U.S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549

                           FORM 10-KSB

[X]  Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
December 31, 2000, or

[  ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange act of 1934 for the transition period from
to

                 Commission File No.  000-15243

                 VITAL HEALTH TECHNOLOGIES, INC.
   (Name of Small Business Issuer as specified in its charter)

           Minnesota                        41-1618186
(State or Other Jurisdiction of           (IRS Employer
Incorporation or Organization)         Identification No.)

       3805 Centre Pointe Dr. North, Roseville, MN  55113
      (Address of Principal Executive Offices and Zip Code)

Issuer's Telephone Number:  (651) 697-9191

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:  Common
Stock, par value $0.01

Check whether the issuer (1) filed all reports required to be
filed by sections 13 or 15(d) of the Exchange Act during the past
12 months (or such shorter period that the issuer was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [  ] No [X]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [X]

The Registrant's revenues for its most recent fiscal year:  $0.

The aggregate market value of voting stock held by non-affiliates:  $0

As of February 6, 2001, the Registrant had outstanding 2,839,898 shares of
common stock, par value $0.01.

Documents incorporated by reference:  None.

<PAGE>

                        TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                  		         Page

Part I

1.   Description of Business                             		             3

2.   Description of Property                             		             9

3.   Legal Proceedings                                     		          	9

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

Part II

5.   Market for Common Equity and Related Stockholder Matters 	        10

6.   Management's Discussion and Analysis or Plan of Operation         12

7.   Financial Statements                           		                 13

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

Part III

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

10.  Executive Compensation                     		                     15

11.  Security Ownership of Certain Beneficial Owners and Management    15

12.  Certain Relationships and Related Transactions  		                15

13.  Exhibits and Reports on Form 8-K           		                     16

Signatures                       		                                    18

                          							2
<PAGE>

                             PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

     Vital Health Technologies, Inc. ("Vital Health" or
"Company") was incorporated in the State of Minnesota on April
11, 1960 under the name of Cherne Test Ball, Inc.  Starting in
December of 1961 through May of 1992, the Company effectuated
several name changes: Cherne Industrial, Inc.; Cherne
Enterprises, Inc.; Cherne Medical, Inc.; and Vital Heart Systems,
Inc.  In 1984, the Company began research into the science of the
electrophysiology of coronary artery disease.  As a result, the
Company began selling off its non-medical activities and focusing
on providing effective technologies and resources to promote
heart disease detection and prevention.  In 1991, the Company
obtained financing to begin the commercialization of a product
that utilized electrophysiology to detect heart disease.
However, due to numerous factors, the Company ceased a majority
of its operations in November of 1993.  On January 1, 1994, the
Company reentered the development stage with limited operations,
and in 1996 the Company ceased all operations.  In 1998, the
Company was again revived.  On September 26, 2000 the Company
changed its name to Vital Health Technologies, Inc. and on
December 1, 2000, the Company acquired all of the assets of Vital
Health Technologies, LLC ("Vital Health LLC").

     Vital Health is a development stage company that owns a
technology called Variance Cardiography ("Variance Cardiography"
or "Variance Cardiograph") for detecting heart disease.  Heart
disease is the number one killer among all diseases and is
responsible for over one million deaths per year.  Statistically,
almost one in every two Americans will develop coronary artery
disease and one in seven will die from sudden cardiac arrest.
Further, it is estimated that 5 million Americans have a non-
symptomatic form of heart disease known as "silent ischemia."
Currently there does not exist an effective methodology to detect
coronary artery disease that can be utilized on a wide scale
basis.  Management believes that the Variance Cardiograph may
become that methodology by providing a state of the art tool to
detect coronary artery disease.

     The Company intends to distribute the Variance Cardiograph
into two business sectors: the medical sector, where hospitals
and clinics can use the Variance Cardiograph as a medical device;
and the health and fitness sector, where the Variance Cardiograph
can be used as a screening tool.  Management has created a
separate division within the Company called LifeFit Health to
focus on the health and fitness sector.  Additionally, LifeFit
Health has its own web page - LifeFitHealth.com.

Principal Product

The Variance Cardiograph

     The Company's primary product is the Variance Cardiograph.
The Variance Cardiograph is a medical device designed to assist
in the diagnosis of coronary artery disease by measuring the
electro-physiological behavior of heart tissue while the patient
is at rest.  If heart cells are unhealthy they are not able to
conduct the electric current that the heart generates each time
it beats.  Just as the water flow in a river will vary due to
obstacles such as boulders and logs, the flow of the electric
current in the heart will vary due to cell deterioration.

     Traditional evaluation for the coronary artery disease
begins with a personal history review, physical examination,
routine lab studies, chest x-rays and electrocardiograms ("ECG").
However, the accuracy of the ECG, particularly a resting ECG, is
much lower than desired for detecting coronary artery disease.
The accuracy of the stress ECG test is higher than that of the
resting ECG, but many patients

                          					3
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cannot be stressed.  For example,non-ambulatory individuals and
individuals with   health   problems such as obesity, asthma or
arthritis cannot be stressed.  The exercise ECG test is limited
in its accuracy to detect coronary artery disease, especially
when its results are equivocal as is usually the case in patients
without hear disease symptoms and in patients with intermediate
risk (i.e., patents with or without symptoms but having high blood
pressure, high cholesterol levels, tobacco use, family history or
diabetes).  The medical community recognizes that stress ECGs
often have high false positive results, particularly in women,
which leads to more invasive tests and more expense.

     The Company believes that its product compares favorably to
ECGs in providing a clinically useful and non-invasive means of
detecting coronary artery disease.  The Company intends to gain
entry into the medical market currently served by the resting and
stress ECG by focusing on the Variance Cardiograph's ability to
accurately test those individuals who cannot tolerate or be
effectively tested with a stress ECG.  Other applications include
utilizing the technology as a device to "rule out" a heart attack
in the emergency room.  A study published in the Annals of
Emergency Medicine, January 1992 concluded that unnecessary
admissions could be reduced by 69% utilizing Variance
Cardiography.  As a monitoring device Variance Cardiography can
be utilized during and following a procedure such as angioplasty
and artery by-pass to evaluate the effectiveness of the
procedure.  Further, the Company intends to gain entry into the
health and fitness market by focusing on the Variance
Cardiograph's ability to quickly and inexpensively screen clients
for overall heart health through non-invasive means.

     The Variance Cardiograph and the ECG are both designed to
detect abnormal electric activity of the heart, but there are
significant differences in the methods used to record and analyze
this electric activity.  The Company believes that the Variance
Cardiograph's manner of collecting data with respect to the
heart's electrical activity allows it to gather data with a
higher resolution and fidelity than the conventional ECG.  The
Variance Cardiograph uses up to 22 surface electrodes, compared
to 10 for the ECG.  The Variance Cardiograph uses a wider
frequency range and increased sample rate, which allows the
higher frequency components to be measured and analyzed.  These
components are normally lost in standard 12-lead ECGs.
Increasing the sample rate improves the resolution of collected
data.  High frequency changes in the waveforms cannot be detected
by the standard ECG due to its the narrow frequency response and
limited sample rate.  The Variance Cardiographs higher analog to
digital conversion resolution allows measurement of smaller
variations in electrophysiological voltage, down to about 1/6th
of a microvolt, compared to about 10 microvolts achieved by the
standard 12-lead ECG.

     Twenty-four clinical studies have been completed with
several studies published that conclude Variance Cardiography has
greater sensitivity, specificity and accuracy than a standard ECG
and exercise stress test.  Additionally, as the following table
shows, the cost of a Variance Cardiograph is comparable, if not
favorable, to comparable tests.

Test                    Cost                 Accuracy
ECG                     $40-$120             30%
Stress ECG              $500                 60%
Variance Cardiogram     $60-$95              85%

Variance Cardiograph Innovation

     Vital Health devoted $400,000 and 2 years to design a new
version of the Variance Cardiograph that replaces the Variance
Cardiograph's current industry standard adapter interface with a
Universal Serial Bus data converter.  The Universal Serial Bus is
the new input/output standard for personal computers and gives
users simple, easy, plug-and-play connections for peripherals.
The new Variance Cardiograph is built as an outside the computer
device that provides potential advantages in flexibility and
mobility by allowing the Variance Cardiograph to interface with a
laptop or desktop personal

                           					4
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computer.  In addition, the newer Variance Cardiograph can complete
a test in 10-15 minutes, compared to the 45-minute test of the
previous design.

     The first prototype for the Universal Serial Bus Variance
Cardiograph was completed in September of 2000.  The new design
requires that a new 510 (k) be filed with the FDA in order to
market the device to the medical community.  Management believes
they may be able to meet FDA requirements by filing a memorandum
to the existing FDA clearance.  Meanwhile, Variance Cardiographs
are being integrated as a fitness-screening tool, where FDA
approval is not required.

Variance Cardiograph Reports

     The Company conducted extensive research involving over 5
years and $300,000 to develop the newer Variance Cardiogram
report.  Originally, the company tested over 5,000 individuals in
developing the report and index score system.  The pre-test
likelihood scores are derived from the Pooling Project Research
Study (a national study combining data from five longitudinal
investigations) that evaluated the relationship of blood
pressure, serum cholesterol, smoking habit, weight and ECG
abnormalities to incidents of major coronary events.  The
following tables illustrate the reports breakdown and
explanation.

Pre-test       A percentage that reflects an individuals
likelihood     probability of coronary artery
               disease based on risk factors such as age,
               gender, weight, diastolic blood
               pressure, cholesterol, smoking history,
               chest pain symptoms, etc.

Post-test      A percentage that combines the pre-test
likelihood     likelihood and Vital Health
               ischemic index score.

The total      The total of all 24 leads.
variance

The Vital      Estimates myocardial ischemia determined by
Health         the Variance Cardiograph
Ischemic       during the test.
Index

Score          The indices are adjusted for a moderate to
               high risk population

0 to 75        Normal or healthy coronary arteries

75 to 90       Individual should be tested periodically

90 to 150      Further evaluation by a medical professional
               is recommended

Patents

     The Company holds and maintains seven US patents relating to
Variance Cardiography with the master patent being issued in
1993.  The Company believes that it possesses all necessary
rights to the technology involved in the Variance Cardiograph.
However, there is no assurance the Variance Cardiograph will not
infringe on patents held by others, nor is there any assurance
that the patents granted will provide commercial benefit to the
Company or adequate protection against competition.  The Company
requires its consultants to agree, in writing, to keep its
proprietary information confidential and, within certain
limitations, to assign to the Company all inventions relating to
the Company's business.

                            					5
<PAGE>


Marketing Plans

Medical Sector

     Currently the Company has entered into no agreement with any
entity in relation to the marketing and distribution of the
Variance Cardiograph into the medical field.  Assuming FDA
approval, the Company intends to distribute the Variance
Cardiograph into the medical field by issuing licenses to larger
more established medical device manufacturers who have already
well established distribution networks.  Management also intends
to enter into strategic alliances with larger and more
influential companies that may have an interest in promoting the
Variance Cardiograph to the medical community.  The Company
intends to retain the marketing rights for Variance Cardiography
in the non-medical markets (i.e., health and fitness sector) and
integrate the Variance Cardiograph with the Company's Internet
and retail operations.

Health and Fitness Sector

     LifeFit Health was formed as a division of Vital Health to
pursue the potentially lucrative health-fitness, longevity and
disease prevention markets.  Due to the evolution of these
markets and developments in computer technology, Variance
Cardiography is potentially well suited to provide early
screening for general heart health.

     LifeFit Health intends to directly pursue the large
population of those who are interested in improving their heart
health and overall fitness.  The market segments that will be
targeted include: corporations and institutions; health oriented
individuals; health and fitness clubs; and independent health
fitness professionals.

     There were over 40 companies in St. Paul-Minneapolis that
participated in the beta testing of LifeFit Health in the fall of
1999 through the spring of 2000.  Several documented case studies
show individuals improving their level of fitness dramatically
after following a fitness program designed by LifeFit Health.  In
certain cases a 50% improvement in the Variance Cardiograph index
score was achieved.  Accordingly, Management believes there is a
market in the health and fitness sector for the Variance
Cardiograph.

     Management intends to infuse the Variance Cardiograph into
the health and fitness sector by distributing units under
licensing agreements to independent practitioners, who will be
provided with training, technical and marketing support.  The
independent practitioners will then perform testing on clients
("members") as part of an overall health fitness assessment;
which will include, assessing the member's goals, collecting
appropriate personal and historical data, and completing a
variety of health and fitness screening tests such as blood
pressure, cholesterol, body composition, diet and nutrition, and
a variance cardiogram.  Under the licensing agreement, members
are added to Vital Health's member base.

     Management believes that the Variance Cardiograph, combined
with the other tests, provides a valuable measure in determining
overall health, and developing a program to achieve health and
fitness goals.  Following the completion of the tests and
analysis, a report is compiled that includes recommendations for
the member to follow.  If the member's Variance Index score is 90
or higher, the member is referred to their doctor or a medical
organization affiliated with the company for medical
interpretation.

     Typically, recommendations comprise of three broad
categories: diet and nutrition; activity and exercise; and
lifestyle adjustment.  The member is then provided with a variety
of products and services that can be purchased to aid in the
process.  The member will also be able to access the Company's web

                          					6
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page, LifeFitHealth.com, to design a fitness program, track
progress, and purchase products at the on-line store.  Currently,
LifeFit Health has agreements with manufacturers and providers
for products and services such as: vitamin and herbal
supplements; monitoring devices such as cholesterol kits, blood
pressure monitors, heart rate monitors and body fat measures;
exercise equipment such as home gyms, tread mills and dumb bells;
and discounts on memberships and day passes at health clubs.
Persons who discover the web page through the Internet can sign
up for membership and obtain member benefits trough the web site.

     Management intends to send a newsletter to each member on a
monthly basis, which may include information on a variety of
health and fitness subjects, product promotions and general
information regarding LifeFit Health.  In order to track and
monitor progress each member is provided with a tracking system
and is contacted periodically by a staff member to review
measures and progress.

     The Company plans to initially rollout LifeFit Health in the
St. Paul - Minneapolis marketplace in 2001, and expand to other
markets following demonstrated success.  Management intends to
place Variance Cardiograph units in health and fitness oriented
facilities.  The first center will be located at the Company's
headquarters in Roseville, Minnesota.

     The cost for an overall health fitness assessment will be
$95, which will include 12 months of tracking, progress review
and adjustment.  Group and corporate programs where 10 or more
participants are involved will be priced at $60 per individual.

     The monthly licensing fee to operate a LifeFit Health unit
will be $200 per month with an additional user fee of $20 per
test.  Each unit will include: a Universal Serial Bus Variance
Cardiograph laptop and printer; all applicable software analysis
and forms; marketing materials; and training and technical
support.  The licensee will have the opportunity to purchase the
following items from the Company: blood pressure measuring
devices; cholesterol testing instruments; body fat measuring
instruments; and flexibility measuring instruments.
Additionally, each licensee will earn a commission on products
sold online at LifeFitHealth.com or distributed directly.

LifeFitHealth.com

     LifeFitHealth.com has been developed to provide: a source of
valuable information for members and prospective members of
LifeFit Health; a marketing and lead generation tool; a health
and fitness program with progress tracking; reward points and
product purchasing; and a foundation for a full "virtual health
and fitness club."

     The first phase of LifeFitHealth.com includes a home page
with 11 sub pages.  Included in the web site are separate
information sheets for download purposes, including, 10 reasons
to exercise, Cholesterol, Blood pressure, Nutrition, and Balanced
Fitness.  Also, as part of the web site there is a self-
assessment quiz to measure an individuals risk of a heart attack
called the Healthy Heart Quiz.  Upon completing the quiz, a score
is tabulated from a range of 1 to 35.  The risk factors
associated with the scores range from "very remote" to "urgent
danger."  Following the Healthy Heart Quiz people have the
opportunity to order additional information on heart disease
prevention and begin a relationship with a LifeFit Health
consultant.  Other pages on the web site are membership
information, product information, and a links page to other web
sites.

     The Company plans on marketing LifeFit Health through
Internet search engines, public relations news wires, trade
organizations, direct mail, radio, and news media health
professionals.



                           					7
<PAGE>


Governmental Regulation

     The Variance Cardiograph is subject to government regulation
by the Food and Drug Administration ("FDA") under the Federal
Food, Drug and Cosmetic Act.  The Company has submitted a 510(k)
and received FDA clearance for the older model of the Variance
Cardiograph in 1986.  The first prototype for the new Variance
Cardiograph was completed in September 2000.  With the new
design, a new 510(k) must be filed with the FDA before the
Company can market the device to the medical community.
Management believes that the Company may be able to meet FDA
requirements by simply filing a memorandum to the older and
approved version of the Variance Cardiograph.  However, FDA
approval is not certain, and such approval may require additional
time, effort, and expense.  Vital Health plans on filing for FDA
approval after field testing is complete.  Field testing is
scheduled to begin in February or March 2001.

     To market the Variance Cardiograph in the health and fitness
sector, the Company does not require FDA approval.  Accordingly,
the Company is moving forward within its LifeFit Health division
and marketing the Variance Cardiograph as a fitness-screening
tool in the health and fitness sector.

Competition

     The detection of heart disease, as an industry, is highly
competitive.  Variance Cardiography competes directly with the
following technologies.

     Doppler technology.  Ultrasound technology can be used to
     create an image of arteries.  Doppler technology is used to
     measure blood circulation generally or the arteries leading
     to the heart specifically.  Although effective in viewing
     arterial restriction, ultrasound techniques require a high
     level of skill and a still patient, making them less useful
     in an emergency room setting.

     Resting ECG.  A traditional resting ECG uses a 12-lead
     device to measure the heart's electrical activity.  It is
     extremely inaccurate with asymptomatic patients.

     Exercise Stress Test.  During an exercise or stress ECG, the
     patient exercises on a treadmill while the ECG
     electronically monitors the activity of the heart.
     Straining the heart increases accuracy.

     Stress Echocardiogram.  During a stress echocardiogram, the
     patient exercises while the heart is monitored with
     ultrasound technology.  This is accurate in both men and
     women.

     Thallium Stress Test.  A thallium test requires a number of
     steps.  The patient walks or runs on a treadmill while a
     physician monitors the patient's heart rate.  After the
     treadmill, the patient receives an injection of radioactive
     thallium 201, which allows a picture to be taken of the
     heart.  The patient rests for two or three hours, and a
     resting heart image is taken.  A comparison of the two
     images is used to diagnose coronary heart disease.

     The ECG and medical supply industry is highly competitive
and significantly influenced by the marketing and pricing
practices of the major industry participants, Hewlett Packard,
Marquette, Burdick, Spacelabs, Del Mar, Siemens, and Toshiba.
These competitors are significantly larger than the Company, and
have substantially greater resources with well-established
distribution networks.

     The ability of Vital Health to compete effectively in
medical and health and fitness sectors will depend on the
Company's ability to provide a high quality product and service
at a competitive price.  Management believes that because the
Variance Cardiograph is inexpensive to produce, it will have
success in the health and fitness sector, and can compete
directly with ECG machines in the medical

                         					8
<PAGE>



sector.  Further, Management believes that the Variance
Cardiograph will benefit persons that are non-ambulatory and
female since its accuracy does not vary with ambulation, stress
or gender.  However, building recognition of the Variance Cardiograph
is critical to short and long-term success.  Failure to do so may
result in stunted growth of the Company's business.

     Management believes that Variance Cardiography provides
certain advantages over competition in that the Variance
Cardiograph is:

     Highly accurate with greater sensitivity, specificity, and
     accuracy than a standard ECG and exercise stress test;

     Inexpensive to the consumer with a test that costs slightly
     more than an ECG and less than an exercise stress test;

     Mobile with the ability to apply testing at a variety of
     locations;

     Flexible to attach a Universal Serial Bus Interface unit to
     a laptop, desktop or complete setup on a medical cart with a
     printer;

     Compatible with Internet, Windows and other new generation
     technologies; and

     Easy to interpret test results with an index score provided
     on each generated report and a more detailed report for
     professional interpretation.

     Emerging technologies may compete directly with Variance
Cardiography.  The only established technology for the
inexpensive, non-intrusive, early detection of coronary artery
disease is the traditional ECG.  Blood pressure is also widely
used as a screening measure, but it does not measure coronary
artery disease directly.  An example of emerging technology is
Cambridge Heart in Boston, Massachusetts, which uses technology
similar to Vital Heart's (T-wave instead of R-wave) to measure
variance in heart electricity.  The product is currently marketed
in the U.S. as an alternative to the exercise stress ECG test.

Employees

     The Company is a development stage company and currently has
no employees.  Executive officers will devote such time to the
affairs of the Company, as they deem appropriate.  Management of
the Company expects to use consultants, attorneys, and
accountants as necessary, and does not currently anticipate a
need to engage any full-time employees.  The need for employees
and their availability will be addressed in connection with the
expansion of operations.

ITEM 2.  DESCRIPTION OF PROPERTY

     In acquiring Vital Health LLC, the Company assumed the
remaining four years of Vital Health LLC's lease for office space
located at 3805 Centre Pointe Dr. North, Roseville, MN, 55113.
Accordingly, the Company paid $3,372 in lease payments for the
year ended December 31, 2000, and the monthly lease payment in
2001 is approximately $2,834.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is not a party to any legal proceedings, and to
the best of its knowledge, no such proceedings by or against the
Company have been threatened.


                            					9
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ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     On August 28, 2000, the Company held a special meeting of
shareholders.  At the special meeting, the shareholders
considered and voted on the following matters.

Election of Directors
                                 Number of Votes
                      For            Against         Abstain
William Kieger    20,636,501         70,150           84,410
Stephen Muscanto  20,635,701         51,960          103,400
Lloyd Woelfle     20,584,001         83,460          123,600

     The shareholders approved a sixty for one reverse split of
the Company's issued and outstanding common stock by a vote of
12,797,270 for, 402,725 shares against, and 78,800 shares
abstaining.

     The shareholders also approved amended and restated Articles
of Incorporation by a vote of 12,948,235 shares for, 291,315
shares against, and 39,245 shares abstaining.  The amendments
effected through the restated Articles of Incorporation include a
name of the Company to Vital Health Technologies, Inc., and
increasing the authorized capital of the Company to 50,000,000
shares of common stock and 5,000,000 shares of undesignated
stock.

     The shareholders approved acquiring the assets of Vital
Health LLC for 2,000,000 shares of common stock and settling the
outstanding debt owed by the Company to Vital Health LLC for
400,989 shares of the Company's common stock by a vote of
13,108,225 shares for, 127,650 shares against, and 41,920 shares
abstaining.

     Finally, the shareholders approved the appointment of
Callahan, Johnston & Associates, LLC as independent auditor for
the Company's fiscal years ending December 31, 1999 and 1998, by
a vote of 20,674,186 shares for, 72,850 shares against, and
44,025 shares abstaining.

                             PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     There is no established trading market for Vital Health's
common stock.  We are filing this report to become current with
our reporting requirements.  Once current, we intend to seek out
market makers as well as a listing on the OTC Bulletin Board to
develop a public market.  However, there is no assurance that a
trading market will develop in the future.  Even if a trading
market should develop, there is no way of determining what the
market price may be at any future time.

     At December 6, 2000, there were approximately 1,175 holders
of the Company's 2,839,898 issued and outstanding shares of
common stock, $0.01 par value.

     The Company has never declared a cash dividend on its Common
Stock.  The Company has not paid, nor declared, any cash
dividends since its inception and does not intend to declare any
such dividends in the foreseeable future. The Company's ability
to pay dividends is subject to limitations imposed by Minnesota
law.


                            					10
<PAGE>



Recent Issuance of Unregistered Securities.

     In December 2000, the Company issued 2,400,989 shares of
restricted common stock to Vital Health LLC in exchange for all
of its assets and cancellation of $151,264 in debt owed by the
Company.  The shares were issued in a private transaction, not
involving any public solicitation or commissions, and without
registration in reliance on the exemption provided by Section
4(2) of the Securities Act.  The shares were distributed by Vital
Health LLC, pro-rata, to its unit owners as follows.


Name                                            		             Shares Received

Aurora Capital Management L.L.C.                 		                 2,096,718
William A. and Joyce E. Bezdicheck                		    		             55,322
David Breen                                       		                   11,064
John Greiber                                       		    		            33,193
Douglas Lennick                                    		   	             110,645
Desta G. Lachner                                    		   	 	           27,661
Lloyd Woelfle                                        		   		           55,322
Nicholas Strenglis as custodian for Sara Strenglis under the MN UGMA    5,532
Nicholas Strenglis as custodian for Nicole Strenglis under the MN UGMA  5,532


     From September through December 2000, the Company issued
warrants to purchase 110,540 shares of Vital Health's restricted
common stock, exercisable on or before five years and at prices
ranging from $0.049 to $0.05 per share.  All warrants were issued
in a private transaction, not involving any public solicitation
or commissions, and without registration in reliance on the
exemption provided by Section 4(2) of the Securities Act.  The
following table provides information on the warrants issued.

                     	Warrant    Exercise    Consideration
Name                		 Shares     Price           Paid        	     Expiration

SRC Funding        		   40,000      $.049      Consulting services    11/26/2005
North Pole Engineering 	40,504      $.05       Consulting services    11/06/2005
Mark Ungs         	      5,000      $.05       Consulting services    10/31/2005
Lloyd Woelfle    	     	10,000      $.05       Consulting services    10/26/2005
Dr. Daniel Carey       	 5,000      $.05       Consulting services    10/23/2005
Stephen Muscanto 	      10,000      $.05       Service as director    10/26/2005


     In September 2000 the Company issued a warrant to purchase
14,509 shares at an exercise price of $0.05 to William Wustenberg
in exchange for cancellation of a debt in the amount of $18,512.
Mr. Wustenberg immediately exercised the warrant.  The warrant
and shares were issued in a private transaction, not involving
any public solicitation or commissions, and without registration
in reliance on the exemption provided by Section 4(2) of the
Securities Act.

     In September 2000, the Company issued 19,076 shares of
restricted common stock in exchange for cancellation of debt owed
by the Company.  All shares were issued in a private transaction,
not involving any public solicitation or commissions, and without
registration in reliance on the exemption provided by Section
4(2) of the Securities Act.  The following table provides
information on debt cancelled.

                            					11
<PAGE>

Name                     Shares Issued         Debt Cancelled

Sylvan R. Lewis,M.D.         250                   $25,100
Alexander M. Rosenfield      167                   $43,790
Snow Communications,Inc.   1,400                   $13,539
John A. Halpern            2,750              Creditor's  attorney's fees

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     Vital Health is a development stage company and has not
commenced its principal operation of distributing the Variance
Cardiograph and related services.  We completed acquisition of
all assets and rights pertaining to the Variance Cardiograph in
December 2000 for 2,000,000 shares of common stock.  During the
last quarter of 2000, we were also engaged in settling
outstanding liabilities totaling $252,205 for stock and warrants
in Vital Health, so that we could pursue product refinement and
marketing for the Variance Cardiograph without the distraction
and burden of pre-existing obligations.  Furthermore, we believe
an additional $1,300,012 in liabilities is void because the legal
time limit for pursuing the liabilities has expired.

     Our plan for the next 12 months is to:

     Medical Application

     Conduct clinical tests of the Variance Cardiograph in
     medical and health care provider facilities to document
     efficacy,

     Apply for FDA market approval of the Variance Cardiograph in
     medical diagnostic applications,

     Seek out a strategic partnership with a medical devise
     distributor to implement manufacturing and marketing of the
     Variance Cardiograph to health care providers, and

     Apply for health care provider reimbursement through
     insurance and government programs for the Variance
     Cardiograph diagnostic procedure to facilitate marketing;

     Fitness Application

     Begin marketing the LifeFit Health program to health clubs
     and businesses in the St. Paul/ Minneapolis area in the
     first quarter of 2001,

     Implement marketing program for LifeFit Health through the
     Internet and in trade publications, and

     Form a sales force for expanding program sales outside the
     initial market, once the program is established in St. Paul/
     Minneapolis.

     Vital Health is going to seek up to $1,500,000 in financing
over the next 12 months to fund its proposed operations over the
next 12 to 24 months.  Of this amount, $950,000 represents
general and administrative expenses and working capital reserves,
which is intentionally high because of the uncertainties we face
in implementing this new business.  The estimated use of the
remaining $550,000 is as follows:


                           					12
<PAGE>



 Medical Application

	Clinical Studies                            $100,000
	FDA Application                             $100,000
	Product Refinement                          $ 50,000

	Fitness Application
	Marketing Program                           $150,000
	Web Site Maintenance and Development        $100,000
	Product Refinement                          $ 50,000

The foregoing figures are only estimates, and actual use of any
capital we obtain may vary substantially as the implementation of
our business unfolds.

     Since we presently have no revenue from operations, we
cannot rely on internal sources of capital to fund operations.
We will seek financing from outside sources to fund operations,
but we have not identified any sources of financing and there is
no assurance any financing will be available on terms acceptable
to Vital Health.  If we are unable to locate adequate financing,
our ability to implement our business will be substantially
impaired and our continuation as a going concern is unlikely.

     Until Vital Health receives outside financing to fund its
capital commitments, its operations will be limited to those that
can be effected through its officers, directors and consultants.
Our officers and directors are engaged in other business
activities and employment, which makes it possible to use their
services without payment, but also means they are unable to
devote their full time and attention to the affairs of the
Company.  All of our outside consultants have accepted warrants
for services rendered, but there is no assurance they will
continue to do so in the future.  In the event Vital Health
generates revenue from product sales and financing from outside
sources sufficient to fund operations, Vital Health expects to
enter into more formal compensation arrangements with it officers
and seek employees with abilities that will advance our business
objectives.

Forward-Looking Statement Notice

     When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements regarding events, conditions, and financial trends
that may affect the Company's future plans of operations,
business strategy, operating results, and financial position.
Persons reviewing this report are cautioned that any forward-
looking statements are not guarantees of future performance and
are subject to risks and uncertainties and that actual results
may differ materially from those included within the forward-
looking statements as a result of various factors.  Such factors
are discussed under the headings "Item 1.  Description of
Business," and "Item 6.  Management's Discussion and Analysis or
Plan of Operation," and also include general economic factors and
conditions that may directly or indirectly impact the Company's
financial condition or results of operations.

ITEM 7.  FINANCIAL STATEMENTS

     The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on
page 19.


                            					13
<PAGE>



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

     There have been no changes in or disagreements with accountants during
the last three fiscal years.

                            PART III

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

Directors and Officers

The following table sets forth the names, ages, and positions
with the Company for each of the officers and directors of the
Company.

Name                Age  Positions                Since

William Kieger      45   President and Director   August, 2000

Stephen Muscanto    58   Director                 August, 2000

Lloyd Woelfle       48   Secretary and Director   August, 2000


     All directors hold office until the next annual meeting of
stockholders or until their successors are duly elected and
qualified.  Officers serve at the discretion of the Board of
Directors.

     The following is information on the business experience of
each director and officer.

     William Kieger received his B.A. in Business Management from
the University of St. Thomas, St. Paul, Minnesota in 1978.  For
fifteen years prior to 1996, Mr. Kieger served as a Vice
President with American Express Financial Advisors, where he was
manager of a sales division for financial service products.  For
the past five years he has owned and operated Aurora Capital
Management, a consulting firm providing business and strategic
planning.

     Stephen Muscanto received a BA from Yale, an MS from the
California Institute of Technology, and an MBA from University of
Southern California in 1972.  He is currently self-employed as a
business consultant specializing in operations and business
systems.  From 1991 to May 1999, he was the President and CEO of
Pneuseal International Corporation, a manufacturer of heat
sealing plastic film equipment and tooling primarily for the
health care market.

     Lloyd Woelfle attended the University of Oklahoma in
Microbiology from 1971 to 1973.  He received a CFP designation
from the College for Financial Planning, Denver, Colorado, and is
a licensed principal.  For the past 23 years American Express has
employed Mr. Woelfle; most recently as a vice president
specializing in security compliance and systems management.

Section 16(a) Beneficial Owner Reporting Compliance.

     The officers and directors of the Company, William Kieger,
Stephen Muscanto and Lloyd Woelfle, have yet to file a Form 3
with the SEC, and are considered to be delinquent in such filing.

                           					14
<PAGE>



The officers and directors have been informed of their filing
responsibilities under Section 16(a) of the Securities Exchange
Act of 1934 and will be filing the required forms in the
immediate future.

ITEM 10.  EXECUTIVE COMPENSATION

     The Company has no agreement or understanding, express or
implied, with any officer or principal stockholder, or their
affiliates or associates, regarding compensation in the form of
salary, bonuses, stocks, options, warrants or any other form of
remuneration, for services performed on behalf of the Company.
Nor are there compensatory plans or arrangements, including
payments to any officer in relation to resignation, retirement,
or other termination of employment with the Company, or any
change in control of the Company, or a change in the officer's
responsibilities following a change in control of the Company.
In consideration of their agreement to serve as directors,
Stephen Muscanto and Lloyd Woelfle each received a warrant to
purchase 10,000 shares of restricted common stock at a price of
$.05 per share, exercisable at any time prior to October 26,
2005.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The following table sets forth as of February 6, 2001, the
number and percentage of the 2,839,898 issued and outstanding
shares of the Company's common stock, par value $0.01, which
according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each executive officer, (iii) all current
directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the outstanding common stock.
Except as otherwise indicated, the persons named in the table
have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.

Name and Address
of Beneficial Owner                          		 Common Shares   Percent of Class

Aurora Capital Management LLC (1)             		    2,096,718     	      73.83

William Kieger (2)                            		    2,096,718            73.83

Stephen Muscanto (2)(3)                       		       11,838             0.42

Lloyd Woelfle (2)(3)                             		    65,322             2.29

All officers and directors as a group: 3 persons    2,173,718            76.01

  (1)  William Kieger owns and controls Aurora Capital Management
       LLC, which directly owns 2,096,718 shares of the Company's common
       stock.  Accordingly, Mr. Kieger may be deemed to have indirect
       voting and investment control over the shares held by Aurora
       Capital Management.
  (2)  Officer or director of the Company.
  (3)  Includes a warrant to purchase 10,000 shares exercisable within 60 days.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In December 1997 and August 1998, the Company entered into
promissory notes with Aurora Capital Management LLC in consideration
for services rendered and funds advanced. The notes were


                       					15
<PAGE>


secured   by   all   of   the  Company's  tangible  and
intangible assets, which are essentially all of the assets and
intellectual property rights pertaining to the Variance
Cardiograph.  The Company defaulted on the notes, and in November
1998, the Company relinquished all assets to Aurora Capital
Management in exchange for cancellation of the debt owed by the
Company.  Aurora Capital Management is owned and controlled by
William Kieger.  William Kieger was director of the Company at
the time of the note transactions, but resigned prior to the
November 1998 transaction.  Subsequent to acquisition of the
assets by Aurora Capital Management, the assets were assigned to
Vital Health LLC, which had resources to pursue product
development and testing.  As a result, Aurora Capital Management
owned approximately 89.4% of Vital Health LLC.

     In September 1998 the Company issued a convertible
subordinate note to Vital Health LLC in exchange for the
agreement of Vital Health LLC to make advances up to $500,000.
In 1999 and 2000 Vital Health LLC advanced funds to or for the
benefit of the Company totaling $151,264.

     In August 2000 the shareholders approved acquiring the
assets of Vital Health LLC for 2,000,000 shares of common stock
and settling the outstanding debt owed by the Company to Vital
Health LLC for 400,989 shares of the Company's common stock.
These transactions were completed by December 2000.  In August
2000, the shareholders also re-elected Mr. Kieger to the position
of director of the Company.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

     Copies of the following documents are included as exhibits to this report
pursuant to Item 601 of Regulation S-B.

SEC Ref.No.  Title of Document                         			 	            Location

2.1          Assignment of Assets In Lieu of Foreclosure Agreement dated 	  E-1
              November 12, 1998, between the Company and Vital Health LLC
2.2          Asset Purchase Agreement dated December 1, 2000 between the	   E-8
              Company and Vital Health LLC
3.1          Amended and Restated Articles of Incorporation        		       E-11
3.2          Restated Bylaws                               			              E-14
10.1         Marketing Agreement between Aurora Capital Management and the  E-26
              Company dated January 28, 1997
10.2         Promissory Note for $50,000 to Aurora Capital Management dated E-29
              December 30, 1997
10.3         Promissory Note for $10,000 to Aurora Capital Management dated E-31
              August 13, 1998
10.4         Collateral Patent Assignment to Aurora Capital Management      E-32
              dated August 13, 1998
10.5         Convertible Subordinate Note to Vital Health LLC               E-36
              dated September 1, 1998
10.6         Collateral Patent Assignment to Vital Health LLC dated         E-44
        	     September 7, 1998
10.7         Settlement of Convertible Subordinate Note,dated October       E-48
              27, 2000
10.8         Engineering Consultant Contract with North Pole Engineering    E-51
10.9         Strategic Alliance Consultant Contract with Mark Ungs          E-56
10.10        Financial Consultant Contract with SRC Funding, Inc.           E-57
10.11        General Consultant Contract with Dr. Dan Carey      		         E-63

                            					16
<PAGE>

10.12       Form of Warrant issued to Consultants *     		                  E-64
10.13       Lease for office in Roseville MN             			                E-66

*     From  September through December 2000, the  Company  issued
warrants  to purchase 110,540 shares of Vital Health's restricted
common  stock, exercisable on or before five years and at  prices
ranging  from $0.049 to $0.05 per share.  The same form was  used
for  all of the warrants issued, which is included as an exhibit.
The  following table provides relevant information on each of the
warrants issued.

                         	Warrant    Exercise  Consideration
Name                   		 Shares     Price        Paid        	      Expiration

SRC Funding      		       40,000      $.049    Consulting services    11/26/2005
North Pole Engineering 	  40,504      $.05     Consulting services    11/06/2005
Mark Ungs         	        5,000      $.05     Consulting services    10/31/2005
Lloyd Woelfle    		       10,000      $.05     Consulting services    10/26/2005
Dr. Daniel Carey       	   5,000      $.05     Consulting services    10/23/2005
Stephen Muscanto 	        10,000      $.05     Service as director    10/26/2005




Form 8-K Filings

      No reports on Form 8-K were filed during the fourth quarter of the year
ended December 31, 2000.

                                					17
<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.

                                     Vital Health Technologies,Inc.
Date: January 30, 2001               /s/ William Kieger,President
                                     Chief Executive and Financial Officer

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


January 30, 2001                      /s/William Kieger, Director


January 30, 2001                     /s/Lloyd Woelfle, Director


January 30, 2001                     /s/Stephen Muscanto, Director


                     				          18
<PAGE>


                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                      FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
              AND THE PERIOD FROM REENTRANCE INTO
                       DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


                       TABLE OF CONTENTS

                                                          Page

Independent Auditors' Report                               20


Financial Statements:

     Balance Sheets                                        21

     Statements of Operations                              22

     Statements of Stockholders' Equity (Deficit)          23

     Statements of Cash Flows                              24

     Notes to Financial Statements                         25



                   				          19
<PAGE>


              Callahan, Johnston & Associates, LLC
          Certified Public Accountants and Consultants

                  INDEPENDENT AUDITORS' REPORT


Stockholders and Board of Directors
Vital Health Technologies, Inc.
  (A Development Stage Company)
Minneapolis, Minnesota


We  have audited the accompanying balance sheets of Vital  Health
Technologies,  Inc.  (f/k/a/ Vital Heart  Systems,  Inc.)  as  of
December  31, 2000, 1999 and 1998, and the related statements  of
operations,  stockholders' equity (deficit), and cash  flows  for
the  years  then  ended  and  the  period  from  reentrance  into
development stage (January 1, 1994) to December 31, 2000.   These
financial  statements  are the responsibility  of  the  Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We  conducted  our  audits in accordance with generally  accepted
auditing  standards.  Those standards require that  we  plan  and
perform  the audits to obtain reasonable assurance about  whether
the financial statements are free of material misstatements.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audits provide a reasonable basis for our opinion.

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the financial position
of  Vital Health Technologies, Inc. as of December 31, 2000, 1999
and  1998  and the results of operations and cash flows  for  the
years  then ended and the period from reentrance into development
stage (January 1, 1994) to December 31, 2000, in conformity  with
generally accepted accounting principles.

As  described in Note 2 to the financial statements, the ultimate
recoverability  of  investments  in  the  development  stage  and
continuance  of  the Company as a going concern is  dependent  on
future   profitable   operations,  which  presently   cannot   be
determined.

/s/ Callahan, Johnston & Associates, LLC


CALLAHAN, JOHNSTON & ASSOCIATES, LLC
Minneapolis, Minnesota
January 12, 2001






      7850 Metro Parkway, Suite 207, Minneapolis, MN 55425
       Telephone: (952)858-7207 Fax: (952)858-7202
                Email: callahan_johnston@msn.com


                 				          20
<PAGE>



                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                         BALANCE SHEETS

                                                    			    December 31,
                                                		2000         1999       1998
        ASSETS

Current assets:
Cash                                          $    9,143 		  $   -     $    86
Inventory                                          3,073         -           -
Prepaid expenses                                   7,282         -           -


Total current assets                              19,498         -          86

Furniture and equipment                            6,677         -           -
Less accumulated depreciation                        162         -           -
Net furniture and equipment                        6,515         -           -

Total assets                                 $    26,013   $     -    $     86

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable and
  accrued expenses                           $    10,232   $ 336,790 $ 1,636,801
Note payable - related party                       -          50,525          -

Total current liabilities                         10,232     387,315   1,636,801

Stockholders' equity (deficit):
Undesignated stock: 5,000,000 shares
 authorized; none issued and
 outstanding                                       -            -             -
Common stock: $.01 par value;
   50,000,000 shares authorized;
   shares issued and outstanding
   2,839,898 in 2000 and 419,833 in
   1999 and 1998                                28,399        4,198        4,198
Additional paid-in capital                  11,820,674   11,790,753   11,790,753
Accumulated deficit                       (11,793,637)  (12,102,090)(13,402,102)
Deficit accumulated during the
  development stage                           (39,655)      (80,176)    (29,564)

Total stockholders'
  equity (deficit)                             15,781      (387,315) (1,636,715)

Total liabilities and
  Stockholders' equity (deficit)          $    26,013     $      -    $      86

        			The accompanying notes are an integral part of
				               these financial statements.

                 				          21
<PAGE>





                     VITAL HEALTH TECHNOLOGIES, INC.
                      (A Development Stage Company)

                         STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                               		    Reentrance Into
                                                                 		    Development
                                                                  		     Stage To
                                   		 Years Ended December 31,         December 31,
                                 		    2000       1999       1998          2000
<S>                               <C>           <C>        <C>          <C>
Revenues                          $      457    $    -     $    -       $   93,455
Other income (expense)          		         -         -          200            200
Administrative expenses              (86,102)    (50,612)    (40,384)     (484,056)
Interest expense                      (4,323)        -          -          (84,323)
Income tax expense (benefit)               -         -          -             (174)

    Operating income (loss)          (89,968)    (50,612)    (40,184)     (474,898)

Gain on debt forgiveness/
  collection, net of income
  taxes of $-0-, $-0-, $-0-,
  and $-0-, respectively             438,942   1,300,012      793,245      435,243

    Net income (loss)                348,974   1,249,400      753,061      (39,655)

Other comprehensive income (loss)          -       -             -              -

Comprehensive income (loss)       $  348,974  $1,249,400   $  753,061   $  (39,655)

Basic earnings (loss) per share:
 Continuing operations            $     (.13) $     (.12)  $     (.10)  $    (1.05)
 Extraordinary item                      .66        3.10         1.90          .96
                                  $      .53  $     2.98   $     1.80   $     (.09)

    Weighted average number of
      shares outstanding             660,661     419,833      418,321      452,283

Diluted earnings (loss) per share:
 Continuing operations            $     (.13) $     (.12)  $     (.10)  $    (1.05)
 Extraordinary item                      .66        3.10         1.90          .96
                                  $      .53  $     2.98   $     1.80   $     (.09)

    Weighted average number of
      shares outstanding             661,461     419,833      418,321      453,083

</TABLE>
          			The accompanying notes are an integral part of
              				  these financial statements.

             				              22
<PAGE>






                                  VITAL HEALTH TECHNOLOGIES, INC.
                                   (A Development Stage Company)

                           STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>

                                                                                            Accumulated
                                                                                              Deficit
                                        	   Common Stock       Additional                     During
                                   		    Number of               Paid-In     Accumulated    Development
                                   	 	    Shares     Amount      Capital      Deficit           Stage        Total
<S> 				                             			 <C>     	  <C>      	<C> 					     <C>              <C>           <C>
Balances, January 1, 1994             	   419,000   $  4,190   $11,775,761  $(13,896,096)    $       -     $(2,116,145)
  Issuance of common stock in 1994            833          8        14,992          -                -          15,000
  Net income (loss) - 1994              	     -           -            -          5,502(1)      (89,747)       (84,244)
  Net income (loss) - 1995             	      -           -            -            -           (62,874)       (62,874)
  Net income (loss) - 1996              	     -           -            -            -           (71,513)       (71,513)
  Net income (loss) - 1997              	     -           -            -            -           (70,000)       (70,000)
  Net income (loss) - 1998               	    -           -            -        488,491(1)      264,570(1)     753,061

Balances, December 31, 1998                419,833     4,198    11,790,753   (13,402,102)       (29,564)    (1,636,715)
  Net income (loss) - 199                     -           -            -       1,300,012(1)     (50,612)     1,249,400

Balances, December 31, 1999                419,833     4,198    11,790,753   (12,102,090)       (80,176)      (387,315)
  Issuance of common stock and warrants in
   in settlement of debt in September 2000   1,817        18           218           -              -              236
  Exercise of warrant in September 2000     14,509       145           581           -              -              726
  Issuance of common stock and warrants for
    services in September 2000               2,750        28           509           -              -              537
 Issuance of common stock in settlement of
   debt in October 2000                    400,989     4,010        16,040           -              -           20,050
 Issuance of warrants for services            -           -            925           -              -              925
 Issuance of common stock as part of asset
   purchase agreement                    2,000,000    20,000        11,648           -              -           31,648
  Net income (loss) - 2000                    -           -            -        308,453          40,521        348,974

Balances, December 31, 2000              2,839,898 $  28,399    $11,820,674 $(11,793,637)    $  (39,655)    $   15,781

</TABLE>

 (1)   Debt  forgiveness applied to accumulated  deficit  and  or deficit
accumulated during development stage  based  on  period forgiven liabilities
were initially incurred.


         			The accompanying notes are an integral part of
				                these financial statements.

             				              23
<PAGE>



                     VITAL HEALTH TECHNOLOGIES, INC.
                      (A Development Stage Company)

                         STATEMENTS OF CASH FLOWS
                       Increase (Decrease) In Cash

<TABLE>
<CAPTION>
                                                                                Reentrance Into
                                                                                  Development
                                                                                    Stage To
                                              Years Ended December 31,            December 31,
                                           2000          1999           1998          2000
<S>				                           		     <C>            <C>            <C>         <C>
Cash flows from operating activities:
  Net income (loss)                      $  348,974     $1,249,400     $  753,061  $  (39,655)
  Adjustments to reconcile net income
    (loss) to cash flows from
    operating activities:
      Debt forgiveness/cancellation        (438,942)    (1,300,012)      (793,245)   (435,243)
      Stock and warrants issued for
        services                              1,462             -              -        1,462
      Indebtedness incurred
        for services and storage             55,000         41,000             -      400,000
      Prepaid expenses                       (7,282)            -              -       (7,282)
      Accounts payable and
        accrued expenses                    (14,970)             1         24,903     (10,442)

Cash  flows  from operating activities      (55,758)        (9,611)       (15,281)    (91,160)

Cash flows from financing activities:
  Stock proceeds                             19,888             -              -       34,888
  Proceeds of note payable                   45,013          9,525             -       54,538

Cash flows from financing activities         64,901          9,525             -       89,426

Increase (decrease) in cash                   9,143            (86)      (15,281)      (1,734)

Cash:
  Beginning of year                              -              86        15,367       10,877

  End of year                            $    9,143 	  		 $     -      $      86     $  9,143


Cash paid for:
 Interest                                $       -        $     -      $      -      $     -
 Income taxes                            $       -        $     -      $      -      $     -

</TABLE>

Summary of non cash activity:

 In  2000  the  Company issued common stock and warrants  with  a
 fair  value of $20,286 as partial settlement of accounts payable
 and other accrued expenses and note payable - related party.

 In  2000  the  Company  issued common  stock  and  warrants  for
 services totaling $1,462.

 On  December  1,  2000, the Company acquired  assets,  including
 cash  of  $19,162,  in  exchange for  2,000,000  shares  of  the
 Company's common stock.


          			The accompanying notes are an integral part of
             				  these financial statements.

             				              24
<PAGE>



                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

The Company was incorporated on April 1, 1960, under the laws  of
the  State  of  Minnesota.  On September 26,  2000,  the  Company
changed its name to Vital Health Technologies, Inc.  Formerly the
Company was known as Vital Heart Systems, Inc.

In  November  1993,  the  Company  ceased  the  majority  of  its
operations.  At January 1, 1994, the Company was deemed  to  have
reentered  the development stage.  From 1994 to 1997 the  Company
had  only  limited operations as it tried to complete the  design
and  marketing  of  a non-invasive, stress-free  coronary  artery
disease  (CAD) detection device.  In 1997 the Company ceased  all
operations.

In  1998  and  1999  the Company worked with a Minnesota  venture
capital  firm,  Aurora Capital Management,  LLC  (Aurora)  and  a
Minnesota  entity  with  compatible  business  operations,  Vital
Health Technologies, LLC (VHT-LLC) in an effort to revitalize the
Company  (see Notes 2 and 5).  These dealings ultimately  led  to
the acquisition of VHT-LLC's assets on December 1, 2000 (see Note
5).

Risks, Estimates and Uncertainties

 Use of Estimates

 The  preparation  of  financial statements  in  conformity  with
 generally accepted accounting principles requires management  to
 make  estimates and assumptions that affect the reported amounts
 of  assets  and liabilities and disclosure of contingent  assets
 and  liabilities  at  the date of the financial  statements  and
 reported  amounts of revenues and expenses during the  reporting
 period.

		                  		 (Continued)
                      					25
<PAGE>

                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Risks, Estimates and Uncertainties (Continued)

 Lender Concentration/Continued Existence

 The  Company has been fully dependent on VHT-LLC and Aurora  for
 the  maintenance  of  its corporate status and  to  provide  all
 managerial  assistance  and  working  capital  support  for  the
 Company.

 Continued Existence

 Management  feels  that  current agreements  will  allow  it  to
 remain as an operating business.  See Notes 2 and 3.

Earnings Per Share

The  Company implemented FASB 128: Earnings Per Share.  Basic EPS
excludes dilution and is computed by dividing net income  by  the
weighted-average  number  of common shares  outstanding  for  the
year.   Diluted  EPS reflects the potential dilution  from  stock
options  and  warrants and is computed using the  treasury  stock
method.   Under  the  treasury stock  method  stock  options  are
assumed to have been exercised at the beginning of the period  if
the  exercise price exceeds the average market price  during  the
period.

Stock-Based Consideration

The Company has applied the fair value-based method of accounting
for  employee  and  nonemployee stock-based consideration  and/or
compensation in accordance with FASB Statement 123.


                     				 (Continued)
                          					26
<PAGE>




                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income

SFAS  No.  130  establishes  standards  for  the  reporting   and
disclosure of comprehensive income and its components which  will
be   presented   in   association  with  a  company's   financial
statements.  Comprehensive income is defined as the change  in  a
business  enterprise's  equity  during  a  period  arising   from
transactions,  events  or  circumstances  relating  to  non-owner
sources,  such  as  foreign current translation  adjustments  and
unrealized gains or losses on available-for-sale securities.   It
includes  all  changes  in equity during a  period  except  those
resulting  from investments by or distributions to  owners.   For
the  years ended December 31, 2000, 1999 and 1998, net income and
comprehensive income were equivalent.

Fair Values

The  Company's agreements with Aurora and VHT-LLC  (see  Note  5)
approximated  their  fair value due to the short-term  nature  of
these financial instruments.

Income Taxes

The   Company  accounts  for  income  taxes  in  accordance  with
Statement  of Financial Accounting Standards No. 109, "Accounting
for  Income  Taxes"  which requires the  use  of  the  "liability
method" of accounting for income taxes.

NOTE 2 - DEVELOPMENT STAGE COMPANY

On  January 1, 1994, the Company was deemed to have reentered the
development  stage.  Since that date the Company has devoted  the
majority of its efforts to: maintenance of the corporate  status;
settlement of liabilities; and the search for a viable method  of
operations and/or merger candidate.

                      				 (Continued)
                           					27
<PAGE>



                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 2 - DEVELOPMENT STAGE COMPANY (Continued)

In  1998,  1999 and 2000 the Company has been fully dependent  on
VHT-LLC  and  Aurora for the maintenance of its corporate  status
and  to  provide  all managerial assistance and  working  capital
support for the Company.

In  November 2000, the Company satisfied the last of its judgment
creditors (see Note 5).  In October 2000, the Company reached  an
agreement with VHT-LLC to settle its indebtedness to VHT-LLC  for
400,989  shares of the Company's common stock (see Note  5).   On
December 1, 2000, the Company acquired all of the assets of  VHT-
LLC  for 2,000,000 shares of the Company's common stock (see Note
5).   The Company is moving forward with development of its  core
technology  (variance cardiography) with a goal of first  quarter
2001  availability.   The Company is also  contemplating  raising
capital  through  a private placement or rights offering  of  the
Company's common stock.

Management feels it will be successful in these efforts and  that
it will achieve profitable operations.  Failure of the company to
achieve  these goals could result in it being unable to  continue
as a going concern.  No estimate can be made of the range of loss
that is reasonably possible should the Company be unsuccessful.

NOTE 3 - GAIN ON DEBT CANCELLATION/SETTLEMENT

From   1998   to   2000,  the  Company  successfully   negotiated
settlements of various obligations for:

 *  Partial payments
 *  Equity issuances
 *  Creditor releases

Other obligations of the Company were statutorily canceled due to
the   expiration   of  the  statute  of  limitations   on   these
obligations.   At  December 1, 2000, these cancellations  and  or
settlements resulted in reduction of the Company's liabilities to
only current trade payables.

                   				 (Continued)
                        					28
<PAGE>



                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT)

Authorized Shares/Reverse Split

At the Company's August 28, 2000 Special Meeting of Shareholders,
the   Company   approved   Amended  and  Restated   Articles   of
Incorporation  which increased the authorized  capitalization  of
the  Company  to fifty million (50,000,000) shares  of  $.01  par
value  common  shares  and  five million  (5,000,000)  shares  of
undesignated   stock.   At  this  meeting   a   one   for   sixty
consolidation of the Company's issued and outstanding shares  was
also approved.

All   references  to  stockholders=  equity  (deficit)   in   the
accompanying financial statements have been restated  to  reflect
these amendments retroactively.

Warrants

The  Company contracted with a venture capital company to  assist
the  Company in its reorganization efforts and with its liability
settlements.  At September 30, 2000, this venture capital company
was entitled to receive warrants to purchase 40,000 shares of the
Company's  common  stock at $.049 per share  exercisable  through
November  27,  2005.  The Company's agreement with  this  venture
capital  company will most likely result in them earning warrants
for an additional 60,000 shares under similar terms and a $10,000
cash bonus during the first quarter of 2001.

In  October,  November  and  December 2000,  the  Company  issued
warrants to purchase 70,504 shares of the Company's common  stock
at  $.05  per share exercisable for five years from the  date  of
issuance to various service providers.  These warrants have  been
reflected   at  $.01  per  unit  in  the  accompanying  financial
statements.  Agreements with these service providers provide  for
issuance  of  additional  warrants in 2001  and  later  based  on
achievement of specified performance criteria.

                   				 (Continued)
                        					29
<PAGE>



                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 5 - OTHER AGREEMENTS

Aurora Agreements

In  1997, Aurora Capital Management, LLC (Aurora) agreed to  loan
the  Company  $60,000 under a primary note  and  entered  into  a
business  agreement  with  the Company.   These  agreements  were
secured  by all of the Company's tangible and intangible  assets.
This note bore interest at 6% per annum and was due December  30,
1998.   The  Company  defaulted on these  agreements  and  Aurora
retained  the  collateral in satisfaction of these agreements  on
November 12, 1998.

VHT-LLC Agreements

In  1998,  the  Company entered into similar loans  and  business
management agreements with Vital Health Technologies,  LLC  (VHT-
LLC).   VHT-LLC  is related to Aurora through common  principals.
These  agreements  were  also secured by  all  of  the  Company's
tangible and intangible assets, bore interest at 10%, and matured
August 31, 1999.

VHT-LLC  expended monies and provided managerial  and  consulting
services  under these agreements from 1998 to September 30,  2000
as follows:

     Advances to and expenses paid on
       behalf of the Company             $ 54,538
     Staff and consulting charges          84,500
     Storage fees/rent                     11,500

                                        $ 150,538

On  October 27, 2000, the Company reached an agreement to  settle
its  obligation  to VHT-LLC for 400,989 shares of  the  Company's
common  stock with a fair value of $20,050.  The Company recorded
a gain on debt forgiveness of $131,214 on this transaction.

                      				 (Continued)
                           					30
<PAGE>




                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 5 - OTHER AGREEMENTS (Continued)

VHT-LLC Agreements (Continued)

On  December 1, 2000, the Company acquired all of the  assets  of
VHT-LLC valued at $31,648 in exchange for 2,000,000 shares of the
Company's   common  stock.   The  Company  accounted   for   this
transaction at VHT-LLC's historical basis in accordance with  SAB
48.

Debt Settlement

In  November  2000,  the Company received notification  that  its
purchase  of  a  judgment against the Company had been  approved.
Satisfaction of this $244,590 judgment for $20,000 resulted in  a
gain on debt forgiveness of $224,590 on this transaction.


NOTE 6 - OPERATING LEASE

The  Company  assumed VHT-LLC's office lease at the time  of  the
acquisition  of  VHT-LLC's  assets (see  Note  5).   The  Company
incurred rent expense of $3,372 in 2000.

Future  minimum lease payments due under this lease  at  December
31, 2000 are:

 2001                                   $  33,891
 2002                                      33,891
 2003                                      33,891
 2004                                      25,418

                                        $ 127,091



                      				 (Continued)
                           					31
<PAGE>




                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 7 - INCOME TAXES

Income taxes consisted of the following:

                                   2000      1999       1998
 Current:
   Federal                       $    -    $    -     $    -
   State                              -         -          -
                                      -         -          -
 Deferred:
   Federal                            -         -          -
   State                              -         -          -
                                      -         -          -

 Income tax benefit (expense)    $    -    $    -     $    -

The  reconciliation between expected federal income tax rates  is
as follows:
                              2000                 1999              1998
                          Amount   Percent   Amount   Percent   Amount  Percent

Expected federal tax	   $ 119,000  34.0%	  $ 425,000  34.0%	  $ 253,000   34.0%
State income tax, net
 of federal tax benefit	  	23,000   6.6       81,000   5.7       48,000    6.5
Exclusion of debt
 forgiveness from gross
 income under insolvency
 exclusion              (178,000) (50.9)    (518,500)(40.7)    (311,000) (41.8)
Valuation of net
 operating loss
 carryforwards            36,000   10.3       12,500   1.0       10,000    1.3

                        $    -      - %      $    -     - %     $    -      - %

The  Company  excluded  debt forgiveness from  gross  income  for
income  tax  purposes in 1998, 1999 and 2000 under the insolvency
exception  allowed for under IRS Publication 908.  Net  operating
loss carryforwards have been reduced for this exclusion.


                             		 (Continued)
                              					32
<PAGE>




          		    VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO DECEMBER 31, 2000


NOTE 7 - INCOME TAXES (Continued)

Differences   between  accounting  rules  and  tax   laws   cause
differences  between the bases of certain assets and  liabilities
for  financial  reporting purposes and  tax  purposes.   The  tax
effects  of  these differences, to the extent they are temporary,
are  recorded as deferred tax assets and liabilities  under  SFAS
109, and consisted of the following:

                            2000        1999            1998
 Deferred tax assets:
   Net operating loss
     carryforwards          $3,658,000  $3,800,000  $4,200,000

 Gross deferred tax asset    3,658,000   3,800,000   4,200,000
 Valuation allowance        (3,658,000) (3,800,000) (4,200,000)

 Net deferred tax asset           -           -            -
 Deferred tax liability           -           -            -
 Net deferred tax asset
   (liability)              $     -     $     -      $     -


Utilization of these losses is limited under Section 382  of  the
Internal  Revenue Code due to current and historical  changes  in
the  Company's  ownership.   The  Company's  net  operating  loss
carryforwards  are  fully allowed for due to questions  regarding
the Company's ability to utilize these losses before they expire.


                     				 (Continued)
                         					33
<PAGE>



                VITAL HEALTH TECHNOLOGIES, INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

          YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
               AND THE PERIOD FROM REENTRANCE INTO
                        DEVELOPMENT STAGE
             (JANUARY 1, 1994) TO December 31, 2000


NOTE 7 - INCOME TAXES (Continued)

The  Company has carryforwards available to offset future taxable
income as follows:

                      NOL         Credits     NOL        Credits

 2002             $      -     $  96,600    $     -   $ 10,000
 2003                    -   	    60,700          -     10,000
 2004                    -        71,100          -        -
 2005                2,615,000       -            -        -
 2006                1,729,000       -            -        -
 2007                3,295,000       -            -        -
 2008                2,939,000       -            -        -
 2009                   14,000       -            -        -
 2010                    -           -            -        -
 2011                    2,000       -            -        -
 2012                    -           -            -        -
 2013                   25,000       -            -        -
 2014                   50,000       -            -        -
 2015                   90,000       -        28,000       -

                   $10,759,000 $ 228,400   $  28,000 $  20,000


                         				 (Continued)
                              					34
<PAGE>