UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 20549


                                FORM 10-KSB

              Annual Report Pursuant to Section 13 or 15(d) of
                     The Securities Exchange Act of 1934


                     Date of Report: September 30, 2002
                                     ------------------

                                MED GEN, INC.
            (Exact name of registrant as specified in its charter)


       NEVADA                                                 65-0703559
(State of incorporation)                                   (I.R.S. Employer
                                                          Identification No.)


7284 W. Palmetto Park Road, Suite 106, Boca Raton, Florida        33433
    (Address of principal executive offices)                    (Zip code)


                Registrant's telephone number:  (561) 750-1100


SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  (None)

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, par value $.001 per share

Check whether Registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]

Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to the Form 10-KSB. [ ]

Registrant's revenues for its fiscal year ended September 30, 2002
were $3,558,294. As of September 30, 2002, Registrant had 12,517,216
shares of its $.001 par value Common Stock issued and outstanding with
an aggregate market value of the common stock held by non-affiliates
of $487,133.28 This calculation is based upon the 6,089,351 shares
held by non-affiliates and a price of $0.08 per share, which was the
bid price at the close of trading September 28, 2002.  Transitional
Small Business Disclosure Format (check one).     Yes [ ]       No [X]



<PAGE>


TABLE OF CONTENTS                                                  PAGE
-----------------                                                  ----

                                PART I
                                ------

Item 1     Description of Business                                  3

           Historical Quarterly Operating Results                   4

           Description of Products                                  4

           Competition, Market Share and Industry Environment       8

Item 2     Description of Property                                  11

Item 3     Legal Proceedings                                        11

Item 4     Submission of Matters to a Vote of Security Holders      11

                               PART II
                               -------

Item 5     Market for Registrant's Common Equity and Related
           Stockholder Matters                                      11

Item 6     Management's Discussion and Analysis of Financial
           Condition and Results of Operations                      13

Item 7     Financial Statements                                     14

Item 8     Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure                      14

                               PART III
                               --------

Item 9     Directors, Executive Officers, and Control Persons;
           Compliance with Section 16(a) of the Exchange Act        14

Item 10    Executive Compensation                                   15

Item 11    Security Ownership of Certain Beneficial Owners
           and Management and Related Stockholder Matters           16

Item 12    Certain Relationships and Related Transactions           17

Item 13    Exhibits and Reports on Form 8-K                         18

Item 14    Controls and Procedures                                  18




                                                                          2
<PAGE>


                               PART I
                               ------

ITEM 1  --  DESCRIPTION OF BUSINESS

Company Background

Med Gen, Inc. (the "Company") was established under the laws of the
State of Nevada in October 1996. Executive offices are located at 7284
W. Palmetto Park Road, Suite 106, Boca Raton, Florida 33433. The
Company's phone number is (561) 750-1100. The Company currently
operates two Web sites: www.medgen.com and www.snorenz.com.  The
                        --------------     ---------------
Company's common stock trades on the OTC Bulletin Board under the
symbol "MGNI.OB"

The Company was established to manufacture, sell and license
healthcare products, specifically to the market for alternative
therapies (health self-care).  One out of two households practice some
form of alternative therapies. Industry observers estimate this
market's size at $27 billion a year, a level of consumer expenditure
almost triple the level of expenditure in 1990. The two most prominent
factors contributing to this robust growth are (i) increased levels of
education among consumers; and (ii) changing patterns of primary care
(both in cost and in delivery).

The Company's flagship product has been SNORenz[R], a throat spray which
reduces or eliminates the sounds ordinarily associated with snoring.
SNORenz[R] is free of artificial colors, flavors or preservatives. Its
patented ingredients, technology and Liposome[R] manufacturing process,
delivers consistent and measured droplet spray mists directly to the
back of the throat, lubricating the uvula and soft palate that vibrate
with each breath. Each application lasts about six to eight hours.
Moreover, the all-natural peppermint taste further provides the
satisfaction of waking up without a morning breath.

SNORenz[R] is currently sold through a number of Fortune 100 retailers
representing a marketing network in excess of 25,000 stores
nationwide. The Company has accelerated its timetable to introduce
additional products that either deploy its proprietary technology or
otherwise address the $27 billion Alternative Therapy  Market: (i) 4-
in-1[TM], a topical analgesic for joint and muscle aches; (ii) Snore
Quell[TM], GlucoFree snoring relief for people with Type-2 diabetes; and
(iii) ComfortCare[TM], a line of pain relief products that are topically-
applied magnetic compression wraps.

Prior to fiscal year 2001, the Company lacked the capital necessary to
successfully market all four products and due to the costs associated
with entering the retail markets in the health and nutrition industry,
the Company opted to concentrate its entire resources heretofore on
the launch of its flagship brand, SNORenz[R].  Given early successes
with selected retailers in the first quarter of fiscal 2002, the
Company has accelerated the planned introduction of ComfortCare[TM] to
its second fiscal quarter (January-March 2002), Snore Quell[TM] to the
third fiscal quarter (April-June) and 4-in-1[TM] to the fourth fiscal
quarter (July-September).

Initial development of the SNORenz[R] product was completed in the
spring of 1997, when several test infomercials were produced and aired
with modest success. Changes were then made in the formulation, the
label design and the spray applicator. The newly designed product was




                                                                          3
<PAGE>

introduced in the fall of 1998, and sales grew modestly until an
infomercial featuring the Company Chairman and Chief Executive, Paul
B. Kravitz, began airing in the Spring of 1999, significantly
increasing sales.

<TABLE>
<CAPTION>

HISTORICAL QUARTERLY OPERATING RESULTS


                                  GROSS      PRETAX         EARNINGS (LOSS)
                        SALES     PROFIT     INCOME            PER SHARE
                        ---------------000's Omitted-----
<S>                     <C>       <C>        <C>            <C>
Fiscal Year 2000
----------------
First Qtr                 508        345         36                nil
Second Qtr                377        291         30                nil
Third Qtr                 265        224       (108)              (0.02)
Fourth Qtr                369        222       (138)              (0.03)
                        -----      -----      -----                ----
        Year            1,519      1,082       (181)              (0.05)

Fiscal Year 2001
----------------
First Qtr                 405        278         30                0.01
Second Qtr                362        271        (82)              (0.02)
Third Qtr                 845        508         51                0.01
Fourth Qtr                664        456     (1,414)              (0.27)
                        -----      -----      -----                ----
        Year            2,276      1,470     (1,515)              (0.27)


Fiscal Year 2002
----------------
First Qtr                 952        681       (206)              (0.02)
Second Qtr                936        562       (132)              (0.01)
Third Qtr                 919        570       (435)              (0.04)
Fourth Qtr                751        512       (558)              (0.04)
                        -----      -----      -----                ----
        Year            3,558      2,325     (1,331)              (0.12)

</TABLE>


DESCRIPTION OF PRODUCTS

SNORenz[R]
----------

SNORenz[R] is an original and innovative entry into the anti-snoring
industry. Never before has a company introduced a liquid throat spray
to prevent or quiet the noise of snoring. The Company was awarded a
Patent on the ingredients and formula during fiscal 2001 (on February
13, 2001). The medical and psychological communities have studied the
causes and symptoms of sleep deprivation for many years.



                                                                          4
<PAGE>


Sleep clinics can be found internationally at the largest hospitals
and universities, and there is a large body of published work on the
subject of snoring. It has been documented in clinical tests that much
of sleep deprivation is caused by snoring. Not only is the snorer
disturbed, but those within close proximity of the noise are disturbed
as well. As the muscles relax during sleep, air flows in and out of
the mouth causing the vibration of the tongue, soft palate and uvula
which produces the sound commonly referred to as snoring.

Traditional snoring remedies include surgical procedures, mechanical
devices and dental appliances. During surgery, portions of the
vibrating tissue are cut away by scalpel or laser in an attempt to
remove the noise-making tissues. This type of procedure is painful,
takes months to heal, and may not offer a long-term solution.
Mechanical devices primarily attempt to increase the volume of air or
create positive air pressure using some type of breathing apparatus
connected to an air pump. This is not only uncomfortable, but also
limits one's sleeping positions. Dental appliances also attempt to
increase the volume of air by expanding the opening of the mouth or by
repositioning the lower jaw and/or the tongue to decrease the
vibration effect. Again, wearing one of these is not the most
comfortable way to sleep. The costs of these methods can be
considerable and may not be covered by basic medical insurance
programs.

Snoring is a problem that affects over 60% of males and 40% of
females.  In the United States alone, it is documented that there are
over 94 million people who suffer with and from the effects of
snoring.  Snoring causes a poor quality of sleep. The medical
implications of snoring usually are not life threatening, except for a
malady called Sleep Apnea, which is not as yet curable. Therapy has
been increasing in response to demand to solve the side effects of
snoring noise.

Experiments with weight loss, the avoidance of alcoholic beverages and
the changing of sleep positions have largely proven ineffective.
Sufferers who demand some relief are now seeking more aggressive
methods.  Invasive surgery, continuous positive airway pressures
(PAP), or appliances are now being used.  These methods have had
variable success in improving the quality of sleep and reducing
snoring.  Due to the discomfort and cost of these methods, less
invasive methods are now being evaluated.

The Biotechnology underlying Med Gen's Products
-----------------------------------------------

One of the most promising of all these new methods is the use of a
natural blend of oils and vitamins specially formulated to be used as
a spray.  After years of research, such a product was developed by a
medical specialist in Brazil with encouraging initial results. The
Company acquired this technology, the trade secrets and proprietary
formula for worldwide commercial marketing.  The Company has spent
considerable capital and other resources to further improve the
delivery of this spray by using, as its manufacturing technology, the
patented technology called Liposome[R], which enables the blend of oils
to remain equally disbursed and suspended in a vesicle in solution.
This and other trade secrets comprise the underlying biotechnology of
SNORenz[R].

In other words, there is never a need to shake the bottle as the
solution is permanently blended. The Company intends to market other
over-the-counter products for alternative therapies, such as 4-in-1[TM]
and Snore Quell[TM].



                                                                          5
<PAGE>


By way of explanation, Lipoceuticals are liposomes in a multiphasic
system that contains an active ingredient in each phase.  The ability
to encapsulate a variety of lipophilic and hydrophilic ingredients,
peptides and proteins are the obvious advantages needed to enhance
delivery, improve quality and sustain product performance of SNORenz[R].
This technology is far superior and much more expensive than other
emulsion type delivery systems and insures the highest possible
quality available in the market today.

The advantages and benefits of this technology and delivery system are
that the SNORenz[R] LipoSpray is absorbed transmucosally to provide
systemic distribution; has a higher concentration of active ingredient
in the mucosal tissue; has longer residence time of active ingredient
in the mucosal tissue; and, has a high encapsulation rate for improved
performance of the active ingredient. It also has greater
bioavailability, which means that it has faster onset of effect,
greater overall absorption, sustained administration, improved
convenience and no pills, water or swallowing problems.

SNORenz[R] attempts to reduce or eliminate the sounds associated with
snoring by simply lubricating the vibrating tissues in the throat with
a combination of five natural oils, vitamins, and trade secret trace
ingredients. The product is formulated to adhere to the soft tissues
in the back of the throat for an extended period of time, and may be
reapplied as needed. Clinical studies, "Double Blind" studies and
scores of testimonials and repeat sales indicate a high level of
success for SNORenz[R] users. SNORenz[R] is not effective where users have
consumed a large amount of alcoholic beverages shortly before
application, as the alcohol tends to break down the chemical bonds of
the natural oils. It should also be noted that SNORenz[R] is not a cure
for APNEA, a condition for which there is no known cure.

SNORenz[R] carries a 30-day money back guarantee. The Company has
experienced negligible product return rates over the past two fiscal
years.

4-in-1[TM]
----------

4-in-1[TM] (formerly sold as PAINenzT), a recently commercialized product
in the Company's family of products, is a topical analgesic sold over-
the-counter. It significantly reduces the pain common to arthritis
sufferers, normal aches and pains due to exercise and other muscle
stress, simple backache pain and muscle sprains. The product comes in
a roll-on applicator. The market for over-the-counter pain relief
products is estimated to exceed $2.5 billion per year.

The active ingredients in 4-in-1[TM]  are, Glucosamine, Chondroitin,
Cetyl Myrist Oleate(CMO) and Capsaicin (kap SAY ih sihn), a derivative
of the hot pepper plant. When applied as an external analgesic,
Capsaicin depletes and prevents reaccumulation of substance P in
peripheral sensory neurons. Substance P is found in slow-conducting
neurons in the outer and inner skin layers and joint tissues, and is
thought to be the primary chemical mediator of pain impulses from the
periphery to the central nervous system. By depleting substance P,
Capsaicin renders skin and joints insensitive to pain since impulses
cannot be transmitted to the brain.

Capsaicin has been approved by the United States Food and Drug
Administration ("FDA") for use without a prescription in topical
preparations marketed for the temporary relief of pain from arthritis,



                                                                          6
<PAGE>


or for the relief of minor aches and pains of muscles and joints.
Information on both Capsaicin and Liposome is available on the
Internet (www.capsaicin.com and www.liposomes.com ).

Snore Quell[TM]
---------------

Snoring turns restful slumber into a nightmare for sleep-deprived
partners. Its distress has been clinically shown to aggravate blood
sugar levels of people with diabetes, especially at nighttime when
glucose levels are hard to detect.  GlucoFree Snore Quell[TM] is sugar-
free and can be used as a diabetic-friendly alternative to alleviate
disturbing snoring noises, along with the related effects due to
sleep-deprivation and elevated glucose levels. The formula is a basic
redesign of SNORenz[R] and thus is a proven snoring noise reducer and at
times, eliminator.  Approximately 16 million adults have Type-2
Diabetes in the USA; another 13 million suffer from Impaired Fasting
Glucose Symptoms.a precursor to the advent of Type-2 Diabetes.
Industry observers estimate that there will be 70 million adults with
Type-2 Diabetes by 2010 spending in excess of $1 billion annually on
ethical drugs, however, the annual expenditure on Type-2 Diabetic-
friendly alternatives has not been effectively measured.

ComfortCare[TM] (Compression Support with Magnets)
---------------

Compression with magnets is designed to provide relief of minor
physical discomfort that originate in stress or strain from repetitive
actions and vigorous movements associated with workplace, at-home, or
energetic activities.  Each magnet compression wrap (fitment) is
designed for application to a specific body part (back, knee, elbow,
wrist, ankle and foot-insole.six components within this product line).
Absorbtek fabric in intersliced within each fitment to absorb and
vent moisture in addition to providing anti-microbial protection.
Med Gen is the first company to have packaged such a combination of
benefits under one product label---and has just received clearance
from the FDA to market all six product components based on its Section
510(k) pre-market notification submission to that Agency. Industry
observers estimate sales of magnetic products approximate $600 million
annually.

Marketing
---------

SNORenz[R] is currently sold over the counter by more than 25,000 retail
stores nationwide and approximately 5,000 stores outside the USA. A
partial list of retailers that carry SNORenz[R] in the United States
are: Ahold USA; Albertsons Supermarkets, American Stores (a division
of Albertsons which includes Jewel Stores, Jewel T Stores, Osco Drugs
and Sav-On Drugs), Brooks Pharmacy, Dillon Stores (a division of
Kroger), Discount Drug Mart, Fedco, Genovese Drug, Giant Eagle,
Hannaford Brothers, Kmart, Longs, Wakefern Food, Walgreens and Wal-
Mart.

Distribution Agreement
----------------------

SNORenz[R], 4-in-1[TM] and Snore Quell are all manufactured by contract
manufacturers under secret and protected manufacturing agreements
signed on behalf of the Company. Through a distribution agreement a
principal  of a manufacturer and the Company's two principals share
patent rights to the formulas. The Company's ComfortCare[TM] line of
Compression Wrap Magnets are manufactured under a special Agreement
with the manufacturer in China.



                                                                          7
<PAGE>


Not including international sales generated from its Internet site,
the Company has distributors to sell its alternate brands of the
snoring spray in Canada, the United Kingdom, Germany, France,
Switzerland, Portugal, Turkey, Australia, New Zealand, Japan, China
and Korea.  The Company fully expects to be able to piggyback
additional products through this distribution network in the future.

COMPETITION, MARKET SHARE AND INDUSTRY ENVIRONMENT

The Information Research Institute (IRI) is arguably the seminal
research organization regarding consumer products research. The
category, Sleeping Remedies, is a $161 million market. In 1998, a sub-
category, Sleeping Aids, Liquid, was created.

The data available for this category is for the 52 week period through
June 16th 2002.

				Sales, 52 weeks
				To June 18, 2002
Brands:                         ----------------

SNORenz[R]                          1,047,000
Simply Sleep                        6,900,000
Unisom Tabs                         7,112,000
Unisom Gels                         6,147,000
Sominex                             4,132,000
Alluna Tabs                         1,902,000
Nytol Caps.                         2,105,000
Sleepinal                           1,514,000
Nytol Gels                          2,105,000

Source: IRI Data

Dominant Customers
------------------

In fiscal year 2002, the Company's three largest customers were Wal-
Mart, Walgreens and Nutrition For Life International which represented
65.0.% of the Company's annual sales that year. The Company's three
largest customers in fiscal 2001 were Wal-Mart, Walgreens and K-Mart
and represented 40% of annual sales that year.

Internet Sales
--------------

With the conversion of the Company's marketing strategy in 2002 from
Direct Marketing to consumer retail store sales, Internet pricing was
dramatically reduced by 50% to be consistent with unit pricing in the
retail network. Therefore, although unit sales remained steady, and
have even slightly increased, dollar sales have dropped.  The Company
operates two e-commerce web sites, www.snorenz.com and www.medgen.com.
                                   ---------------     --------------
Orders from these sites average over $9,000 per month in retail sales.
Future enhancements to the Company's web sites are planned.



                                                                          8
<PAGE>


The Company expects to show steady and important increases in future
sales on its internet site.  During the second quarter of fiscal 2002
(January to March), the web site will be re-designed to increase "user
friendly" utilization and to offer new company products. In addition,
the company has appointed an executive to head-up the Internet Sales
so that there will be a concentrated effort made in this important
media. Investor Relations will also be included and enhanced on the
web site with more frequent up-dates than previously given.  Although
no sales figures can be given or estimated, the Company expects that
these efforts will produce substantial increases in e-commerce sales
in fiscal 2002.

Patents, Trademarks and Licenses
--------------------------------

The name "SNORenz" is a registered trademark of the Company with the
United States Patent and Trademark Office (Reg. No. 2,210,381 -
12/15/98). An application for trademark of the name "Snore Quell[TM]",
"4 in 1[TM]" and COMFORT CARET has been made. The Company has also
taken steps to trademark its product names and safeguard its
formulations internationally.

Government Regulation
---------------------

The manufacturing, processing, formulation, packaging, labeling and
advertising of the Company's products may be subject to regulation by
one or more federal agencies, including the FDA, the Federal Trade
Commission ("FTC"), the Consumer Product Safety Commission, the United
States Department of Agriculture, the United States Postal Service,
the United States Environmental Protection Agency and the Occupational
Safety and Health Administration. The Company's products may also be
regulated by various agencies of the states and localities in which
our products will be sold. In particular, the FDA regulates the
safety, labeling and distribution of dietary supplements, including
vitamins, minerals, herbs, food, OTC and prescription drugs and
cosmetics.

The regulations that are promulgated by the FDA relating to the
manufacturing process are known as Current Good Manufacturing
Practices ("CGMPs"), and are different for drug and food products. In
addition, the FTC has overlapping jurisdiction with the FDA to
regulate the labeling, promotion and advertising of vitamins, OTC
drugs, cosmetics and foods. The FDA is generally prohibited from
regulating the active ingredients in dietary supplements as drugs
unless product claims, such as claims that a product may heal,
mitigate, cure or prevent an illness, disease or malady, trigger drug
status.

Governmental regulations in foreign countries where the Company may
sell our products may prevent or delay entry into a market or prevent
or delay the introduction, or require the reformulation, of certain of
our products. In addition, the Company cannot predict whether new
domestic or foreign legislation regulating its activities will be
enacted. Such new legislation could have a material adverse effect on
the Company.



                                                                          9
<PAGE>

Federal Trade Commission
------------------------

The Company's product packaging and advertised claims strictly adhere
to Federal Trade Commission regulations and guidelines. The FTC has
concluded an investigation as to a customers claims and its own claims
and packaging. Without admitting or denying any guilt, the Company paid
a $30,000 settlement to the FTC  as a result of this investigation. The
Company has complied with the FTC in revamping and redesigning its
packaging and labels with "APNEA" warnings that meet all new compliance
issues does not expect any further or significant claims to result from
this investigation.  Failure to follow such regulations could lead to
further fines, suspension of sales, or product recalls. The Company
intends to comply with all government regulations, both in domestic and
foreign markets, regarding the distribution and sales marketing of its
product lines.

Reports to Security Holders
---------------------------

The Company periodically prepares and publishes News Releases and
other significant reports that are deemed newsworthy. These reports
are sent to Business Wire for wide distribution. In addition,
shareholder reports are mailed to all shareholders, as the Company
deems necessary.  Notices of yearly shareholders' meetings, proxy
statements and events of this nature are distributed with the help of
Liberty Transfer Company, the Company's transfer agent, and with
information obtained from ADP Investor Communication in regard to
street name accounts.

Employees
---------

The Company currently has seven full-time employees. Paul Kravitz is
the Chairman and Chief Executive Officer of the Company; Paul S.
Mitchell is President, Treasurer and Chief Operating Officer; and Jack
Chien is Chief Financial Officer.

The Company has entered into employment agreements with Mr. Paul B.
Kravitz and Mr. Paul S. Mitchell. Both Employment Agreements provide
for 5 year automatically renewable terms, buyout provisions and other
normal and suitable codicil's. The Company has no other Employment
Agreements with any of its executives and will only gradually add
support staff as needed for future growth and expansion. Given that
the Company out-sources the manufacture of its products and relies
upon distributors and brokers to sell its products, it is unlikely the
corporate office will ever number more than one dozen employees.


ITEM 2.	DESCRIPTION OF PROPERTY

Effective December 10, 1999, the Company signed a five (5) year lease
and is occupying a 4,500 square foot executive office complex located
at 7284 W. Palmetto Park Road, Suite 106, Boca Raton, Florida 33433.
The monthly rent is $12,519.  The telephone number at this address is
(561) 750-1100. In November 1999, the Company also agreed to rent
expandable warehouse space (space as needed) located in Buffalo, New
York on the premises of its prime sub-contractor. This location will
significantly reduce the duplicity of handling and its related costs
as well as reduce overhead. It will also simplify inventory controls.



                                                                          10
<PAGE>

ITEM 3.	LEGAL PROCEEDINGS:

The Company was being sued by its former Master Distributor, Global
Health Laboratories Inc., ("GHL") after GHL was terminated due to a
breach of its contract with the Company. The Court has dismissed the
Plaintiffs claims without prejudice.

The Company is seeking payment on an open account of approximately
$42,000 and is named in a counter-suit by the defendant who is seeking
damages of $1,200,000 for a breach of contract. In the opinion of
management this suit is without merit and has been entered only to
delay collection of the account stated.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:

        None.


                             PART II
                             -------

ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of September 30, 2002, there were approximately 282 Common Stock
shareholders consisting of both registered shareholders and those
being held by the Deposit Trust Corporation in street name. Of the
12,517,216 shares outstanding, 6,428,050 were restricted and 6,089,351
were non-restricted. The Company's Common Stock is traded on the NASD
OTC Bulletin Board under the symbol "MGNI.OB". Shares first began
trading on the OTC Bulletin Board in May of 2000 (prior to May, the
Company's Common Stock was traded in the Pink Sheets).

The following table sets forth the high and low bid prices by month
for the Company's Common Stock for fiscal years 2001 and 2002. The
following high and low bid prices reflect inter-dealer prices without
retail markup, markdown or commission, and may not represent actual
transactions.

Common Stock: Historical Price Data
-----------------------------------

<TABLE>
<CAPTION>
     Fiscal 2001
     -----------
<S>                                           <C>                <C>
October         2000                          0.312              0.15625
November        2000                          1.01               0.16
December        2000 (end first quarter)      1.01               0.19
January         2001                          1.03               0.25
February        2001                          1.375              0.51
March           2001 (end second quarter)     1.00               0.343
April           2001                          0.45               0.22
May             2001                          0.55               0.25
June            2001 (end third quarter)      0.55               0.33
July            2001                          0.46               0.27
August          2001                          0.37               0.22
September       2001                          0.33               0.175

</TABLE>

                                                                          11
<PAGE>

<TABLE>
<CAPTION>

     Fiscal 2002
     -----------
<S>                                           <C>                <C>
October         2001                          0.312              0.15625
November        2001                          0.46               0.28
December        2001 (end first quarter)      0.33               0.26
January         2002                          0.34               0.23
February        2002                          0.30               0.25
March           2002 (end second quarter)     0.29               0.23
April           2002                          0.32               0.26
May             2002                          0.30               0.18
June            2002 (end third quarter)      0.25               0.17
July            2002                          0.20               0.15
August          2002                          0.16               0.07
September       2002                          0.11               0.07
</TABLE>


On September 28, 2002, the bid price of MGNI shares was $0.08 and the
asked price was $0.10.
The transfer agent for the Company's Common Stock is Liberty Transfer
Co., 191 New York Ave, Huntington, NY 11743-2711  Tel. (631) 385-1616.

ITEM 6	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATION

General
-------

The Company has been headquartered at 7284 W. Palmetto Park Rd. Suite
106, Boca Raton, Florida 33433 since December 1999. Although the
company has expanded in 2000 and 2001 it does not foresee any need to
further expand its 4500 sq. ft. corporate facility.  The Company has
elected to outsource the manufacture of all of its products at this
time.

Results of Operations
---------------------

Sales for the fiscal year ended September 30, 2002 increased 37.1% to
$3,558,294 from $2,275,607 in sales in the last fiscal year. Gross
Profit of  $2,324,892 increased 37.8% in fiscal 2002 up from
$1,469,563 last fiscal year as a result of the increase in sales. The
gross margin was approximately the same in both years. The increase in
sales results principally from sales to Wal-Mart which were $1,437,790
in the 2002 fiscal year as compared to $316, 686 in the 2001 fiscal
year.

Total operating expenses, which include Non-Cash Compensation for
stock and stock option issuance increased 11% to $3,337,487.

The cash-only portion of expenses increased 24.4% to $2,733,331 as
compared with $2,067,232 from the previous year. The increase in
Selling, General and Administrative expenses of $666,139 was mainly
due to a "gearing up" of staff, telecommunications and computer
technology, all of which were necessary to (i) operate at a higher
level of sales volume, (ii) meet the data transmission requirements of
Wal-Mart and Walgreens and (iii) commercialize international markets
in Asia, Australia, New Zeeland and Europe. Certain specific costs


                                                                          12
<PAGE>


that increased from fiscal 2001 to fiscal 2002 were advertising and
legal costs. The Company engaged in extensive advertising and public
relations promotions. During 2002 the company successfully defended an
action with a former distributor and incurred significant non-
recurring legal expenses. In addition the Company has initiated a
double-blind placebo controlled study for its flagship product at a
cost of approximately $60,000.

Non -Cash Stock Compensation was $604,116 in fiscal 2002 versus
$904,185 in the last fiscal year. This compensation related to stock
issued in lieu of salaries, consultant fees and expenses and in
exchange for professional services rendered.

Interest expense aggregated $341,574 during the year ended September
30, 2002 compared to $13,014 during the year ended September 30, 2001.
This increase results principally from non-cash interest expense of
$270,000 related to the Company's credit facility and interest paid on
the credit facility and convertible debentures in the 2002 fiscal
year.

For the full 2002 fiscal year, the Net Loss was $1,331,285 or $.12 per
share versus a Net Loss in fiscal 2001 of $1,514,868 or $.27 per
share.

Liquidity and Capital Resources
-------------------------------

Cash on hand at the end of fiscal 2002 increased by $41,576 from
fiscal 2001. Current Assets increased $13,159 to $833,719 of which
$505,014 are current account receivables and all due within the next
90 days. Current Liabilities decreased $88,905 to $1,044,166. The
Company has negotiated a $1,000,000 credit facility collateralized by
receivables, of which $500,000 remains available. The company
maintains significant cash resources reflecting this credit facility,
increased sales and growing accounts receivable to provide for all
general corporate operations in the foreseeable future.

Net cash used in operating activities increased from $450,442 to
$622,906 an increase of 38.3% over fiscal 2001. The net cash used in
operating activities was comprised of the net loss of $1,331,285
offset principally by non-cash stock issuances and subscriptions
aggregating $1,072,116 and a decrease in accounts payable and accrued
expenses of $366,046.

Net cash used in investing activities during fiscal year 2002
consisted of the purchase of property and equipment aggregating
$71,158.

Net cash provided by financing activities was $735,640 in fiscal
2002.The net cash provided by financing activities was comprised of
proceeds from notes payable aggregating $506,600 convertible
debentures aggregating $400,000 and stock issuances aggregating
$58,540 offset by repayments of notes payable aggregating $100,000 and
repayments of convertible debentures aggregating $129,500.

The Company believes that fiscal 2003 will be a commercially robust
year. The Company expects to introduce a major product into retail
stores and its SNORenz[R] Brand continues to grow in popularity. In
addition, overseas sales are expected to contribute an approximate 20%


                                                                          13
<PAGE>


increase to sales in FY 2003. The disappearance of the one-time
burdens of legal, computer and other non-recurring expenses would add
to a commercially robust year.

Critical Accounting Policies

Our discussion of results of operations and financial condition relies
on our consolidated financial statements that are prepared based on
certain critical accounting policies that require management to make
judgments and estimates that are subject to varying degrees of
uncertainty. We believe that investors need to be aware of these
policies and how they impact our financial reporting to gain a more
complete understanding of our consolidated financial statements as a
whole, as well as our related discussion and analysis presented
herein. While we believe that these accounting policies are grounded
on sound measurement criteria, actual future events can and often do
result in outcomes that can be materially different from these
estimates or forecasts. The accounting policies and related risks
described in the notes to our financial statements for the year ended
September 30, 2002 are those that depend most heavily on these
judgments and estimates.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements and their effect on us are
discussed in the notes to the financial statements.

Forward Looking  Statements
---------------------------

When used throughout in this Form 10-SB filing, the words "believe",
"should",  "would" and similar expressions that are not historical are
intended to identify forward-looking statements that involve risks and
uncertainties.  Such statements include, without limitation,
expectations with respect to the results for the next fiscal year, the
Company's beliefs and its views about the long-term future of the
industry and the Company, its suppliers or its other strategic
business partners.  In addition to factors that may be described in
the Company's other Securities and Exchange Commission ("SEC")
filings, unforeseen circumstances or events could cause the Company's
financial performance to differ materially from that expressed in any
forward-looking statements made by, or on behalf of, the Company.  The
Company does not undertake any responsibility to update the forward-
looking statements contained in this Form 10-SB filing.


ITEM 7.	FINANCIAL STATEMENTS

The Financial Statements that constitute Item 10 appear at the end of
this report (page 17).


ITEM 8.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Pursuant to Item 304 of Regulation S-B the registrants states:


                                                                          14
<PAGE>


(a) (1)	On January 7, 2002, the Registrant changed accountants from
Richard H. Harris & Associates, PA to Stark Winter Schenkein & Co.,
LLP, 7535 East Hampden Ave., Suite 109, Denver, CO 80231.

	(i)	Richard H. Harris & Associates, PA elected not to stand for
reappointment as the Company's independent accountant;

	(ii)	The financial statements reported on by Richard H. Harris &
Associates, PA were not subject to an adverse or qualified opinion, or
a disclaimer of opinion and were not modified as to uncertainty, audit
scope or accounting principles during the past two fiscal years, and
the interim period through January 7, 2002;

	(iii)	The decision to change accountants was approved by the
Registrant's Board of Directors; and

        (iv)    (A)     There were no disagreements related to accounting
principles or practices, financial statement disclosure, or auditing
scope or procedure during the past two fiscal years and the interim
period through January 7, 2002.

		(B)	Not applicable;

		(C)	Not applicable;

		(D)	Not applicable; and

		(E)	Not applicable.

	(2)	On January 7, 2002, the Registrant engaged Stark Winter
Schenkein & Co., LLP, as its independent accountants.

		(i)	The Registrant did not consult with Stark Winter
Schenkein & Co., LLP, its new independent accountants, regarding any
matter prior to its engagement; and

		(ii)	Not applicable.

	(3)	The Registrant has provided to Richard H. Harris &
Associates, PA, its former accountants, a copy of the disclosures
contained in this item and the Registrant has requested a letter from
Richard H. Harris & Associates, PA, addressed to the Commission,
confirming the statements made by the Registrant in this item . A copy
of such letter was filed with the Commission.

(b)	Not applicable.


                                                                          15
<PAGE>


                                PART III
                                --------

ITEM 9.	DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS

<TABLE>
<CAPTION>

Name                    Age       Position
----                    ---       --------
<S>                     <C>       <C>
Paul B. Kravitz         70        Chairman; Chief Executive Officer
                                  Secretary and Director

Paul S. Mitchell        49        President, Treasurer, Chief
                                  Operating Officer and Director
</TABLE>


All directors hold office until the next annual meeting of
stockholders and the election and qualification of their successors.
Officers are elected annually by the Board of Directors ("Board) and,
subject to existing employment and consulting contracts and
agreements, serve at the discretion of the Board. The Company intends
to conduct an annual shareholders meeting in accordance with Nevada
state law at its principal office location at 7284 West Palmetto Park
Road, Boca Raton, Florida during which Messrs. Kravitz and Mitchell
will stand for re-election as Directors.

Paul B. Kravitz (70) is Chairman and Chief Executive Officer.  He has
been a member of the Board of Directors since company inception.
Prior to founding Med Gen and its principal product SNORenz[R], Mr.
Kravitz was the President and CEO of a public company (AppleTree
Companies, Inc.) engaged in the manufacture and distribution of food
supplies to convenience stores in 24 states. Annual Sales exceeded $38
million. Mr. Kravitz retired from that company in 1996.

From 1986 until 1992, Mr. Kravitz was the CEO and principal
shareholder of The Landon Group, a financial services company. In
1990/1991, Mr. Kravitz was appointed Chairman of the Southeast Bank's
Leasing Division, an appointment made by the Federal Deposit Insurance
Corporation which was in the process of liquidating that bank. From
1960 until the mid-1980's, Mr. Kravitz was the CEO of several
furniture companies (American Furniture Company, Inc., and Furniture
Resources International, Inc.) whose operations encompassed
manufacturing of and marketing to retail showrooms nationwide. The
furniture companies were taken public in 1979 and had reached combined
sales in excess of $450,000,000..

Mr. Kravitz is a graduate of Boston University with a BS Degree. He is
a published writer for the aviation industry, food industry and the
natural supplement industry. He has appeared on national television,
in infomercials for SNORenz[R] and Med Gen.  Mr. Kravitz is a veteran of
the Korean War and served honorably as an officer in the United States
Air Force. Mr. Kravitz was honorably discharged receiving the
Distinguished Service Medal for his military service during the Korean
War. In 1955 he was retired from active duty and placed on Reserve. In
1972 he was retired as a permanent 1st Lt. USAFR after 20 years of
service to his country.


                                                                          16
<PAGE>



Paul S. Mitchell (49) is the President and Chief Operation Officer. He
has also been a Director of the Company since 1997.  In 1995, Mr.
Mitchell sold his food services company (the Sandwich Makers) to
AppleTree, becoming that company's Chief Operating Officer.  From
$135,000 in sales in 1987, sales had increased to almost $5 million by
the time it was sold to AppleTree. Prior to 1987, Mr. Mitchell worked
for Tasty Baking Company based in Pennsylvania, and for whom he held
several positions nationwide.

ITEM 10.  EXECUTIVE COMPENSATION

The following table shows that for the fiscal years ended September
30, 2000, September 30, 2001 and September 30, 2002 the cash and other
compensation paid to each of the executive officers and directors of
the Company.

                         Annual Compensation
                         -------------------
<TABLE>
<CAPTION>

Name and                                  Other          Award         Other
Position Held     Year    Salary  Bonus   Compensat'n    Restricted    Stock
                                                         Stock         Awards
-----------------------------------------------------------------------------
<S>               <C>     <C>     <C>     <C>            <C>           <C>

Paul B. Kravitz,
Chairman & CEO,
Director          2002    78,000   -0-    2,500,000(1)       -0-         -0-
                                            Options
                  2001         0   -0-    2,635,000(2)       -0-         -0-
                                            Options
                  2000     9,000   -0-        -0-            -0-         -0-
-----------------------------------------------------------------------------

Paul S. Mitchell
President & COO,
Director          2002    78,000   -0-    2,500,000(1)       -0-         -0-
                                            Options
                  2001         0   -0-    2,635,000(2)       -0-         -0-
                                            Options
                  2000     9,000   -0-        -0-            -0-         -0-
-----------------------------------------------------------------------------
</TABLE>


(1) The Options granted in 2002 were in lieu of salary. They were as
    follows: 2,000,000 @ .30 per share, 1,000,000 @ .1310 per share,
    2,000,000 @ .25 per share and 3,000,000@ .30 per share. A total of
    8 million options were granted to management and registered on Form
    S-8 in fiscal 2002.

(2) The Options granted in 2001 were in lieu of salary. They are as
    follows: 270,000 @ .25 per share and 2,000,000 @ .1350 per share. A
    total of 2,270,000 options were granted to management and registered
    on Form S-8 in fiscal 2002.



                                                                          17
<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTSAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS


<TABLE>
<CAPTION>

----------------------------------------------------------------------------
    (1)                 (2)                   (3)                 (4)
----------------------------------------------------------------------------
                Name and Address of    Amount and Nature
Title of Class  Beneficial Owner       of Beneficial Owner  Percent of Class
----------------------------------------------------------------------------
<S>             <C>                    <C>                 <C>
                Paul B. Kravitz
Common Stock    4320 NW 101 Drive         1,473,000              11.76%
                Coral Springs, FL 33065
----------------------------------------------------------------------------
                Paul S. Mitchell
Common Stock    7284 W. Palmetto Pk Rd    1,473,000              11.76%
                Boca Raton, FL  33433
----------------------------------------------------------------------------
Directors and Executive Officers
as a group (2 persons)                    2,946,000              23.53%
----------------------------------------------------------------------------
</TABLE>



ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the past two years there have been no transactions to which the
Company was a party with the following persons who had or would have a
direct or indirect material interest in the transaction :

Any director or executive officer of the Company,
Any nominee for election as a director, any security holder or any
immediate family of any of the directors, executive officers or
affiliates of the Company.

Mr Kravitz and Mr.Mitchell hold 1,646,000 shares in Di-Su Holding. Di
-Su Holding is an affiliate of the Company. They each beneficially own
50% of Di-Su Holding. During the past two years there have been no
material transactions between the Company and Di-Su Holding.

Mr. Kravitz and Mr. Mitchell have signed two identical Employment
Contracts dated September 27, 2002.The contracts provide for a gross
income of $150,000 each and participation in the Company's benefit
plans and stock option plans. The contract also calls for the payment
of a 1.66% Bonus based on pre-tax income or net cash flow, whichever
is greater. The terms are for five years and provide for termination
under normal and usual conditions.


ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  Exhibits

Exhibit 3.1   Agreement of Share Exchange with I.C.C., dated July 26th,
              2002



                                                                          18
<PAGE>

Exhibit 23    Independent Auditors Consent, filed herewith

Exhibit 24    Certification Under Sarbane-Oxley Act

     (b)  The following documents are filed as part of the report:

          1.      Financial statements

                       Independent Auditor's Reports
                       Balance Sheet
                       Statements Of Operations
                       Statement of Stockholders' (Deficit)
                       Statements of Cash Flows
                       Notes To Financial Statements

     (c)  Reports on Form 8-K

          The Company filed a report on Form 8-K announcing a change in
          it's auditors.

          The registrant will send its annual report to security holders
          and proxy solicitation material subsequent to the filing of this
          form and shall furnish copies of both to the Commission when they
          are sent to security holders.


ITEM 14.  CONTROLS AND PROCEEDURES

The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the
Company's Exchange Acts reports is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and
forms, and that such information is accumulated and communicated to
the Company's management, including its Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. In designing and evaluating the
disclosure controls and procedures , no matter how well designed and
operated, can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily was required to
apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

Within 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of
the Company's management, including the Chief Executive Officer and
the Company's Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and
procedures. Based on the foregoing, the Company's Chief Executive
Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective.



                                                                          19
<PAGE>


There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect the
internal controls subsequent to the date the Company completed its
evaluation.






                                                                          20
<PAGE>


SIGNATURES

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


MED GEN, INC.
(Registrant)


Date: November 13, 2002



By:_______/s/ Paul B. Kravitz____________
              (Signature)

_____________Chairman and CEO____________
(Print name and title of signing officer)






                                                                          21
<PAGE>



CERTIFICATIONS

Paul B Kravitz, Chairman and Chief Executive Officer

I, Paul B. Kravitz, Chairman and Chief Executive Officer, certify
that:

1.   I have reviewed this annual report on Form 10-K of Med Gen, Inc.
(the Registrant);

2.   Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;

3.   Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;

4.   The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within
          those entities, particularly during the period in which this
          annual report is being prepared;

     b)   evaluated the effectiveness of the registrants disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this annual report (the Evaluation Date); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

5.   The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the registrants board of directors:

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrants
          ability to record, process, summarize and report financial data
          and have identified for the registrants auditors any material
          weaknesses in internal controls; and

     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrants
          internal controls; and

6.   The registrants other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.


By: _______/s/Paul B. Kravitz___________
    Paul B. Kravitz
    Chairman and Chief Executive Officer


November 13, 2002




                                                                          22
<PAGE>



Jack Chien, Vice President Finance and Chief Financial Officer

I, Jack Chien Vice President, Finance and Chief Financial Officer,
certify that:

1.   I have reviewed this annual report on Form 10-K of Med Gen, Inc.
(the Registrant);

2.   Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;

3.   Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;

4.   The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within
          those entities, particularly during the period in which this
          annual report is being prepared;

     b)   evaluated the effectiveness of the registrants disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this annual report (the Evaluation Date); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

5.   The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the registrants board of directors:

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrants
          ability to record, process, summarize and report financial data
          and have identified for the registrants auditors any material
          weaknesses in internal controls; and

     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrants
          internal controls; and

6.   The registrants other certifying officers and I have indicated in
this annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.


By: _______/s/Jack Chien________________
    Jack Chien
    Vice President, Financial and Chief
    Financial Officer


November 13, 2002





                                                                          23
<PAGE>



                               MED GEN, INC.

                           FINANCIAL STATEMENTS

                            SEPTEMBER 30, 2002

                              C O N T E N T S


Reports of Independent Auditors

Financial Statements:

Balance Sheet

Statements of Operations

Statement of Stockholders' (Deficit)

Statements of Cash Flows

Notes to Financial Statements




<PAGE>


                    REPORT OF INDEPENDENT AUDITORS


Stockholders and Board of Directors
Med Gen, Inc.

We have audited the accompanying balance sheet of Med Gen, Inc. as of
September 30, 2002, and the related statements of operations,
stockholders' (deficit) and cash flows for the year ended September 30,
2002. 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 audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Med Gen,
Inc. as of September 30, 2002, and results of its operations and its
cash flows for the year ended September 30, 2002, in conformity with
accounting principles generally accepted in the United States of
America.




Stark Winter Schenkein & Co., LLP

/s/Stark Winter Schenkein & Co., LLP


Denver, Colorado
October 31, 2002



<PAGE>    F-1



                  REPORT OF INDEPENDENT AUDITORS


To The Board of Directors and Stockholders
Med Gen, Inc

We have audited the accompanying balance sheet of Med Gen, Inc. as of
September 30, 2001, and the related statements of operations, changes in
stockholders' (deficit) and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Med Gen,
Inc., as of September 30, 2001, and the results of its operations and
cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.



RICHARD H. HARRIS & ASSOCIATES, P.A.


/s/Richard H. Harris & Associates, P.A.


Fort Lauderdale, Florida
December 7, 2001



<PAGE>    F-2

                                Med Gen, Inc.

                                Balance Sheet

                             September 30, 2002



ASSETS

Current Assets
   Cash and cash equivalents                               $      49,563
    Accounts receivable, net of reserve of $70,000               505,014
    Inventory                                                    257,013
    Other current assets                                          22,129
                                                           -------------
      Total Current Assets                                       833,719

Property and Equipment, net                                       92,505

Other Assets
    Deposits                                                      64,148
    Assets held for sale                                          78,322
    Other                                                         11,325
                                                           -------------
                                                           $   1,080,019
                                                           =============

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current Liabilities
   Accounts payable and accrued expenses                   $     410,466
   Notes payable - officers                                      100,000
   Note payable                                                  503,700
   Convertible debentures                                         30,000
                                                           -------------
      Total Current Liabilities                                1,044,166

Convertible debentures                                           400,000
                                                           -------------

Stockholders' (Deficit)
   Preferred stock, $.001 par value, 5,000,000 shares
     authorized:
   Series A 8% cumulative, convertible, 1,500,000 shares
      authorized, no shares issued and outstanding                     -
   Undesignated, 3,500,000 shares authorized                           -
   Common stock, $.001 par value, 50,000,000
     shares authorized, 12,517,216 shares
     issued and 12,497,216 shares outstanding                     12,517
   Paid in capital                                             4,159,492
   Accumulated (deficit)                                      (4,440,696)
                                                           -------------
                                                                (268,687)

   Receivable for common stock                                   (85,460)
   Treasury stock, at cost 20,000 shares                         (10,000)
                                                           -------------
                                                                (364,147)
                                                           -------------
                                                           $   1,080,019
                                                           =============


            See accompanying notes to the financial statements


<PAGE>    F-3

                                Med Gen, Inc.

                          Statements of Operations

               For the Years Ended September 30, 2002 and 2001

<TABLE>
<CAPTION>

                                                      2002            2001
                                                  -----------     -----------
<S>                                               <C>             <C>

Net Sales                                         $ 3,558,294     $ 2,275,607

Cost of Sales                                       1,233,402         806,044
                                                  -----------     -----------
                                                    2,324,892       1,469,563
                                                  -----------     -----------

Operating expenses:
  Non cash stock compensation                         604,116         904,185
  Selling, general and administrative expenses      2,733,371       2,067,232
                                                  -----------     -----------
                                                    3,337,487       2,971,417

(Loss) from operations                             (1,012,595)     (1,501,854)

Other (income) expense:
  Other (income)                                      (22,884)              -
  Interest expense                                     71,574          13,014
  Non cash interest expense                           270,000               -
                                                  -----------     -----------
                                                      318,690          13,014
                                                  -----------     -----------
Net (loss)                                        $(1,331,285)    $(1,514,868)
                                                  ===========     ===========


Per share information - basic and fully diluted:

 Weighted average shares outstanding               11,354,891       5,599,267
                                                  ===========     ===========

 Net (loss) per share                             $     (0.12)    $     (0.27)
                                                  ===========     ===========
</TABLE>



            See accompanying notes to the financial statements


<PAGE>    F-4



                               Med Gen, Inc.

                    Statement of Stockholders' (Deficit)

               For the Years Ended September 30, 2002 and 2001

<TABLE>
<CAPTION>
                                         Common Stock
                                     --------------------
                                                             Addt'l
                                                             Paid in      Treasury    Subscription   Accumulated
                                      Shares       Amount    Capital       Stock       Receivable      Deficit         TOTAL
                                    ----------     ------   ----------   ---------    ------------   ------------    ----------
<S>                                 <C>            <C>      <C>          <C>          <C>            <C>             <C>

Balance, September 30, 2000          4,444,716     $4,445   $1,759,913   $     -      $       -      $(1,594,543)    $  169,815

Issuance of shares for services        901,500        901      164,209         -              -              -          165,110
Issuance of shares for conversion
  of loan                              170,000        170       84,830         -              -              -           85,000
Exercise of stock options            2,285,000      2,285      140,965         -              -              -          143,250
Repurchase of shares                      -          -            -        (10,000)           -              -          (10,000)
Conversion of shares to debenture      (50,850)       (51)     (16,949)        -              -              -          (17,000)
Issuance of shares for cash            323,550        324      107,526         -              -              -          107,850
Value attributed to options issued        -          -          89,700         -              -              -           89,700
Value attributed to repriced
  options                                 -          -         617,625         -              -              -          617,625
Net (loss) for the year                   -          -            -            -              -       (1,514,868)    (1,514,868)
                                    ----------     ------   ----------   ---------     -----------   -----------     ----------

Balance, September 30, 2001          8,073,916      8,074    2,947,819     (10,000)           -       (3,109,411)      (163,518)

Cancellation of shares                (115,000)      (115)     (20,010)        -              -              -          (20,125)
Issuance of shares for services      1,918,300      1,918      548,323         -              -              -          550,241
Issuance of shares for cash            140,000        140       13,860         -              -              -           14,000
Exercise of stock options            1,000,000      1,000      129,000         -          (130,000)          -             -
Subscribed shares                         -          -         198,000         -              -              -          198,000
Issuance of shares as interest
 payment                            1,500,000      1,500      268,500          -              -              -          270,000
Payment on stock subscription             -          -            -            -            44,540           -           44,540
Value attributed to options issued        -          -          74,000         -              -              -           74,000
Net (loss) for the year                   -          -            -            -              -       (1,331,285)    (1,331,285)
                                    ----------     ------   ----------   ---------     -----------   -----------     ----------

Balance, September 30, 2002         12,517,216    $12,517   $4,159,492   $ (10,000)    $   (85,460)  $(4,440,696)    $ (364,147)
                                    ==========    =======   ==========   =========     ===========   ===========     ==========
</TABLE>


            See accompanying notes to the financial statements


<PAGE>    F-5



                                Med Gen, Inc.

                           Statements of Cash Flows

                 For the Years Ended September 30, 2002 and 2001
<TABLE>
<CAPTION>
                                                        2002            2001
                                                     -----------     -----------
<S>                                                  <C>             <C>

Net (loss)                                           $(1,331,285)    $(1,514,868)
  Adjustments to reconcile net (loss) to
    net cash (used in) operating activities:
  Depreciation and amortization                           23,908          14,349
  (Loss) on disposition of property and equipment          3,331            -
  Write off of receivable from affiliate                  10,908         116,235
  Allowance for doubtful accounts                         10,000          50,000
  Common shares issued for interest                      270,000            -
  Common shares subscribed for services                  198,000            -
  Common shares and options issued for services          604,116       1,015,726
Changes in assets and liabilities:
  (Increase) in accounts receivable                      (81,405)       (221,209)
  (Increase) in inventory                                (44,138)       (146,324)
  (Increase) decrease in subscriptions receivable         55,000         (55,000)
  (Increase) in other current assets                        (270)        (89,688)
  (Increase) decrease in deposits and other assets        24,975         (16,961)
  Increase (decrease) in accounts payable and
    accrued expenses                                    (366,046)        397,298
                                                     -----------     -----------
Net cash (used in) operating activities                 (622,906)       (450,442)
                                                     -----------     -----------

Cash flows from investing activities:
  Acquisition of property and equipment                  (71,158)        (14,048)
  Purchase of treasury shares                               -            (10,000)
                                                     -----------     -----------
Net cash (used in) investing activities                  (71,158)        (24,048)
                                                     -----------     -----------

Cash flows from financing activities:
  Proceeds from note payable                             456,600         235,000
  Proceeds from notes payable - officers                  50,000            -
  Repayment of notes payable                            (100,000)         (2,900)
  Proceeds from convertible debentures                   400,000         142,500
  Repayment of convertible debentures                   (129,500)           -
  Proceeds from stock issuances                           58,540         107,850
                                                     -----------     -----------
Net cash provided by financing activities                735,640         482,450
                                                     -----------     -----------

Net increase in cash                                      41,576           7,960

Beginning - cash balance                                   7,987              27
                                                     -----------     -----------
Ending - cash balance                                $    49,563     $     7,987
                                                     ===========     ===========

Supplemental cash flow information:
  Cash paid for income taxes                         $      -        $      -
  Cash paid for interest                             $    71,574     $    10,945

Non cash investing and financing activities:
  Common shares issued for conversion of
    debenture                                        $      -        $    17,000
  Assets held for sale received in settlement
    of debt                                          $    78,322     $      -
  Repayment of note payable by issuance of
    new note                                         $    47,100     $      -
  Common shares issued to officers for receivable    $   130,000     $      -

</TABLE>



            See accompanying notes to the financial statements


<PAGE>    F-6


                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Med Gen, Inc. the (Company) was incorporated October 22, 1996 under
the laws of the State of Nevada and began operations in the State of
Florida on November 12, 1996. The Company currently markets an all
natural product, SNORENZ, which is designed to aid in the prevention
of snoring. The Company also plans to offer additional products
dealing with alternative nutritionals as well as other health related
items.

Reclassifications

Certain items presented in the previous period's financial statements
have been reclassified to conform to current year presentation.

Revenue Recognition

The Company recognizes revenue when services are provided or products
are shipped and is presented net of returns.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

Inventory

Inventory is stated at the lower of cost, determined on the first-in,
first-out method, or net realizable market value. Inventory at
September 30, 2002 consisted of finished goods and packaging
materials.

Property and Equipment

Property and equipment is recorded at cost. Expenditures for major
improvements and additions are added to the property and equipment
accounts while replacements, maintenance and repairs, which do not
extend the life of the assets are expensed. Certain idle property and
equipment with a basis and approximate fair market value of $78,322
has been reclassified to property held for sale at September 30, 2002.

Depreciation and Amortization

Depreciation and amortization are computed by using the straight-line
method over the estimated useful lives of the assets. The estimated
useful lives are summarized as follows:

         Furniture and fixtures             7 years
         Office and computer equipment      5 years
         Computer software                  3 years
         Leasehold improvements             5 years



<PAGE>    F-7


                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


Financial Instruments

Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of
September 30, 2002. The respective carrying value of certain on-balance-
sheet financial instruments approximated their fair values. These
financial instruments include cash, accounts receivable, accounts
payable, notes payable and convertible debentures. Fair values were
assumed to approximate carrying values for these financial instruments
because they are short term in nature and their carrying amounts
approximate fair values.

The fair value of long-term debentures approximates the carrying value
as the stated interest rates of the debentures reflect current market
conditions.

Long Lived Assets

The carrying value of long-lived assets is reviewed on a regular basis
for the existence of facts and circumstances that suggest impairment.
To date, no such impairment has been indicated. Should there be an
impairment, in the future, the Company will measure the amount of the
impairment based on the amount that the carrying value of the impaired
assets exceed the undiscounted cash flows expected to result from the
use and eventual disposal of the from the impaired assets.

Net Income (Loss) Per Common Share

The Company calculates net income (loss) per share as required by
Statement of Financial Accounting Standards (SFAS) 128, "Earnings per
Share." Basic earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share is
calculated by dividing net income (loss) by the weighted average
number of common shares and dilutive common stock equivalents
outstanding. During periods in which the Company incurs losses common
stock equivalents, if any, are not considered, as their effect would
be anti dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.

Advertising Costs

Advertising costs are charged to expense as incurred. Advertising
costs charged to expense included in selling, general and
administrative expenses, amounted to $151,350 and $41,091 for the
years ended September 30, 2002 and 2001.

Segment Information

The Company follows SFAS 131, Disclosures about "Segments of an
Enterprise and Related Information." Certain information is disclosed,
per SFAS 131, based on the way management organizes financial
information for making operating decisions and assessing performance.
The Company currently operates in a single segment and will evaluate
additional segment disclosure requirements as it expands its
operations.


<PAGE>   F-8



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


Income Taxes

The Company follows SFAS 109 "Accounting for Income Taxes" for
recording the provision for income taxes. Deferred tax assets and
liabilities are computed based upon the difference between the
financial statement and income tax basis of assets and liabilities
using the enacted marginal tax rate applicable when the related asset
or liability is expected to be realized or settled. Deferred income
tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggests that it is more
likely than not that some portion or all of the deferred tax assets
will not be realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not to be
realized. Future changes in such valuation allowance are included in
the provision for deferred income taxes in the period of change.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees for
services based on the fair value of the equity instruments issued and
accounts for equity instruments issued to other than employees based
on the fair value of the consideration received or the fair value of
the equity instruments, whichever is more reliably measurable.

The Company accounts for stock based compensation in accordance with
SFAS 123, "Accounting for Stock-Based Compensation." The provisions of
SFAS 123 allow companies to either expense the estimated fair value of
stock options or to continue to follow the intrinsic value method set
forth in APB Opinion 25, "Accounting for Stock Issued to Employees"
(APB 25) but disclose the pro forma effects on net income  (loss) had
the fair value of the options been expensed. The Company has elected
to continue to apply APB 25 in accounting for its stock option
incentive plans.

Recent Pronouncements

In July 2001, the Financial Accounting Standards Board (FASB) issued
SFAS 141, "Business Combinations", and SFAS 142, "Goodwill and
Intangible Assets".  SFAS 141 is effective for all business combinations
completed after June 30, 2001.  SFAS 142 is effective for the year
beginning January 1, 2002; however certain provisions of that Statement
apply to goodwill and other intangible assets acquired between July 1,
2001, and the effective date of SFAS 142.  The Company does not believe
the adoption of these standards will have a material impact on its
financial statements.

In July 2001, the FASB issued SFAS 143, "Accounting for Asset Retirement
Obligations".  This statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs.  This
Statement applies to all entities.  It applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and (or) the normal operation of
a long-lived asset, except for certain obligations of lessees.  This
Statement is effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Company does not believe the adoption
of this standard will have a material impact on its financial
statements.

In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets".  This statement addresses financial
accounting and reporting for the impairment or disposal of long-lived
assets and supersedes FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of.  The provisions of the statement are effective for financial
statements issued for fiscal years beginning after December 15, 2001.



<PAGE>   F-9



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


The Company does not believe the adoption of this standard will have a
material impact on its financial statements.

In April 2002, the FASB issued SFAS 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". SFAS 145 rescinds the provisions of SFAS No. 4 that
requires companies to classify certain gains and losses from debt
extinguishments as extraordinary items, eliminates the provisions of
SFAS No. 44 regarding transition to the Motor Carrier Act of 1980 and
amends the provisions of SFAS No. 13 to require that certain lease
modifications be treated as sale leaseback transactions. The provisions
of SFAS 145 related to classification of debt extinguishments are
effective for fiscal years beginning after May 15, 2002. The provisions
of SFAS 145 related to lease modifications is effective for transactions
occurring after May 15, 2002. Earlier application is encouraged. The
Company does not believe the adoption of this standard will have a
material impact on its financial statements.

In June 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities."  This Statement addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullifies Emerging Issues Task Force Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in
a Restructuring)."  The provisions of this Statement are effective for
exit or disposal activities initiated after December 31, 2002. The
Company does not believe the adoption of this standard will have a
material impact on its financial statements.

NOTE 2. PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2002 consisted of the following:

     Furniture and office equipment                   $  51,539
     Computer equipment and  software                    71,255
     Leasehold improvements                               8,090
                                                      ---------
                                                        130,884
     Accumulated depreciation and amortization         ( 38,379)
                                                      ---------
                                                      $  92,505
                                                      =========


Depreciation and amortization expense for the years ended September 30,
2002 and 2001 was $23,908 and $12,090.

NOTE 3. NOTES PAYABLE - OFFICERS

Notes payable officers consisted of two unsecured loans of $50,000 each
bearing interest at 10% and 0%, respectively. These notes are due on
demand.

NOTE 4. NOTE PAYABLE

During October 2001 the Company entered into security agreement to
borrow up to $1,000,000 and in conjunction with this refinanced
certain loans into a $350,000 note payable due during January 2002
with interest at 7.5% per annum. As additional consideration for the
loan, the Company issued 1,500,000 shares of its common stock (see
Note 7). During March 2002 the Company refinanced this obligation into
a $500,000 note payable. This note bears interest at 8% per annum,
requires interest payments of $3,333 per month and is due on March 23,
2003. During 2002 the lender advanced an additional $3,700 on this
note.



<PAGE>   F-10



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


NOTE 5. CONVERTIBLE DEBENTURES

Convertible debentures, as of September 30, 2001, aggregated $159,500
maturing on July 31, 2002 and providing for 8% annual interest. Each
1,000 face value debenture is convertible into 2,000 shares of common
stock. Additionally, each 1,000 face value debenture includes 1,000
warrants, which are convertible into 1,000 shares of common stock at
$1.25 per share. The warrants are non-detachable and expire on July 31,
2004. During July 2002 the Company repaid $129,500 of these debentures
and renewed a $30,000 debenture at an 8% annual interest rate maturing
during July 2003.

During February through April 2002 the Company issued $400,000 of 8%
cumulative convertible debentures due in May 2004 for cash aggregating
$400,000. The debentures are convertible into common shares of the
Company as follows:

  At any time after the Company's common stock price exceeds $3 per
share for a period of ten consecutive trading days the holder may
convert 50% of the value of the debenture into common stock at the rate
of $.10 per common share (election to convert).

  The remaining 50% of the debenture may be redeemed by the Company for
cash or may be converted into the number of common shares of the Company
determined by dividing the balance of the value of the debenture by the
common stock price at the time of the election to convert.

Notwithstanding the above, on the 25th monthly anniversary of the date of
the investments the debentures automatically convert into common stock
as follows:

  50% of the value of the debentures converts into common stock at the
rate of $.10 per common share and the remaining 50% of the value of the
debentures converts into the number of common shares determined by
dividing the balance of the value of the debentures by the common stock
price at the 25th monthly anniversary.

The shares of common stock to be issued upon conversion are subject to
certain registration rights.

Any difference between the fair market value of the common shares and
the conversion price shall be recorded as additional interest on the
debentures at the time of the conversion.


NOTE 6. INCOME TAXES

The Company accounts for income taxes under SFAS 109, which requires use
of the liability method. SFAS 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax bases
of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences. Deferred tax
assets and liabilities at the end of each period are determined using
the currently enacted tax rates applied to taxable income in the periods
in which the deferred tax assets and liabilities are expected to be
settled or realized.

The provision for income taxes differs from the amount computed by
applying the statutory federal income tax rate to income before
provision for income taxes. The sources and tax effects of the
differences are as follows:



<PAGE>   F-11



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002



         Income tax provision at
          the federal statutory rate	  34 %
         Effect of operating losses	 (34)%
                                         ---
                                           -
                                         ===

As of September 30, 2002, the Company has a net operating loss
carryforward of approximately $4,070,000. This loss will be available
to offset future taxable income. If not used, this carryforward will
expire through 2017. The deferred tax asset of approximately
$1,380,000 relating to the operating loss carryforward has been fully
reserved at September 30, 2002.

NOTE 7. STOCKHOLDERS (DEFICIT)

Common stock

During January 2001 the Company issued an aggregate of 470,000 shares of
its common stock valued at $88,135 to certain employees and non-
employees as compensation for services.

During March 2001 a consultant to the Company exercised 285,000 stock
options at $.24 per share or $68,250.

During June 2001 the Company repurchased 20,000 shares of its common
stock for cash aggregating $10,000.

During June 2001 the Company issued 170,000 shares of its common stock
for the conversion of a loan aggregating $85,000. In conjunction with
this issuance the Company issued 85,000 stock options exercisable at
$1.00 per share. These options expire during July 2004.

During June 2001 the Company issued 323,550 shares of its common stock
for cash aggregating $107,850.

During June 2001 a consultant exercised 500,000 stock options at $.05
per share or $25,000.

During August 2001 a consultant exercised 1,500,000 stock options for
services valued at $50,000 and a stock subscription receivable of
$55,000, which was subsequently paid in December 2001.

During September 2001 a shareholder of the Company converted 50,850
shares of common stock into a debenture for $17,000.

During September 2001 the Company issued 409,000 shares of its common
stock to certain consultants for services valued at $71,575 and 22,500
shares of its common stock to an employee for services valued at $5,400.
The value ascribed to these shares corresponds to the fair market value
of the common shares on the date it was agreed that they would be
issued.

During October 2001 the Company issued 735,000 shares of common stock to
a consultant. The Company charged the fair value of these shares of
$183,750 to operations during the year.

During October 2001 the Company issued 1,500,000 shares of common stock
as partial consideration for a loan (see Note 4). The Company charged
the fair value of these shares of $270,000 to interest expense during
the year ended September 30, 2002.



<PAGE>   F-12


                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


During January 2002 the Company issued 83,300 shares of common stock in
exchange for services. The Company charged the fair value of theses
shares of $22,491 to operations during the year.

During January 2002 the Company agreed to issue 100,000 shares of common
stock for cash aggregating $10,000. The difference between the price
paid for the shares and their fair market value of $17,000 has been
charged to operations during the year. These shares were issued during
May 2002.

During the quarter ended March 31, 2002 the Company agreed to issue
800,000 shares of common stock to officers for services. The Company
charged the fair value of these shares of $198,000 to operations during
the period. These shares have not yet been issued.

During April 2002 the Company issued 1,000,000 shares of common stock to
officers pursuant to the exercise of stock options. The Company has
recorded the amount due from these officers of $130,000 as a receivable
for common stock. Subsequently $44,540 was paid to the Company by one of
the officers.

During May 2002 the Company issued 1,000,000 shares of common stock to
officers and a consultant for services. The Company charged the fair
value of these shares of $301,000 to operations. In addition, during May
2002 the Company issued 40,000 shares of common stock for cash
aggregating $4,000. The difference between the price paid for the shares
and their fair market value of $4,000 has been charged to operations.

During July 2002 the Company issued 100,000 shares of common stock for
services. The Company charged the fair value of the shares of $22,000 to
operations.

During September 2002 the Company rescinded the issuance of 115,000
shares of common stock valued at $20,125 that it had agreed to issue
during the year ended September 30, 2001.

Stock-based Compensation

During the years ended September 30, 2002 and 2001 the Company issued
options to purchase shares of common stock to certain employees and non-
employees. Compensation costs charged to operations aggregated $74,000
and $89,700 for the years ended September 30, 2002 and 2001. In
addition, the Company repriced certain options during the year ended
September 30, 2001 which resulted in a charge to operations of $617,625.

SFAS 123 requires the Company to provide proforma information regarding
net income and earnings per share as if compensation cost for the
Company's stock option plans had been determined in accordance with the
fair value based method prescribed in SFAS 123. The fair value of the
option grants is estimated on the date of grant utilizing the Black-
Scholes option pricing model with the following weighted average
assumptions for grants during the year ended September 30, 2002 and
2001: expected life of options of 3 to 5 years, expected volatility of
178% and 34% risk-free interest rate of 3% and 4.0% and no dividend
yield. The weighted average fair value at the date of grant for options
granted during the year ended September 30, 2002 and 2001 approximated
$.16 and $.06 per option. These results may not be representative of
those to be expected in future years.

Under the provisions of SFAS 123, the Company's net income (loss) and
earnings (loss) per share would have been reduced (increased) to the
proforma amounts indicated below:



<PAGE>   F-13



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002
<TABLE>
<CAPTION>


                                          2002            2001
                                       ----------      -----------
<S>                                    <C>             <C>
Net (loss)
   As reported                         $1,331,285      $(1,514,868)
   Proforma                            $2,131,285      $(1,674,868)
Basic and diluted (loss) per share
   As reported                         $(.12)          $(.27)
   Proforma                            $(.19)          $(.30)

</TABLE>


A summary of stock option activity is as follows:

<TABLE>
<CAPTION>

                                                   Weighted      Weighted
                                        Number     average        average
                                            of     exercise         fair
                                        shares      price          value
                                     ----------    --------      --------
<S>                                  <C>           <C>           <C>
        Balance at
          September 30, 2000            100,000     $.50            $.50
        Granted                       9,747,200     $.52            $.38
        Exercised/Forfeited           2,285,000     $.09            $.45
        Balance at                   ----------

          September 30, 2001          7,562,200
        Granted                       5,340,000     $.23            $.20
        Exercised/Forfeited           1,775,000     $.18            $.18
        Balance at                   ----------

          September 30, 2002         11,127,200     $.28
                                     ==========
</TABLE>


The following table summarizes information about fixed-price stock
options at September 30, 2002:

<TABLE>
<CAPTION>
                                Outstanding                        Exercisable
                                -----------                        -----------
                  Weighted       Weighted       Weighted-
                   Average        Average       Average
Exercise           Number       Contractual     Exercise      Number        Exercise
 Prices          Outstanding       Life          Price       Exercisable      Price
--------         -----------    -----------     --------     -----------    --------
<S>              <C>            <C>             <C>          <C>            <C>

 $0.13             3,000,000     4.0 years       $0.13         3,000,000      $0.13
 $0.17             3,000,000     4.8 years       $0.17         3,000,000      $0.13
 $0.20 to
 $0.25             3,045,000     3.9 years       $0.25         3,045,000      $0.25
 $0.30             1,000,000     4.0 years       $0.30         1,000,000      $0.30
 $0.38 to
 $0.54               500,000     1.1 years       $0.45           500,000      $0.45
 $1.00               170,000     1.8 years       $1.00           170,000      $1.00
 $1.25               235,850     1.8 years       $1.25           235,850      $1.25
 $2.50               176,350     1.0 year        $2.50           176,350      $2.50
                  ----------                                  ----------
                  11,127,200                                  11,127,200
                  ==========                                  ==========
</TABLE>




<PAGE>   F-14



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


NOTE 8. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its office and two warehouse facilities under
operating leases for gross monthly rent, including common area
maintenance, of approximately $16,800. The office lease provides for no
annual cost of living adjustments in the base rent and the warehouse
leases provide for fixed annual increases in the base rent.

Future minimum lease payments under all non-cancelable operating leases
for years ending subsequent to September 30, 2002 are as follows:

                2003      $  195,300
                2004         157,700
 		2005	      27,000
                          ----------
                          $  380,000
                          ==========

Rent expense for the years ended September 30, 2002 and 2001 was
$342,900 and $262,006.

Employment Contracts

On September 27, 2002 the Company entered into 5-year employment
contracts with 2 officers. Each contract provides for annual salary
payments aggregating $150,000 plus a bonus equal to 1.66% of the
Company's pre tax income or net cash-flow whichever is greater.

Litigation

The Company is involved in various legal actions arising in the normal
course of business including a pending case in which the Company is
seeking payment on an open account aggregating approximately $42,000 and
in which a counter suit has been filed in which the plaintiff is seeking
damages of approximately $1,200,000 for breach of contract. In the
opinion of management, the likelihood of success by plaintiffs against
the Company is small and such matters will not have a material effect
upon the financial position of the Company.

During July 2002 the Company entered into an agreement with the
manufacturer of several of its products, whereby the Company would
acquire all of the outstanding common shares of the manufacturer and
certain related entities for $2,000,000 in shares of common stock at the
Company's stock value at closing, $3,000,000 in cash and $2,000,000
evidenced by a note payable over 3 years with interest at 8% per annum.
The note is convertible into common shares of the Company at the average
price of the Company's common stock for the five business days prior to
conversion This acquisition is contingent upon the Company obtaining the
necessary funding to complete the transaction which at a minimum must
aggregate $12,000,000.

NOTE 9. CONCENTRATIONS

During years ended September 30, 2002 and 2001, the Company derived
substantially all of its revenue from the sale of one product, SNORENZ.
Credit is granted to their customers in the normal course of business.

The Company derived 40%, 13% and 12% of its total sales from three major
customers during the year ended September 30, 2002 and 40% of its total



<PAGE>   F-15



                              Med Gen, Inc.
                        Notes to Financial Statements
                           September 30, 2002


sales from three major customers during the year ended September 30,
2001. At September 30, 2002 outstanding accounts receivable from these
three customers accounted for 70% of net accounts receivable.

The Company has an exclusive contract with a single manufacturing
company to produce SNORENZ.

NOTE 10. RELATED PARTY TRANSACTIONS

Receivables from affiliates

During the years ended September 30, 2002 and 2001, the Company wrote
off advances and accounts receivable aggregating $10,908 and $165,660 as
bad debts from related entities by virtue of common control.




<PAGE>   F-16