SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(MARK ONE)

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934

                   For the Fiscal Year Ended December 31, 2004

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
      ACT OF 1934

       For the transition period from _______________ to ________________

                        Commission File Number 000-09489

                               SWISS MEDICA, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)

                      Delaware                               98-0355519
        ---------------------------------              ---------------------
           (State or other jurisdiction                  (I.R.S. Employer
        of incorporation or organization)               Identification No.)

                           53 Yonge Street, 3rd Floor
                        Toronto, Ontario, Canada M5E 1J3
               --------------------------------------------------
               (Address of principal executive offices)(Zip code)

Issuer's telephone number, including area code:  (416) 868-0202

Securities registered pursuant to Section 12(b) of the Act:

                                           Name of each exchange on
       Title of each class                 which each is registered
       -------------------                 ------------------------
              None                                   None

Securities registered pursuant to Section 12(g) of the Act:

                Class A Common Stock, par value $0.001 per share
                -------------------------------------------------
                                (Title of class)

         Check whether the issuer: (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 will not 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
this Form 10-KSB. [ ]

         The issuer's revenues for the fiscal year ended December 31, 2004
totaled $626,569.

         The number of shares of the issuer's Class A common stock, no par value
per share, outstanding as of March 28, 2005 was 80,398,904. The aggregate market
value of the voting and non-voting common equity held by non-affiliates of the
registrant on March 28, 2005, based on the average bid and ask price on the OTC
Bulletin Board as of such date, was approximately $0.285.

                    DOCUMENTS INCORPORATED BY REFERENCE: None

           Transition Small Business Disclosure Format:  Yes ___  No _X_

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

PART I

         ITEM 1.      DESCRIPTION OF BUSINESS..............................   5
         ITEM 2.      DESCRIPTION OF PROPERTY..............................   7
         ITEM 3.      LEGAL PROCEEDINGS....................................   7
         ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF
                      SECURITY HOLDERS.....................................   7

PART II

         ITEM 5.      MARKET FOR COMMON EQUITY AND
                      RELATED STOCKHOLDER MATTERS..........................   7
         ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS.................   8
                         OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
         ITEM 7.      FINANCIAL STATEMENTS.................................  14
         ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                      ON ACCOUNTING AND FINANCIAL DISCLOSURE...............  14
         ITEM 8A.     CONTROLS AND PROCEDURES..............................  14

PART III

         ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                      CONTROL PERSONS; COMPLIANCE WITH
                      SECTION 16(a) OF THE EXCHANGE ACT....................  15
         ITEM 10.     EXECUTIVE COMPENSATION...............................  17
         ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                      OWNERS AND MANAGEMENT................................  18
         ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......  19
         ITEM 13.     EXHIBITS.............................................  19
         ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES...............

FINANCIAL STATEMENTS
SIGNATURES



                                       2
<PAGE>

                    NOTE REGARDING FORWARD LOOKING STATEMENTS

         This report by Swiss Medica, Inc. ("we", "us", "our", "Swiss Medica" or
the "Company") contains forward-looking statements. These are statements
regarding financial and operating performance and results and other statements
that are not historical facts. The words "expect," "project," "estimate,"
"believe," "anticipate," "intend," "plan," "forecast," and similar expressions
are intended to identify forward-looking statements. Certain important risks
could cause results to differ materially from those anticipated by some of the
forward-looking statements. Some, but not all, of the risks that could cause
actual results to differ from those suggested by the forward-looking statements
include, among other things:

     o    the loss of the services of any member of our management team and, in
          particular, the loss of the services of Raghunath Kilambi, Chief
          Executive Officer, and Grant Johnson, our President and Chief
          Operating Officer;

     o    our ability to continue to find and acquire bioscience products with
          demonstrated competitive advantages;

     o    whether or not our products are able to compete successfully with
          bioscience and other products of other companies and whether or not
          some or all of our products are rendered obsolete by newer products or
          technologies;

     o    our ability to successfully market the products we acquire or develop;

     o    the implementation of any government regulation that could make it
          more difficult or more costly to bring our products to market or to
          acquire other products;

     o    our ability to obtain financing as and when we need it; and

     o    other factors, all of which are difficult to predict and many of which
          are beyond our control.

         You are cautioned not to place undue reliance on these forward-looking
statements, which relate only to events as of the date on which the statements
are made. We undertake no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
You should refer to and carefully review the information in future documents we
file with the Securities and Exchange Commission.


                                       3
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

         We market and distribute bioscience products designed to enhance the
well-being and health of individuals. Bioscience products are natural compounds
that have health promoting, disease preventing or medicinal properties. We
believe that consumers are deeply concerned about the management and cost of
their health care and the expensive, chemical-based prescription drug approach
predominant in modern medicine. We believe that this concern will increase the
demand for bioscience health products because natural products are considered to
be effective against many ailments and are more accessible than prescription
medications. The global market for herbal products is currently estimated to be
$62 billion and the World Health Organization has estimated that the global
market for herbal products will be worth $5 trillion dollars by the year 2050.

         Swiss Medica, Inc., a Delaware corporation, was, prior to May 16, 2003,
a holding company focused on acquiring, expanding and developing technology
companies and we had no operations.

         As of May 16, 2003, we began to implement a new business plan pursuant
to which we market and distribute proprietary bioscience health products,
focused on chronic ailments. We retained a new management team to implement this
new business plan. The global market for chronic ailment products is in excess
of $100 billion and is currently dominated by prescription, chemical based
drugs. The global market for natural, herbal and bioscience products is
currently estimated to be over $60 billion and growing rapidly. On May 16, 2003
we acquired certain assets of General Cosmetics Corporation, a Delaware
corporation based in Munich, Germany. The acquisition was made by issuing to
General Cosmetics Corporation 6,750,000 shares of our Class A Common Stock,
subject to adjustment based on the terms of the March 31, 2003 definitive
agreement. The assets we acquired included a patented essential oil bioscience
product family that has been developed for pain relief, menstrual cramps, cold
sores and other ailments. We intend to introduce these products to the market
over time and we are currently marketing and selling the pain relief formulation
called "O24 Pain Relief" or "O24 Essential Pain Relief Neutralizer" in both
Canada and the United States. O24 Essential Oil Pain Neutralizer complies with
FDA regulations and can be sold in the United States pursuant to an FDA
monograph. As yet, we have not determined when the remaining products will be
introduced. In 2003, the combined U.S., over-the-counter and prescription market
for pain relief products was estimated to be $12 billion.

         We will continue to look for quality proprietary, natural consumer
healthcare products to license and/or acquire. We plan to sell our products
through multiple distribution channels including, via retail outlets, the
Internet, and via healthcare professionals.

         To date during 2004 and early 2005, we have further expanded the
distribution of O24 Essential Oil Pain Neutralizer into major retail outlets in
Canada and to regional pharmacies and massage clinics in the United States. We
entered into a major retail outlet in the United States in February 2005 and
anticipate entering into additional outlets in the future.

We currently have 13 individuals who render services to us for our day-to-day
operations

         Our principal executive offices are located at 53 Yonge Street, Third
Floor, Toronto, Ontario, Canada M5E 1J3. Our telephone number is (416) 868-0202.
The address of our website is www.swissmedica.com.


                                       4
<PAGE>

HISTORY AND COMPANY DEVELOPMENT

         The Company was originally incorporated on March 11, 1980, as
Associated Medical Devices, Inc., under the laws of Nevada for the development
and marketing of various devices. Due to the non-payment of required fees and
filing of required reports, the Company forfeited its corporate charter during
1986 and was revived in February 1995.

         Pursuant to an Acquisition Agreement dated, July 1, 1999, and finally
executed on October 20, 1999, John F. Huguet ("Huguet") and Gold Crown Holdings
Limited, a British Virgin Islands corporation ("Gold Crown"), acquired 4,968,000
restricted shares of the Company's common stock, comprising approximately 85% of
the Company's issued and outstanding Shares, in exchange for 100% of the issued
and outstanding common stock of Euro American Business Group, Inc., a New York
corporation owned by Huguet and Gold Crown. Contemporaneously thereto, Huguet
and Gold Crown purchased 25,000 shares of Registrant's common stock from Glenn
A. Little, a director of the Company for $200,000. In anticipation of the
execution of the above agreement, on October 7, 1999, the directors of the
Company tendered their resignations as directors of the Company and appointed
new directors and officers.

         Prior to the Agreement, the Company was a development stage company
with no significant operations, seeking a new business plan. At the time of the
Agreement, Euro American Business Group, Inc., had conducted no business to
date, but had plans to become a provider of low cost internet access in Europe.
To better reflect the Company's new business plan, the Company changed its name
to Yournet, Inc. on October 20, 1999.

         Effective August 14, 2001, Yournet, Inc. merged with and into Global
Path Incorporated, a Delaware corporation. Pursuant to the merger, Yournet,
Inc., a Nevada corporation, reincorporated under the laws of Delaware. As a
result of the merger, shareholders of Yournet, Inc. received the right to
receive one share of Class A common stock of Global Path Incorporated for each
one share of common stock of the Company. After the reincorporation, 20,455,903
shares of Yournet, Inc. common stock was converted to 20,455,903 shares of Class
A common stock of Global Path Incorporated ("GPI"), the surviving entity. GPI in
November 2002 performed a share consolidation of 100:1.

         In July 2003, after the acquisition of the General Cosmetics
Corporation assets, our name was changed from GPI to Swiss Medica, Inc. The
Company's common stock currently trades on the Over-the-Counter Bulletin Board
under the trading symbol SWME.

BUSINESS STRATEGY

         Swiss Medica is focused on commercializing proprietary, effective, safe
and natural products that address chronic ailments such as, but not exclusive
to, pain. The products that Swiss Medica will commercialize will have the
following attributes:

o    Patented and/or intellectual property,
o    Clinical and/or medical studies,
o    Over-the-counter, natural solutions for chronic ailments,

         Our goal is to bring natural, healthy, clinically-proven and
proprietary products that address chronic ailments, into the mainstream food,
drug and mass retail channels and out of their traditional market niche of
specialty retailers.


                                       5
<PAGE>

         Swiss Medica is currently focused on marketing and selling its products
in North America. Our initial product launch was in Canada, with our first U.S.
retail order coming in the fourth quarter of 2004, followed by our first major
U.S. retailer in February of 2005. We expect to further expand into the national
United States retail market in 2005.

         Swiss Medica does not manufacture any of its products, but out sources
this activity to contract manufacturers. It should be noted that the raw
materials used in the manufacturing process are commodity items and are subject
to price fluctuations.

PRODUCT OFFERINGS

         The Company is currently offering only one product in the marketplace.
Designated as O24(TM) Essential Oil Pain Neutralizer ("O24(TM)"), it is a
patented, topical pain relief solution containing all natural, essential oils.
O24(TM) is endorsed by leading medical professionals, professional athletes and
Olympic teams. We believe that sales of over-the-counter topical pain relief
medication exceeded $250 million in 2002. In addition, the market for Vioxx(TM)
and Celebrex(TM) drugs may have exceeded $5.0 billion last year. We estimate
that the recent recall of these prescription medications combined with O24(TM)'s
efficaciousness in treating pain sufferers may increase our market opportunity.
In light of the present scare that Vioxx(TM) has created among previous users,
consumers may hesitate before switching to other related prescription products
such as prescription pain relievers. Hence, much of that estimated prescription
pain reliever marketplace might be susceptible to penetration by OTC products,
such as O24(TM).

         Over time, we intend to attempt to market variations of the O24(TM)
formulation which would treat additional ailments including menstrual cramps. We
are also seeking to acquire additional consumer healthcare products or companies
that address the chronic health market described above.

INTELLECTUAL PROPERTY

         We own United States Patent Number 6,444,238 (issued September 3, 2002)
which covers our O24(TM) product, however, there is no assurance we will be able
to obtain patent protection for any derivative uses of O24(TM), or for any other
products we may later acquire or develop. We also cannot assure that we will be
able to obtain foreign patents to protect our products.

         Litigation may be required to enforce our intellectual property rights,
protect our trade secrets or determine the validity and scope of proprietary
rights of others. Any action we take to protect our intellectual property rights
could be costly and could absorb significant management time and attention. In
addition, as a result of any such litigation, we could lose any proprietary
rights we have. If any of the foregoing occurs, we may be unable to execute on
our business plan and you could lose your investment.

GOVERNMENT REGULATION

         In the United States, governmental agencies and extensive federal
regulations regulate the manufacture, packaging, labeling, advertising,
promotion, distribution and sale of our products. In the United States, the Food
and Drug Administration (FDA) regulates the safety and effectiveness of the
product and the Federal Trade Commission (FTC) regulates how we advertise and
market our products. Since O24(TM) is classified as a drug, it carries an FDA
"monograph" (written description of the medication's properties and usages)


                                       6
<PAGE>

enabling the Company to make certain efficacy claims. Swiss Medica is using an
FDA designated laboratory, an FDA certified bottler and FDA certified
manufacturer to ensure product compliance.

         O24(TM) and any other products we may manufacture or sell in the future
are also subject to regulation in the United States by, among other regulatory
entities, the Consumer Product Safety Commission, the U.S. Department of
Agriculture, and the Environmental Protection Agency. The laws, regulations and
enforcement policies governing our products are relatively new and still
evolving, and we cannot predict what enforcement positions the FDA or other
governmental agencies may take with respect to our products. We cannot at this
time determine the extent to which FDA and other regulations will impact our
business.

          There are similar regulatory bodies and regulations in Canada, and
other countries in which we may decide to market, sell and distribute our
products. In Canada, Health Canada controls over-the-counter drugs and a special
application is needed for most national retailers. Health Canada regulates the
safety, efficacy and permissible claims of certain products and their
manufacturers/representatives. The Company is required to ensure that O24(TM)
and its other products are manufactured using Health Canada's Good Manufacturing
Process ("GMP") guidelines. The recent Natural Health Product ("NHP") Act allows
companies that sell nutraceutical products to make additional health benefit
claims for products that comply with the regulations and monographs.

         We cannot be certain that we comply or will comply with all laws and
regulations in this area. Enforcement actions by any of these regulatory
agencies can result in civil and criminal penalties, an injunction to stop or
modify certain selling methods, seizure of products, adverse publicity or
voluntary recalls and labeling changes. If any governmental agency were to
undertake an enforcement action against us, this could cause an immediate
decrease in our revenues, cause us to incur significant additional expenses and
result in a decrease in our stock price.

SALES & MARKETING

         Swiss Medica sells O24(TM) and intends to sell its other products
through various distribution channels including retail outlets, e-commerce and
our professional sales staff. The Company intends to support O24(TM) and its
other products with point-of-presence marketing, sampling, print and in-store
advertisements, radio spots, and extensive use of public relations, including
testimonials and endorsements from medical professionals and recognized
celebrities.


COMPETITION

     The market for health-related retail goods and services is characterized by
intense competition. We believe that the principal competitive factors for
companies in the industries in which we compete are:

     o   functionality;
     o   quality of merchandise;
     o   discounts and rewards;
     o   brand recognition;
     o   customer loyalty; and
     o   price.

         While competition in the over-the-counter arthritis pain relief
products market is highly fragmented, there are a few significant brand names
that have managed to acquire the majority of retail shelf space. Some of these


                                       7
<PAGE>

treatments are general pain relief tablets such as Aleve(TM) from Roche
Laboratories (Germany: RO), Bayer(TM) from Bayer AG (NYSE:BAY), and Tylenol(TM)
from Mc-Neil Consumer & Specialty Pharmaceuticals (privately-held).
Additionally, arthritis rubs are popular for pain relief, including Ben-Gay(TM)
from Pfizer Inc. (NYSE:PFE), Joint-Ritis(TM) (privately held), Mineral Ice(TM)
from Bristol-Myers Squibb Company (NYSE:BMY), and Icy Hot(TM) and related
products by Chattem, Inc. (OTC:CHTT). It has been estimated that in 2002, the
domestic sales for these seven products alone are in excess of $200 million. In
the topical market, our competitors are products such as, but not limited to Ben
Gay and Ice Hot, with the total combined market sales estimated to be $250
million in 2002.

         In the natural products market, there are two significant competitors.
Rodlen Laboratories (privately held) sells Zostrix, which contains Capsaicin, a
compound found in hot peppers. Capsaicin is a powerful irritant that can cause a
severe skin reaction for some individuals. Tiger Balm is a counterirritant
ointment based on herbal ingredients, derived from ancient Chinese sources
manufactured by Haw Par Corporation (Singapore:HPAR), which we believe to be
O24's only direct competitor. Sales of Tiger Balm and related healthcare
products reached approximately $35 million in FY 2002 (Singapore $60 million).

         Although the Company does not view pharmaceutical products as direct
competitors, we believe that eventually mainstream consumers will view natural
products as alternatives to prescription medication.

         Nearly all of our existing and potential competitors have longer
operating histories, greater experience, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than Swiss Medica. Due to their greater resources, our competitors are
able to undertake more extensive marketing campaigns for their brands and
services, and make more attractive offers to potential employees, retail
affiliates, and others. We cannot assure you that we will be able to compete
successfully against our current or future competitors or that our business and
financial results will not suffer from competition.

MANUFACTURING

         We rely on third-party manufacturers to fulfill all of our
manufacturing requirements. We currently engage:

     o    Semi-Chem Inc. of Dallas, Texas to bottle, fill, label and package our
          finished bottled product,

     o    Creative Fragrances Ltd. of Dallas, Texas and Natural Care Mfg, Inc.
          of Arlington, Texas as our formulator and blender of O24(TM), and

     o    Progressive Products of White Plains New York to fill, label and
          package our finished foil packs


RESEARCH & DEVELOPMENT

         We do not anticipate incurring material research and development costs
during the next 12 months, nor do we anticipate the acquisition or sale of any
material property, plant or equipment during the next 12 months, with the
exception of the possible acquisition of additional consumer healthcare or
herbal health products and their related infrastructure. We have acquired and
expensed $2,601 and $3,725,826 for research and development during fiscal years
ended December 31, 2004 and December 31, 2003, respectively.


                                       8
<PAGE>

DEPENDENCE ON ONE OR MORE CUSTOMER

         As of December 31, 2004 the Company was on the shelves at national
retail chains such as Shopper's Drug Mart (TSX:SC) with 878 stores, the Katz
Group of Pharmacy retailers who sell our products through their 900 retail
locations throughout Canada. For the year ended December 31, 2004, Shopper's
Drug Mart accounted for approximately 70% of our net sales.

     On November 29, 2004, we announced that O24(TM) Essential Oil Pain
Neutralizer was available at the Happy Harry's Discount Drugstore chain, which
is based in Newark, Delaware.

     On January 18, 2005, we announced that Rite Aid Corporation (NYSE:RAD, a
national U.S. drug store chain, would be carrying O24 Essential Oil Pain
Neutralizer in its stores.

EMPLOYEES

As of December 31, 2004 we had thirteen full-time employees and one part-time
employee. Of these employees, three were in sales, two were in accounting, two
were in manufacturing, and two were in logistics and four were in administration
and general operations. We believe our relations with our employees are good.

ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS

         We are a company incorporated under the laws of Delaware but because we
are a company headquartered in Canada our investors may not be able to enforce
civil liabilities under the U.S. federal securities laws against our officers
and directors. Some of our directors and officers reside in Canada. Because some
of our assets are located outside the U.S., it may be difficult for an investor
to sue, for any reason, us or any of our directors or officers through U.S.
jurisdictions. If an investor was able to obtain a judgment against us or any of
our directors or officers in a U.S. court based on U.S. securities laws or other
reasons, it may be difficult to enforce such judgment in Canada. We have been
advised by our Canadian counsel that there is uncertainty as to the
enforceability, in original actions in Canadian courts, of liability based upon
the U.S. federal securities laws and as to the enforceability in Canadian courts
of judgments of U.S. courts obtained in actions based upon the civil liability
provisions of the U.S. federal securities laws.

ITEM 2.  DESCRIPTION OF PROPERTY

         We currently lease three offices, including our 1,800 square foot
corporate headquarters located at 53 Yonge Street, 3rd Floor, Toronto, Ontario,
and our West Coast office located at 890, 789 West Pender Street, Vancouver,
British Columbia, which houses our sales operations. We lease these offices at
market rates and our leases began on July 1, 2003 and June 25, 2003
respectively. We have not renewed the lease for 53 Yonge St, but pay on a
monthly basis with a condition to provide three months termination notice. We
have renewed the lease at 789 West Pender Street, which will continue until June
30, 2006, with an option to renew for an additional five years. We also lease
office space in Dallas, Texas on a month to month basis, which we expect will
suffice for the next year.

         We also have warehouse and logistic facilities in Toronto, Ontario and
Richmond, British Columbia through our partnership with Mayfield Solutions Inc.
In addition, we have access to a logistics facility and warehouse in Arlington,
Texas, which is adequate for our current operations, and management believes


                                       9
<PAGE>

will continue to be adequate through the initial lease term which is open ended.
Management is currently investigating the possibility of outsourcing its
inventory and logistics operations in the U.S. to more efficiently handle
anticipated growth.

ITEM 3.  LEGAL PROCEEDINGS

         Occasionally we may be named as a party in claims and legal proceedings
arising out of the normal course of our business. These claims and legal
proceedings may relate to contractual rights and obligations, employment
matters, or to other matters relating to our business and operations.

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

         None.


                                       10
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is quoted on the National Association of Securities
Dealers, Inc. Electronic Bulletin Board (the "OTC Bulletin Board"), and is
traded under the symbol "SWME".

         The table below sets forth the range of high and low bid quotes of our
common stock for each quarter for the last fiscal year, the only full fiscal
year during which our common stock traded, as reported by Stockgroup Information
Systems Inc. The bid prices represent inter-dealer quotations, without
adjustments for retail mark-ups, markdowns or commissions and may not
necessarily represent actual transactions.

               2004                      HIGH BID        LOW BID
                                         --------        -------
               First Quarter               $0.39           $0.17
               Second Quarter              $0.40           $0.10
               Third Quarter               $0.14           $0.06
               Fourth Quarter              $0.38           $0.08

               2003                      HIGH BID        LOW BID
                                         --------        -------
               First Quarter               $1.07           $0.70
               Second Quarter              $1.01           $0.52
               Third Quarter               $0.68           $0.15
               Fourth Quarter              $0.53           $0.14

         As of March 28, 2005, there were approximately 2,810 holders of record
of our Class A common stock. This number does not include an indeterminate
number of shareholders whose shares are held by brokers in street name.

         Since becoming a reporting company, we have never declared or paid any
cash dividends on our common stock and do not expect to declare or pay any cash
dividends in the foreseeable future. Prior to becoming a reporting company, we
were an S corporation for tax reporting purposes and we paid dividends to our
sole shareholder.

RECENT SALES OF UNREGISTERED SECURITIES

         In October 2004 we issued 575,714 Class A Common Shares for services
rendered by certain consultants and officers. The securities were issued in
reliance upon the exemption provided in Section 4(2) of the Securities Act of
1933.

            During December 2004 the Company has raised $1,112,187.50 of gross
proceeds through the exercise of 4,673,750 warrants by certain investors of the
Company. The investors exercised 625,000 warrants at a price of $0.16 per share,
and 4,048,750 at a price of $0.25 per share. The securities were issued in
reliance upon the exemption provided in Section 4(2) of the Securities Act of
1933.


                                       11
<PAGE>

         We also granted warrants to certain lenders to purchase 500,000 Class A
Common Shares at $0.40 per share and another 350,000 shares at $0.42 per share
December 23, 2004 and December 6, 2004 respectively in exchange for short term
loans. The securities were issued in reliance upon the exemption provided in
Section 4(2) of the Securities Act of 1933.



                                       12
<PAGE>

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

               The following discussion and analysis is qualified by, and should
be read in conjunction with, our audited financial statements and the notes
thereto included in Item 7 of this Annual Report on Form 10-KSB.

         Management's discussion and analysis of results of operations and
financial condition are based on our financial statements. These statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America. These principles require management to make certain
estimates, judgments and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates based on
historical experience and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The preparation of our financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our consolidated financial statements; we believe the following
critical accounting policies involve the most complex, difficult and subjective
estimates and judgments:

          o    Stock-based compensation;

          o    Intangible assets; and

          o    Research and Development.

         Stock-Based Compensation

         In December 2002, the FASB issued SFAS No. 148 - Accounting for
Stock-Based Compensation - Transition and Disclosure. This statement amends SFAS
No. 123 - Accounting for Stock-Based Compensation, providing alternative methods
of voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also requires disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002.

         The Company elected to continue to account for stock-based compensation
plans using the intrinsic value-based method of accounting prescribed by APB No.
25, "Accounting for Stock Issued to Employees," and related interpretations.
Under the provisions of APB No. 25, compensation expense is measured at the
grant date for the difference between the fair value of the stock and the
exercise price.


                                       13
<PAGE>

         Acquired  Intangible Assets

           Acquisitions of intangible assets are accounted for under Statement
of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets.
These standards require that certain identifiable assets be amortized over their
expected useful lives. Intangible assets that have indefinite useful lives are
not subject to amortization, but rather will be tested at least annually for
impairment.

         Research and Development

             The Company accounts for research and development costs in
accordance with the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 2 ("SFAS 2"), "Accounting for Research and
Development Costs." Under SFAS 2, all research and development costs must be
charged to expense as incurred. Accordingly, internal research and development
costs are expensed as incurred. Third-party research and developments costs are
expensed when the contracted work has been performed or as milestone results
have been achieved. Company-sponsored research and development costs related to
both present and future products are expensed in the period incurred.

RESULTS OF OPERATIONS

OVERVIEW

         We market and distribute bioscience products designed to enhance the
well-being and health of individuals. Bioscience products are natural compounds
that have health promoting, disease preventing or medicinal properties. We
believe that consumers are deeply concerned about the management and cost of
their health care and the expensive, chemical-based prescription drug approach
predominant in modern medicine. We believe that this concern will increase the
demand for bioscience health products because natural products are considered to
be effective against many ailments and are more accessible than prescription
medications. The global market for herbal products is currently estimated to be
$62 billion and the World Health Organization has estimated that the global
market for herbal products will be worth $5 trillion dollars by the year 2050.

         Prior to May 16, 2003 we were a holding company focused on acquiring,
expanding and developing technology companies and we had no operations.

         As of May 16, 2003 we began to implement a new business plan pursuant
to which we will market and distribute proprietary bioscience health products,
focused on chronic ailments. We retained a new management team to implement this
new business plan. The global market for chronic ailment products is in excess
of $100 million and is currently dominated by prescription, chemical based
drugs. The global market for natural, herbal and bioscience products is
currently estimated to be over $60 billion and growing rapidly.

         On May 16, 2003 we acquired certain assets of General Cosmetics
Corporation, a Delaware corporation based in Munich, Germany. The acquisition
was made by issuing to General Cosmetics Corporation 6,750,000 shares of our
Class A Common Stock, subject to adjustment based on the terms of the March 31,
2003 definitive agreement. The assets we acquired included a patented essential
oil bioscience product family that has been developed for pain relief, menstrual
cramps, cold sores and other ailments. We intend to introduce these products to
the market over time. We are currently marketing and selling the pain relief
formulation called "O24 Pain Relief" or "O24 Essential Oil Pain Neutralizer" in
both Canada and the United States. O24 Essential Oil Pain Neutralizer complies


                                       14
<PAGE>

with FDA regulations and can be sold in the United States pursuant to an FDA
monograph. We have not yet determined when the remaining products will be
introduced.

         We will continue to look for quality proprietary, natural consumer
healthcare products to license and, or acquire. We plan to sell our products
through multiple distribution channels including, via retail outlets,
e-commerce, and via health care professionals.

         To date during 2004 and early 2005, we have further expanded the
distribution of O24 Essential Oil Pain Neutralizer into major retail outlets in
Canada and to regional pharmacies and massage clinics in the United States. We
entered into a major retail outlet in the United States in February 2005 and
anticipate entering into additional outlets in the future.

         We currently have 13 individuals who render services to us for our
day-to-day operations.

YEAR ENDED DECEMBER 31, 2004

         Swiss Medica began generating revenues in the third quarter of 2003,
totaling $104,091 for the third and fourth quarters. Prior to June 2003, we had
no active operations. The following is a summary of financial information for
the years ended December 31, 2004 and 2003:

                                                     Years ending December 31,
                                                    --------------------------
                                                        2004            2003
                                                    -----------    -----------

         Net Sales:                                 $   626,569    $   104,091
         Cost of Sales:                                 119,798         16,991
                                                    -----------    -----------

         Gross Profit:                                  506,771         87,100
         Gross Profit as % of Sales:                       80.9%          83.7%

         Operating expenses:
            Research & Development expenses:              2,602      3,725,826
            Marketing & Promotions*                   1,730,109         99,947
            General & administrative  expenses*       5,823,633     10,120,420
            Depreciation and amortization:              195,732        122,157

         Total operating expenses:                    7,752,076     14,068,350

         Loss from operations:                        7,245,305     13,981,250

         Interest expense:                                5,567          7,250

         Net loss:                                    7,250,872     13,988,500

         Loss per Common Share:                           $0.14          $0.88


         * Stock & Warrant based compensation to Consultants, Professional
         Advisors , Directors and Officers, totaled $2,952,806 for the year
         ending December 31, 2004 and $9,733,431 for the year ending Decemeber
         31, 2003


                                       15
<PAGE>

SALES

         Our revenues from operations for the years ended December 31, 2004 and
2003 were $626,569, and $104,091 respectively and for the year ending December
31, 2004, sales were generated predominately from a major Canadian retail
pharmacy totaling approximately $445,000. We allowed a provision of $12,763 to
cover discounts.

         COST OF SALES AND GROSS PROFIT

         Our 2004 cost of sales of $119,798, generated a percentage margin on
sales of 80.9%. We anticipate 2005 gross profit percentages to be between 70%
and 80%, depending on the distribution mix of our revenue. It should be noted
that the raw materials used in the O24 product formulation are all commodities
and prices may vary significantly, causing fluctuations in our profit margins.

         RESEARCH AND DEVELOPMENT

         $2,601 was expended on research and development during 2004, and
$3,725,826 during the fiscal year ending December 31, 2003. 2003 expenses
incurred were primarily related to the acquisition of the bioscience intangible
assets acquired from General Cosmetics Corporation, and were written off during
the year ended December 31, 2003 and are included in the accompanying statement
of losses as research and development expenditures. We do not anticipate any
major research and development costs during fiscal year ending December 31,
2005.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         A summary of our Selling, General and Administrative costs is as
follows:

         Stock based compensation to Consultants, Professional Advisors ,
Directors and Officers, totaled $2,665,306 ($9,689,371 for 2003) , and an
additional $287,500 stock warrants were issued in exchange for services (44,060
for 2003). Stock based compensation was granted to recruit and compensate
executives, directors, legal advisors, marketing, promotion, business and
development advisors.

         Cash based compensation was paid to our staff of thirteen full-time and
one part time employees, consulting fees for outside directors, legal advisors
and marketing consultants.

Other selling, general and administrative costs include consulting fees,
insurance, finance fees, travel, rent and other office expenses relating to
three offices.

         DEPRECIATION & AMORTIZATION

         Depreciation & Amortization expenses of $195,451 were incurred during
the year ending December 31, 2004 to amortize the tangible and intangible assets
acquired from the General Cosmetics Corporation acquisition, and $281 to
amortize the tangible assets in our Dallas office.

         INTEREST EXPENSE

         Interest expenses of $5,567 were incurred during the year ending
December 31, 2004 and relate to interest paid on promissory notes and redeemable
debentures.


                                       16
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 2004, we had a working capital deficit of $210,060,
and as a result of our operating losses in 2004, we generated a cash flow
deficit of $3,079,443 from operating activities. We used no cash flows in
connection with investing activities in 2004, and met our cash requirements
through the private placement of:

     o    19,490,000 shares of common stock generating $2,886,500

     o    4,673,750 shares of common stock in exchange for warrants exercised,
          generating $1,112,188

     o    convertible debentures of $500,000 *

     o    promissory note advances of $342,000 from a secured, third party.

         *Pusuant to the termination agreement, the Company redeemed the
          convertible debentures in January of 2005.


         During the first quarter of 2005 the Company has generated $3,323,000
gross proceeds from the exercise of 12,900,250 warrants by certain investors of
the Company.

         We will be seeking to continue funding our operations through

     o    debt instruments: we are currently seeking debt financing in order to
          provide the necessary working capital to fund our ongoing operations,
          including a Bank operating line of credit secured by trade accounts
          receivable.

     o    The continued exercise of warrants outstanding in exchange for common
          shares

     o    additional sales of our equity securities, if necessary

     o    and/or shareholder loans

              There is no guarantee that we will be successful in completing
              these contemplated financings, nor can we assure you that we will
              be successful in obtaining any additional financing should it be
              required. If we cannot secure additional financing when needed, we
              may be required to cease operations.

         By adjusting its operations and development to the level of
capitalization, management belives it has sufficient capital resources to meet
projected cash flow deficits through the next twelve months . However, if
thereafter, we are not successful in generating sufficient liquidity from
operations or in raising sufficient capital resources, on terms acceptable to
us, this could have a material adverse effect on our business, results of
operations liquidity and financial condition.

         Our independent certified public accountants have stated in their
report, which is included with our audited financial statements in the Form
10-KSB for the period ended December 31, 2004, that we have incurred operating
losses in the last two years and that we are dependent on management's ability
to raise capital and develop profitable operations. These factors, among others,
may raise substantial doubt about our ability to continue as a going concern.


                                       17
<PAGE>

New Accounting Pronouncements

         In November 2004, the Financial Accounting Standards Board (FASB)
issued SFAS 151, Inventory Costs-- an amendment of ARB No. 43, Chapter 4. This
Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to
clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter
4, previously stated that ". . . under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and rehandling costs may
be so abnormal as to require treatment as current period charges. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on the
Company.

In December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. with earlier application encouraged.
The Company does not anticipate that the implementation of this standard will
have a material impact on its financial position, results of operations or cash
flows.

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
Share-Based Payment ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
123R are effective as of the first interim period that begins after June 15,
2005. Accordingly, the Company will implement the revised standard in the third
quarter of fiscal year 2005. Currently, the Company accounts for its share-based
payment transactions under the provisions of APB 25, which does not necessarily
require the recognition of compensation cost in the financial statements.
Management is assessing the implications of this revised standard, which may
materially impact the Company's results of operations in the third quarter of
fiscal year 2005 and thereafter.

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions (" SFAS 153"). This statement amends APB
Opinion 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for nonmonetary transactions in fiscal periods that begin after June
15, 2005. The Company does not anticipate that the implementation of this
standard will have a material impact on its financial position, results of
operations or cash flows.

FACTORS AFFECTING BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION

         An investment in us involves a high degree of risk and should be
undertaken only by persons whose financial resources are sufficient to enable
them to assume such risk and to bear the total loss of their investment. This
section sets forth a brief summary of some of the principal risk factors. If the
Company is unable to address and deal with one or more of the risks described
below or any other risks which it may face, then its business, operating results
and financial condition could be materially adversely affected, and you could
lose all or part of your investment. For these reasons, prospective investors
should carefully consider the risks described below as well as any other
possible risks that could be important.


                                       18
<PAGE>

THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN

         Our independent accountants have included an explanatory paragraph in
our financial statements included in our public filings stating that we have
incurred operating losses in the last two years and that we are dependent on our
management's ability to develop profitable operations, and that these factors,
among others, may raise substantial doubt about our ability to continue as a
going concern.

         We have been dependent primarily on private placements of our equity
securities and shareholder loans to fund our operations. In the near term, we
intend to focus on increasing our marketing efforts for our existing products.
Such funding may not be available to us when needed, on commercially reasonable
terms, or at all. If we are unable to obtain additional financing if needed, we
will likely be required to curtail our marketing and operating plans and
possibly cease our operations. In addition, any additional equity financing may
involve substantial dilution to our then-existing stockholders.

WE MAY NEVER BECOME PROFITABLE AND IF WE DO NOT BECOME PROFITABLE WE MAY HAVE TO
CEASE OUR OPERATIONS

         We have incurred net operating losses in each fiscal quarter since we
have been in business. We expect to continue to experience losses until the
time, if ever, when we are able to sell products sufficient to generate revenues
adequate to support our operations. If we fail to become profitable, we may be
forced to cease operations.

WE MAY RAISE ADDITIONAL CAPITAL THROUGH A SECURITIES OFFERING THAT COULD DILUTE
YOUR OWNERSHIP INTEREST

         We require substantial working capital to fund our business. If we
raise additional funds through the issuance of equity, equity-related or
convertible debt securities, these securities may have rights, preferences or
privileges senior to those of the holders of our common stock. The issuance of
additional common stock or securities convertible into common stock by our
management will also have the effect of further diluting the proportionate
equity interest and voting power of holders of our common stock.

         In addition, under our Certificate of Incorporation, the Board is
authorized to issue, without obtaining shareholder approval, shares of preferred
stock having the rights, privileges and designates as determined by the Board.
Therefore, the Board could issue shares of preferred stock that would have
preferential liquidation, distribution, voting, dividend or other rights, which
would be superior to the rights of common stockholders.

WE HAVE NOT PAID CASH DIVIDENDS AND IT IS UNLIKELY THAT WE WILL PAY CASH
DIVIDENDS IN THE FORESEEABLE FUTURE

         We plan to use all of our earnings to the extent we have earnings, to
fund our operations. We do not plan to pay any cash dividends in the foreseeable
future. We cannot guarantee that we will, at any time, generate sufficient


                                       19
<PAGE>

surplus cash that would be available for distribution as a dividend to the
holders of our common stock. You should not expect to receive cash dividends on
our common stock.

WE ARE A DEVELOPMENT STAGE COMPANY WITH A LIMITED OPERATING HISTORY AND WE MAY
BE UNSUCCESSFUL

         We have been engaged in our current business for approximately less
than two years. Accordingly, we have a limited operating history and our
operations are subject to all the risks inherent in a business enterprise with
such a limited operating history, including limited capital, possible delays in
the development and implementation of our business plan, uncertain markets, and
the absence of an operating history. The likelihood that we will succeed must be
considered in light of the problems, expenses, and delays frequently encountered
in connection with the development of new businesses, as well as many other
factors. We may not be able to develop successfully the business we are
pursuing. We cannot be certain that our business will be successful or that we
will generate significant revenues.

THE MARKET PRICE OF OUR COMMON STOCK MAY BE ADVERSELY AFFECTED IF TOO MUCH OF IT
IS SOLD AT ONCE

         Sales of substantial amounts of our common stock in the public market
could adversely affect the market price of the common stock. Such sales also
might make it more difficult for us to sell equity or equity-related securities
in the future at a time and price that we deem appropriate.

         In addition, we often compensate consultants who provide services to
the Company through the issuance to them of shares of publicly traded Class A
Common Stock and other securities. The shares of Class A Common Stock are often
registered under a Form S-8 Registration Statement that we filed with the SEC
which allows the consultants to immediately sell such shares on the open market.
We also issue our employees options to purchase common stock at fair market
value that we have registered under a Form S-8 Registration Statement. The sale
of any of those shares will likely adversely affect the market price of the
Class A Common Stock. Your ability to sell shares of our common stock may be
prevented, or the price adversely affected as a result of this increased selling
pressure.

OUR STOCK IS QUOTED ON THE OTC BULLETIN BOARD AND COULD BE SUBJECT TO EXTREME
VOLATILITY

         Our common stock is currently quoted under the symbol "SWME" on the OTC
Bulletin Board, which is often characterized by low trading volume. A large
volume of stock being sold into the market at any one time could cause the stock
to rapidly decline in price. In addition, we must comply with ongoing
eligibility rules to ensure our common stock is not removed from the OTC
Bulletin Board, which would materially adverse affect the liquidity and
volatility of our common stock. These factors may limit your ability to sell
shares of our common stock.


                                       20
<PAGE>

THERE IS A LIMITED PUBLIC MARKET FOR OUR COMMON STOCK AND OUR STOCKHOLDERS MAY
BE UNABLE TO LIQUIDATE THEIR SHARES

         Our common stock is listed on the Over-the-Counter Bulletin Board, and
there is a limited volume of sales, thus providing a limited liquidity into the
market for our shares. As a result of the foregoing, stockholders may be unable
to liquidate their shares.

OUR EXECUTIVE OFFICERS AND DIRECTORS CONTROL A LARGE PERCENTAGE OF OUR COMMON
STOCK, WHICH ALLOW THEM TO CONTROL MATTERS SUBMITTED TO STOCKHOLDERS FOR
APPROVAL

         Our executive officers and directors (and their affiliates), in the
aggregate, own approximately 15% of our outstanding common stock, and a
substantial majority of our outstanding voting stock. There is currently an
aggregate of 82,398,904 shares of Class A and Class B Common Stock outstanding.
The holders of the Class A and Class B Common Stock vote together on all matters
submitted to a shareholder vote. Raghunath Kilambi, our Chief Executive Officer
and director, owns 1,784,451 shares of our Class A Common Stock, and 2,000,000
shares of our Class B Common Stock which constitute all outstanding shares of
our Class B Common Stock. Each share of Class B Common Stock is entitled to
fifty votes of Class A Common Stock. Therefore, Mr. Kilambi has the ability to
decide the outcome of matters submitted to our stockholders for approval
(including the election and removal of directors and any merger, consolidation
or sale of all or substantially all of our assets) and to control our management
and affairs. Accordingly, such concentration of ownership may have the effect of
delaying, deferring or preventing a change in control, impede a merger,
consolidation, takeover or other business combination or discourage a potential
acquirer from making a tender offer or otherwise attempting to obtain control,
which in turn could have an adverse effect on the market price of our common
stock.

WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS FOR OUR PRODUCTS WHICH COULD HAVE
A SUBSTANTIAL, ADVERSE EFFECT ON OUR BUSINESS AND FINANCIAL RESULTS

         Customers may sue us if any of our products sold to them injure the
user. Liability claims could require us to spend significant time and money in
litigation and pay significant damages. As a result, any of these claims,
whether or not valid or successfully prosecuted, could have a substantial,
adverse effect on our business and financial results. We currently have product
liability insurance, however, the amount of damages awarded against us in such a
lawsuit may exceed the policy limits.

WE ARE SUBJECT TO GOVERNMENT REGULATIONS WHICH MAY HINDER OUR GROWTH

         In the United States, governmental agencies and extensive federal
regulations regulate the manufacture, packaging, labeling, advertising,
promotion, distribution and sale of our products. The Food and Drug


                                       21
<PAGE>

Administration (FDA) regulates the safety and effectiveness of our products and
the Federal Trade Commission (FTC) regulates how we advertise and market our
products. O24 and any other products we may manufacture or sell in the future
are also subject to regulation by, among other regulatory entities, the Consumer
Product Safety Commission, the U.S. Department of Agriculture, and the
Environmental Protection Agency. The laws, regulations and enforcement policies
governing our products are relatively new and are still evolving, and we cannot
predict what enforcement positions the FDA or other governmental agencies may
take with respect to our products.

         There are similar regulatory bodies and regulations in Canada, and
other countries in which we may decide to market, sell and distribute our
products. We cannot be certain that we comply or will comply with all laws and
regulations in this area. Enforcement actions by any of these regulatory
agencies can result in civil and criminal penalties, an injunction to stop or
modify certain selling methods, seizure of products, adverse publicity or
voluntary recalls and labeling changes. If any governmental agency were to
undertake an enforcement action against us, this could cause an immediate
decrease in our revenues, cause us to incur significant additional expenses and
result in a decrease in our stock price.

WE MAY NOT BE SUCCESSFUL IN ACQUIRING OR LICENSING NEW PRODUCTS WHICH COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

         We are currently seeking to license or acquire new products or
companies with bioscience products, manufacturing or distribution capabilities
consistent with our commercial objectives. We may not be able to acquire such
products. We may not be able to find and acquire additional bioscience products
with demonstrative competitive advantages. We presently do not have the capital
to make acquisitions. Accordingly, in the near term, any such acquisitions would
most likely require that we issue stock in our Company to effect acquisitions
which would result in dilution to our shareholders.

WE HAVE RISKS ASSOCIATED WITH OUR DEPENDENCE ON THIRD PARTY MANUFACTURING WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

         We depend upon third parties to manufacture our products. The inability
of a manufacturer to ship orders of our products in a timely manner, including
as a result of local financial market disruption which could impair the ability
of such manufacturers to finance their operations, or to meet quality standards,
could cause us to miss the delivery date requirements of our customers for those
items, which could result in cancellation of orders, refusal to accept
deliveries or a reduction in purchase prices, any of which could have a material
adverse effect on our financial condition and results of operations. We have no
long-term formal arrangements with any of our third party manufacturers.
Although we believe we could replace such manufacturers if necessary, without a
material adverse effect on us, these manufacturers may not be replaced in a
timely manner, and the loss of such manufacturers could have a material adverse
effect on our business, financial condition and results of operations.


                                       22
<PAGE>

THERE IS NO CERTAINTY AS TO THE POTENTIAL MARKET FOR OUR PRODUCTS WHICH COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         We have not undertaken an independent analysis or survey of the market
for our products. We believe that consumers are willing to expend large sums for
the purchase of bioscience and herbal health products; however, our products and
services may not have the commercial potential to succeed in these target
markets. If our products are not accepted by the marketplace, our business will
be materially impaired.

WE ARE DEPENDENT ON OUR TRADEMARKS AND PATENTS AND THE FAILURE TO OBTAIN
TRADEMARK PROTECTION COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The market for certain of our products will be, in part, dependent upon
the goodwill engendered by our trademarks and trade names. Trademark protection
is therefore material to a portion of our business. The failure to obtain
trademark protection, or illegal use of any trademarks we may obtain, may have
an adverse effect on our business, financial condition and operating results.

         The Company owns United States Patent Number 6,444,238 (issued
September 3, 2002) which covers our O24 product, however, we may not be able to
obtain patent protection for any derivative uses of O24, or for any other
products we may later acquire or develop. We also cannot assure you that we will
be able to obtain foreign patents to protect our products.

          The failure to protect our patent, trademarks and trade names, may
have a material adverse effect on our business, financial condition and
operating results. Litigation may be required to enforce our intellectual
property rights, protect our trade secrets or determine the validity and scope
of proprietary rights of others. Any action we take to protect our intellectual
property rights could be costly and could absorb significant management time and
attention. In addition, as a result of any such litigation, we could lose any
proprietary rights we have. If any of the foregoing occurs, we may be unable to
execute on our business plan and you could lose your investment.

WE NEED TO BUILD OUT OUR SALES AND MARKETING ORGANIZATION OTHERWISE OUR BUSINESS
WILL BE EFFECTED ADVERSELY

         We are and shall continue marketing our existing products and future
products that we may license or acquire either through the utilization of
contract sales representatives and brokers, the establishment of our own sales
force, strategic alliances and various other methods. We are in the early stages
of developing such sales and marketing channels, and further development of
those channels will require an investment of substantial amounts of capital
which we currently do not possess and which we may never be able to access.
Accordingly, despite our plans, we may be unable to substantially develop our
own marketing channels.


                                       23
<PAGE>

WE DEPEND ON KEY PERSONNEL AND WILL REQUIRE ADDITIONAL SKILLED EMPLOYEES TO
EXECUTE OUR GROWTH PLANS OTHERWISE THE DEVELOPMENT OF OUR BUSINESS COULD BE
DELAYED OR PREVENTED

         Our potential for success depends significantly on our executive
officers, including, Raghunath Kilambi, our Chief Executive Officer, and Grant
Johnson, our President. These individuals do not have employment agreements with
the Company. We do not carry key-man life insurance on any executive. Given the
early stage of our development and our plans for rapid expansion, the loss of
the services of any executive or the services of any other key employees we may
hire in the future would have a substantial, adverse effect on our business. We
believe that our future success will depend in large part on our ability to
attract and retain highly skilled sales, marketing and management personnel. If
we are unable to hire the necessary personnel, the development of our business
will likely be delayed or prevented. Competition for these highly skilled
employees is intense. As a result, we cannot assure you that we will be
successful in retaining our key personnel or in attracting and retaining the
personnel we require for expansion.

WE FACE SIGNIFICANT COMPETITION AND OUR BUSINESS AND FINANCIAL RESULTS COULD
SUFFER FROM COMPETITION

         The market for health-related retail goods and services is
characterized by intense competition. We believe that the principal competitive
factors for companies in the industries in which we compete are:

          o    functionality;

          o    quality of merchandise;

          o    discounts and rewards;

          o    brand recognition;

          o    customer loyalty; and

          o    price.

         Nearly all of our existing and potential competitors have longer
operating histories, greater experience, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than we do. Because of their greater resources, our competitors are
able to undertake more extensive marketing campaigns for their brands and
services, and make more attractive offers to potential employees, retail
affiliates, and others. We may not be able to compete successfully against our
current or future competitors and our business and financial results could
suffer from such competition.


                                       24
<PAGE>

FUTURE SALES BY OUR STOCKHOLDERS MAY ADVERSELY AFFECT OUR STOCK PRICE AND OUR
ABILITY TO RAISE FUNDS IN NEW STOCK OFFERINGS

         Sales of shares of our common stock in the public market could lower
the market price of our common stock. Sales may also make it more difficult for
us to sell equity securities or equity-related securities in the future at a
time and price that our management deems acceptable or at all. Of the 80,398,904
shares of common stock outstanding as of March 28, 2005, 59,553,553 shares are,
or will be, freely tradable without restriction, unless held by our
"affiliates." The remaining 20,845,351 shares of common stock which will be held
by existing stockholders, including the officers and directors, are "restricted
securities" and may be resold in the public market only if registered or
pursuant to an exemption from registration. Some of these shares may currently
be resold under Rule 144.

OUR COMMON STOCK IS DEEMED TO BE "PENNY STOCK," WHICH MAY MAKE IT MORE DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES DUE TO SUITABILITY REQUIREMENTS

         Our common stock is deemed to be "penny stock" as that term is defined
in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. Penny
stocks are stocks:

          o    With a price of less than $5.00 per share;

          o    That are not traded on a "recognized" national exchange;

          o    Whose prices are not quoted on the Nasdaq automated quotation
               system

          o    Nasdaq stocks that trade below $5.00 per share are deemed a
               "penny stock" for purposes of Section 15(b)(6) of the Exchange
               Act

          o    In issuers with net tangible assets less than $2.0 million (if
               the issuer has been in continuous operation for at least three
               years) or $5.0 million (if in continuous operation for less than
               three years), or with average revenues of less than $6.0 million
               for the last three years.

         Broker/dealers dealing in penny stocks are required to provide
potential investors with a document disclosing the risks of penny stocks.
Moreover, broker/dealers are required to determine whether an investment in a
penny stock is a suitable investment for a prospective investor. These
requirements may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors
in our common stock to sell shares to third parties or to otherwise dispose of
them. This could cause our stock price to decline.


                                       25
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements, together with the independent auditors'
report thereon, appear beginning on page F-1 of this report.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.

ITEM 8A. CONTROLS AND PROCEDURES

         We carried out an evaluation, under the supervision and with the
participation of our management, including our President and Chief Executive
Officer and our Chief Financial Officer of the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the period
covered by this report. The evaluation was undertaken in consultation with our
accounting personnel. Based on that evaluation, the President and Chief
Executive Officer concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.

         There were no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of their evaluation.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

         The following table sets forth certain information regarding our
directors and executive officers.

      NAME             AGE                         TITLE
-----------------     ------   ------------------------------------------------
Raghunath Kilambi       39     Chief Executive Officer and Director
Greg Nuttall*           39     Executive Vice President, Strategy & Business
                               Development and Director
Grant Johnson           45     President, Chief Operating Officer and Director
Bruce Fairbairn         52     Chief Financial Officer
Ronald Springer         52     Director
Azim Fancy              63     Director
Bryson Farrill          74     Director

* Mr. Nuttall resigned as the Executive Vice President, Strategy & Business
Development and as a Director on January 25, 2005

         There are no family relationships among any of the directors or
officers of the Company.


                                       26
<PAGE>

BUSINESS EXPERIENCE

         RAGHUNATH KILAMBI has served and is currently serving as our Chief
Executive Officer, and a Director since May 2003. Prior to launching Swiss
Medica, Mr. Kilambi served as a general partner of Rubicon Investment Group, a
Canada-based merchant banking firm since 2001. Between 1998 and 2000, Mr.
Kilambi was CFO and Director of FutureLink Corp., a California based application
service provider. Mr. Kilambi is also a director of Rubicon Investment Group,
Inc. Prior to Future Link, Mr. Kilambi was a principal at New Economy Capital
from 1993 to 1998 and worked at Canada Starch Company from 1990 to 1993. Mr.
Kilambi began his career with Touche Ross & Co. and is a Chartered Accountant
holding a Bachelor of Commerce and a Graduate Diploma in Public Accounting from
McGill University, in Montreal, Canada.

         GREG NUTTALL was our Vice-Chairman and Executive Vice-President,
Strategy & Business Development and a Director from July 2003 through January
2005. Mr. Nuttall has also acted as a General Partner at Rubicon Investment
Group, a merchant banking firm, since December 2000. Prior to co-founding
Rubicon, he co-founded Cultural Research Inc., a leading change management
consulting firm where he worked from 1994 to December 2000. Earlier in his
career Mr. Nuttall worked as a lawyer in the International Capital Markets
department at Clifford Chance in London and practised corporate law at Tory Tory
DesLauriers & Binnington in Toronto. Mr. Nuttall is currently a director of
Dover Petroleum Corporation and Woodland Chemical Systems Inc. Mr. Nuttall
received a Master of International Laws degree from Cambridge University, a
Bachelor of Laws degree from Osgoode Hall Law School, and a B.A. from the
University of Manitoba. Mr. Nuttall resigned as the Executive Vice President,
Strategy & Business Development and as a Director on January 25, 2005.

         GRANT JOHNSON has served as our President, Chief Operating Officer and
Director since April 2003. From November 2001 until December 2002, before
joining Swiss Medica, Mr. Johnson was an outside consultant and senior advisor
to Scarab Systems Inc. From April 1999 until March 2002, Mr. Johnson was CEO of
HLNT Networks International, a company that designed, built and maintained
health Web sites. From September 1996 to February 1999 Mr. Johnson was the VP of
Corporate Development at Starnet Communications, a software company which built
and designed online gaming systems for clients. Mr. Johnson received a
bachelor's degree in Economics from University of Western Ontario in 1983.

         BRUCE FAIRBAIRN has been our Chief Financial Officer since December
2004. Mr. Fairbairn brings nearly 30 years of experience as a financial analyst,
internal auditor and Chief Financial Officer. After graduating from McGill
University with a Bachelors degree in Commerce, Mr. Fairbairn served in various
financial capacities at the Canadian subsidiaries of NYSE-listed companies such
as Crane Company and Alcan Inc. He has also served as Chief Financial Officer or
in a senior financial position for privately owned firms, such as Air Niagara
Ltd., Range Transportation and Evergreen Peripherals Inc. He has also been a
director of a private company called 984647 Ontario Limited since August 1992.
Mr. Fairbairn has been the Company's Controller (part-time) since June 2003,
controlling costs and building the accounting and budgeting systems. From 2000
to June 2003, Mr. Fairbairn was an independent financial consultant to mid-sized
companies in the early growth stages. Prior to that, Mr. Fairbairn was
responsible for all of the day-to-day operations of a privately-held
corporation, including: financial reporting, cash flow analysis and control and
implementation of maintenance of operating controls and procedures.

         RONALD SPRINGER has served as a Director since May 2003. Mr. Springer
has been the President and CEO of General Cosmetics Corporation since 1993.
Prior to building General Cosmetics, he founded several other companies,
including Heaven from Earth Corp., Ceo-Capital Corp, Global Capital Security
Inc., Limardo Productions, ISB Overseas GmbH and Doitsu Shinpo. He also held
positions at Esarco LTD. and Hynolds Ltd.


                                       27
<PAGE>

         AZIM FANCY serves as a Director. Mr. Fancy is President and owner of
real estate developer, Daulat Investments Limited since 1985. Prior to this, Mr.
Fancy has held a variety of senior level positions, including Chairman and
Owner, International Trading and Sales, Inc. (1977-1985), Chairman and Owner,
Pan Atlantic Paper Inc. (1977-1985), and previously President, Orient Pacific
Agencies Ltd., an arm of Gulf Group of Companies of London, England.

         BRYSON FARRILL serves as Chairman and Director of Swiss Medica Inc.
since July 2002 Mr. Farrill has been a Financial Consultant for the past five
years most recently acting as a Senior Partner of Belgravia Financial, a
European real estate investment company based in London, England. Previously, he
was a Member of the New York Stock Exchange and held various senior and
executive-level positions at McLeod Young Weir and Mcleod Young Weir
International (now Scotia McLeod). Mr. Farrill currently serves on the boards of
directors of several leading public companies, including Power Technology, Inc.,
a designer and manufacturer of laser diodes (OTC:PWTC), Devine Entertainment, an
media entertainment company (PK:DVNNF) and Crowflight Minerals Inc., a mining
and exploration company (TSX:CML). He is also a director of a private company
called Belgravia Financial Services Limited, a real estate investment company.

         No individual on our Board of Directors possesses all of the attributes
of an audit committee financial expert and no one on our Board of Directors is
deemed to be an audit committee financial expert. In forming our Board of
Directors, we sought out individuals who would be able to guide our operations
based on their business experience, both past and present, or their education.
Our business model is not complex and our accounting issues are straightforward.
Responsibility for our operations is centralized within management, which is
comprised of four people. We rely on the assistance of others, such as our
accountant, to help us with the preparation of our financial information. We
recognize that having a person who possesses all of the attributes of an audit
committee financial expert would be a valuable addition to our Board of
Directors, however, we are not, at this time, able to compensate such a person
therefore, we may find it difficult to attract such a candidate.

DIRECTOR COMPENSATION

         Two of our Directors are also employees and do not receive separate
board compensation. Two of our remaining three directors each receive $3,000 per
month, plus any related expenses incurred, and the third Director (also Chairman
of our Board) receives $5,000 per month, plus any related expenses incurred. Mr.
Nuttall, an employee as well as a Director, resigned as a Director and Officer
effective January 25, 2005.

TERM OF OFFICE

         The directors named above will serve until the next annual meeting of
our shareholders. In absence of an employment agreement, officers hold their
positions at the pleasure of the Board of Directors.

CODE OF ETHICS

         On March 29, 2004 our Board of Directors adopted a Code of Business
Conduct and Ethics that applies to all of our officers, directors and employees.


                                       28
<PAGE>

COMPLIANCE WITH SECTION 16(a) OF EXCHANGE ACT

         Section 16(a) of the Securities Exchange Act requires our directors,
executive officers and persons who own more than 10% of our common stock to file
reports of ownership and changes in ownership of our common stock with the
Securities and Exchange Commission. Directors, executive officers and persons
who own more than 10% of our common stock are required by Securities and
Exchange Commission regulations to furnish to us copies of all Section 16(a)
forms they file.

         To our knowledge, based solely upon review of the copies of such
reports received or written representations from the reporting persons, we
believe that during our 2004 fiscal year our directors, executive officers and
persons who own more than 10% of our common stock complied with all Section
16(a) filing requirements with the exception of the following: none of the
current officers and directors have filed a Form 3 yet. . Bryson Farrill did not
make a Form 4 to report a stock grant of 45,000, 41,860, 755,000, 100,000 and
145,000 Class A Common Shares on March 3, July 12, September 30, and October 20,
2004, respectively. Greg Nuttall has yet to file a Form 4 to report the
acquisition of 443,363 Class A Common Shares on February 24, 2004. Ronald
Springer did not file a Form 4 regarding the receipt of 45,000, 36,870, and
100,000 Class A Common Shares on March 3, July 12, and October 20, 2004,
respectively for services rendered. He also failed to file a Form 4 for the sale
of 40,000, 35,000, 50,000 and 25,000 Class A Common Shares on March 30, June 25,
November 28 and December 22, 2004, respectively. Raghunath Kilambi has not yet
filed a Form 4 regarding the acquisition of 457,377 Class A Common Shares on
February 24, 2004. Grant Johnson failed to file a Form 4 for the acquisition of
11,870 Class A Common Shares on January 22, 2004. Azim Fancy failed to file a
Form 4 for the acquisition of 45,000, 41,860, 100,000, and 300,000 Class A
Common Shares on March 10, July 12, October 20, and December 16, 2004,
respectively.

ITEM 10. EXECUTIVE COMPENSATION

         During the 2004 fiscal year, Mr. Raghunath Kilambi, our Chief Executive
Officer and Grant Johnson, our President and Chief Operating Officer were the
only executive officers receiving compensation of at least $100,000 per year.

The following table sets forth information as to the compensation paid or
accrued to Mr. Kilambi, and Mr. Johnson, our President, Chief Operating Officer
and Director: :

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
------------------------- -------- ------------------------------------ -----------------------------------------------
                                           ANNUAL COMPENSATION                      LONG TERM COMPENSATION
                                   ------------------------------------ -----------------------------------------------
                                                                                 AWARDS                 PAYOUTS
                                                                        ----------------------- -----------------------
                                                                        Restricted Securities               All Other
                                                         Other Annual   Stock      Underlying              Compensation
Name and Principal                  Salary    Bonus      Compensation   Awards      Options/     LTIP
Position                  Year        ($)       ($)          ($)          ($)         SARs       Payout($)     ($)
------------------------- -------- ---------- --------- --------------- -------- -------------- --------- -------------
<S>                       <C>       <C>       <C>          <C>             <C>         <C>          <C>         <C>
Raghunath Kilambi,        2004      $46,000   $30,000      $26,000*        0           --           0           0
Chief Executive
Officer, and Director     2003      $51,233              $1,000,000**
------------------------- -------- ---------- --------- --------------- -------- -------------- --------- -------------
Grant Johnson,            2004      $60,000      0       $111,800***       0           --           0           0
President, Chief
Operating Officer and
Director                  2003      $47,289               $400,000**
------------------------- -------- ---------- --------- --------------- -------- -------------- --------- -------------
</TABLE>


                                       29
<PAGE>

*    Includes stock awards of 154,762 Class A Common Shares issued to Mr.
     Kilambi in lieu of salary; and 214,258 Class A Common Shares issued as
     compensation.

**   Includes stock awards as signing bonuses of 1,250,000 Common A Shares
     issued to Mr. Kilambi; and 500,000 Common A Shares issued to Mr. Johnson
     all of which were issued with a fair market value of $0.80 per share.

***  Includes stock awards of 1,120,000 Class A Common Shares issued to Mr.
     Johnson with a fair market value of $0.09 per share.


         We do not have a long term incentive plan or arrangement of
compensation with any individual in the group of officers and directors.


EMPLOYMENT AGREEMENTS

         Our Board of Directors is currently considering an employment agreement
for Mr. Raghunath Kilambi, Grant Johnson, and Bruce Fairbairn.


               EQUITY COMPENSATION AND CONSULTANT PLAN INFORMATION

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                                                                    Number of securities
                                 Number of securities to     Weighted average     remaining available for
                                 be issued upon exercise    exercise price of      future issuance under
                                 of outstanding options,   outstanding options,   the equity compensation
Plan Category                      warrants and rights     warrants and rights              plan
----------------------------------------------------------------------------------------------------------
<S>                                    <C>                        <C>                  <C>
Equity Compensation Plans                   0                       0                       0
approved by security holders
----------------------------------------------------------------------------------------------------------
Equity compensation plans not          27,331,175(1)              $0.34                3,549,909(2)
approved by security holders
----------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes warrants granted to consultants in exchange for services rendered.


                                       30
<PAGE>

(2) Equity securities may be issued under the Company's 2003 Equity Incentive
Plan or the 2003 Consultant Stock Plan. Pursuant to the terms of the 2003 Equity
Incentive Plan, awards may be granted for options (both incentive stock options
and non-qualified stock options) and for restricted stock and stock bonuses.
Under the 2003 Consultant Stock Plan, awards may be granted to consultants in
vested or unvested stock. As of December 31, 2004, there were an aggregate of
3,549,909 Common A Shares reserved for issuance under both plans.


2003 EQUITY INCENTIVE PLAN

         Our Board of Directors has approved the Swiss Medica, Inc. 2003 Equity
Incentive Plan which permits us to grant, for a ten year period, stock awards,
stock bonuses and stock options. We had originally reserved 4,500,000 shares of
our Class A common stock for issuance to our directors, employees and
consultants under the Plan. The Plan is administered by the Board of Directors.
As the administrator of the Plan, the Board of Directors has the authority and
discretion, subject to the provisions of the Plan, to select persons to whom
stock awards, bonuses or options will be granted, to designate the number of
shares to be covered by each option or stock award, to specify the type of
consideration to be paid, and to establish all other terms and conditions of
each option or stock award. Options granted under the Plan will not have a term
that exceeds ten years from date of grant. As of December 31, 2004, we granted
stock awards and bonuses equal to 991,828 shares of our Class A common stock
under the Plan.

2003 CONSULTANT STOCK PLAN

         Our Board of Directors has also approved the 2003 Consultant Stock Plan
which permits us to grant, for a ten year period, stock issuances subject to
vesting provisions, or "unvested stock" or stock awards without such
restrictions. We had originally reserved 6,000,000 shares of our Class A common
stock for issuance to consultants under the Consultant Plan. The Consultant Plan
is administered by the Board of Directors. As the administrator of the
Consultant Plan, the Board of Directors has the authority and discretion,
subject to the provisions of the Consultant Plan, to select persons to whom
stock awards or unvested stock will be granted, to designate the number of
shares to be covered by each stock issuance, to specify the type of
consideration to be paid, and to establish all other terms and conditions of
each stock issuance. As of December 31, 2004, we granted stock awards (all
vested) equal to 3,516,444 shares of our Class A common stock under the
Consultant Plan.

         No stock options were granted or exercised during the last completed
fiscal year by each of the executive officers and our directors


                                       31
<PAGE>

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information as of March 28, 2005
with respect to the beneficial ownership of the Company's Common Stock prior to
this Offering, by (i) each person who beneficially owns more than 5% of our
voting securities; (ii) each Director; (iii) each Executive Officer and (iv) all
directors and executive officers as a group. Unless otherwise indicated, all
persons named as beneficial owners of our voting securities, have sole voting
and sole investment power with respect to the shares indicated as beneficially
owned, and beneficial ownership includes shares issuable upon conversion of
shares of Series Common Stock. As of March 28, 2005, the Company's issued and
outstanding capital stock consisted of 82,398,904 shares of Common Stock,
including 80,398,904 shares of Class A Common Stock and 2,000,000 shares of
Class B Common Stock.

<TABLE>
<CAPTION>
                                                                                         PERCENT OF SHARES OF
                                              TOTAL OUTSTANDING                           CLASS A AND CLASS B
                                            CLASS A COMMON STOCK    TOTAL OUTSTANDING        COMMON STOCK
NAME AND ADDRESS                                BENEFICIALLY      CLASS B COMMON STOCK       BENEFICIALLY
OF BENEFICIAL OWNER(1)(2)                          OWNED           BENEFICIALLY OWNED            OWNED
-----------------------------------------   --------------------  --------------------   --------------------
<S>                                                <C>                  <C>                 <C>
RAGHUNATH KILAMBI Chief Executive
Officer, and Director (3)                             1,784,451         2,000,000             4.6%

GRANT JOHNSON, President, Chief
Operating Officer and Director                        1,631,870             --                2.0%

BRUCE FAIRBAIRN, Chief Financial Officer                575,000             --                0.7%

AZIM FANCY, Director                                    486,860             --                0.6%

BRYSON FARRILL, Chairman                                900,000             --                1.1%

RONALD SPRINGER, Director (4)                         5,104,000             --                6.2%

ALPHA CAPITAL AKTIENGESELLSCHAFT(5)                6,250,000(6)                               7.5%

ALL DIRECTORS AND OFFICERS AS A GROUP
   (6 PERSONS)                                       10,482,181         2,000,000            15.1%
</TABLE>

-----------
*    Less than 1%.
(1)  Unless otherwise indicated, the address of the persons named in this column
     is c/o Swiss Medica, Inc., 53 Yonge Street, 3rd Floor, Toronto, Ontario,
     Canada M5E 1J3.
(2)  Included in this calculation are shares deemed beneficially owned by virtue
     of the individual's right to acquire them within 60 days of the date of
     this report that would be required to be reported pursuant to Rule 13d-3 of
     the Securities Exchange Act of 1934.
(3)  Each Class B Share is entitled to vote as 50 shares of Class A Common
     Stock.
(4)  Includes 4,054,000 Class A Shares owned by General Cosmetics Corporation, a
     corporation controlled by Ronald Springer.
(5)  The address for Alpha Capital is 300 Esplanade Drive, suite 1950, Oxnard,
     California, 93036
(6)  Includes 1,562,500 Warrants with an exercise price of $0.30 per share, and
     1,562,500 Warrants outstanding with an exercise price of $0.40 per share
     all exercisable within 60 days of the date of this report that would be
     required to be reported pursuant to Rule 13d-3 of the Securities Exchange
     Act of 1934.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.


                                       32
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

Exhibit No.  Description of Exhibit
-----------  ----------------------

2.1          Agreement for Purchase and Sale of Stock between Goldcrown Holdings
             Ltd. and Oxford Capital Group dated as of January 10, 2000. (1)

2.2          Agreement for Purchase and Sale of Stock between Bodet Ltd. and
             Oxford Capital Group dated as of January 10, 2000. (1)

2.3.         Acquisition Agreement between Associated Medical Devices, Inc. and
             Euro American Business Group, Inc. dated July 1, 1999.(2)

2.4          Agreement and Plan of Merger of Yournet, Inc. with and into Global
             Path Incorporated dated June 25, 2001.(3)

2.5          Asset Purchase Agreement dated as of March 31, 2003, by and among
             Global Path Incorporated, Swiss Medica, Inc, General Cosmetics
             Corporation, and the shareholder of General Cosmetics named
             therein. (4)

3.1          Certificate of Incorporation, as amended.(3)

3.2          Bylaws of Swiss Medica, Inc (5)

4.1          Registration Rights Agreement by and among the Registrant and
             Platinum Partners Global Macro Fund L.P. ("Platinum") and Fennmore
             Holdings ("Fennmore") dated February 19, 2004 (5)

10.1         2003 Equity Incentive Plan (6)

10.2         2003 Consultant Stock Plan (7)

10.3         2002 Amended and Restated Stock Option, Stock Warrant and Stock
             Award Plan (8)

10.4         2001 Employees Stock Incentive Plan (9)

10.5         2001 Director and Officer Stock Option and Stock Award Plan (9)

10.6         Lease Agreement between Paul Millar and Swiss Medica, Inc. for the
             premises 53 Yonge Street, Third Floor Toronto, Canada, M5E 1J3
             dated as of July 1, 2003. (5)

10.7         Securities Purchase Agreement by and among the Registrant and
             Platinum and Fennmore dated February 19, 2004 (5)

10.8         Form of Warrant. (5)

10.9         Securities Purchase Agreement with Highgate House, Ltd. and
             Montgomery Equity Partners, Ltd. dated December 23, 2004 (12)

10.10        Termination Agreement with Highgate House, Ltd. and Montgomery
             Equity Partners, Ltd. dated January 19, 2005, terminating the
             Securities Purchase Agreement dated December 23, 2004 (13)

10.11        Warrant issued to Highgate House, Ltd. and Montgomery Equity
             Partners, Ltd., dated January 19, 2005 (13)

10.12        Standby Equity Distribution Agreement dated December 23, 2004 with
             Cornell Capital Partners, LP (12)

10.13        Placement Agent Agreement with Sloan Securities Corporation dated
             December 23, 2004 and terminated on January 19, 2005 (13)

10.14        Termination Agreement with Cornell Capital Partners, LP dated
             January 19, 2005, terminating the Standby Equity Distribution
             Agreement dated December 23, 2004 (13)

10.15        Warrant to Purchase Series A Common Stock of Swiss Medica, Inc.
             issued to Strategic Equity Corp. dated December 6, 2004 (11)

10.16        Note and Purchase Warrant Agreement between Swiss Medica, Inc. and
             Strategic Equity Corp. dated December 6, 2004 (11)

10.17        Note and Purchase Warrant Agreement Amendment between Swiss Medica,
             Inc. and Strategic Equity Corp. effective as of December 7, 2004
             (11)

10.18        Security Agreement between Swiss Medica, Inc. and Strategic Equity
             Corp. dated December 6, 2004 (11)


                                       33
<PAGE>

10.19        Security Agreement Amendment between Swiss Medica, Inc. and
             Strategic Equity Corp. dated December 7, 2004 (11)

10.20        Secured Promissory Note issued to Strategic Equity Corp., dated
             December 6, 2004 (11)

10.21        Secured Promissory Note issued to Strategic Equity Corp., dated
             December 7, 2004 (11)

10.22        Secured Promissory Note issued to Strategic Equity Corp., dated
             January 3, 2005 (11)

14.1         Code of Business Conduct and Ethics.(5)

23.1         Consent of Russell Bedford Stefanou Mirchandani, LLP.(5)

23.2         Consent of Russell Bedford Stefanou Mirchandani, LLP.(5)

23.3         Consent of Russell Bedford Stefanou Mirchandani, LLP.(5)

24.1         Power of Attorney (5)

31.1         Certification pursuant to Rule 13a-14(a) and 15d-14(a).(5)

32.1         Certification pursuant to 18 U.S.C. Section 1350, as adopted
             pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(5)

(1)   Incorporated by reference to the registrant's Form 8-K filed March 28,
      2000

(2)   Incorporated by reference to the registrant's Form 10-KSB filed April 14,
      2000

(3)   Incorporated by reference to the registrant's Preliminary Proxy Statement
      filed June 26, 2001

(4)   Incorporated by reference to the registrant's Form 10-QSB filed on August
      20, 2003

(5)   Filed herewith

(6)   Incorporated by reference to the registrant's Form S-8 filed on November
      28, 2003.

(7)   Incorporated by reference to the registrant's Form S-8 filed on August 27,
      2003.

(8)   Incorporated by reference to the registrant's Amendment to Form S-8 filed
      on March 11,2002.

(9)   Incorporated by reference to the registrant's Form S-8 filed on November
      19, 2001.

(10)  Incorporated by reference to the registrant's Form S-8 filed on November
      19, 2001.

(11)  Incorporated by reference from the Company's Registration Statement on
      Form SB-2 filed on February 14, 2004.

(12)  Incorporated by reference from the Company's Form 8-K filed on December
      29, 2004.

(13)  Incorporated by reference from the Company's Form 8-K filed on January 20,
      2005.


(b)   Reports on Form 8-K

         A Form 8-K was filed on December 30, 2004 to report the resignation of
Raghunath Kilambi as our Chief Financial Officer and appointment of Bruce
Fairbairn as our Chief Financial Officer.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

            The following table sets forth fees billed to us by our auditors
during the fiscal years ended December 31, 2004 and December 31, 2003 for: (i)
services rendered for the audit of our annual financial statements and the
review of our quarterly financial statements, (ii) services by our auditor that
are reasonably related to the performance of the audit or review of our
financial statements and that are not reported as Audit Fees, (iii) services
rendered in connection with tax compliance, tax advice and tax planning, and
(iv) all other fees for services rendered.


                                       34
<PAGE>

                                   December 31, 2004         December 31, 2003
                                   -----------------         -----------------

(i)     Audit Fees                     $ 44,250                   $ 32,500
(ii)    Audit Related Fees             $      0                   $      0
(iii)   Tax Fees                       $      0                   $      0
(iv)    All Other Fees                 $      0                   $      0


         AUDIT FEES. Consists of fees billed for professional services rendered
for the audit of Swiss Medica. Inc.'s financial statements and review of the
interim consolidated financial statements included in quarterly reports and
services that are normally provided by Russell Bedford Stefanou Mirchandani LLP
in connection with statutory and regulatory filings or engagements.

         AUDIT-RELATED FEES. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of Swiss Medica, Inc. financial statements and are not reported under "Audit
Fees."

         TAX FEES. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. There were no tax services provided in
fiscal 2003 or 2002.

         ALL OTHER FEES. Consists of fees for products and services other than
the services reported above. There were no management consulting services
provided in fiscal 2003 or 2002.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

         The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-approve all
audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or category of
services and is generally subject to a specific budget. The independent auditors
and management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.


                                       35
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on this 30th day of March 2005.

                                                SWISS MEDICA, INC.


                                                By:  /s/ Raghunath Kilambi
                                                     ---------------------------
                                                     Raghunath Kilambi,
                                                     Chief Executive Officer


                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Raghunath Kilambi, jointly and severally,
his or her attorneys-in-fact, each with the power of substitution, for him or
her in any and all capacities, to sign any amendments to this Report on Form
10-KSB, and to file the same, with exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his or her
substitute or substitutes may do or cause to be done by virtue hereof.

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

    Signature                          Title                          Date
    ---------                          -----                          ----

/s/Raghunath Kilambi          Chief Executive Officer and        March 30, 2005
--------------------------    Director
Raghunath Kilambi


/s/Grant Johnson              President, Chief Operating         March 30, 2005
--------------------------
Grant Johnson                 Officer and Director

/s/Bruce Fairbairn            Chief Financial Officer            March 30, 2005
--------------------------
Bruce Fairbairn


/s/Bryson Farrill             Chairman, Director                 March 30, 2005
--------------------------
Bryson Farrill

/s/Ronald Springer            Director                           March 30, 2005
--------------------------
Ronald Springer

/s/Azim Fancy                 Director                           March 30, 2005
--------------------------
Azim Fancy



                                       36
<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



                              FINANCIAL STATEMENTS

                           DECEMBER 31, 2004 AND 2003



                         FORMING A PART OF ANNUAL REPORT
                 PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934


                               SWISS MEDICA, INC.




                                      F-1

<PAGE>

                               SWISS MEDICA, INC.

                          INDEX TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------

                                                                         PAGE
                                                                         ----

   Report of Independent Registered Certified Public Accounting Firm      F-3
   Financial Statements
           Balance Sheets at December 31, 2004 and 2003                   F-4
           Statements of Losses for the years ended
           December 31, 2004 and 2003                                     F-5
           Statements of Deficiency in Stockholders' Equity for the
           years ended December 31, 2004 and 2003                         F-6
           Statements of Cash Flows for the years ended
           December 31, 2004 and 2003                                     F-7
           Notes to Financial Statements                              F-8 - F-20




                                      F-2

<PAGE>

                    RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                          CERTIFIED PUBLIC ACCOUNTANTS


        REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM


Board of Directors
Swiss Medica, Inc.
Toronto, Ontario


         We  have  audited  the  balance  sheets  of  Swiss  Medica,  Inc.  (the
"Company")  as of  December  31,  2004 and 2003 and the  related  statements  of
losses,  deficiency in stockholders'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to  express  an  opinion  on the  financial
statements based upon our audits.

         We  conducted  our audits in  accordance  with  standards of the Public
Company Accounting  Oversight Board (United States of America).  Those standards
require that we plan and perform the audits 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 our
audits provide 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 the Company at
December 31, 2004 and 2003 and the results of its  operations and its cash flows
for the years then ended,  in conformity with  accounting  principles  generally
accepted in the United States of America.

         The accompanying  financial statements have been prepared assuming that
the  Company  will  continue as a going  concern.  As  discussed  in Note N, the
Company is  experiencing  difficulty in generating  sufficient cash flow to meet
its obligations and sustain its operations, which raises substantial doubt about
its  ability to  continue as a going  concern.  Management's  plans in regard to
these matters are also described in Note N. The  accompanying  statements do not
include any adjustments that might result from the outcome of this uncertainty.


                                     /s/RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                     -------------------------------------------
                                        Russell Bedford Stefanou Mirchandani LLP
                                        Certified Public Accountants
McLean, Virginia
February 23, 2005


                                      F-3

<PAGE>

                               SWISS MEDICA, INC.
                                 BALANCE SHEETS
                           DECEMBER 31, 2004 AND 2003

                                                        2004            2003
                                                        ----            ----
ASSETS:
Cash and cash equivalents                          $  1,630,559    $      1,471
Accounts receivable, net of allowance for
  discounts of $12,763 and $18,364 at
  December 31, 2004 and December 31, 2003,
  respectively                                           60,412         103,017
Inventories (Note B)                                    616,585           8,057
Prepaid expenses and deposits                            75,498          86,310
                                                   ------------    ------------
Total current assets                                  2,383,054         198,855

Property and equipment:: (Note C and D)
Property and equipment:                                  54,382          48,751
Less: accumulated depreciation                           16,125           6,094
                                                   ------------    ------------
Total property and equipment                             38,257          42,657

Other assets: (Note C)

Intangible assets, net of accumulated amortization
  of $301,763 and $116,062 at December 31, 2004
  and December 31, 2003, respectively                   457,987         643,688
Other receivable                                         22,798              --
                                                   ------------    ------------
Total other assets                                      480,785         643,688

Total assets                                       $  2,902,096    $    885,200
                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Cash disbursed in excess of available funds        $         --    $      3,102
Accounts payable and accrued liabilities (Note E)     1,751,114         184,585
Convertible Notes Payable (Note F)                      500,000              --
Notes payable (Note F)                                  342,000              --
Other advances (Note G)                                      --         126,527
                                                   ------------    ------------
Total current liabilities                             2,593,114         314,214

Commitments and contingencies (Note L)                       --              --

Stockholders' equity:
Preferred stock, par value $.001 per share;
  10,000,000 shares authorized; none issued
  at December 31, 2004 and December 31,
  2003 (Note H)                                              --              --
Class A Common stock, par value $ .001 per
  share; 100,000,000 shares authorized;
  66,493,654 and 26,962,530 shares issued
  at December 31, 2004 and December 31, 2003,
  respectively (Note H)                                  66,494          26,963
Class B Common stock, par value $.001 per
  share; 50,000,000 shares authorized;
  2,000,000 shares issued at December 31,
  2004 and December 31, 2003 (Note H)                     2,000           2,000
Additional paid-in capital                           26,628,844      19,679,507
Accumulated deficit                                 (26,388,356)    (19,137,484)
                                                   ------------    ------------
Total stockholders' equity                              308,982         570,986
                                                   ------------    ------------
Total liabilities and stockholders' equity         $  2,902,096    $    885,200
                                                   ============    ============

                 See accompanying notes to financial statements

                                      F-4

<PAGE>

                               SWISS MEDICA, INC.
                              STATEMENTS OF LOSSES
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                        2004            2003
                                                   ------------    ------------
Revenue:
Sales, net                                         $    626,569    $    104,091

Cost of Sales                                           119,798          16,991
                                                   ------------    ------------

Gross Profit                                            506,771          87,100

Operating Expenses:

Research and Development                                  2,602       3,725,826

Selling, General and Administrative expenses          7,553,742      10,220,367

Depreciation and Amortization (Note C and D)            195,732         122,157
                                                   ------------    ------------

Total Operating Expenses                              7,752,076      14,068,350


Loss from Operations                                 (7,245,305)    (13,981,250)


Interest Expense                                         (5,567)         (7,250)

Provision for Income Taxes                                   --              --
                                                   ------------    ------------

Net Loss                                           $ (7,250,872)   $(13,988,500)
                                                   ============    ============

Loss per common share (basic and assuming
  dilution) (Note K)                               $      (0.14)   $      (0.88)
                                                   ============    ============


Weighted average common shares outstanding           51,000,505      15,936,124
                                                   ============    ============



                 See accompanying notes to financial statements

                                      F-5

<PAGE>

SWISS MEDICA, INC.

               STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                           Class A Common Stock    Class B Common Stock
                                         -----------------------  ---------------------    Additional
                                                                                            Paid-in      Accumulated
                                            Shares       Amount     Shares      Amount      Capital         Deficit        Total
                                         ------------  ---------  ----------  ---------   -----------   ------------   ------------
<S>                                        <C>         <C>         <C>        <C>         <C>           <C>            <C>
Balance at January 1, 2003                    278,180  $     278          --  $      --   $ 4,210,402   $ (5,148,984)  $   (938,304)
Common shares issued in exchange for
  services rendered                        15,999,431     15,999          --         --     9,673,372             --      9,689,371
Common shares issued in exchange for
  previously incurred debt                  2,000,000      2,000   2,000,000      2,000       762,285             --        766,285
Common shares issued in exchange for
  cash, net of costs and fees               1,773,919      1,774          --         --       431,673             --        433,447
Common shares issued in exchange for
  prepaid rent                                161,000        161          --         --        31,839             --         32,000
Common shares issued in connection with
  acquisition of General Cosmetics
Corp.'s assets (Note C)                     6,750,000      6,750          --         --     4,525,877             --      4,532,627
Warrants issued to consultants in
  exchange for services rendered (Note I)          --         --          --         --        44,060             --         44,060
Net loss                                           --         --          --         --            --    (13,988,500)   (13,988,500)
                                         ------------  ---------  ----------  ---------   -----------   ------------   ------------
BALANCE AT DECEMBER 31, 2003               26,962,530  $  26,963   2,000,000  $   2,000   $19,679,507   $(19,137,484)  $    570,986
                                         ============  =========  ==========  =========   ===========   ============   ============

Common shares issued in exchange for
  services rendered and prepaid expenses   15,325,504     15,325          --         --     2,679,981             --      2,695,306
Common shares issued in exchange for
  cash, net of costs and fees              19,490,000     19,490          --         --     2,867,010             --      2,886,500
Common shares issued in exchange for
  warrants exercised, net of costs and
  fees                                      4,673,750      4,674          --         --     1,107,514             --      1,112,188
Common shares issued in exchange for
  expenses paid by shareholders                41,870         42          --         --         7,332             --          7,374
Warrants issued to consultants in
  exchange for services rendered (Note I)          --         --          --         --       287,500             --        287,500
Net loss                                           --         --          --         --            --     (7,250,872)    (7,250,872)
                                         ------------  ---------  ----------  ---------   -----------   ------------   ------------
BALANCE AT DECEMBER 31, 2004               66,493,654  $  66,494   2,000,000  $   2,000   $26,628,844   $(26,388,356)  $    308,982
                                         ============  =========  ==========  =========   ===========   ============   ============
</TABLE>

                 See accompanying notes to financial statements

                                      F-6

<PAGE>

                               SWISS MEDICA, INC.
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                                    2004             2003
                                                                                ------------    ------------
<S>                                                                             <C>             <C>
Cash flows from operating activities:
Net loss                                                                        $ (7,250,872)   $(13,988,500)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Provision for sales returns and allowances                                            (5,601)             --
Common stock issued in exchange for services rendered (Note H)                     2,665,306       9,689,371
Common stock issued in exchange for expenses paid by shareholders (Note H)             7,374
Common stock issued in exchange for research and development costs (Note C)               --       3,724,125
Stock warrants issued in exchange for services (Note I)                              287,500          44,060
Expenses prepaid in prior year                                                        85,393              --
Depreciation and amortization (Note C and D)                                         195,732         122,157
(Increase) decrease in accounts receivable                                            48,206        (103,017)
(Increase) decrease in inventories                                                  (608,528)         (8,057)
(Increase) decrease in deposits and other assets                                     (67,379)        (38,519)
Increase (decrease) in cash disbursed in excess of available funds                    (3,102)          3,102
Increase (decrease) in accounts payable and accrued liabilities                    1,566,528         (22,812)
                                                                                ------------    ------------
Net cash (used in) operating activities                                           (3,079,443)       (578,090)

Cash flows from investing activities:

Purchase of property and equipment (Note D)                                           (5,630)             --
                                                                                ------------    ------------

Net cash (used in) investing activities                                               (5,630)             --
Cash flows from financing activities:
Proceeds from related party advances                                                      --          19,489
Proceeds from notes payable (Note F)                                                 342,000              --
Proceeds from convertible debentures (Note F)                                        500,000              --
Proceeds from sale of common stock, net of costs (Note H)                          3,998,688         433,447
Proceeds from (repayments to) third party advances (Note G)                         (126,527)        126,527
                                                                                ------------    ------------
Net cash provided by investing activities                                          4,714,161         579,463

Net increase in cash and cash equivalents                                          1,629,088           1,373
Cash and cash equivalents at the beginning of the year                                 1,471              98
                                                                                ------------    ------------
Cash and cash equivalents at the end of the year                                $  1,630,559    $      1,471
                                                                                ============    ============

Supplemental Disclosures of Cash Flow Information:
Interest paid in cash                                                           $         --    $         --
Taxes paid in cash                                                                        --              --
Issuance of common stock in exchange for services (Note H)                         2,665,306       9,689,371
Issuance of common stock in exchange for expenses paid by shareholders
  (Note H)                                                                             7,374              --
Issuance of Class B common stock in exchange for previously incurred debt
  (Note H)                                                                                --          20,000
Issuance of Class A common stock in exchange for previously incurred debt
  (Note H)                                                                                --         746,285
Common stock issued in exchange for research and development costs (Note C)               --       3,724,125
Common stock issued in exchange for prepaid rent (Note H)                                 --          32,000
Common stock issued in exchange for office equipment (Note C)                             --          48,751
Common stock issued in exchange for intangible assets (Note C)                            --         759,751
Common stock issued in exchange for prepaid service fees (Note H)                     30,000              --
Expenses pre-paid in prior year                                                       85,393              --
Issuance of stock warrants in exchange for services (Note I)                         287,500          44,060
</TABLE>

                 See accompanying notes to financial statements

                                       F-7
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows.

Business Operations

Swiss Medica, Inc., formerly Global Path Incorporated (the "Company") was
reincorporated under the laws of the State of Delaware in September 2001. The
Company is engaged in the business of marketing and distributing proprietary
bioscience health products, with the focus on chronic ailments.

Cash and Cash Equivalents

For purposes of the Statements of Cash Flows, the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or less
to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. When retired or otherwise disposed,
the related carrying value and accumulated depreciation are removed from the
respective accounts and the net difference less any amount realized from
disposition, is reflected in earnings. For financial statement purposes,
property and equipment are depreciated using the straight-line method over their
estimated useful lives of the assets.

LONG-LIVED ASSETS

The Company has adopted Statement of Financial Accounting Standards No. 144
("SFAS 144"). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should an impairment in value be indicated,
the carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to sell.

INCOME TAXES

THE COMPANY HAS IMPLEMENTED THE PROVISIONS ON STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS NO. 109, "ACCOUNTING FOR INCOME TAXES" ("SFAS 109"). SFAS 109 REQUIRES
THAT INCOME TAX ACCOUNTS BE COMPUTED USING THE LIABILITY METHOD. DEFERRED TAXES
ARE DETERMINED BASED UPON THE ESTIMATED FUTURE TAX EFFECTS OF DIFFERENCES
BETWEEN THE FINANCIAL REPORTING AND TAX REPORTING BASES OF ASSETS AND
LIABILITIES GIVEN THE PROVISIONS OF CURRENTLY ENACTED TAX LAWS.

NET EARNINGS (LOSSES) PER COMMON SHARE

THE COMPANY COMPUTES EARNINGS (LOSSES) PER SHARE UNDER STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO. 128, "EARNINGS PER SHARE" ("SFAS 128"). NET EARNINGS
(LOSSES) PER COMMON SHARE IS COMPUTED BY DIVIDING NET INCOME (LOSS) BY THE
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND DILUTIVE COMMON STOCK
EQUIVALENTS OUTSTANDING DURING THE YEAR. DILUTIVE COMMON STOCK EQUIVALENTS
CONSIST OF SHARES ISSUABLE UPON CONVERSION OF CONVERTIBLE PREFERRED SHARES AND
THE EXERCISE OF THE COMPANY'S STOCK OPTIONS AND WARRANTS (CALCULATED USING THE
TREASURY STOCK METHOD).

                                       F-8
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES REQUIRES MANAGEMENT TO MAKE ESTIMATES AND ASSUMPTIONS THAT
AFFECT CERTAIN REPORTED AMOUNTS AND DISCLOSURES. ACCORDINGLY, ACTUAL RESULTS
COULD DIFFER FROM THOSE ESTIMATES.

REVENUE RECOGNITION

For revenue from product sales, the Company follows a policy of recognizing
revenues as products are shipped. The THE COMPANY RECOGNIZES REVENUE IN
ACCORDANCE WITH STAFF ACCOUNTING BULLETIN NO. 104, REVENUE RECOGNITION
("SAB104"), WHICH SUPERCEDED STAFF ACCOUNTING BULLETIN NO. 101, REVENUE
RECOGNITION IN FINANCIAL STATEMENTS ("SAB101"). SAB 101 REQUIRES THAT FOUR BASIC
CRITERIA MUST BE MET BEFORE REVENUE CAN BE RECOGNIZED: (1) PERSUASIVE EVIDENCE
OF AN ARRANGEMENT EXISTS; (2) DELIVERY HAS OCCURRED; (3) THE SELLING PRICE IS
FIXED AND DETERMINABLE; AND (4) COLLECTIBILITY IS REASONABLY ASSURED.
DETERMINATION OF CRITERIA (3) AND (4) ARE BASED ON MANAGEMENT'S JUDGMENTS
REGARDING THE FIXED NATURE OF THE SELLING PRICES OF THE PRODUCTS DELIVERED AND
THE COLLECTIBILITY OF THOSE AMOUNTS. PROVISIONS FOR DISCOUNTS AND REBATES TO
CUSTOMERS, ESTIMATED RETURNS AND ALLOWANCES, AND OTHER ADJUSTMENTS ARE PROVIDED
FOR IN THE SAME PERIOD THE RELATED SALES ARE RECORDED. THE COMPANY DEFERS ANY
REVENUE FOR WHICH THE PRODUCT HAS NOT BEEN DELIVERED OR IS SUBJECT TO REFUND
UNTIL SUCH TIME THAT THE COMPANY AND THE CUSTOMER JOINTLY DETERMINE THAT THE
PRODUCT HAS BEEN DELIVERED OR NO REFUND WILL BE REQUIRED.

SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's consolidated financial position and results of operations was not
significant.

Advertising

The Company follows the policy of charging the costs of advertising to expenses
as incurred. The Company incurred advertising costs of $809,789 and $28,938 for
the years ended December 31, 2004 and 2003, respectively.

RESEARCH AND DEVELOPMENT

The Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs."
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. The Company incurred
expenditures of $2,601 and $3,725,826 on research and product development for
the years ended December 31, 2004 and 2003, respectively (Note C).

FOREIGN CURRENCY TRANSLATION

The Company translates the foreign currency financial statements in accordance
with the requirements of Statement of Financial Accounting Standards No. 52,
"Foreign Currency Translation." Assets and liabilities are translated at current
exchange rates in effect during the period. Resulting translation adjustments
are recorded as a separate component in stockholder's equity. Foreign currency
transaction gains and losses are included in the statement of operations.

                                       F-9
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Liquidity

As shown in the accompanying financial statements, the Company incurred a net
loss of $7,250,872 and $13,988,500 for the year ended December 31, 2004 and
2003, respectively. The Company's current liabilities exceeded its current
assets by $210,060 as of December 31, 2004.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents
and related party receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of the FDIC insurance limit. The Company periodically reviews its
trade receivables in determining its allowance for doubtful accounts. The
allowance for doubtful accounts was $12,763 and $18,364 at December 31, 2004 and
2003, respectively.

COMPREHENSIVE INCOME (LOSS)

The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income". SFAS No. 130 establishes standards for the
reporting and displaying of comprehensive income and its components.
Comprehensive income is defined as the change in equity of a business during a
period from transactions and other events and circumstances from non-owner
sources. It includes all changes in equity during a period except those
resulting from investments by owners and distributions to owners. SFAS No. 130
requires other comprehensive income (loss) to include foreign currency
translation adjustments and unrealized gains and losses on available-for-sale
securities.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments," requires disclosure of the fair value of
certain financial instruments. The carrying value of cash and cash equivalents,
accounts receivable, accounts payable and short-term borrowings, as reflected in
the balance sheets, approximate fair value because of the short-term maturity of
these instruments.

STOCK BASED COMPENSATION

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 ("SFAS No. 148"), "Accounting for Stock-Based Compensation-Transition
and Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has chosen to continue to account for stock-based
compensation using the intrinsic value method prescribed in APB Opinion No. 25
and related interpretations. Accordingly, compensation expense for stock options
is measured as the excess, if any, of the fair market value of the Company's
stock at the date of the grant over the exercise price of the related option.
The Company has adopted the annual disclosure provisions of SFAS No. 148 in its
financial reports for the year ended December 31, 2004 and 2003 and will adopt
the interim disclosure provisions for its financial reports for the subsequent
periods. The Company has no awards of stock-based employee compensation
outstanding at December 31, 2004.

                                      F-10
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Segment Information

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131") establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein materially represents all of the financial information related to the
Company's principal operating segment.

New Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151, Inventory Costs-- an amendment of ARB No. 43, Chapter 4. This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that ". . . under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and rehandling costs may
be so abnormal as to require treatment as current period charges. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on the
Company.

In December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. with earlier application encouraged.
The Company does not anticipate that the implementation of this standard will
have a material impact on its financial position, results of operations or cash
flows.

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
Share-Based Payment ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
123R are effective as of the first interim period that begins after June 15,
2005. Accordingly, the Company will implement the revised standard in the third
quarter of fiscal year 2005. Currently, the Company accounts for its share-based
payment transactions under the provisions of APB 25, which does not necessarily
require the recognition of compensation cost in the financial statements.
Management is assessing the implications of this revised standard, which may
materially impact the Company's results of operations in the third quarter of
fiscal year 2005 and thereafter.

                                      F-11
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Pronouncements (Continued)

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions (" SFAS 153"). This statement amends APB
Opinion 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for nonmonetary transactions in fiscal periods that begin after June
15, 2005. The Company does not anticipate that the implementation of this
standard will have a material impact on its financial position, results of
operations or cash flows.

RECLASSIFICATIONS

CERTAIN RECLASSIFICATIONS HAVE BEEN MADE IN PRIOR YEAR'S FINANCIAL STATEMENTS TO
CONFORM TO CLASSIFICATIONS USED IN THE CURRENT YEAR.

NOTE B - INVENTORIES

Inventories are stated at the lower of cost or market determined by the
first-in, first-out (FIFO) method. Inventories primarily consist of cosmetic
oils and packaging materials. Components of inventories as of December 31, 2004
and 2003 are as follows:

                                                  2004              2003
                                                  ----              ----
         Raw Materials                         $   172,652       $   2,893
         Finished Goods                            443,933           5,164
                                               -----------       ---------
                                               $   616,585       $   8,057
                                               ===========       =========

NOTE C - ACQUISITION

On May 20, 2003 the Company acquired equipment, nine patented bioscience
products and related intangible assets from General Cosmetics Corporation.

In consideration for the acquisition of the tangible (see Note D) and intangible
assets, the Company issued a total of 6,750,000 shares of restricted common
stock. The stock that was issued in this transaction was valued at 85 percent of
its average closing price ten days prior to and after May 21, 2003. The cost of
the tangible and intangible assets acquired is the fair value of the Company's
common stock issued of $4,532,627.

In connection with the acquisition of the tangible and intangible assets, the
Company acquired $3,724,125 of research and development assets which were
charged to operations during the year ended December 31, 2003 and are included
in the accompanying statement of losses as research and development
expenditures.

                                      F-12
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003


NOTE C - ACQUISITION (Continued)

INTANGIBLE ASSETS

The cost to acquire the intangible assets has been preliminarily allocated to
the assets acquired according to estimated fair values and is subject to
adjustment when additional information concerning asset valuations is finalized.

The Company has adopted SFAS No. 142, Goodwill and Other Intangible Assets,
whereby the Company periodically test its intangible assets for impairment. On
an annual basis, and when there is reason to suspect that their values have been
diminished or impaired, these assets are tested for impairment, and write-downs
will be included in results from operations.

The intangible assets acquired and carrying value at December 31, 2003 are:

<TABLE>
<CAPTION>
                                     Gross                                         Weighted Average
                                   Carrying   Accumulated               Residual     Amortization
                                    Amount   Amortization     Net         Value     Period (Years)
                                  ---------   ---------    ---------   ---------   ----------------
<S>                               <C>         <C>          <C>         <C>                <C>
Amortizable Intangible Assets:
Patents                           $ 563,250   $ (70,406)   $ 492,844   $      --          5.0
Customer Mailing Lists               30,000      (3,750)      26,250          --          5.0
Trademarks                           45,000      (5,625)      39,375          --          5.0
Non-compete agreements              112,500     (35,156)      77,344          --          2.0
Other                                 9,000      (1,125)       7,875          --          5.0
                                  ---------   ---------    ---------   ---------       ------
Total                             $ 759,750   $(116,062)   $ 643,688   $      --          4.6
                                  =========   =========    =========   =========       ======
</TABLE>

The intangible assets acquired and carrying value at December 31, 2004 are:

<TABLE>
<CAPTION>
                                     Gross                                         Weighted Average
                                   Carrying   Accumulated               Residual     Amortization
                                    Amount   Amortization     Net         Value     Period (Years)
                                  ---------   ---------    ---------   ---------   ----------------
<S>                               <C>         <C>          <C>         <C>                <C>
Amortizable Intangible Assets:
Patents                           $ 563,250   $(183,056)   $ 380,194   $      --          5.0
Customer Mailing Lists               30,000      (9,750)      20,250          --          5.0
Trademarks                           45,000     (14,625)      30,375          --          5.0
Non-compete agreements              112,500     (91,406)      21,094          --          2.0
Other                                 9,000      (2,925)       6,075          --          5.0
                                  ---------   ---------    ---------   ---------       ------
Total                             $ 759,750   $(301,762)   $ 457,988   $      --          4.6
                                  =========   =========    =========   =========       ======
</TABLE>

Total amortization expense charged to operations for the year ended December 31,
2004 and 2003 were $185,701 and $116,063.

Estimated amortization expense as of December 31, 2004 is as follows:

       2005                             $ 150,544
       2006                               129,450
       2007                               129,450
       2008                                48,544
                                        ---------
       Total                            $ 457,988
                                        =========

NOTE D - PROPERTY AND EQUIPMENT

In connection with the acquisition of assets from General Cosmetics Corporation
in May 2003, the Company's acquired a total of $48,751 of property and equipment
(Note C). During the year ended December 31, 2004, the Company also acquired
furniture and equipment for its new facilities in Texas. Property and equipment
are depreciated over their estimated useful life of 5 years. Property and
equipment at December 31, 2004 and 2003 consists of the following:

                                               2004               2003
                                               ----               ----
  Office furniture and equipment            $  54,382          $  48,751
  Accumulated depreciation                    (16,125)            (6,094)
                                            ---------          ---------
                                            $  38,257          $  42,657
                                            =========          =========

Depreciation expense included as a charge to operations amounted to $10,031 and
$6,094 for the year ended December 31, 2004 and 2003, respectively.

                                      F-13

<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE E - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at December 31, 2004 and 2003 are as
follows:
                                           2004            2003
                                           ----            ----
Accounts payable                        $  529,694      $ 86,122
Other accrued expenses                   1,191,420        98,463
Litigation (Note L)                         30,000            --
                                        ----------      --------
  Total                                 $1,751,114      $184,585
                                        ==========      ========

NOTE F - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Notes Payable

On December 6 and 7, 2004, the Company entered into a Security Agreement and
Security Agreement Amendment (together the "Agreement") with Strategic Equity
Corp. ("Strategic Equity") for the sum of $600,000 Canadian Dollar (CAD) of
loans, in two equal installments of $300,000CAD with the first installment being
delivered to the Company on or before December 7, 2004, and the second
installment being delivered to the Company on or before January 3, 2005, and
additional $105,000 USD of loan being delivered to the Company on or before
December 7, 2004. Pursuant to the Agreement, the Company issued to Strategic
Equity warrants to purchase an aggregate of 350,000 shares of the Company's
Class A common stock at $0.42 per share, exercisable at any time after the
issuance and expiring on the day prior to the 5th anniversary of the warrant
issue date.

As of December 31, 2004, the Company issued to Strategic Equity two promissory
notes in the amount of $300,000 CAD (approximately $237,000 USD) and $105,000
USD, respectively. The promissory note in the amount of $300,000 CAD is monthly
interest payable only at 24% per annum commencing January 5, 2005, with the
maturity date on June 5, 2005. The promissory note in the amount of $105,000 USD
is non-interest bearing, with $59,167 of principal due and payable on or before
January 5, 2005, $9,167 on or before February 5, 2005, $9,167 on or before March
5, 2005, $9,167 on or before April 5, 2005, $9,167 on or before May 5, 2005, and
$9,165 on or before June 5, 2005. The promissory notes are secured by the
Company's assets.

Subsequent to the date of financial statements, the Company received the second
installment of $300,000 CAD and issued to Strategic Equity a promissory note in
the amount of $300,000 CAD with the same repayment terms and arrangements as the
$300,000 CAD of promissory note issued in December 2004.

Convertible Notes Payable

On December 23, 2004, the Company entered into a Securities Purchase Agreement
(the "Securities Purchase Agreement") with Highgate House, LP ("Highgate") and
Montgomery Equity Partners, LP ("Montgomery"). Pursuant to the Securities
Purchase Agreement, the Company shall issue convertible-redeemable debenture to
Highgate and Montgomery in the original principal amount of $1,000,000. The
debentures accrue interest at 7% per annum, with a maturity date of 210 days
from the issuance ("Maturity Date"). Highgate and Montgomery delivered $500,000
to the Company as of December 31, 2004, and the remaining $500,000 shall be
delivered to the Company within five days of the Company's filing of a
registration statement related to the shares issueable upon conversion of the
convertible debentures. The debentures may be redeemed by the Company at any
time before the Maturity Date, in whole or in part. The redemption price equals
to 125% of the amount redeemed plus accrued interest. The debentures are
convertible at the holder's option, after 180 days from December 23, 2004, up to
maturity at a conversion price equal to the lower of (i) $0.372 or (ii) 80% of
the lowest closing bid price of the Company's common stock for the five trading
days immediately preceding the conversion date.


                                      F-14
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE F - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE (CONTINUED)

Convertible Notes Payable (Continued)

As of December 31, 2004, Highgate and Montgomery each received from the Company
a promissory note in the amount of $250,000, and 250,000 warrants each to
purchase the Company's common stock at the lower of (i) $0.248 or (ii) 80% of
the closing bid price of common stock on the date the registration statement
becomes effective. The warrants expire three years from December 23, 2004. As of
December 31, 2004, the Company's management has approved to terminate the
Securities Purchase Agreement with Highgate and Montgomery, and a Termination
Agreement was entered into subsequent to the date of financial statements.
Pursuant to the Termination Agreement, the Company redeemed the aggregate of
$500,000 convertible debentures for $625,000 plus accrued interest in January
2005. Highgate and Montgomery still have the right to exercise the aggregate of
500,000 warrants, however, the exercise price of the warrants was re-priced to
$0.40 per share. The Company agreed to issue an aggregate of 250,000 shares of
its common stock to Highgate and Montgomery to compensate the increase in the
exercise price of warrants issued

The Company accounted for the note payable and stock purchase rights in
accordance with APB No. 14, "Accounting for Convertible Debt and Debt Issued
with Stock Purchase Warrants" ("APB 14"). The conversion price exceeded the fair
value of the company's common stock at the time the conversion option was
granted and at December 31, 2004. Accordingly, there was no imbedded beneficial
conversion feature in connection with the issuance of the convertible
debentures. At December 31, 2004, the Company had accrued $125,000 of financing
charges in connection with the redemption of the convertible debentures. The
Company also has included in its accrued liabilities the 250,000 shares of
common stock to be issued, valued at the fair market value of the Company's
common stock at the date the management proved the Termination Agreement.

NOTE G - OTHER ADVANCES

During the year ended December 31, 2003, sophisticated investors of the Company
advanced funds to the Company for working capital purposes. Total proceeds the
Company received are $76,627, net of repayments. No formal repayment terms or
arrangements exist. Additionally, the Company entered into an informal agreement
with an investor whereby the investor advanced $50,000 of funds to the Company
for working capital purposes, at interest rate of 18% per annum. No formal
repayment terms or arrangements exist. Total advances from unrelated parties are
$126,527 as of December 31, 2003. The Company has repaid in full the advances
from investors during the year ended December 31, 2004.

NOTE H - CAPITAL STOCK

The Company is authorized to issue 10,000,000 shares of preferred stock with par
value $.001 per share, 100,000,000 shares of Class A common stock with par value
of $.001 per share, and 50,000,000 shares of Class B common stock with par value
$.001 per share. On November 27, 2002, the Company effected a "one-for-one
hundred" reverse stock split of its outstanding shares of Class A common stock.
The authorized shares remain unchanged. All references in the financial
statements and notes to financial statements, numbers of shares and share
amounts have been retroactively restated to reflect the reverse split.

As of December 31, 2004 and 2003, the Company has no preferred stock issued and
outstanding. The Company has 66,493,654 and 26,962,530 shares of Class A common
stock issued and outstanding at December 31, 2004 and 2003, respectively. The
Company also has issued and outstanding 2,000,000 shares of Class B common stock
at December 31, 2004 and 2003.

                                      F-15

<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE H - CAPITAL STOCK (CONTINUED)

For the year ended December 31, 2003, the Company issued an aggregate of
15,999,431 shares of Class A common stock to consultants for services rendered
in the amount of $9,689,371. All valuations of common stock issued for services
were based upon the value of the services rendered, which did not differ
materially from the fair value of the Company's common stock during the period
the services were rendered. The Company also issued an aggregate of 2,000,000
shares of Class A common stock and 2,000,000 shares of Class B common stock in
exchange for $766,285 of previously incurred debt. Additionally, the Company
issued an aggregate of 1,773,919 shares of Class A common stock in exchange for
$433,447 of proceeds, net of costs and fees. The Company issued an aggregate of
161,000 shares in exchange for $32,000 of prepaid rent. The Company issued to
General Cosmetics Corporation an aggregate of 6,750,000 shares of Class A common
stock in connection with the acquisition of $48,751 of equipment, $759,751 of
intangible assets, and $3,724,125 of research and development costs (Note C).

For the year ended December 31, 2004, the Company issued an aggregate of
15,325,504 shares of Class A common stock to attorneys and consultants for
services rendered in the amount of $2,665,306 and prepaid service fees of
$30,000. All valuations of common stock issued for services were based upon the
value of the services rendered, which did not differ materially from the fair
value of the Company's common stock during the period the services were
rendered. The Company also issued an aggregate of 19,490,000 shares of Class A
common stock in exchange for $2,886,500 of proceeds, net of costs and fees. The
Company issued an aggregate of 4,673,750 shares of Class A common stock in
exchange for warrants exercised (Note I) at $0.16 to $0.25 per share for a total
proceeds of $1,112,188, net of costs and fees.The Company issued an aggregate of
41,870 shares of Class A common stock in exchange for $7,374 of expenses paid by
shareholders.

NOTE I - WARRANTS

The following table summarizes the changes in warrants outstanding and the
related prices for the shares of the Company's common stock issued to the
Company consultants. These warrants were granted in lieu of cash compensation
for services performed to a non-employee, each warrant to purchase one share of
the Company's Class A common stock.

             Warrants Outstanding                       Warrants Exercisable
             --------------------                       --------------------
                         Weighted
                         Average      Weighted
                        Remaining      Average
Exercise    Number     Contractual    Exercise       Number     Weighted Average
 Prices   Outstanding  Life (Years)     Price     Exercisable    Exercise Price
 ------   -----------  ------------     -----     -----------    --------------

$ 75.00        8,675       2.01       $   75.00         8,675       $   75.00
   0.75      100,000       0.91            0.75       100,000            0.75
   0.45      100,000       0.91            0.45       100,000            0.45
   0.16      937,500       2.25            0.16       937,500            0.16
   0.25    9,522,500       0.60            0.25     9,522,500            0.25
   0.30    7,906,250       2.25            0.30     7,906,250            0.30
   0.40    8,406,250       2.29            0.40     8,406,250            0.40
   0.42      350,000       4.93            0.42       350,000            0.42
         -----------      -----       ---------    ----------       ---------
         27,331,175        1.71       $    0.34    27,331,175       $    0.34
         ===========      =====       =========    ==========       =========


                                      F-16

<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE I - WARRANTS (CONTINUED)

Transactions involving warrants issued to non-employees are summarized as
follows:

                                                  Number of     Weighted Average
                                                  Warrants      Price Per Share
                                                 -----------    ----------------
       Outstanding at December 31, 2002                8,675      $   75.00
          Granted                                    200,000           0.60
          Exercised                                       --             --
          Canceled or expired                             --             --
                                                 -----------      ---------
       Outstanding at December 31, 2003              208,675      $    3.69
                                                 ===========      =========
          Granted                                 31,796,250           0.30
          Exercised (Note H)                      (4,673,750)          0.24
          Canceled or expired                             --             --
                                                 -----------      ---------
       Outstanding at December 31, 2004           27,331,175      $    0.34
                                                 ===========      =========

The weighted-average fair value of warrants granted to non-employees during the
years ended December 31, 2004 and 2003 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:

<TABLE>
<CAPTION>
                                                              2004               2003
                                                              ----               ----
<S>                                                     <C>                        <C>
       Significant assumptions (weighted-average):
           Risk-free interest rate at grant                         1.25%             1.63%
       date
           Expected stock price volatility                            33%               84%
           Expected dividend payout                                     -                 -
           Expected warrant life-years (a)                0.78 to 5 years           2 years
</TABLE>

         (a)The expected warrant life is based on contractual expiration dates.

The Company granted to note holders an aggregate of 850,000 non-compensatory
warrants in connection with issuing promissory notes in December 2004 (Note F).
The Company granted an aggregate of 2,143,750 and 200,000 compensatory warrants
to an attorney and consultants in exchange for services during the year ended
December 31, 2004 and 2003, respectively. The amount of the expense charged to
operations in connection with granting the warrants was $287,500 and $44,060 for
the year ended December 31, 2004 and 2003, respectively. The Company granted an
aggregate of 28,802,500 non-compensatory warrants to investors in connection
with its private placement during the year ended December 31, 2004. Those
warrants had no intrinsic value at the time the warrants were granted.


NOTE J - INCOME TAXES

Statement of Financial Accounting Standards No. 109 requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statement or tax returns. Under
this method, deferred tax liabilities and assets are determined based on the
difference between financial statements and tax bases of assets and liabilities
using enacted tax rates in effect for the year in which the differences are
expected to reverse. Temporary differences between income reported for financial
reporting purposes and income tax purposes are insignificant.

For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $26,300,000 which expires through 2024, subject to
limitations of Section 382 of the Internal Revenue Code, as amended. The
deferred tax asset related to the carryforward is approximately $9,200,000. The
Company has provided a valuation reserve against the full amount of the net
operating loss benefit, because in the opinion of management based upon the
earning history of the Company, it is more likely than not that the benefits
will not be realized.

                                      F-17

<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE J - INCOME TAXES (CONTINUED)

Components of deferred tax assets as of December 31, 2004 are as follows:

             Non current:
                Net operating loss carryforward       $  9,200,000

                Valuation allowance                    (9,200,000)
                                                      ------------
                Net deferred tax asset                $         --
                                                      ============

NOTE K - LOSSES PER COMMON SHARE

The following table presents the computation of basic and diluted loss per
share:

<TABLE>
<CAPTION>
                                                                  2004              2003
                                                                  ----              ----
<S>                                                           <C>              <C>
  Net loss available for common shareholders                  $ (7,250,872)    $ (13,988,500)
                                                              =============    ==============
  Basic and fully diluted loss per share                      $      (0.14)         $  (0.88)
                                                              =============    ==============
  Weighted average common shares outstanding, as adjusted       51,000,505        15,936,124
                                                              =============    ==============
</TABLE>

NET LOSS PER SHARE IS BASED UPON THE WEIGHTED AVERAGE OF SHARES OF COMMON STOCK
OUTSTANDING. IN NOVEMBER 2002 A ONE (1) FOR ONE HUNDRED (100) REVERSE STOCK
SPLIT OF THE COMPANY'S COMMON STOCK WAS EFFECTED (SEE NOTE H). ACCORDINGLY, ALL
HISTORICAL WEIGHTED AVERAGE SHARE AND PER SHARE AMOUNTS HAVE BEEN RESTATED TO
REFLECT THE REVERSE STOCK SPLIT.

NOTE L - COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases office and warehouse facilities on a month-to-month basis in
Dallas, Texas. Monthly rents under the lease are $400. The Company leases office
space in Toronto, Canada on a quarterly basis at approximately $2,500 per month.
The Company leases office space and warehouse facilities Vancouver, Canada, on a
two-year lease expiring July 2006, at approximately $1,450 per month.

Rental expenses charged to operations during the year ended December 31, 2004
and 2003 were $54,667 and $22,222, respectively. Commitments for minimum rentals
under non cancelable leases at December 31, 2004 are as follows:

         2005                               $  17,500
         2006                                  10,208
                                            ---------
         Total                              $  27,708
                                            =========

CONSULTING AGREEMENTS

The Company has consulting agreements with outside contractors to provide
marketing and financial advisory services. The Agreements are generally for a
term of 12 months from inception and renewable automatically from year to year
unless either the Company or Consultant terminates such engagement by written
notice.

                                      F-18
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE L - COMMITMENTS AND CONTINGENCIES (CONTINUED)

LITIGATION

During the year ended December 31, 2003, Gleiss Lutz Hootz ("Hootz"), a German
law firm filed a complaint against the Company in a Canadian jurisdiction. The
complaint alleges a breach of contract and is seeking for $24,496.41 EURO, or
approximately $33,400, for legal service fees. During the year ended December
31, 2004, Hootz had offered $35,000 CAD (approximately $29,050) to settle the
claim. The Company is still in process of negotiating the settlement, and had
accrued $30,000 of liabilities at December 31, 2004 in connection with the
claim.

The Company is subject to other legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.

NOTE M - MAJOR CUSTOMERS AND VENDORS

Revenue from one (1) major customer, which accounted for greater than 10% of
total sales, approximated $445,000 or 70% of sales for the year ended December
31, 2004, and $101,724 or 98% of sales for the year ended December 31, 2003.

Total purchases from five (5) major suppliers, each accounted for greater than
10% of total purchase, approximated $631,360 or 85% of purchases for the year
ended December 31, 2004. Total accounts payable of $129,753, or 25% of total
accounts payable was due to these five suppliers as of December 31, 2004. Total
purchases from one (1) major supplier, which accounted for more than 10% of
total purchase, approximated $11,167 or 43% of purchases for the year ended
December 31, 2003. Total accounts payable of $3,329, or 4% of total accounts
payable was due to this supplier as of December 31, 2003.

NOTE N - GOING CONCERN MATTERS

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements during the years ended December 31, 2004 and 2003, the
Company incurred losses of $7,250,872 and $13,988,500, respectively. The
Company's current liabilities exceeded its current assets by $210,060 and the
accumulated deficit amounted $26,388,356 as of December 31, 2004. These factors
among others may indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.

The Company's existence is dependent upon management's ability to develop
profitable operations and resolve its liquidity problems. Management anticipates
the Company will attain profitable status and improve its liquidity through the
strategic acquisition of businesses and continued business development, and
additional equity investment in the Company. The accompanying consolidated
financial statements do not include any adjustments that might result should the
Company be unable to continue as a going concern.

In order to improve the Company's liquidity, the Company is actively pursuing
additional equity financing through discussions with investment bankers and
private investors. There can be no assurance the Company will be successful in
its effort to secure additional equity financing.

If operations and cash flows continue to improve through these efforts,
management believes that the Company can continue to operate. However, no
assurance can be given that management's actions will result in profitable
operations or the resolution of its liquidity problems.


                                      F-19
<PAGE>

                               SWISS MEDICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE O - SUBSEQUENT EVENTS

Subsequent to the date of financial statements, the Company issued an aggregate
of 12,900,250shares if its common stock in exchange for warrants exercised at
$0.16 to $0.30 per share. Gross proceeds received in connection with the
warrants exercised, total approximately $3,323,000.





                                      F-20