment are stated at cost.  Depreciation is calculated
          on a straight line basis using the following estimated useful lives:

          Fixtures, fittings & equipment                         5 years
          Motor vehicles                                         4 years




                                      F-6
<PAGE>



     (e)  Intangible Assets

          Intangible Assets representing Patents and Proprietary  Technology are
          stated at cost.  Amortization  is  calculated on a straight line basis
          over an estimated useful life of 5 years.

          Goodwill is being amortized on the straight line method over 15 years.
          Goodwill included in the consolidated  financial statements relates to
          the Company's  acquisition  on September 26, 1995 of certain assets of
          Carme Inc.

          In accordance  with  Statement of Financial  Accounting  Standards No.
          121,  "Accounting for the Impairment of Long-Lived Assets and for Long
          Lived  Assets to Be Disposed  Of",  the Company  reviews the  carrying
          value of its  investments  for  impairment  value  whenever  events or
          changes in  circumstances  indicate that the carrying amount of assets
          may  not be  recoverable.  The  Company  considers  various  valuation
          factors including  discounted cash flows, fair values, and replacement
          costs to assess  any  impairment  of  goodwill  and other  long  lived
          assets.

     (f)  Research and Development

          Expenditures on research and development are written off as incurred.

     (g)  Foreign Exchange

          The Company follows  currency  translation  principles  established by
          Statement of  Financial  Accounting  Standards  No. 52. All assets and
          liabilities in the balance sheets of foreign branches and subsidiaries
          whose functional currency is other than U.S. dollars are translated at
          period-end  exchange rates.  Translation gains and losses arising from
          the  translation of the financial  statements of foreign  branches and
          subsidiaries  whose functional  currency is other than the U.S. dollar
          are not included in  determining  net income but are  accumulated in a
          separate component of stockholders' equity. The functional currency of
          the Company's  foreign  operation is the  applicable  local  currency.
          Foreign  currency  transaction  gains and losses are  included  in the
          determination of net income in the period in which they occur.

     (h)  Calculation of the Number of Shares in Issue

          The loss per share for all  periods  presented  is  calculated  on the
          basis of the weighted  average of the number of shares in issue during
          each period.

     (i)  Net Loss Per Share

          The per share  calculations  include fully paid up Ordinary shares and
          exclude  Ordinary  share   equivalents   because  inclusion  would  be
          anti-dilutive.

     (j)  Statement of Cash Flows

          For the purposes of the statement of cash flows, the Company considers
          all highly liquid debt instruments purchased with an original maturity
          of three months or less to be cash equivalents.

     (k)  Financial Instruments

          The  carrying  value of the  Company's  financial  instruments,  being
          current assets and current  liabilities  approximate fair value due to
          the short term value of these items. Fair value is the amount at which
          the  instrument  could be exchanged in a current  transaction  between
          willing parties, other than in a forced sale of liquidation.





                                      F-7
<PAGE>




3.   ACQUISITION OF THE ASSETS OF CARME INC.

     On June 21, 1995 the Company  incorporated a new, wholly owned  subsidiary,
     CII, a Delaware  corporation.  On September 26, 1995, CII acquired  certain
     assets of Carme Inc.,  a Nevada  corporation  ("Carme")  in an arm's length
     transaction  pursuant  to the terms  and  provisions  of an Asset  Purchase
     Agreement dated as of July 31, 1995 ("the  Agreement") by and between Carme
     and  CII.  The  purchase  price  for  the  assets  including  expenses  was
     $3,952,000 in cash and the assumption of certain liabilities  including the
     liabilities  and  obligations  of Carme  arising  under the  Contracts  (as
     defined in the Agreement) and all obligations  whether arising by contract,
     course of dealings or otherwise,  to customers of the business with respect
     to the return of  Products  (as  defined in the  Agreement)  or credits for
     unsold merchandise.

     The funds used for the acquisition  were obtained from the liquid resources
     of the  Company  and no bank  or  other  loans  have  been  used  for  this
     transaction.  The principles involved in determining the valuation followed
     an  assessment  of the fair value of the assets as a result of research and
     inquiry by the Company.

     The consummation of the proposed  transaction  pursuant to the terms of the
     Agreement  were subject to the approval of the US Bankruptcy  Court for the
     District of Delaware and such approval was obtained on August 25, 1995.

     The  business  of Carme was the  manufacturing  and  selling  of health and
     beauty aids.  The assets  acquired from Carme include all the assets of the
     business  of  Carme  (not  expressly   excluded  under  the  terms  of  the
     Agreement), including the inventory for a provisional figure of $1,042,000;
     the accounts receivable for $488,000 and the plant, machinery and equipment
     used for the business for $220,000.  This  allocation of the purchase price
     has  resulted in  goodwill of  $2,202,000  and  tangible  assets of a fixed
     nature  represented by property and equipment of $220,000.  The goodwill is
     being  amortized  over 15 years and the tangible  assets in question over 5
     years, both under a straight line basis.

     CII intends to continue to utilize these assets to continue the manufacture
     and distribution of health and beauty aids.

4.   INVENTORY

     Inventory at cost comprises the following:

                                      December 31, 1995      December 31, 1996
                                      -----------------      -----------------
                                                  (in $ thousands)
    Finished Goods                           635                       879
    Raw Materials                            552                       776
    Work in Progress                          44                         2
                                          ------                    ------
                                          $1,231                     1,657
                                          ------                    ------
                                                           



                                      F-8
<PAGE>



5.   PROPERTY AND EQUIPMENT

     Property and equipment is summarized as follows:

                                      December 31, 1995      December 31, 1996
                                      -----------------      -----------------
                                                  (in $ thousands)

    Cost:
      Fixtures, fittings, plant and 
        laboratory equipment              $  877                     1,309
      Motor vehicles                          77                       106
      Assets in the course of                                  
        construction                         462                       284
                                          ------                    ------
                                           1,416                     1,699
                                          ------                    ------
                                                             
      Less accumulated depreciation:
      Fixtures, fittings, plant and
        laboratory equipment                (301)                     (469)
      Motor vehicles                         (28)                      (48)
                                          ------                    ------
                                            (329)                     (517)
                                          ------                    ------
                                          $1,087                     1,182
                                          ------                    ------
                                                         

     Changes  during  1995 and 1996  include  the  effects of  foreign  currency
     translations.

     NOTES:

     1.   Depreciation  charged  during the year  amounted  to  $187,000  (1995:
          $100,000)

     2.   The tangible  fixed assets of the Group include  plant and  laboratory
          equipment owned under Capital leases as follows:

          Cost                            $   --                        26
          Depreciation                        --                        (1)
                                          -----------              -----------
          Net book value                  $   --                        25
                                          -----------              -----------
           






                                      F-9
<PAGE>




6.   GOODWILL AND OTHER INTANGIBLE ASSETS

     The amount in the Company's  Balance Sheet  represented by these intangible
     assets is made up as follows:

                                      December 31, 1995      December 31, 1996
                                      -----------------      -----------------
                                                  (in $ thousands)
    Goodwill:
      Cost                                 2,202                     2,202
      Amortization                           (33)                     (169)
                                          ------                    ------
      Net                                  2,169                     2,033
                                          ------                    ------
                                                                 
    Other Intangible Assets:                                     
      Cost                                   635                       635
      Amortization                          (413)                     (540)
                                          ------                    ------
      Net                                 $  222                    $   95
                                          ------                    ------
                                                                 
    Totals                                $2,391                    $2,128
                                          ------                    ------
                                                                
     In October 1992, the Company acquired from the inventor,  the patent rights
     and related proprietary  technology for a  self-administered  auto-injector
     syringe. It is anticipated that initially this will be used as the delivery
     system for the Company's IVISD compound.  The total consideration for these
     intangible assets was $635,000. Future royalties will become payable by the
     Company to the inventor based on the number of syringes sold.

7.   GOVERNMENT BONDS

     Effective  January 1, 1994,  the Company  adopted  Statement  of  Financial
     Accounting  Standard (FAS) No. 115 "Accounting  for Certain  Investments in
     Debt  and  Equity  Securities".  Application  of FAS  115  resulted  in the
     Company's  investments in marketable  debt securities  being  classified as
     "available for sale".

     During the year ended December 31, 1995 the Company  disposed of its entire
     holdings in  securities  available  for sale.  This  generated  proceeds of
     $3,378,000  and  created a loss of  $273,000.  This loss is  reported as an
     operating expense in accordance with FAS 115.





                                      F-10
<PAGE>




8.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

     Accounts payable and accrued liabilities comprise the following:

<TABLE>
<CAPTION>
                                                               December 31, 1995                  December 31, 1996

                                                           Accrued          Accounts          Accrued          Accounts
                                                         Liabilities         Payable        Liabilities         Payable
                                                       ----------------- ---------------- ----------------- ----------------
                                                                                 (in $ thousands)
<S>                                                             <C>              <C>             <C>                <C>
           Trade Creditors                                      --               413               --               495
           Directors' Fees and Remuneration                     --                 3               --                --
           Staff Salaries                                       50                 4               60                 8
           Vacation Pay Accrual                                 29                --               71                --
           Taxes and Social Security                            --                26               --                28
           Audit and Accountancy Fees                          108                19              107                18
           Research Grants and Costs                            --               324               --               368
           Approved Travel and Accommodation
           Expenses                                             --                10               --                15
           Legal and Professional Fees                          18                 1               20                52
           Consultancy Fees                                     --                37               15                15
           Other Liabilities and Accruals                       --               118               39               237
           Accrued Financing Costs on Issue of
           Convertible Debentures                               --                --              100                --
                                                              ----              ----             ----             -----
                                                         $     205               955              412             1,236
                                                              ----              ----             ----             -----

           Obligations under capital leases
                                                                                                 1995              1996
                                                                                                 $000              $000
                                                                                                 ----              ----

           Amounts payable (within one year $9,000; within two to three years $9,000,
           within three to four years $9,000; within four to five years $5,000)                $   --                32

           Less Future Financing Charges                                                           --                (9)
                                                                                              -------               ----
                                                                                                   --                23

           Due within one year                                                                     --                 5

           Due after more than one year                                                       $    --                18
                                                                                              -------               ---



</TABLE>

9.   8% CONVERTIBLE DEBENTURES

     These  debentures  have 2 and 3 year terms  expiring in September  1998 and
     October 1999 respectively and have been issued to private investors. During
     the year  debentures  to the  value of  $3,500,000  were  issued,  of which
     $1,800,000  were converted to Ordinary  share  capital,  and $1,700,000 was
     outstanding at year end. Another $1,100,000 was redeemed and converted into
     Ordinary  shares  in  January  1997.  The  Company  promises  to pay to the
     debenture holder, or any subsequent  registered holder the principal sum on
     or prior to October  1999,  the maturity  date,  and to pay interest on the
     principal  sum  outstanding  in arrears  on the  earlier of the Date of the
     Conversion or the Maturity Date at the rate of 8% per annum.  The principal
     and interest on the Debenture are payable, if converted,  at eight per cent
     (8%) per annum in shares of ADR to the holder.  Warrants  with a fair value
     of $1,588,000 were issued to various intermediaries in connection with this
     issue.  These have been treated as an addition to deferred  financing costs
     and are amortized to the income  statement over the life of the debentures.
     Upon  the date of  conversion  the  carrying  value  of the  debentures  is
     released to share premium  together with any related  unamortized  deferred
     financing costs.





                                      F-11
<PAGE>
10.  STOCKHOLDERS' EQUITY

     (a)  During the year ended December 31, 1996, the outstanding share capital
          of the Company increased by 3,293,082 to 43,899,205 Ordinary shares.

     (b)  Warrants outstanding at December 31, 1996 are as follows:

          (1)  1,037,591 'A' Warrants at an exercise price of $2.50 per Ordinary
               share, expiring May 15, 1990. The Board of Directors has approved
               the  extension  of the expiry date of the 'A' Warrants to May 15,
               1997. The Company has the right to call the warrants,  at a price
               of $0.01 per  warrant,  upon  giving the holder 30 days notice of
               its intention.

          (2)  1,322,500 'B' warrants at an exercise price of $3.25 per Ordinary
               share, expiring May 15, 1990. The Board of Directors has approved
               the  extension  of the expiry date of the 'B' warrants to May 15,
               1997. The Company has the right to call the warrants,  at a price
               of $0.01 per  warrant,  upon  giving the holder 30 days notice of
               its intention.

          (3)  The following warrants, mainly issued in association with private
               placements, remain unexercised as follows:

<TABLE>
<CAPTION>
                                                                                                          Warrants
                                                                                        Lapsed/        Unexercised at
                      Warrants Issued      Exercise Price          Expiry Date         Canceled       December 31, 1996
                      ---------------      --------------          -----------         --------       -----------------

<S>                         <C>                  <C>          <C>                       <C>              <C>
                            175,000              0.75         December 1996             175,000                 --
                            633,000              3.00         May 1997                                      40,000
                          1,215,920              3.00         June 1997                  12,500            818,420
                          1,036,517              3.00         July 1997                                    946,342
                             25,000              1.15625      December 1999                                 25,000
                          1,285,000              1.4625       December 1998                              1,285,185
                          ---------                                                     -------          ---------
                          4,370,437                                                     187,500          3,114,947
                          ---------                                                     -------          ---------

</TABLE>


     (4)  The following Regulation S Convertible Warrants, issued in association
          with the placement of Convertible  Debentures,  remain  unexercised as
          follows:

              Warrants            Exercise                            Warrants
               Issued               Price         Expiry Date       Unexercised
              ---------           ---------       -----------       -----------
              2,700,000           $1.70             10/10/99          2,700,000

          The  Warrants   entitle  the  holder  thereof  to  purchase   American
          Depositary Receipts ("ADR") of the Company at a purchase price per ADR
          equal to 115% of the average  closing bid price of the  Company's  ADR
          for the five (5) days preceding the Closing Date,  such Warrants to be
          exercisable at any time on or after the 90th day from the Closing Date
          until  October  1999.  The offer and the sale of the Warrants is being
          made  in  compliance  with  and in  reliance  upon  the  provision  of
          Regulation  S under  the  United  States  Securities  Act of 1933,  as
          amended.

11.  STOCK OPTIONS

     (a)  On October 8, 1993,  4,550,000 options,  representing the total number
          of options  available for grant at that time were  registered with the
          Securities & Exchange Commission on Form S-8.

          In December 1985, the Company  adopted a share option plan (the "No. 1
          Plan") for  employees.  Under the Plan,  options to purchase  Ordinary
          shares are granted by the Board of Directors,  subject to the exercise
          price of the  option  being  not  less  than  the  market  value of an
          Ordinary  share  twenty-one  days prior to the grant  date.  After the
          first  twelve  months  following  the date of the grant,  options  are
          exercisable  at the  rate  of 25 per  cent,  for  each  full  year  of
          employment. In the event the optionee's employment is terminated,  the
          option may not be exercised  unless the Board of Directors so permits.
          The options expire seven years from the date of the grant.


                                      F-12
<PAGE>



          The following table  summarizes  option  transactions  under the No. 1
          Plan for the three years ended December 31, 1996:


<TABLE>

<CAPTION>
                                                Shares
                                               Available      Options       Options      Exercise Price
                                               For Grant     Outstanding     Vested        Per Share
                                               ----------    ----------    ----------    ---------------

<S>                                            <C>             <C>           <C>         <C>            
          Balance at December 31, 1993          1,318,000       682,000       431,000    $0.75-3.19
             Canceled                              10,000       (10,000)                 $     3.19
             Exercised                            250,000      (250,000)     (250,000)   $     0.75
             Granted                             (330,000)      330,000                  $     2.00
             Options Vested                          --            --         105,500    $     0.75
                                               ----------    ----------    ----------    ---------------

          Balance at December 31, 1994          1,248,000       752,000       286,500    $0.75-2.00
             Canceled                             120,000      (120,000)      (12,500)   $0.75-2.00
             Granted                             (477,000)      477,000                  $1.32-2.00
             Options Vested                          --            --         170,500    $0.75-2.00
                                               ----------    ----------    ----------    ---------------

          Balance at December 31, 1995            891,000     1,109,000       444,500    $0.75-2.00

             Exercised                            200,000      (200,000)     (200,000)   $     1.75
             Granted                           (1,436,000)    1,436,000          --      $1.25-4.00
             Options Vested                          --            --         201,750    $0.75-2.00
                                               ----------    ----------    ----------    ---------------
          Balance at December 31, 1996         * (345,000)    2,345,000       446,250    $0.75-4.00
                                               ----------    ----------    ----------    ---------------
</TABLE>
          *The above figure  represents  options granted under the No. 1 Plan in
          excess  of the  total  of 2  million,  being  the  number  of  options
          available for grant under the Plan, as approved at the Annual  Meeting
          of  Stockholders  on December 16, 1992,  and is  provisional  upon the
          retrospective  approval by stockholders of Resolution 11 at the Annual
          Meeting to be held on May 16, 1997.

          Not included in the above are 350,000 and 150,000  options  granted to
          Dr. G. Homan and P.A.  Logan  respectively,  at an  exercise  price of
          $0.75,  under the general power granted to Directors for the allotment
          of equity securities  approved at an Extraordinary  General Meeting of
          the Company held on March 6, 1991.

     (b)  In May 1987 the Company adopted a share option plan ("the No. 2 Plan")
          for  non-executive  directors and  consultants.  Under the No. 2 Plan,
          options  to  purchase  Ordinary  shares  are  granted  by the Board of
          Directors,  subject  to the  exercise  price  being  not less than the
          market  value of an  Ordinary  share 21 days prior to the grant  date.
          Options  granted under this plan are exercisable in their entirety one
          year after the date of grant. In the event the optionee ceases to be a
          non-executive Director or consultant,  the option may not be exercised
          unless the Board of  Directors  so permits.  The options  expire seven
          years from the date of grant.





                                      F-13
<PAGE>




          The following table  summarizes  option  transactions  under the No. 2
          Plan for the three years ended December 31, 1996:

<TABLE>

<CAPTION>
                                                Shares
                                               Available      Options       Options           Price
                                               For Grant     Outstanding     Vested        Per Share
                                               ----------    ----------    ----------    ---------------

<S>                                            <C>             <C>           <C>         <C>            
          Balance at December 31, 1993          1,424,000       576,000       510,000    $0.75-3.00
             Granted                              (85,000)       85,000          --      $2.00
             Cancelled                             50,000       (50,000)      (50,000)   $2.00
             Exercised                            300,000      (300,000)     (300,000)   $0.75
             Options Vested                          --            --          66,000    $2.00
                                               ----------    ----------    ----------    ---------------



          Balance at December 31, 1994          1,689,000       311,000       226,000    $0.75-3.00
             Cancelled                            110,000      (110,000)     (110,000)   $2.00-3.00
             Granted                              (19,000)       19,000          --      $1.75
             Options Vested                          --            --          85,000    $2.00
                                               ----------    ----------    ----------    ---------------
          Balance at December 31, 1995          1,780,000       220,000       201,000    $0.75-2.00

             Granted                               (7,500)        7,500                  $1.21
             Options Vested                          --            --          19,000    $1.75
                                               ----------    ----------    ----------    ---------------
          Balance at December 31, 1996          1,772,500       227,500       220,000    $0.75-2.00
                                               ----------    ----------    ----------    ---------------
</TABLE>

12.  CALCULATION OF THE NUMBER OF SHARES IN ISSUE

                                                                    Weighted
                                                      Shares        Average
                                                    Issued and       Shares
                                                    Outstanding    Outstanding
                                                    -----------    -----------

     Twelve Months January 1, 1994 through December 31, 1994
     -------------------------------------------------------
     Shares outstanding at the beginning
       of the period                                  38,677,198   38,677,198
     Conversion of warrants                              328,925      219,509
     Exercise of Options                                 600,000      126,713
     Private Placements                                  300,000       38,630
                                                      ----------   ----------

     Shares outstanding at the end of the period      39,906,123   39,062,050
                                                      ----------   ----------

     Twelve Months January 1, 1995 through December 31, 1995
     -------------------------------------------------------
     Shares outstanding at the beginning
       of the period                                  39,906,123   39,906,123
     Private Placements                                  700,000      584,109
                                                      ----------   ----------

     Shares outstanding at the end of the period      40,606,123   40,490,232
                                                      ----------   ----------




                                      F-14
<PAGE>



                                                                    Weighted
                                                      Shares        Average
                                                    Issued and       Shares
                                                    Outstanding    Outstanding
                                                    -----------    -----------

     Twelve Months January 1, 1995 through December 31, 1996
     -------------------------------------------------------
     Shares outstanding at the beginning
       of the period                                  40,606,123   40,606,123
     Private Placements and Conversion of Debentures   3,093,082      604,115
     Options Exercised                                   200,000       25,205
                                                      ----------   ----------

     Shares outstanding at the end of the period      43,899,205   41,235,443
                                                      ----------   ----------



13.  SHARE OPTION PLANS

     Under U.S. GAAP, the Company applies Accounting Principle Board Opinion No.
     25, "Accounting for Stock Issues to Employees" and related interpretations
     in accounting for its plans. Accordingly, no compensation expense has been
     recognized for its stock-based compensation plans. Had compensation expense
     for the Company's No. 1 and No. 2 Share Option Plans been determined based
     upon the fair value at the grant date for awards under these Plans
     consistent with the methodology prescribed under SFAS No. 123, "Accounting
     for Stock-Based Compensation", the Company's U.S. GAAP net loss and loss
     per share would have to be increased in 1996 by $278,129 and $0.01 per
     share, and in 1995 by $102,643 and $0.00 per share, respectively.

     The fair value of the options granted are estimated using the Black-Scholes
     option pricing model with the following assumptions:

     Dividend yield of nil, volatility of 93%, risk-free investment rate of 6.37
     % (1995 - 6.47%), and an expected life of 6 years. The average fair values
     of the options granted during 1996 and 1995 are estimated respectively as
     being $1.06 and $1.41 for each Ordinary Share ADR.

14.  TAXATION

     The Company is incorporated  in England with US  subsidiaries  and formerly
     owned a  subsidiary  in Denmark.  The Company is subject to United  Kingdom
     corporation tax on a worldwide basis with relief for foreign taxes in cases
     where double taxation relief agreements have been established.  The Company
     will be liable for United States tax  (including  state taxes)  through the
     U.S. subsidiaries.

     Income  tax  charges/(credits)  have  been  reflected  in the  Consolidated
     Statement of Operations:

                                              Year ended December 31,
                                      1994             1995              1996
                                      ----             ----              ----
     Current:
     UK                                --               --                --
                                      ____             ____              ____


     Provisional tax losses  available to the Company in the UK are estimated to
     be approximately $24,200,000.  The deferred tax asset value of these losses
     is  approximately  $8,000,000  but no benefit  has been  recognized  in the
     financial  statements  as the  benefit  is  offset  by an  equal  valuation
     allowance.

     Provisional tax losses available to the Company in the USA are estimated to
     be  approximately  $1,850,000 at the end of fiscal year 1996.  The deferred
     tax asset value of these  losses is  approximately  $630,000 but no benefit
     has been recognized in the financial statements as the benefit is offset by
     an equal valuation allowance.



                                      F-15
<PAGE>

15.  INDUSTRY AND GEOGRAPHIC AREA SEGMENT

     The  Company's  operations  are in the areas of research,  development  and
     sales of pharmaceutical  products related to senescence or aging, and, from
     September  1995, the  manufacture  and  distribution of health and cosmetic
     beauty aids. These products have been classified into  pharmaceuticals  and
     cosmetics.

     Industry Segments                   1994           1995          1996
     -----------------                 -------        -------        -------
                                             (in thousands of dollars)

     Net Sales
       Pharmaceuticals                 $   212            160            499
       Cosmetics                          --            1,771          5,987
                                       -------        -------        -------
     Total                                 212          1,931          6,486
                                       -------        -------        -------
     Operating Profit/(Loss)
       Pharmaceuticals                  (3,476)        (3,896)        (4,110)
       Cosmetics                          --               (8)            44
                                       -------        -------        -------
     Operating Loss                     (3,476)        (3,904)        (4,066)
     Interest Income/(expense)             534            419            (23)
     Other Income                         --               37             69
     Loss on Sale of Investments           (40)          (273)          --
                                       -------        -------        -------
     Loss Before Taxation               (2,982)        (3,721)        (4,020)
                                       -------        -------        -------
     Identifiable Assets:
       Pharmaceuticals                   1,489          1,113          1,090
       Cosmetics                          --            4,778          5,318
       General Corporate                 8,272          2,014          3,433
                                       -------        -------        -------
     Total                               9,761          7,905          9,841
                                       -------        -------        -------

     Capital Expenditure:
       Pharmaceuticals                     400            178            254
       Cosmetics                          --               40             64
                                       -------        -------        -------
     Total                                 400            218            318
                                       -------        -------        -------
     Depreciation and Amortization:
       Pharmaceuticals                     175            220            278
       Cosmetics                          --               40            172
                                       -------        -------        -------
     Total                             $   175            260            450
                                       -------        -------        -------





                                      F-16
<PAGE>






     Geographic Areas                    1994           1995          1996   
     ----------------                  -------        -------        ------- 
                                               (in thousands of dollars)
     Net Sales
       Pharmaceuticals -
          United States                   --              246            202
          United Kingdom and Europe        212            (98)           260
          Pacific, Far East & Canada      --               12             37
                                       -------        -------        -------
     Total Pharmaceutical                  212            160            499

       Cosmetics -
          United States - Domestic
            & Export Customers            --            1,771          5,987
                                       -------        -------        -------
                                           212          1,931          6,486
                                       -------        -------        -------

     Operating Losses:
       Pharmaceuticals:
          United States                 (2,658)        (2,520)        (2,260)
          United Kingdom & Europe         (818)        (1,376)        (1,850)
                                       -------        -------        -------
                                        (3,476)        (3,896)        (4,110)

       Cosmetics:
          United States                   --               (8)            44
                                       -------        -------        -------

     Total                              (3,476)        (3,904)        (4,066)
                                       -------        -------        -------

       Cosmetics:
          United States                   --               (8)            44
                                       -------        -------        -------

     Total                              (3,476)        (3,904)        (4,066)
                                       -------        -------        -------
       Identifiable Assets, excluding
          General Corporate Assets

       Pharmaceuticals:
          United States                  1,289          1,026            948
          United Kingdom & Europe          200             87            142
                                       -------        --------       --------
                                         1,489          1,113          1,090

       Cosmetics:
          United States                    --           4,778           5,318
                                       -------        -------        --------

     Total                             $ 1,489          5,891          6,408
                                       -------        --------       --------


     The Company's registered office is located in the United Kingdom from which
     the  financial   controls,   administration  and  scientific  research  and
     development activities are operated. The Company's Chairman is based in the
     United States from where  liaison is effected with the US investing  public
     and from where the  development of the activities of MEIS  Corporation  and
     Carme International Inc. are directed.

16.  SUBSIDIARY UNDERTAKINGS

     MEIS  Corporation  was  incorporated  in the State of  Delaware in December
     1993. Its main activity is the development,  production and distribution of
     the  auto-injector  syringe for use with the  Company's  MSD  compound.  In
     addition,  it undertakes the sales activities for the monoclonal antibodies
     derived  from the  Research  Foundation  for Mental  Hygiene  Inc. and made
     available to the Senetek  Organisation  by virtue of an  agreement  entered
     into in July 1994.

     CarmeInternational  Inc. was  incorporated in the State of Delaware in June
     1995. Its main activity is the manufacture  and  distribution of health and
     beauty aids.





                                      F-17
<PAGE>



17.  COMMITMENTS AND CONTINGENCIES

     (a)  Research

          1)   Under  existing  agreements,  the Company is committed to provide
               funding   for   research   programs   and   clinical   trials  of
               approximately  $1,350,000  during the year  ending  December  31,
               1997.

          2)   Commitments of approximately $1.5 million have been given for the
               automation of the auto-injector assembly line at MEIS Inc.

     (b)  Commitments Under Operating Leases

          The Company  leases certain  office,  laboratory and factory space and
          equipment  under operating  leases in the United Kingdom and,  through
          its subsidiaries MEIS Corporation and Carme International Inc., in the
          United States. The premises formerly occupied in Aarhus,  Denmark have
          been vacated and the lease lapsed in March 1995.

          Minimum  future  lease  payments  under  non-cancelable  leases are as
          follows:

               Years Ending                          Future
               December 31,                      Minimum Payment
               ------------                      ---------------
                                                    $   000


                    1997                            $   550
                    1998                                517
                    1999                                134
                    2000                                 --
                    2001                                 --
                                                  ---------
                                                    $ 1,201

     Rent expense was  approximately  $552,000 in 1996, and $200,000 and $98,000
     in 1995 and 1994, respectively.

18.  GOING CONCERN

     The Company's  continuing  development of its pharmaceutical  products in a
     timely manner is dependent  upon  maintaining  adequate  sources of finance
     during the period up to the marketing stage, and in this connection,  it is
     presently engaged in substantive  discussions  regarding additional sources
     of finance.  If the current  proposals can be successfully  concluded it is
     anticipated  that the Company  should be able to continue its operations so
     as to conclude the UK Phase III clinical  trials for its MSD product during
     1997 leading to a successful application for a Product License.

     Any amounts which the Company may receive as part of any proposed licensing
     distribution  or  joint-venture  arrangements  whereby a partner may effect
     contributions  in  consideration  for the transfer of certain rights to the
     Company's  research  project,  have  not been  taken  into  account  in the
     Company's  financial  projections.  If  present or future  discussions  for
     additional funding do not proceed satisfactorily, Senetek may not otherwise
     be able to support its  operations  at the  desired  augmented  level.  The
     Company's  ability  to enter  into such  agreements  depends in part on the
     results of  evaluation  tests of the  Company's  products,  as well as on a
     number of economic and market factors over which the Company has little, if
     any, influence.




                                      F-18